Just The Beginning Of A Price War
A report from the Wall Street Journal. “Some of the biggest names in commercial real-estate lending have all but turned off the spigot. Blackstone Mortgage Trust and KKR Real Estate Finance Trust, two of the biggest mortgage real-estate investment trusts, have halted loans to any new borrowers. While these firms continued to provide financing related to existing loans, they didn’t originate any new loans during the first half of this year, according to the companies. Starwood Property Trust, another lender in the sector, has greatly decreased its appetite for new lending in recent quarters, securities filings show.”
“The remaining lenders in the market, including insurance companies and some nonbank lenders, now essentially have the field to themselves. ‘Liquidity from the banks and the mortgage REITs is at its lowest we have seen in a very long time,’ said Avi Shemesh, principal of CIM Group, which has a lending business with $12.5 billion in assets under management that remains active. ‘We can pick and choose. We receive even better terms from [borrowers with] much better credit.'”
The Commercial Observer. “Phoenix’s office market tanked in the second quarter of this year, multifamily rents have stalled, and the city’s once-thriving industrial market faces a risk of an overabundance of space after the industrial absorption rate fell 80 percent in the last three months. ‘It’s instability, and just as every other market is trying to find their footing right now, Phoenix is no different,’ Jennifer Barili, senior research analyst at Transwestern Real Estate Services, told Commercial Observer. Barili isn’t wrong that every other city is struggling. Apartment sales in Los Angeles plummeted in the second quarter — dropping almost 49 percent year-to-date compared to the same time last year — while the nationwide vacancy rate for apartments ticked up to 5 percent.”
“The country’s struggling real estate market has led to valuation woes coast to coast, and Kushner Companies’ Times Square retail condominium has topped one data provider’s list for the largest drop. The 238,557-square-foot 229 West 43rd Street saw its valuation plummet 82 percent — from $470 million to $84 million — nearly eight years after Kushner acquired the property, according to CRED iQ. It’s not just Kushner getting a downgrade on a property, but the entire country itself (literally). Fitch Ratings gave the U.S. government its first credit downgrade in 12 years last week. That move also led Fitch to downgrade the long-term debt of two government-sponsored entities — Fannie Mae and Freddie Mac — days later.”
The Real Deal. “If Sun Belt multifamily owners had a crystal ball, many of them wouldn’t be in such dire straits. But new rental market data in Texas suggest that conditions may be clearing on the horizon. Some are starting to trend up, according to data from MRI ApartmentData. That means hope, perhaps short lived, for value-add multifamily shops that often factored in continued rent hikes for their Sun Belt assets in 2021 and early 2022, only to see growth fall off a cliff. Rents are down about 4 percent in Austin over the past 12 months. San Antonio is also an outlier, as it was the only Texas city to post negative absorption in the past year. The city is riding a wave of new development, with higher-quality units coming online to challenge existing supply. That can also be tough on rents.”
“‘People are moving out of the Class B, C and D stabilized product, and people are moving into the new product,’ said Bruce McClenny, who leads ApartmentData. ‘It has been a drain — the rents cannot hold.'”
From NBC News. “Rudy Tomarchio has been looking for a job for three months — and says time is running out before he’ll deplete his savings. The 37-year-old Miami resident is looking for a management-level role, and recognizes that it is likely limiting his results. In the job market trenches, the slowdown has workers like Tomarchio on the verge of substantial lifestyle changes. He has already moved out of Miami’s tony Brickell neighborhood to a more reasonably priced rental apartment in nearby Wynwood, which has recently seen a glut of new apartment construction. ‘I’m very urgently looking for a job, because I only have so many months of savings left before I cannot afford my rent or use my car,’ he said.”
The Messenger. “San Francisco has recovered just 32% of its downtown foot traffic since the start of the pandemic—dead last on a list of more than 60 major North American cities. The ranking, which was compiled based on anonymized cell phone data analyzed by the University of Toronto, comes as San Francisco has struggled with a large population of homeless people and drug users downtown—along with tech workers reluctant to return to their offices. Portland, which has similar problems, also ranked low on the list—with just 36% of people returning.”
Axios on Oregon. “Foot traffic in downtown Portland is still lagging compared to pre-pandemic levels, despite ambitious development projects and various attempts by city officials to bring people back. City officials hope developments like the Ritz-Carlton, an extensive food cart pod revamp and the reconstruction of Darcelle XV Plaza (formerly O’Bryant Square) will help resuscitate downtown activity and combat petty crime, open-air drug use and a homelessness crisis. Dozens of businesses have left, or plan to leave, due to the rise in break-ins, robberies and vandalism.”
“Meanwhile, some business owners don’t believe a few building openings will solve downtown’s many issues. ‘It’ll take a while because there’s still a reluctance for people to come downtown,’ Brad Popick, president of the Portland Outdoor Store on the corner of SW Third Avenue and Oak Street, tells Axios. ‘Plus there’s not enough retail; almost every building has vacancies.’ Paul Higgins lives in SW Portland and works on NW 23rd, so he’s nearby daily, but ‘I’m trying to think of the last time,’ he said when asked if he comes downtown often. ‘It’s been a while. I didn’t realize how many empty storefronts there are downtown,’ he said.”
My Northwest in Washington. “Google users are ripping ‘Jay Inslee’s Campground’ in Oak Harbor via online reviews. It has a nasty reputation for embracing meth heads and looking like a trash heap. But the campground doesn’t actually exist. A group of community activists are behind the stunt. Someone added the fictional ‘Jay Inslee’s Campground’ to Google Maps in an effort to troll the governor for being astoundingly absent on the issue of homelessness. It replaced a previous and short-lived listing for ‘Jay Inslee State Park.’ User Pat gave it five stars, but not for the reason you’d expect. ‘Super nice place for doing meth and coke,’ the reviewer says. ‘No laws enforced, and bathrooms are easily accessible since they’re literally everywhere, including in the middle of the road. Will stay here for free again.'”
“User Samuel had a similar tone but gave the site only one star. ‘Would not recommend. Their carbon-related policies are outdated. However, at least no carbon tax… or property tax,’ Samuel noted. Activist Steve Adams took partial responsible for this stunt. ‘Jay Inslee State Park stands for the true pinacle [sic] of Inslee’s accomplishments in Washington. Filled with garbage, human excrement, burnt-down RVs, derelicts, criminals, and needles, this park has it all. It is so loved by all, not even county and city police can stay out of it. Rumor has it, it’s a sweet pedophile haven,’ the review reportedly said.”
The New York Post. “Some residents of trendy Williamsburg are crying foul over the dozens of migrants being sheltered in the recreation center at its popular McCarren Park — claiming the city’s asylum crisis has left ‘chaos emerging everywhere.’ The Brooklyn rec center warned residents on its Web site Monday that all programs in its south wing, including its media lab, are ‘canceled until further notice’ because of migrant housing set up there three days ago.”
“‘I’m a Latina person. I don’t want to sound racist because you have to be really careful about what you say these days. But it’s not fair that these people are brought in in these conditions or that they’re brought in at all,’ said Adriana Mesen, 41, a freelance graphic designer who walked to the park to get a first-hand look at the new shelter after hearing about it from a friend. ‘We come to the park every day, we work out, it’s a safe space,’ she said. ‘You don’t know who — I mean not everybody is dangerous, but somebody might be. The city government is weird. It’s like they don’t care about the city,. You see trash everywhere, it’s like chaos emerging everywhere. It’s like they’re trying to bring in the chaos somehow.'”
“‘I remember when this place used to be abandoned,’ Teriq, 54, an art student and shiatsu practitioner who has lived in the neighborhood for 34 years said of the facilities at McCarren Park. ‘It used to be closed off and you could worship Satan and drink. It’s very different now.’ said Teriq, who declined to give his last name.”
The Boston Globe in Massachusetts. “The state’s shelter system has become so overburdened that Governor Maura Healey is preparing to take action aimed at relieving the pressure exacerbated by an influx of migrants on top of the state’s already dire housing needs, according to several people with knowledge of the proposed plan. The action could come as early as this week in the form of an emergency declaration. ‘There’s been a group of providers who have really been pushing hard in the governor’s office’ for such a declaration, said Danielle Ferrier, chief executive officer of the Boston-area homeless services provider Heading Home, in an interview. At present, she said, the shelters are in a ‘catastrophic’ situation. ‘It is not safe any longer on the ground, in our sites,’ she said.”
“This comes months after New York called a state of emergency and Florida activated additional National Guard members to help cope with surges in migrants. New York City, Chicago, El Paso, and Washington, D.C., have also made emergency declarations. John Yazwinski, head of Father Bill’s & MainSpring, which runs shelters south of Boston, said he is among those who have been urging the governor to declare a state of emergency. He said Father Bill’s took in a few dozen of the migrants that Governor Ron DeSantis of Florida flew to Martha’s Vineyard last summer — and most of them remain in his shelter system. And one major reason for that, he said, is that, ‘We can’t get them their work papers.'”
From Reuters. “Country Garden said on Tuesday it has not paid two dollar bond coupons due on Aug. 6 totalling $22.5 million, confirming market fears that the biggest privately owned developer in China is slipping into repayment troubles. Country Garden had total liabilities of 1.4 trillion yuan ($194 billion) at the end of 2022 and large exposure in lower-tier cities. ‘The fact that (Country Garden) is struggling to address an interest payment, rather than a full bond principal repayment, perhaps underscores its very tight liquidity,’ said CreditSight analyst Nicholas Chen. ‘Given (its) size, we think such an event will have a negative spillover effect for the sector, particularly on investor sentiment towards other privately-run developers that are still afloat.'”
The South China Morning Post. “Hong Kong homebuyers rushed to snap up new flats at the lowest prices the city has seen in seven years, betting that the flagship property company of Hong Kong’s richest man has the correct reading of the slumping market. More than 8,000 prospective buyers have deposited cheques to bid for 254 units at The Coast Line II in Yau Tong, which has not yet launched. The project by CK Asset Holding, the property flagship of Hong Kong billionaire Li Ka-shing, lies about 10 minutes from an MTR station in the southeastern corner of Kowloon.”
“The 132 flats in the project’s first batch are priced at HK$14,997 (US$1,921) per square foot on average after discounts – 16 per cent cheaper than the most recent launches of Wheelock Properties’ Koko Mare and Koko Rosso in the neighbouring Lam Tin neighbourhood. ‘The launch of Coast Line II is just the beginning of a price war,’ said Joseph Tsang, chairman of JLL in Hong Kong, who called CK Asset’s aggressive pricing a bid to raise attention and spark an improvement in sentiment among homebuyers who are reluctant to buy right now because they foresee prices continuing to fall. ‘What CK Asset did is actually quoting a more down-to-earth, more realistic and more updated market price,’ Tsang said. ‘If new projects are launching at a normal market price, the responses are going to be very slow and cold.'”
“Meanwhile, the number of unsold units in completed projects is the highest since 2007, according to JLL. A total of 83,000 housing units are available in Hong Kong, with 18,000 in completed projects and the rest under construction. About 25,000 more units are expected to hit the market in 2023. The glut of new supply in the second half will further exert pressure on the already floundering residential market amid a challenging external economic environment, high interest rates and a slow economic recovery in mainland China. ‘In order to digest inventory, developers understand they need to offer some discounts,’ said Raymond Cheng, managing director of property management at CGS-CIMB Securities. Price pressure in the new-home market has spilled over to the secondary market as well. ‘Transaction volume over the weekend has frozen’ in the secondary market, said Cheng.”
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“Minor respiratory illness”
“Two weeks to flatten the curve.”
safe and effective
‘two of the biggest mortgage real-estate investment trusts, have halted loans to any new borrowers’
These clowns use short term loans and lend out for 30 years. Wa could go wrong?
‘‘Liquidity from the banks and the mortgage REITs is at its lowest we have seen in a very long time…We can pick and choose. We receive even better terms from [borrowers with] much better credit’
That’s the spirit Avi, ditch those losers!
Wa could go wrong?
They don’t know because they were still in diapers the last time it was a problem.
‘The city government is weird. It’s like they don’t care about the city,. You see trash everywhere, it’s like chaos emerging everywhere. It’s like they’re trying to bring in the chaos somehow’
These commies have set out to destroy yer cities Adriana, ever since minor respiratory illness.
‘It used to be closed off and you could worship Satan and drink. It’s very different now’
Well.
Let freedom ring!
Sounds more like Nazi Germany, CCP, or the USSR than any Western “democracy”
Keep in mind that many Communist countries, past and present, had the word “Democratic” in their name, like the former German Democratic Republic, AKA East Germany. Hence why our tyrants claim to fight tooth and nail to preserve democracy.
The illusion of manufactured consent of the masses
Someone had mentioned “The Chekist” here. Finally got around to watching it yesterday, brutal.
Watch Mr Jones (2019) about Stalin starving out peasants and the great beacon of freedom NY Times covering for him.
…aka Holodomor (terror famine).
Thanks, will do.
Mr Jones (2019)
👍🏻 It’s on Amazon Prime.
Looks bleak, was bleak in ’87 when I visited. There was a little old lady behind a table on every floor of the hotel, watching. We were told in all likelihood the rooms were bugged, so we’d greet our listeners with “We’re back!” when we’d get “home”.
“The Chekist” should be required viewing in our NEA indoctrination mills. Especially since the Democrats are working off the same playbook as their Bolshevik forerunners.
The Chekist (1992)
https://vimeo.com/378689989
‘He said Father Bill’s took in a few dozen of the migrants that Governor Ron DeSantis of Florida flew to Martha’s Vineyard last summer — and most of them remain in his shelter system. And one major reason for that, he said, is that, ‘We can’t get them their work papers’
That’s cuz they’re illegal John.
The illegals need workpapers so they can compete in the market and drive down wages while inflation is raging for the working class
I think a lot of them do just fine without papers. They can even get drivers licenses in most states now.
DeSantis flew these folks to the Vineyard in mid-September. So they’ve been mooching for a year now. And not one of them has even bothered to stand in the Home Depot parking lot?
So they just mooch and do nothing? That’s plain weird. No goals, nothing, just free-cheesin’ it? Disgusting.
“That’s cuz they’re illegal”
No, no, no.
They are “undocumented” which implies that they were once in possession of their alleged documents, but those documents were unfortunately misplaced.
Seems like half the jobsites I’ve been on recently I’m the only native English speaker working there.
‘He has already moved out of Miami’s tony Brickell neighborhood to a more reasonably priced rental apartment in nearby Wynwood, which has recently seen a glut of new apartment construction’
Wa happened to my shortage Miami?
‘Country Garden said on Tuesday it has not paid two dollar bond coupons due on Aug. 6 totalling $22.5 million, confirming market fears that the biggest privately owned developer in China is slipping into repayment troubles’
Fook the gringo continues. Did they make a last minute payment bloomberg?
‘The fact that (Country Garden) is struggling to address an interest payment, rather than a full bond principal repayment, perhaps underscores its very tight liquidity’
Can’t even pay the interest.
DONG!
Based on the deals I’ve seen closing the past 5 years, this will be repeated across the country over the next few years as the 3-5 yr loans roll off and need to be refinanced. The floating rates are even worse. Some of the smarter ones purchased interest rate swaps that will protect them, but even those only last a few years. Either we get a crash now or rates stay high and we get a bigger crash later.
He’s dead, Jim.
How did you lose yer airbox Joe?
What CK Asset did is actually quoting a more down-to-earth, more realistic and more updated market price.
‘Super nice place for doing meth and coke,’ the reviewer says. ‘No laws enforced, and bathrooms are easily accessible since they’re literally everywhere, including in the middle of the road. Will stay here for free again’
Maybe so Pat, but what about devil worshiping with bar service?
How about some music?
Third World Dump New York
https://www.bitchute.com/video/awaSe3MK6tau/
2:23.
So sad.
Last night my husband spoke to a guy just back from NYC. Midtown is an open air drug market, stuff spread on blankets on the sidewalks.
A reader sent these in:
Soft Landing
https://twitter.com/WinfieldSmart/status/1687743519601885185
This is the guy who is try to get all of the central banks of the world to enact CBDCs (Central Bank Digital Currencies) which will monitor and control everything that you spend. Agustin Carstens Bank for International Settlements
https://twitter.com/WallStreetSilv/status/1687801403459207168
The Pentagon: We accidentally sent $6.2 billion to Ukraine
The US Treasury: We’re unable to track $5 trillion of pandemic spending
Sam Bankman: I don’t know where $10 billion of my users’ funds went
The IRS: You just sent $602.17 on Venmo report it or you’re going to jail
https://twitter.com/WSBChairman/status/1687929427395543041
Banker in Dallas: “We approved loans for $200k to $300k higher than we should have during the pandemic. So that folks could bid on houses up to $800k to $1M. Stretched the DTI limits all the time to 50%. It’s a house of cards that’ll fall when the economy shakes.” Yikes
https://twitter.com/akm515/status/1688211765983641600
🤮 𝗧𝗥𝗨𝗟𝗬 𝗗𝗜𝗥𝗘 𝗗𝗔𝗧𝗔 𝗢𝗨𝗧 𝗢𝗙 𝗖𝗛𝗜𝗡𝗔
https://twitter.com/PriapusIQ/status/1688754927466622976
US Consumer Credit rose by $17.8 billion — beating the +$13 billion estimate. No, people aren’t in better shape. Prices are 20%+ higher than 2 years ago. Consumers don’t load up on credit after rates go from 15% → 25% for fun. They do it because they’re running out of money.
https://twitter.com/JoeConsorti/status/1688720517497344000
Moody’s wanted a piece of the action after seeing what Fitch did last week
https://twitter.com/eliant_capital/status/1688713260189560833
⚠️ US revolving credit. Contracted in June for the first time since March 2021. Rarely falls outside of a crisis or end-of-cycle recession.
https://twitter.com/VPatelFX/status/1688629956882898944
“Soft landing” is all the rage in the news these days.
https://twitter.com/AyeshaTariq/status/1688621452122066945
The recent rise in gas prices is likely to erase most of the Fed’s joy about (and room to point to) softening core as a reason for running easier than expected policy:
https://twitter.com/BobEUnlimited/status/1688598376386904064
In the US, interest rates on household items are skyrocketing. In just 1 year, the average interest rate on credit card debt has gone from 14% to 21%+. New car loan rates went from 4% to 8% while used car loan rates are at 12%+. Mortgage rates are at a fresh high of 7.2%, up from 2.7% in 2021. How can the average person afford any of these items?
https://twitter.com/KobeissiLetter/status/1688746679543971840
The US government has spent an alarming $6.7 trillion over the last 12 months. This is up 14% since last year and just shy of the $7.6 trillion record during 2020. We are now spending just $900 billion less than a period when $4 trillion was handed out. The worst part? Over the last 12 months, the US deficit is at $1.4 trillion. This is up $1 TRILLION compared to last year. Simply put, this is unsustainable.
https://twitter.com/KobeissiLetter/status/1688343901193576448
“For the eleven quarters since the pandemic/recession ended, real average hourly earnings (which cover 119 million full time wage and salaried workers) FELL at a 2.9% annual rate.” – Lacy Hunt
https://twitter.com/RudyHavenstein/status/1685703833157353472
“We’re unable to track $5 trillion of pandemic spending”
A minor respiratory illness will do that. Must be one of those “we’re all in this together” type of things.
“We’re unable to track $5 trillion of pandemic spending”
Check the billionaires’ bank accounts.
“Stretched the DTI limits all the time to 50%. It’s a house of cards that’ll fall when the economy shakes”
It don’t matter if it’s A+ conforming, Fannie/Freddie or whatever…..50% DTI is SUBPRIME! Perhaps worse. Because a lot of subprime loans make sense and work. 50% DTI is doomed for failure.
50% DTI purchased in 2020-2022
Add in 10-20% inflation since then
Add in skyrocketing property taxes and insurance
He’s dead, Jim.
Mortgage rates are at a fresh high of 7.2%, up from 2.7% in 2021.
Still waiting for home prices to reflect this.
But you can hear the dogs barking? They say that just before a major earthquake, due to the immense pressure between opposing tectonic plates, a high frequency sound is emitted that causes dogs to bark and fish to jump. The dogs are barking and the fish are jumping. This is gonna be the “Big One!”
It’s crazy it hasn’t yet. Not sure what it will take, but it makes no sense.
Student loan payments restart next month.
It’s crazy it hasn’t yet.
They pumped over $10 trillion in liquidity into the US system in a tiny window, and that doesn’t even count the international liquidity which also funnels into US equities and real estate. Bottom line, this sh!t’s got legs. It doesn’t just disappear. They printed a new baseline in all asset prices – at least tried to.
And remember not all those credit cards and LOC’s have been maxed out yet. Funny, just got a notice from Capitol One that they extended the limit on one of our CC $10,000. We haven’t touched the first 20K yet. 😳
It’s crazy it hasn’t yet.
I know!
It’s been true in my lifetime too that changes come slowly and then suddenly.
Still waiting for home prices to reflect this.
Nobody can afford to sell without losing their shirts. And, even if someone were to sell, even after cutting the price, nobody can afford the loan much less the PITI. The prices have gotten so high in big cities other desirable locations, that even cut in half they are still too expensive for most buyers. All of the talk about this magical “service” economy and tech booms that would make everybody rich and therefore capable of affording 1.3 million dollar homes is just fantasy land on steroids.
I keep saying this, Japan is the only modern example of a bubble and bust–look what happened there and how long it took. Their economy and way of life has never fully recovered. There’s no law that says that home prices and RE here has to revert to some realistic and sustainable level. Right now we’re seeing that millions of people are living on the streets or way below poverty levels. Is this dirty open secret really affecting our economy, government or average person? No.
So we could end up in a situation where a few people are wealthy, a much smaller middle-class that lives comfortably, a lower class that has a job and roof over their heads but are trapped in poverty, and a bottom caste which will be like the situation in India.
The only thing that makes Japan not look so bad and their bubble burst relatively benign, is that the lowest caste and homeless population still live by the rules and behave themselves and still contribute something to society. Tokyo has lots of blue tarp villages, but the inhabitants are able to stay clean (public baths and toilets), and they are orderly and disciplined. In fact, there are some old seniors that don’t have any money and can’t manage to live on the streets. So they go to a 7-11 and shop lift a rice ball. They get arrested and sent to prison. They get out and repeat the cycle. Japanese prisons are harsh but offer food and a mat to sleep on. It’s a huge problem for the government now since prisons are acting like senior living facilities.
Can you imagine that here? Our descent into misery is going to be much more unpleasant. Just make sure you live in a place that is physically removed from the riff raff.
It seems that the only thing to stop this print economy is for the population to physically die off, their debts dying off with them.
In fact, there are some old seniors that don’t have any money and can’t manage to live on the streets. So they go to a 7-11 and shop lift a rice ball. They get arrested and sent to prison. They get out and repeat the cycle. Japanese prisons are harsh but offer food and a mat to sleep on. It’s a huge problem for the government now since prisons are acting like senior living facilities.
Can you imagine that here? Our descent into misery is going to be much more unpleasant.
Imagine our senior citizens in gen pop with MS13 gang bangers. Ugly doesn’t even begin to describe it.
“Can you imagine that here? Our descent into misery is going to be much more unpleasant.”
The 2nd amendment will insure politeness despite one’s belly button rubbing against the spine.
Imagine our senior citizens in gen pop with MS13 gang bangers.
In a Japanese prison, those MS13 gangbangers would be reduced to babbling babies. People today forget how brutal the Japanese were during the War to their POWs. Convicts in Japan have no “rights” and have lower status than POWs who were at least warriors. Convicts like we have in our prisons would be regarded as the lowest of the low–they would literally be seen as less valuable than garbage. Even the Yakuza in Japan operate with an honor code and don’t cause trouble with law abiding citizens,
MS15 gang members would literally be beaten to a pulp and then thrown into REAL solitary confinement. They would not be allowed to mix with aging senior citizen prisoners.
Does the news that US housing affordability has reached an all time low upset you?
Fox Business
Economy
Published August 7, 2023 6:00am EDT
US housing affordability at an all-time low
It’s more difficult than ever to afford housing in the US
By Breck Dumas FOXBusiness
US housing market needs a break: Redfin CEO Glenn Kelman
A “For Sale” sign outside a home in Atlanta, Georgia. The median mortgage payment in the U.S. is now the highest on record, and so is the asking rent price for a single-family home.
(Dustin Chambers/Bloomberg via Getty Images / Getty Images)
Redfin CEO Glenn Kelman says its hard to fault the Fed for overdoing rate hikes when there are other persistent sources of inflation.
Global markets publication The Kobeissi Letter declared last week that housing affordability in America is now at an all-time low, pointing to several striking data points showing it is more expensive to pay for a place to live in the U.S. than ever.
For starters, the outlet said buying a house in the U.S. has become a luxury. It pointed to a Redfin report released Friday showing the median home mortgage payment in the U.S. hit $2,605 a month in July, up 19% from a year ago and the most expensive ever.
Kobeissi reported there are now a record 31 states where homeowners pay a median monthly house payment above $2,000 per month, and Hawaii is now the first state in history with a median house payment above $5,000. Not far behind are Californians whose median mortgage bill is at $4,800, followed by Massachusetts homeowners who pay $4,000.
…
https://www.foxbusiness.com/economy/us-housing-affordability-at-an-all-time-low.amp
There’s no doubt housing has to break. And I think the Fed knows it has to break it. This hope that the Fed can somehow reign in inflation without breaking the housing market is quite comical. But it is humorous reading articles explaining how it’s somehow possible.
Anything is possible in Clownworld!
https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fcb2pkrcc6ygb1.jpg
Lefties Only!
housing has to break
Powell has been quite clear that’s his intent.
Nice new house in Northwest FL, but 521 days on Zillow isn’t a good sign. Apparently, its not getting much interest at that 409K list price.
https://www.zillow.com/homedetails/4086-Lane-Rd-Milton-FL-32583/2070871661_zpid/
They must have built it on that empty lot with the mini-swamp in the back yard. Don’t let out any dogs or kids. Keep the listings coming! I love looking at the actual houses.
Given that the stock market is red hot cakes, do you ever wonder why Uncle Warren is sitting on a huge cash pile?
Markets
Berkshire shares hit all-time high as investors cheer strong earnings, Buffett’s near-record cash pile
Published Mon, Aug 7 2023 8:41 AM EDT
Updated Mon, Aug 7 2023 4:03 PM EDT
Yun Li
Warren Buffett, Berkshire Hathaway CEO and chairman.
Cnbc | Nbcuniversal | Getty Images
Berkshire Hathaway shares rallied to record highs Monday following a strong quarterly report that showed a rebound in insurance operations as well as a massive cash hoard that swelled to nearly $150 billion.
…
https://www.cnbc.com/2023/08/07/berkshire-hathaway-rises-as-investors-cheer-strong-earnings-and-buffetts-near-record-cash-stockpile.html
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
— Ernest Hemingway, The Sun Also Rises
Coronavirus Update: New ‘Eris’ variant is now dominant in the U.S.
Market Extra
A complicated options trade that has helped prop up U.S. stocks is starting to unravel
Published: Aug. 8, 2023 at 10:35 a.m. ET
By Joseph Adinolfi
It could ultimately shave 500 points off the S&P 500, one analyst says
A complicated derivatives trade that may have helped drive U.S. stocks higher this year is starting to unravel. Getty Images/iStockphoto
Referenced Symbols
AAPL
-0.06%
SPX
-0.89%
MSFT
-1.73%
GOOGL
-0.46%
GOOG
-0.42%
META
-1.55%
A complicated derivatives trade that may have helped power some of the U.S. stock market’s post-March rally is showing signs of unwinding, with potential consequences for the broader market, one veteran analyst warned Tuesday.
Should it come completely unglued, the result could be nearly 500 points shaved off the S&P 500 index, a move that would erase much of this year’s nearly 18% gain, FactSet data show.
In his latest missive to subscribers, Michael Kramer, founder of Mott Capital Management and a longtime independent market analyst, said he’s seeing signs that a complicated play known as the “short volatility dispersion” trade is starting to unravel, threatening a rapid unwind, if the past is any guide.
Here’s how the trade works, according to Kramer: traders purchase call options on Big Seven stocks like Apple Inc. AAPL, -0.06%, while at the same time selling call options on the S&P 500 SPX index to offset the cost of the individual stock options.
Then, they hedge their short position with shares in Apple or other S&P 500 components, helping to limit their risk should the trade move against them.
A call option gives traders the right, but not the obligation, to buy shares in a given stock, although index options are often settled in cash or in futures tied to the index.
Kramer has been tracking the trade in his newsletter for months. He believes sophisticated traders saw opportunity after the collapse of Silicon Valley Bank, when the Cboe Volatility Index, otherwise known as the Vix, traded as high as 30 intraday, its highest level of 2023.
Those who put this trade on hoped the S&P 500 would continue to rally, sending the Vix lower, while traders would continue to pile into call options on the Big Seven stocks. In a way, the trade is also a bet that individual S&P 500 components would outperform the index, which has been a major theme for markets this year.
Heading into the second-quarter earnings reporting season, the trade worked well as the Vix fell while the so-called “Magnificent Seven” stocks pushed the S&P 500 higher.
This group includes Apple Inc. AAPL, -0.06%, Microsoft Corp. MSFT, -1.73%, Alphabet Inc.’s Class A GOOGL, -0.46% and Class C GOOG, -0.42% shares, Meta Platforms Inc. META, -1.55%, Amazon.com Inc. AMZN, -1.70%, Tesla Inc. TSLA, -1.41%, Nvidia Corp. NVDA, -2.00%
…
https://www.marketwatch.com/story/a-complicated-options-trade-that-has-helped-prop-up-u-s-stocks-is-starting-to-unravel-7d6a8f13
Coronavirus Update: New ‘Eris’ variant is now dominant in the U.S.
I. DON’T. CARE.
Vietnam’s Real Estate just COLLAPSED! (goes Terribly WRONG)
Duong Global Business Consulting Group
Aug 4, 2023
Attorney Ken Duong shares in detail about what he thinks about the rapid decline of Vietnam’s real estate market, from what to led to the real estate collapse to bank loans and current business climate in Vietnam. Learn about the reasons behind Vietnam’s real estate collapsed and get Attorney Ken’s take as a real estate investor who has been living in Vietnam more than 10 years. Finally, he will discuss whether you should invest in Vietnam and buy real estate this year as a foreigner.
00:00 Intro
01:36 Timeline of Vietnam’s Real Estate Collapse
02:00 Real Estate Market Prices
02:50 What is happening?
03:36 First reason for Real Estate Collapse
04:35 Robert Walters’ Survey
05:05 Second reason for Market Decline
06:47 Attorney Ken Duong’s opinion
09:36 Consequences of Real Estate Market Drop in District 1, Ho Chi Minh City
10:37 Should you invest and buy real estate in Vietnam right now?
11:08 Prediction
https://www.youtube.com/watch?v=ZACF150vToE
12 minutes.
Funny how countries that are officially still Communist have some of the biggest bubbles.
Vietnam’s Real Estate just COLLAPSED!
These intentional real estate bubbles are really, really dumb.
Sharing some random memories.
Paddleboarder Arrested In Malibu For Refusing To Exit Water, Scientist Says Beaches Are Dangerous Right Now (4/3/2023):
“According to the Los Angeles County Sheriff’s Department, the unidentified man spent 30 to 40 minutes paddling in the ocean waters off Malibu Beach after refusing to heed orders from L.A. County lifeguards to go ashore.
Finally, LASD Harbor Patrol brought in a boat, at which point the paddleboarder voluntarily swam in and was taken into custody.
He was arrested on misdemeanor charges of disobeying a lifeguard. He was booked and released from the Malibu/Lost Hills Sheriff’s Station with orders to appear in court. It’s unclear what kind of fine he faces.
On March 25, Malibu closed its famous pier and all the restaurants that sit along it. Since March 27, all L.A. County-owned beaches have been closed, including beach bathrooms, piers, promenades, and beach bike paths.
Kim Prather, a leading atmospheric chemist at Scripps Institution of Oceanography, said the beaches are so dangerous right now that she wouldn’t even go in the water for $1 million.
“The ocean churns up all kinds of particulate and microscopic pathogens, and every time the ocean sneezes with a big wave or two, it sprays these particles into the air,” Prather said in a statement.
https://www.cbsnews.com/losangeles/news/paddleboarder-arrested-in-malibu-for-refusing-to-exit-water/
Correction: article is dated 4/3/2020, not 2023.
Kim Prather, a leading atmospheric chemist at Scripps Institution of Oceanography, said the beaches are so dangerous right now that she wouldn’t even go in the water for $1 million.
This woman is scary stupid.
More likely a paid fearmonger like most of the TV whitecoats
Politicians aren’t the only recipients of stuffed brown envelopes.
Many scientists work on “soft money,” i.e. they don’t get a base salary and have to beg for their grant money. The brown envelopes isn’t extra scratch on top of salary; it IS the salary. Pay someone like a used car salesman and they’ll act like a used car salesman. Tell the truth about the cars and your pay will $0.
I’m a FedGov for a reason.
and she’s not alone
also more proof that clearly college degrees are now worth less than the prize in a crackerjack box
“Foot traffic in downtown Portland is still lagging compared to pre-pandemic levels, despite ambitious development projects and various attempts by city officials to bring people back.”
https://truthonthestreets.substack.com/p/organized-crime-and-the-homeless
tl;dr: Guy witnesses smash and grab, chases suspect, makes lots of new friends in organized retail crime ring, calls 911 repeatedly and is told to fvck off.
CNBC — Over half of student loan borrowers racked up credit card debt during the payment pause—now experts worry about ‘shock’ (8/8/2023):
“Federal student loan borrowers have had a break from paying back their student loans for over three years now.
Though the forbearance may have given them breathing room, helped them add to their savings or pay down other debts, inflation creeping up throughout 2022 undermined a lot of that progress.
Over 50% of borrowers added debt on regular credit cards during the student loan payment pause and another 31% racked up balances on retail cards, a recent TransUnion analysis found.
Now, with the worst of the pandemic in the rearview, borrowers will be required to start making payments again in October. Many will have to work to get out of credit card debt at the same time. Experts worry lots of them won’t be able to keep up.”
https://www.cnbc.com/2023/08/08/over-half-of-student-loan-borrowers-racked-up-credit-card-debt-during-the-payment-pause.html
Minor respiratory illness.
Excuse me?
Yes, twas the minor respiratory illness (hat tip to our blog host I just can’t get enough of that phrase).
More:
“Concerned that borrowers will have trouble making payments when they resume, the Unelected Occupant administration has put some safeguards in place, including a 12-month payment “on-ramp” grace period. From October 2023 through Sept. 30, 2024, missed monthly payments will not be considered delinquent, reported to credit bureaus, placed in default or referred to debt collection agencies.”
September 30, 2024? Golly gee what happens five weeks after that?
Time to release the new “variant” you know the super super scary one. And print another few trillion…
Sept. 30, 2024
I’d be surprised if they let the pain land just at election time.
I despise these losers.
“I’ve put America behind me.” —Chad Haag, student loan debtor
The state government wants to force large building owners to spend millions refurbing their buildings to be “green”
Welcome to the Doom Loop. And this stupid law is state wide. And you just know they will soon be targeting smaller buildings.
Link to full story:
https://coloradosun.com/2023/08/08/colorado-greenhouse-gas-building-emissions-cuts/
In most cases, the “greenest” thing to do is use all existing buildings, autos, machinery and equipment until it is at the end of its useful service life. Scrapping it and building new results in much higher environmental damage. But, of course, this ain’t really about “green” and what’s best for mother earth, it’s about lining billionaire cvck globalists’ pockets. Let’s just chop their fookin’ heads off and skip “green” altogether.
Almost ALL of my work is commercial. Fortunately not much downtown, but all around Denver and near suburbs, Glendale, Lakewood, Littleton, Greenwood Village, Centennial, etc.
Renovation, tenant finish, white box spaces. And much of it in buildings close to the age of the one profiled in the article. The people passing these regulations have no f*ing clue of the actual conditions in these buildings, electrical, plumbing, HVAC or the windows and insulation that the article refers to. Good luck with all of that.
“they will soon be targeting smaller buildings”
I’m beginning to worry that buying my teardown house was a mistake. I’m a couple years out (at least) from starting construction on the new house. These Marxists really don’t want taxpaying productive members of society living in Colorado…
I’m beginning to worry
I am confident that you will be fine.
They will come for residential last. Maybe grandfather seniors but require properties be upgraded when sold.
I can’t wait for when an inner city supermarket, the last one in the hood that barely breaks even or isn’t hemorrhaging shoplifting losses is forced to spend millions to upgrade. They’ll just close those stores and walk away, and the idiots who passed these laws will wring their hands and complain about “food deserts”.
Imagine if a landmark like the Brown Palace is forced to close.
There is a shuttered college campus off of Quebec (the former Johnson and Wales U). If the owners have to spend tens of millions to meet the new code they will abandon the property. Doom Loop, here we come!
But think of the children! Do you want to doom them into a world that is boiling over? Upgrading windows on an old building won’t affect anything, but it’s the thought that counts!!!!
Just wait, the Dems will pass new regulations requiring A/C units to meet ever higher efficiency levels, which will make them unaffordable for the masses. These features that make modern life (A/C. heating, cars, energy, airplanes, meat, etc.) will never be banned but will be regulated to make then unobtainable for the masses.
Big Price Drops in Many Areas in July, 2023 Canadian Real Estate Market
Jon Flynn Broker of Record, Flynn Real Estate Inc.
Aug 8, 2023
The government has finally realized real estate speculators are the reason for runaway house prices in Canada. I share the data and statistics to show the massive increase in rentals and leased homes over the last 10 years. Also stats from across the country.
https://www.youtube.com/watch?v=RGK9X2uPAl0
13 minutes.
Everyone is going to HOFDL to their 2.75% mortgage on their 2nd, 3rd, and 4th properties acquired with 5% cash-out loans and claiming primary residence. Until that is, they see prices dropping 5% a month. Tough to sell FI courses on social media in that climate.
So apparently there’s a downside to leaving your investment shack vacant.
https://www.dailymail.co.uk/news/article-12385309/Pennsylvania-jeanette-squatters-vacant-homes.html
So would houses with squatters be exempt from your beloved surcharge tax on vacant properties?
Will Sellers Lose All Their Power In Toronto Real Estate? – Aug 2
Team Sessa Real Estate
Aug 8, 2023 CANADA
Toronto Real Estate Market Report for the week of July 27 – Aug 2, 2023.
https://www.youtube.com/watch?v=sgJzpp61qZo
16:17.
Vaughan’s Busy Market’s GONE! Sales Plummet 46% in 2 Months
Honest real estate talk 🇨🇦
Aug 7, 2023
Vaughan home prices and home sales tank in July. The spring real estate market in Vaughan comes to a grinding halt. Bank of Canada’s 2 rate hikes have slowed the whole GTA market down.
Homes sales in Vaughan drop 46% and detached homes in Vaughan drop over $130,000 in just 60 days.
Will the Vaughan housing market recover in the fall? A lot depends on what Bank of Canada does.
https://www.youtube.com/watch?v=PMwfcAkOMlk
5 minutes.
Another unicorn only possible in a world awash with Yellen Bux funny money joins the F*cked Company Deadpool.
https://www.bloomberg.com/news/articles/2023-08-08/wework-raises-substantial-doubt-about-staying-in-business
‘People are moving out of the Class B, C and D stabilized product, and people are moving into the new product…It has been a drain — the rents cannot hold’
Bruce is saying the bottom already fell out and rent statistics aren’t reflecting that yet but when these lower tiers go empty SHTF.
Drama Queen much, Comrade Pelosi?
https://www.dailymail.co.uk/news/article-12381631/Nancy-Pelosi-says-U-S-come-END-Trump-elected-called-wicked-witch.html
“Yes, People Were Forced To Get The Vaxx!” – Australian Politician Tells Pfizer Execs
The Jimmy Dore Show
Aug 8, 2023
Pfizer executives Dr Krishan Thiru and Dr Brian Hewitt recently appeared in front of the Australian Senate and had the audacity to suggest that “nobody was forced to have a vaccine.” Yet as Jimmy demonstrates through a video compilation, countless Australians, to say nothing of Americans, Canadians, Europeans and others, were unquestionably compelled to take the jab or else face losing their livelihood, their housing and other essentials.
Jimmy and Darkhorse Podcast host Bret Weinstein discuss this remarkable lie and why anyone would ever believe it.
https://www.youtube.com/watch?v=BBWTBaCqnBQ
7:15.
At 6 minutes:
‘This was all sorted out at Nuremberg’
The Stooges — No Fun:
https://www.youtube.com/watch?v=HXIw1BvfEQ8
Are you more afraid of inflation, deflation, or general price instability?
Financial Times
Chinese economy
Chinese economy falls into deflation as recovery stumbles
Consumer prices turn negative for first time since February 2021 as policymakers face calls for stimulus
A vendor at a vegetable stall at a fresh food market in Shanghai
Slipping consumer prices in China are set to fuel more calls for government stimulus to help revive domestic consumption
Thomas Hale in Shanghai an hour ago
China’s economy has fallen into deflation as consumer prices contracted for the first time in more than two years, in one of the starkest indicators of the challenges facing policymakers as they struggle to revive consumption.
The consumer price index fell 0.3 per cent year on year in July, compared with no change a month earlier. The producer price index, a gauge of prices as goods leave factory gates, was down 4.4 per cent in July.
Consumer prices, which last slipped into negative territory in February 2021, have been on the brink of deflation for months as China’s economic momentum failed to rebound as strongly as expected after authorities lifted pandemic restrictions at the beginning of the year.
…
Could a hair-of-the-dog hangover cure save them?
Currencies
Dollar firm on safe-haven demand as markets fret over China, banks
By Kevin Buckland
August 8, 2023 8:28 PM PDT
Updated 2 hours ago
The employee of a currency exchange shop counts U.S. dollar banknotes in Ciudad Juarez, Mexico July 27, 2023. REUTERS/Jose Luis Gonzalez
TOKYO, Aug 9 (Reuters) – The dollar remained on the front foot in Asia on Wednesday, holding on to overnight gains against major peers as investors sought the safety of the currency amid risks from a floundering Chinese economy and downgrades for U.S. banks.
The risk-sensitive Australian and New Zealand dollars wallowed near multi-month lows. The Chinese yuan, however, got some respite after the central bank set a stronger official rate than expected, signalling its discomfort with recent declines.
The U.S. dollar index – which measures the currency against the euro, yen and four other counterparts – was little changed at 102.50 in the Asian morning, following a 0.47% rise in the previous session.
Worries about the global economy flared again after data on Tuesday showed Chinese imports and exports contracting faster than expected in July.
Data on Wednesday showed China’s consumer prices fell for the first time in more than two years in July, fanning deflation fears, although the decline of 0.3% was slightly less than forecast in a Reuters poll.
Concerns about U.S. banks added to the risk-averse sentiment, after Moody’s cut credit ratings of several small to mid-sized U.S. banks and said it may downgrade some of the nation’s biggest lenders, including Bank of New York Mellon and US Bancorp. Rome also caused a commotion by setting a one-off 40% tax on Italian bank profits.
U.S. Treasuries also saw a surge in demand from haven-seeking investors, with 10-year yields briefly dipping back below 4%.
…
https://www.reuters.com/markets/currencies/dollar-firm-safe-haven-demand-markets-fret-over-china-banks-2023-08-09/
Disgraced FBI official who probed Trump-Russia ties set to plead guilty to illegally working for Russian oligarch
By Priscilla DeGregory
August 7, 2023
McGonigal played a central role in the FBI’s controversial “Russiagate” investigation of former President Donald Trump, which ultimately led to Robert Mueller getting appointed as special counsel to probe potential Russian meddling in the 2016 election.
https://nypost.com/2023/08/07/ex-fbi-official-slated-to-plead-guilty-in-corruption-case/