We’re Starting To See The Bubble Pop And Ponzi Schemes And Pyramid Schemes Failing
A report from Alabama.com. “Average home sale prices declined slightly in Baldwin County in the month of July, after more than two years of skyrocketing home values. ‘We’re heading into a buyer’s market,’ Rachel Romash-Reese, president of Baldwin Realtors, said. ‘If [buyers] want to negotiate and make a deal, now’s the time to shine. Everyone’s holding on to their money. I keep telling sellers, ‘You need to negotiate, because we don’t have the upper hand here.”’
The Bellingham Herald in Washington. “Whatcom County’s median home sale price has fluctuated throughout 2023. The median home sale price reached an extreme high of $682,000 on Jan. 2, the highest price so far this year, according to Redfin. In July, Whatcom’s median home sale prices decreased, dropping to $524,250 on July 31, the lowest price since February. ‘We are still in a sellers market despite the head wind of recent mortgage rate highs. Seller credits for closing costs and rate buy downs are more common for homes that have remained on market longer than average,’ wrote Jason Lee, a local broker with Windermere Real Estate in Bellingham.”
The Real Deal. “Brokers, buyers and sellers across South Florida are in a paradoxical situation. Despite the continued slowdown in deal volume, high interest rates and a pricing disconnect between sellers and buyers, sales are still setting records across South Florida, including in wealthy enclaves like Miami Beach and Indian Creek. Luxury single-family home sales, defined as the upper 10 percent of the market, in Miami Beach and the nearby barrier island cities, fell by about 30 percent in the second quarter, year-over-year, according to Douglas Elliman. The median sale price also dropped 20 percent to $16.7 million.”
“Price cuts are ubiquitous. Of the 98 single-family homes that sold in Miami Beach over the past six months, 91 sold at a discounted price off the asking price, according to MLS data compiled by Miami Real Estate Group, a brokerage led by Andres Asion. The houses that sold traded at an average 15 percent discount off their asking prices and spent nearly six months on the market. But it’s still not easy to convince sellers to ‘improve’ their pricing or accept below-asking price offers. Successfully closing some deals is like ‘pulling teeth and nails,’ said Dora Puig, owner of Luxe Living Realty.”
The Wall Street Journal on California. “Known as Stanley 2, the three-story house will be very different from the other billions of dollars worth of real estate that the couple has sold in the L.A. area, says real-estate broker-turned developer Branden Williams. After nearly five years of construction, Stanley 2 is finally slated to come on the market for $38 million this fall. It is one of two major spec houses the Williamses, who run the brokerage the Beverly Hills Estates, have developed in the Hills over the past several years. Having acquired the construction site for $2.9 million in 2016, at the height of the L.A. spec-home construction frenzy, the Williamses have run up against a series of hurdles. Now realizing that the team will struggle to make any significant profit on the project, Branden says these two houses in the Hills will be their last major ground-up developments. ‘If I really looked at what we’re going to make on this house, it’s not a lot of money,’ Branden said. ‘There’s no more meat on the bone.'”
The San Francisco Chronicle in California. “Redfin real estate agent Alex Sobieski has seen Bay Area agents reduce their typical commission from 2.5% of the transaction down to 2% or even 1.75%, depending on the home price. Agents should be ready to pay for staging, photos and even more ‘gimmicky stuff,’ he said. One agent he knows will hire a taco truck for his open houses to attract buyers to homes over $2 million. ‘They’re doing whatever it takes. … The sellers expect that kind of stuff now too,’ he said. ‘… They’re very anxious.'”
“Lower commissions and more money spent on marketing mean agents are working harder than ever while earnings shrink. ‘Pretty much every agent out there is making 25%-40% less income than they used to,’ Sobieski said. ‘Sellers more than ever are looking for value, and that means less commission. They know their homes are worth 8%-10% less because of the [interest] rate increase.'”
The Philadelphia Inquirer in Pennsylvania. “Even as an undergraduate at Drexel University, Benjamin Nelson knew he wanted ‘out of the rat race.’ On social media, he discovered that real-estate influencers Greg Parker Jr. — known online as Big Bizzneesss — and his wife, Danielle ‘Nikki’ Morris Parker, offered an enticing option. Against backdrops of private planes, luxury cars, and their palatial $2.3 million home in Fort Lauderdale, they shared their own rags-to-riches story of building a real estate empire from the ground up in North Philadelphia. They had gotten rich while investing in their own community, and promised to empower their 285,000 Instagram followers to achieve similar success. Parker sought to create a sense of urgency. ‘Stay locked in,’ he urged his viewers. ‘If you blink, you’ll miss it.'”
“In an August interview, Nelson said he had hesitated to take action because he was embarrassed about being conned. He hasn’t yet told his family about the loss. He had also been holding out hope that Parker, whom he once regarded as a mentor, would make good. ‘They were the people that introduced me to real estate,’ he said. ‘I wasn’t expecting the person I learned the thing from to do that to me.'”
“,Jayson Thornton, is a St. Louis-based financial adviser. In his view, Parker is similar to many other influencers who offer expensive books, classes and mentoring programs, leading to investment opportunities — but often landing clients in ever-deeper debt. He said such offerings proliferated during the pandemic as the government pumped out stimulus checks, unemployment support and forgivable small-business loans — ensuring that their growing audiences suddenly had more free time to devote to social media, and more access to capital than ever before. ‘Over the past four or five years it’s been the Wild West of criminals and convicts turning themselves into finance gurus,’ he said. ‘Now, with all the stimulus and unemployment money running out, we’re starting to see the bubble pop and Ponzi schemes and pyramid schemes failing.'”
The Globe and Mail. “The condominium market has slowed in Toronto this summer, except for one cadre of buyers. Downsizers who have cash to spend are driving sales. But even those in the upper echelons are looking for a deal. Christopher Bibby, broker with Re/Max Hallmark Bibby Group Real Estate, says condo units were selling quickly in the spring to people who planned to live in them. Potential sellers saw sales bouncing back and began to list more units. But the Bank of Canada’s interest rate hike in June – followed by another increase to its key rate in July – doused the enthusiasm of buyers. ‘It very quickly took out those ideal conditions and deflated the market. Sellers have had to change their expectations very quickly,’ as bidding wars backfire and properties sit on the market. ‘We’re getting showings on properties and nobody wants to pay.'”
“In June, Andre Kutyan, broker at Harvey Kalles Real Estate listed a two-bedroom, two-bathroom unit in an older building at Bay and Bloor. The condo has a nicely renovated interior but doesn’t provide outdoor space, he says. The sellers purchased the unit for $2.7-million in 2018. When it came time to sell this year, Mr. Kutyan advised the sellers to list the unit for less than they paid for it. The owners set an asking price of $2.495-million but, after three weeks, the unit hadn’t sold so Mr. Kutyan reduced the price to $2.349-million. Two days after the price cut, the unit sold for $2.315-million, or $1,137 per square foot.”
From Delano. “House prices in Luxembourg have enjoyed remarkable growth over the past decade. However, the housing market has hit a speed bump in recent months due to higher interest rates. Property prices in the grand duchy fell by 7.5% during the second quarter of 2023 and residential listings are declining. Kat Henson, founder of Match Works design studio in Esch-Sur-Alzette, says the challenging market conditions pose a problem for homeowners. ‘Currently the housing market is stagnant and saturated with homebuyers that cannot afford future mortgage repayments and others that can, but who have to sell in order to secure the deposit.’ Rather than selling or remortgaging their homes, Henson says that homeowners should consider investing in their property through renovations.”
From Bloomberg. “Judging by China’s official statistics, the nation’s housing market has been remarkably resilient in the face of tepid economic growth and record defaults by developers. But the picture emerging from property agents and private data providers is far more dire. These figures show existing-home prices falling at least 15% in prime neighborhoods of major metropolitan areas like Shanghai and Shenzhen, as well as in more than half of China’s tier-2 and tier-3 cities. Existing homes near Alibaba Group Holding Ltd.’s headquarters in Hangzhou have dropped about 25% from late 2021 highs, according to local agents.”
“In Hangzhou, close to where Alibaba is headquartered, home prices in some neighborhoods are down 25% to 28% from a peak around October 2021, agents said. In Lianyang, a downtown area popular with expats and financiers in Shanghai, residential prices have slid 15% to 20% from record highs in mid-2021, they said. Even as of March, before a fresh slowdown, more than half of tier-2 and tier-3 cities saw existing-home prices fall more than 15% from peaks, Guolian Securities Co. economists wrote in a report. Actual declines from peaks could be sharper, as the agency only compiles data starting November 2018, the economists cautioned. Top cities, once considered resilient against a housing downturn, aren’t immune. Prices of existing homes in at least five popular districts of Shenzhen have slumped 15% in the past three years, according to a July report.”
The South China Morning Post. “Yu Qian, a 26-year-old freelance English teacher, has moved with her husband and newborn to Zhengzhou, the capital of central China’s Henan province seeking more lucrative work. The small family will not be buying a home for now. They are currently renting a 90-sq-m (968-sq-ft) flat for 2,100 yuan (US$290) a month. The unit’s sale price is listed at 1.08 million yuan (US$148,000). ‘We are also considering buying an apartment in Zhengzhou, but I think property prices will very possibly drop next year. The liquidity and preservation value of real estate are much worse than before,’ Yu said. ‘All of my friends who bought an apartment over the past couple of years have regretted the decision.'”
“Eli Mai, a sales director with a foreign company in Guangzhou, saw the value of his two flats rise from 3.8 million yuan in 2016 to 6.4 million yuan in 2017. They peaked at 8 million yuan in 2021 and are now worth less than 7 million yuan. ‘No one knows how the economy will be in the future. Under such circumstances … you should not invest rashly,’ he said. ‘Now, most Chinese ordinary people who own housing feel that their wealth is shrinking dramatically.'”
“Li Wei, a freelancing copywriter in Shenzhen, has to repay 18,000 yuan each month for three apartments bought in the late 2010s when the property was still booming and buyers were betting on persistent price hikes. Adding to her stress, she has not yet been paid for freelance work done this year. ‘The mortgage is now a heavy burden for me,’ said the 34-year-old with a two-month-old, as current market prices have fallen below what she paid.”
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You will own nothing.
This is neither here nor there, but the 2020 election was stolen.
Stolen, you say?
Yes, stolen. Electoral fraud carried out openly on a scale that would make Uganda scold us for our unchecked systemic corruption.
‘The median home sale price reached an extreme high of $682,000 on Jan. 2, the highest price so far this year, according to Redfin. In July, Whatcom’s median home sale prices decreased, dropping to $524,250 on July 31’
Good thing everybody put $200,000 down!
The only people who can afford Bellingham’s high prices are equity locusts from Seattle et al. The local wages are kept low by a steady stream of college students from WWU. On the bright side, the region is naturally beautiful with ample precipitation, forests and scenic mountain views in several directions.
CNBC (8/17/2023):
“As of June, 61% of adults are living paycheck to paycheck, according to a LendingClub report. In other words, they rely on those regular paychecks to meet essential living expenses, with little to no money left over.
Almost three-quarters, 72%, of Americans say they aren’t financially secure given their current financial standing, and more than a quarter said they will likely never be financially secure, according to a survey by Bankrate.”
https://www.cnbc.com/2023/08/17/heres-why-americans-cant-stop-living-paycheck-to-paycheck.html
More than a quarter said they will likely never be financially secure?
Must be one of those minor respiratory illness kind of things.
I wonder how many are driving nice new cars and have $1000 phones. I actually had a lady approach me at a QT gas station a couple of years ago asking for money…..she was driving a late model honda odesey van…..I was pumping gas into my 2005 BMW 530i with 400,000 miles on it. I’m like what the F. We need to be teaching financial and family planning in the country.
Beaters seem to have all but vanished. That said, my 10 year old Kia still looks pretty spiffy. Maybe enough to be considered “late model” even though it’s certainly not.
All the beaters came to my neighborhood. Lots of amateur mechanics in the barrio.
I had this happen in a Sam’s Club parking lot last year. The 20s-ish woman drove up to me in a massive late model SUV, kids/toys in the car, and asked for money. I said hell, no and looked at another woman a few yards away. I could tell she had just been hit up too; she seemed furious. I mean, if you’re going to beg, at least look poor.
I refuse to speak English with such people. Works easily.
‘If [buyers] want to negotiate and make a deal, now’s the time to shine.
Three things:
1. Realtors are liars
2. Realtors are liars
3. Anyone who buys into a bursting housing bubble is a supreme idiot
But it’s still not easy to convince sellers to ‘improve’ their pricing or accept below-asking price offers.
I don’t have to convince sellers of anything. All I need to do is recline on my lawn chair, popcorn in hand, and watch the carnage play out. Then the greedhead sellers will get their long-overdue reality check, and I’ll get my chance to pay cash for a shack at the nadir of the coming housing bubble bust. It’s called “strategic patience.”
I did it after the 2008… I had enough popcorn and then I bought a house in California in 2010 and sold last year… and I steel have have some more “popcorns” left 😉
🙂 Good one!
‘If I really looked at what we’re going to make on this house, it’s not a lot of money,’ Branden said. ‘There’s no more meat on the bone.’”
Die, speculator scum.
“Redfin real estate agent Alex has seen Bay Area agents reduce their typical commission from 2.5% of the transaction down to 2% or even 1.75%, depending on the home price.
Oh dear – I fear we could see a scenario where starving realtors slash their commissions so deeply to secure a listing that they’re unable to make their Lexus payments.
‘Currently the housing market is stagnant and saturated with homebuyers that cannot afford future mortgage repayments and others that can, but who have to sell in order to secure the deposit.’
For brevity’s sake, “Homebuyers that cannot afford future mortgage payments” shall henceforth be referred to as “FBs.”
Oh dear – Pooh Bear & the CCP might not be able to print their way out of the consequences of central planner mismanagement.
https://www.news.com.au/finance/economy/world-economy/xi-jinping-caught-in-leadership-crisis-as-economy-tanks-and-property-giant-teeters-on-brink/news-story/27de37869036662370a3941ab40a34cf
“Oh dear – Pooh Bear & the CCP might not be able to print their way out of the consequences of central planner mismanagement.”
– Any centrally planned, command and control economy is doomed to fail. Think former USSR, or any current Socialist State.
– Pooh bear has a nation of ghost cities, with the populace souring on real estate. China also drank the Keynesian Kool-Aid.
– There’s a warning here for the USSA, but too late for this Everything Bubble cycle.
– Asset bubbles always burst. The world enjoyed the artificial boom from free money and easy credit. Now the chickens come home to roost.
– Enjoyed the boom? Now enjoy the global bust.
Grifter heads on pikes?
“Location, Location, Location” – Yeah, if you want to be located close to crime, street hookers, thugs, drug dealers, and homeless. “You are bound to make some money especially that houses in this area are selling at $350-450K!” – I laughed so hard I peed my pants. Mr Realtor, if its a guaranteed money maker, why don’t you buy it yourself? 320K for a property that isn’t worth 32K.
https://www.zillow.com/homedetails/816-W-Gregory-St-Pensacola-FL-32502/44723851_zpid/
Date Event Price
08/16/2023 Listed $320,000
10/26/2005 Sold $55,000
Those housing touts flogging their “investment opportunities” are such selfless philanthropists, my jaded eyes mist over every time at their benevolence toward wanna-be real estate moguls.
My gawd, flush the f**king toilet before taking ‘yer photos!
The place is a tear-down anyway.
It’s certainly nicer than yesterday’s block of cousin-kissers, but not $320K worth! The $350K comps nearby have already been fixed up, so this one should be $200K tops, and that’s if the nabe was any good.
The satellite view of this neighborhood is telling. Fully 1/3 of the houses are showing blue tarp roofs. Was there a recent hurricane?
To make us feel better, here’s a showplace that’s been for sale for almost a year:
https://www.zillow.com/homedetails/744-Skywater-Rd-Gibson-Island-MD-21056/36050583_zpid/?
Gorgeous house on a private island community. Bought in 2005 for $3.7 mil, now for sale for $13.7 mil. I’m sure the place was neglected and in bad shape at that price, and I’m sure the owners put a few million into renovations, but $13.7 mil is still too high. I’m not sure what it’s worth. $9 mil maybe?
“Now, with all the stimulus and unemployment money running out…”
The most devastating result of the pandemic? In my opinion it’s the CARES Act. This went further in creating an super bubble than subprime ever did.
Don’t forget climate crisis lockdowns.
I don’t remember exactly what the CARES Act covered, but IMO the moratoriums on evictions and car repos and student loans were extremely devastating because of all the moral hazard it created. Perhaps the best way to go about it would have been to supplement the unemployment system to pay all those laid-off workers the same salary and have no moratoriums. You’re effectively pretending the pandemic doesn’t exist, financially. Sure, there would be fraud, but you wouldn’t have deadbeats driving unpaid cars and thumbing their noses at LLs for years afterward.
Usually you’d have to travel to California to see such quality road construction laid down by Chinese infrastructure stimulus programs.
https://twitter.com/FedPostGlow1488/status/1689556797563219968
“Redfin real estate agent Alex has seen Bay Area agents reduce their typical commission from 2.5% of the transaction down to 2% or even 1.75%, depending on the home price.”
1.75% of $2 million is $35,000, not exactly chump change for one sales transaction. The question is whether there are enough sales happening to provide a livelihood.
Insights
Latest Insights
Chart: Two types of steepening yield curves
Jul 23, 2021
Our latest chart explains how different short-term and long-term interest rate changes could impact fixed-income investments.
– The yield curve shows the relationship between bond yields and maturity. A steepening yield curve is one where the difference between short-term and long-term rates increases. Whether the movement is at the short end or long end of the curve can provide insight into the market’s expectations for the economy and interest rate changes. Recalling the inverse relationship between price and yield, it could occur in two ways:
– Long-term rates rise by more than short-term rates. This is referred to as a bear steepener. This movement suggests investors are concerned about inflation and expect the Fed to hike interest rates in the future, which makes long-term bonds less attractive. When this happens, fixed-income investors usually reduce their demand for long-term bonds, causing prices to fall and yields to increase.
– Short-term rates fall by more than long-term rates. This is referred to as a bull steepener. This movement occurs as a result of an expectation or the actual cutting of the fed funds rate (a short-term rate) by the Federal Reserve to spur economic activity. Lower yields mean higher prices, which result in gains for bond investors.
– The yield curve is constantly changing, and it’s important for investors to be aware of how it could impact their portfolios and to remain proactive in order to respond to potential opportunities.
https://www.columbiathreadneedleus.com/blog/chart-two-types-of-steepening-yield-curves
US Treasurys
Bill Ackman says he’s shorting 30-year Treasury bills, and yields could hit 5.5% ‘soon’
Published Thu, Aug 3 2023 2:25 AM EDT
Updated Thu, Aug 3 2023 5:07 AM EDT
Clement Tan
Key Points
– Bill Ackman, the founder of Pershing Square Capital Management, said he is “short in size” on the 30-year U.S. Treasurys.
– The hedge fund manager argues his bearish call is a good standalone bet and a hedge against the impact of long-term rates on stocks.
– Ackman is expecting inflation rates to stay persistently around 3% and says 30-year Treasury yields could hit 5.5% “soon.”
…
https://www.cnbc.com/2023/08/03/billionaire-investor-bill-ackman-says-hes-shorting-30-year-treasury-bills.html
Buy Treasurys now. There may not be a better chance for a long while at these high rates, Wells Fargo says
Published Wed, Aug 16 2023 1:06 PM EDT
Updated Wed, Aug 16 2023 1:52 PM EDT
Michelle Fox
…
https://www.cnbc.com/2023/08/16/buy-treasuries-now-wells-fargo-says.html
Stocks Could Be Sandbagged by Rising Treasury Yields
By Teresa Rivas
Aug. 15, 2023 11:19 am ET
Treasury yields are rising again, yet another headwind for the stock market that’s struggled to make headway this month.
…
https://www.barrons.com/articles/stocks-rising-treasury-yields-31e7682c
Financial Times
Saudi Arabia cuts holdings of US Treasuries to 6-year low
Kingdom’s position in US government bonds falls by $3.2bn in June to $108bn
Residential and commercial buildings in the King Abdullah Financial District in Riyadh, Saudi Arabia
Saudi Arabia has been ploughing money into investments aimed at diversifying its economy beyond oil revenues
Samer Al-Atrush in Dubai and Mary McDougall in London yesterday
Saudi Arabia sold down its holdings of US Treasuries in June to the lowest in more than six years, as the kingdom directs more funds to foreign equity and domestic investments.
The kingdom held $108.1bn of Treasury securities in June, down $3.2bn from May and below the $119.7bn it held at the end of last year, according to data from the US Treasury department.
The reduction, the third consecutive monthly drop, comes as the world’s largest oil exporter faces lower economic growth this year due to a fall in oil prices from last year’s highs and a cut in its production.
…
A reader sent these in:
2 days. 3 headlines.
https://twitter.com/NorthmanTrader/status/1691133559824699395
The Typical Teacher Can Afford Just 12% of Homes for Sale Near Their School, Down From 30% in 2019
https://twitter.com/TaylorAMarr/status/1691430874607235072
It’s about to get wild in Senior Housing acquisition. Check the data coming out of Fannie Mae. 587 loans. $16.5 Billion.
39% of them don’t have Debt Service Coverage
57% of the loans are criticized
4.75% of them are 60 days past due
https://twitter.com/joepohlen/status/1691090459400003584
$ABNB down over 15% since the founder dumped a quarter of his stock. Wouldn’t be surprised to see another order print this month. The execs are pulling the parachute.
https://twitter.com/DonMiami3/status/1691539935453442048
Wow – big miss for NAHB Housing Market Index, driven lower by the recent spike in mortgage rates. Buyer traffic, present sales, and future sales all took a big step back.
Higher rates have cooled buyer traffic, leading more builders to resort to sales incentives (both price cuts and other incentives like rate buydowns). After dropping from 31% in March to 22% in July, the share of builders cutting prices ticked higher to 25% in August. Overall, the share of builders using sales incentives climbed to 55% in August from 52% but remained below the 62% reached in Dec ’22.
https://twitter.com/Econ_Parker/status/1691456451674533888
“WeWork, Opendoor, Sonder and Compass—now have a market value below the amount of private capital they raised, putting investors deeply underwater.”
https://twitter.com/rhunterh/status/1691432236837388288
“F normal people” – great dialogue from margin call about accountability
https://twitter.com/DonMiami3/status/1648381153374601217
Three months ago Agent: “I know it’s a little outside your budget but you can buy now and refinance when the fed lowers rates in a few months”
https://twitter.com/BarnabasDull/status/1691612736688726433
January 2006
https://twitter.com/GRomePow/status/1691492986994233345
Getting real for new homes in Phoenix. This from a developer right next to the TSMC chip plant.
https://twitter.com/crimsondose/status/1691599715694178460
Building: 60 Spears. A 11-story South Financial District office tower in SF that recently traded at $235 per square foot (pictured below)
Asking rents are 20 percent off their pre-pandemic peak, according to Colliers
Sellers bought the building in 2014 for $107 million (roughly $680 per square foot).
The property sold last week for $41 million – about 66% less than its most recently assessed property value of $121 million.
currently 70% vacant but is expected to be fully vacant by summer 2025.
The Buyer plans to expand the building’s square footage from 157k sqft to 170,000 sqft and transform it into a “Class-A trophy office building with exceptional design and hospitality-driven amenities.” They will create San Francisco’s first and only rooftop bar and restaurant located in the Financial District
are you a buyer for this type of asset at the current repricing? 👇🏼👇🏼
https://twitter.com/UntrendedYOC/status/1691461455399563265
U.S. 30-YEAR FIXED MORTGAGE RATE RISES TO 7.55%, HIGHEST SINCE 2000 Its SO over 💀
https://twitter.com/merlinscapital/status/1691574874257379570
FED’S KASHKARI: WE NEED TO AVOID A 1970S-TYPE SCENARIO WHERE THE FED STOPPED RAISING RATES TOO SOON.
Correct even if that means burning down the ponzi scheme
https://twitter.com/GRomePow/status/1691576550498689502
Imagine being a former Director at a Fortune 500 home builder and current CEO of an investment firm. You decide to go on a softball interview with Fox Business to…bring this subject up SEEMINGLY OUT OF THE BLUE. 🧵
https://twitter.com/GayBearRes/status/1690720632294543360
Everyone already knows REITs are f…..
https://twitter.com/Callum_Thomas/status/1691313901441548288
Investors are incredibly adept at identifying problems that are safely offshore. Wait ’til these China headlines move stateside. The ‘no landing’ thesis is about to go the way of the DoDo bird.
https://twitter.com/spomboy/status/1691535196796121089
I just love the smell of revisions in the morning!
https://twitter.com/INArteCarloDoss/status/1691804341177323970
Everytime you hear a politician tell you about building more homes or see them point at shiny new programs like “The Housing Accelerator Fund” understand this: Politicians don’t BUILD Houses, the numbers are getting worse: when they say they have solutions its a God Damn Lie
https://twitter.com/ronmortgageguy/status/1691798051386466527
Interest rates at 5% isn’t the problem. Interest rates being held near 0% for 10 years is the problem.
https://twitter.com/davidbelle_/status/1691567611786498241
Here’s Tiff Macklem’s “temporary” rise in Canadian CPI. Nowadays, above a certain level, there is never any accountability, anywhere, ever.
https://twitter.com/RudyHavenstein/status/1691862331930886538
“For our current framework to be effective and credible, we must walk the walk and actually allow inflation to climb modestly above 2 percent in order to demonstrate that we are serious about symmetry.” – @neelkashkari 2019
https://twitter.com/RudyHavenstein/status/1524516212708823040
“Fresh home listings are now rising faster than buyers can absorb them across the combined capital cities, indicating tougher competition for vendors and more options for buyers in spring, data from CoreLogic shows.”
https://twitter.com/AvidCommentator/status/1692038563268100554
“Wow – big miss for NAHB Housing Market Index, driven lower by the recent spike in mortgage rates. Buyer traffic, present sales, and future sales all took a big step back.”
There is more bear steepening ahead.
LIVE UPDATES
Stock Market Today: Dow Rises, Nasdaq Down as Key Treasury Yield Keeps Rising
Hawaiian Electric stock retreat continues; CVS shares drop
Last Updated:
Aug. 17, 2023 at 10:17 AM EDT
The bond blow-out isn’t over just yet.
Ten-year Treasury yields are up again after settling at their highest level since 2008, an ascent that is raising concern on Wall Street about the potential fallout for stocks. The 30-year yield is also on the rise.
Yields have been driven up mostly by the strength of the U.S. economy, and the prospect of inflation remaining stubbornly high. The latest reading: The Labor Department this morning reported 239,000 initial jobless claims last week, just below economists’ expectations.
…
In early trading:
Yields on longer-dated government bond climbed. Ten-year Treasury yields rose closer to 4.3%, after settling at 4.258% Wednesday. Shorter-term rates, in contrast, fell.
…
https://www.wsj.com/livecoverage/stock-market-today-dow-jones-08-17-2023
US stocks rise amid upbeat earnings while the 10-year Treasury yield hits the highest since 2008
Jason Ma
Aug 17, 2023, 6:38 AM PDT
Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on February 01, 2023 in New York City.
Michael M. Santiago/Getty Images
– US stocks rose Thursday even as the 10-year Treasury yield hits the highest since 2008.
– The benchmark rate reached 4.30% after hawkish comments from the Fed.
– Dow Jones Industrial Average components Walmart and Cisco beat earnings views.
…
https://markets.businessinsider.com/news/stocks/stock-market-news-today-dow-sp500-walmart-earnings-bond-yields-2023-8
Financial Times
Markets Briefing Markets
Treasury yields hit 16-year high over fears US interest rates will stay higher for longer
Global bond prices fall after Fed minutes warn of ‘upside risks to inflation’
Montage of the US Treasury building and the logo of the Department of the Treasury
The yield on the 10-year US Treasury rose to 4.3%, its highest level since 2007
Daria Mosolova in London and Hudson Lockett in Hong Kong 57 minutes ago
Yields on long-term US government debt hit their highest levels since 2007 on Thursday as investors grew more fearful that the Federal Reserve will keep interest rates higher for longer to fight inflation.
The technology-focused Nasdaq Composite was off 0.2 per cent, extending its losses following the release on Wednesday of the minutes from the Fed’s July meeting. The benchmark S&P 500 opened 0.1 per cent higher.
The yield on the 10-year US Treasury rose 0.04 percentage points to 4.3 per cent, its highest point in 16 years, after the central bank cited “significant upside risks to inflation, which could require further tightening of monetary policy”.
…
The Most Expensive Stocks in 50 Years: A Look at Equity Risk Premium
August 15, 2023 Barret Loux
According to The Economist, stocks are currently at their highest valuation in five decades. This is measured by the equity risk premium, which calculates the difference between the forward earnings yield and the 10-year treasury yield.
This valuation is causing investors to question why the stock market is still rising despite the bond market offering attractive yields. The answer is simple: stocks are performing well while bonds are experiencing significant losses.
Looking at drawdowns in the bond market, it is evident that long-duration bonds are in market crash territory. Even 7-10 year treasuries are still in a bear market. This is a new phenomenon for bond investors, as historically, stocks have always made a comeback after falling.
If interest rates continue to rise, the bond market may face an unprecedented string of losses. It is possible that 2023 could mark three consecutive years of losses in benchmark U.S. government bonds. This has not been seen since the 1950s.
…
https://www.claytoncountyregister.com/news2/why-arent-investors-selling-stocks-to-buy-bonds-a-wealth-of-common-sense/97972/
Financial Times
Today’s top headlines:
US mortgage rates hit 21-year high as Treasury yields peak
Jaren Kerr, Steff Chávez, Peter Wells, Maxine Kelly, Donato Paolo Mancini, Jonathan Wheatley, William Langley and Gary Jones
33 minutes ago
Steff Chávez in Chicago
US mortgage rates have soared to a 21-year high, driven by the Federal Reserve’s monetary tightening campaign, which has pushed up the cost of real estate borrowing.
The average 30-year fixed-rate mortgage has risen to 7.09 per cent, mortgage lender Freddie Mac said on Thursday, up from 6.96 per cent last week and the highest since the 7.13 per cent registered in April of 2002.
“The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb,” said Freddie Mac chief economist Sam Khater.
The yield on the 10-year Treasury reached 4.3 per cent on Thursday, its highest level in 16 years.
…
Yahoo
Yahoo Finance
Stocks slide for third straight day as yields continue climb: Stock market news today
Brett LoGiurato and Josh Schafer
Thu, August 17, 2023 at 1:05 PM PDT·1 min read
In this article:
US stocks on Thursday finished sharply lower for a third straight session as a glum August continued on Wall Street.
The blue-chip Dow Jones Industrial Average (^DJI) fell around 0.8%, while the S&P 500 (^GSPC) fell around the same amount. The tech-heavy Nasdaq Composite (^IXIC) lost more than 1% for the third consecutive day.
Meanwhile, the 10-year US Treasury yield settled just below 4.3%, staying near recent highs. Globally, yields have hit highs not seen since the depths of the Great Recession.
…
https://finance.yahoo.com/news/stocks-slide-for-third-straight-day-as-yields-continue-climb-stock-market-news-today-200402418.html
Stocks
Reasons to Still Believe In This New Bull Market
Contributor
Richard Saintvilus
Published
Aug 14, 2023 7:40AM EDT
Wall Street Bull statue in Manhattan
Credit: Carlo Allegri / Reuters –
The bear market is over. That’s without question. But investors aren’t feeling all warm and fuzzy about the new bull market. The past several weeks might have produced record-breaking heat in terms of climate temperature, but stocks have cooled off quite a bit with both the S&P 500 index and the Nasdaq Composite suffering losses in two straight weeks.
Market focus has centered on the economy’s trajectory and the Federal Reserve’s role in managing inflation to prevent a recession. The July Consumer Price Index (CPI) came in softer than anticipated, with a year-over-year increase of 3.2%, below the estimated 3.3%. However, the producer price index (PPI), which tracks wholesale prices for raw goods, exceeded expectations with a 0.3% month-over-month increase.
…
https://www.nasdaq.com/articles/reasons-to-still-believe-in-this-new-bull-market
If this is a bull market, I wonder what a crash looks like?
Annualized PPI inflation rate:
1.003 ^ 12 – 1 = 3.7%
“Three months ago Agent: “I know it’s a little outside your budget but you can buy now and refinance when the fed lowers rates in a few months”
My wife showed me an IG post (I don’t do IG) where a realtor/influencer was touting the same message. It was encouraging to see her get completely slaughtered in the comments. People are waking up.
“…when the fed lowers rates in a few months”
How come everyone but the Fed is on on this plan?
Financial Times
Markets Briefing Markets
Treasury yields near 16-year high as bond market shifts from low rate era
Global bond prices fall after Fed minutes warn of ‘upside risks to inflation’
Montage of the US Treasury building and the logo of the Department of the Treasury
Until this month, yields on 10-year notes had struggled to stay above 4%
Jennifer Hughes in New York, Daria Mosolova and Mary McDougall in London and Hudson Lockett in Hong Kong an hour ago
Yields on long-term US government debt were on Thursday close to hitting their highest level since 2007 as investors increased bets that the Federal Reserve would successfully deliver a soft landing — avoiding a recession while keeping a lid on inflation.
The sell-off in bonds — yields rise as prices fall — was mirrored in European markets, where UK 10-year gilt yields hit their highest level since 2008 and Germany’s equivalent hit levels not seen since 2011.
Central banks on both sides of the Atlantic have maintained a hawkish stance with higher interest rates even as inflation pressures have eased, leading investors to worry that the Fed and others are unlikely to let rates fall any time soon.
…
to be honest, I have absolutely no idea how this higher for longer can be sustainable for longer than a few months. the banks are insolvent the way it is. how much longer can they last. and if they all go under, then what? as absurd as it sounds, if interests stay higher for longer, then all 3% mortgages will need to be adjusted to current rates. and I don’t need to hear about how it’s not constitutional, and about contract law. this is live or die situation. they’ll have to come up with something. either the rates are high and the banking sector collapses, or the rates go down and we all collapse through hyperinflation. banks take huge loses on all those 30 year mortgages at 3%. somebody needs to subsidize that difference.
how this higher for longer can be sustainable
Past your credit limit. Game over. Nothing personal.
banks take huge loses on all those 30 year mortgages at 3%
I was under the impression that Fanny Mae and Freddie mac owned all the paper and the banks only service the loans.
Statements like that need to be treated as individual financial advice and the real estate mafiosi held accountable accordingly.
“The Typical Teacher Can Afford Just 12% of Homes for Sale Near Their School, Down From 30% in 2019”
I’d like to know how they define affordable, because I think that number is understated. Got to be lower. Where I live that number would be closer to 0% can afford a starter home at 500k.
A remember that affordable has nothing to do with whether they can qualify or not. We know how that works.
Teaching hasn’t been a stand-alone career for upwards of 30 years now. You usually have to pair a young pretty woman teacher with a well-paid hubby to afford a home.
Green hair, nose ring, morbidly obese, tattoos all over, mentally unstable
Good luck finding that well paid hubby
Teachers in many areas make minimum student loan payments for ten years, and then…”Abracadabra,” the public service obligation agreement retires the loan balance.
A couple things… first, the SF ‘office tower’ in question is only 10 floors. It resembles more of an office cube. Calling it a tower is like calling SF a world class city.
Second, they are reporting their official homeless population to be 38k. According to recent census: San Francisco has a 2023 population of 715,717. San Francisco is currently declining at a rate of -6.3% annually and its population has decreased by -17.74% since the most recent census, which recorded a population of 870,014 in 2020. Which means if 1% of pop is 7157 then they are over 5% homeless. If we add this to the pop drop we get around 23% of the 2020 population has left the housing market in SF. I’m sure it’s fine, housing only goes up!
“Fresh home listings are now rising faster than buyers can absorb them across the combined capital cities, indicating tougher competition for vendors and more options for buyers in spring, data from CoreLogic shows.”
Rising listings and mortgage rates is a good combination for affordability improvements.
Former British Olympic swimmer Helen Smart has died “suddenly,” leaving her family devastated over the sudden loss.
Smart, 43, who competed at the Sydney Olympics, was discovered unresponsive by her four-year-old daughter Heidi when the little girl tried to crawl into bed with her parents at 4am during a family trip in the UK.
“Daddy, I can’t wake mummy up,” she reportedly told her father Craig Smart, who then discovered his wife lying next to him dead.
https://www.stuff.co.nz/sport/women-in-sport/300952513/daddy-i-cant-wake-mummy-up-british-olympian-helen-smart-dies-suddenly
100% safe and effective.
“I can’t wake mummy up”
Where does a four year old child come up with such repulsive misinformation?
Pfizer CEO Albert Bourla lovingly fondles some loose change in his pocket upon reading this story…
“We’re all in this together”
Of course her family is “stunned” and have absolutely no idea why she died of suddenly. The British authorities (she died in London) will of course be of no help whatsoever and will say that it’s a mystery.
You can’t fix stupid.
Being the school headmaster, she signed off on the clot shot mandate for all teachers and students. Karma
‘Now, with all the stimulus and unemployment money running out, we’re starting to see the bubble pop and Ponzi schemes and pyramid schemes failing.’
It takes time!
https://m.economictimes.com/markets/cryptocurrency/crypto-prices-today-live-news-bitcoin-dogecoin-ethereum-shibha-inu-cryptocurrency-latest-updates-17-august-2023/articleshow/102795726.cms
Technology
Binance files for protective order against SEC
Reuters
August 15, 2023 10:13 AM PDT
Updated 2 days ago
FILE PHOTO: Illustration shows Binance logo is seen in this illustration taken March 31, 2023. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights
Aug 15 (Reuters) – Crypto exchange Binance late on Monday filed for a protective court order against the U.S. Securities and Exchange Commission, saying the regulator’s requests for information were “over broad” and “unduly burdensome.”
BAM Trading, Binance U.S.’ operating company, and BAM Management in a court filing in the US District Court of Columbia said the group had already provided sufficient information to the regulator.
The protective order seeks to limit the SEC, among other things, to four depositions from BAM employees and to drop the deposition of BAM’s chief executive and of its chief financial officer, without naming anyone.
Binance did not immediately respond to a request for comment, while the SEC declined to comment.
U.S. regulators sued Binance and CEO Changpeng Zhao in June for allegedly operating a “web of deception,” listing 13 charges including claims the company artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S. customers from its platform and misled investors about its market surveillance controls.
…
https://www.reuters.com/technology/binance-files-protective-order-against-sec-court-filing-2023-08-15/
Agreed. 2 trillion takes time.
Financial Times
2 hours ago
Bitcoin falls nearly 8% as cryptocurrency slide continues
Mark Vandevelde in New York
The gyrating price of bitcoin follows on the heels of a tough few months for digital currency enthusiasts
© Reuters
Bitcoin fell by nearly 8 per cent during an hour of frenzied trading on Thursday afternoon in the US, extending a day of losses that reversed most of the cryptocurrency’s gains since June.
The price of a token briefly fell to as low as $25,409, according to data from CoinMarketCap, before staging a partial recovery.
The whipsaw price action left the digital asset changing hands for 15 per cent less than the $31,814 high registered in July, echoing recent declines in stocks, bonds and other financial assets.
…
Blackstone REIT Appoints New President as Redemption Requests Continue To Exceed Limits
Rob Harper Is a Former Head of Europe for Blackstone’s Real Estate Debt Strategies Business
Blackstone offices in New York City. (Photo by Erik McGregor/LightRocket via Getty Images)
By Paul Norman
CoStar News
August 16, 2023 | 1:58 AM
BREIT, private equity giant Blackstone’s $68 billion real estate investment trust, has appointed Rob Harper as president while the incumbent AJ Agarwal takes a nine-month sabbatical.
The Blackstone REIT said in a filing on Tuesday that Agarwal will be on an educational sabbatical at Stanford University starting in mid-September and will remain an “observer of the board” throughout that time. He stepped down from his role as president on Tuesday.
…
https://www.costar.com/article/197566210/blackstone-reit-appoints-new-president-as-redemption-requests-continue-to-exceed-limits
Note to self:
Avoid investments where the fund managers can block redemption requests when prices are CR8Ring.
Any PE investment where you can’t sell and GTFO when things go bad
“And it said as the largest owner of student housing in the United States, it is focused on an “all-weather sector where accelerating supply and demand fundamentals are driving outsized market rent growth” and its focus on last-mile logistics is leading to strong performance.”
Living off the fat side of the student debt crisis. Isn’t that special?
The Supreme Court dealt a crushing blow to millions of Americans earlier this summer when it rejected President Joe Biden’s federal student loan forgiveness plan.
The pressure, however, for lawmakers to keep finding solutions to remedy the now $1.77 trillion debt burden may only just be beginning.
Nearly 1 in 3 Americans (or 31 percent) say the government hasn’t done enough to provide financial assistance to borrowers, including policies such as deferment or forgiveness. That’s higher than the 17 percent who say the government has done too much and 12 percent who say lawmakers have already done enough, according to a new Bankrate poll.
But for those with student loan debt, the share of Americans saying lawmakers should do more jumps to nearly half (or 48 percent). The same percentage of current borrowers also say student loan debt has become a national crisis, compared with about a third (or 32 percent) of Americans overall.
…
https://www.bankrate.com/loans/student-loans/borrowers-want-more-government-assistance/
It almost seems like Blackstone’s student loan debt gravy train is about to dry up.
And of course the obvious, simple solution is never mentioned. Namely, just make student loans dischargeable in bankruptcy on the same terms as other debt.
“Namely, just make student loans dischargeable in bankruptcy on the same terms as other debt.”
Only for democrats; a crisis must not be wasted.
That would set a precedent of being able to discharge any debt to the government via BK. Not going to happen.
It’s how it used to be, IC. Please do a little reading on the subject.
“Prior to 1976, student loans were dischargeable the same as any other unsecured debts. From 1976 to 2005, the dischargeability of student loans was restricted to the point where substantially all student loans are now excluded from discharge absent a finding of undue hardship.”
Link:
https://www.abi.org/feed-item/dischargeability-of-student-loans-in-bankruptcy
Discharging in BK is just a license for schools to jack up prices, and for kids to become professional students. Hell, even BK isn’t what it used to be. Weren’t people buying houses within 3 years of declaring BK? Borrow money, pretend to go to school, declare BK, live in mom’s basement playing games for 3-5 years, rinse and repeat. Just to avoid meaningful work.
By the way, the first college loans were made in 1958: “High school students who showed promise in mathematics, science, engineering, or foreign language, or those who wanted to become teachers, were offered grants, scholarships, and student loans.”
Dang, I wouldn’t mind going back to that. https://lendedu.com/blog/history-of-student-loans
“Dang, I wouldn’t mind going back to that.”
That was a great find, oxide! Thanks for the URL.
That was before 0bama had the feds take over the student loan market
It is my understanding that in 2026 CAFE number is going to be 40 mpg, up from 28 mpg today, which is a 40%+ increase.
This has me wondering, how will automakers meet this challenge? I don’t think further reducing engine sizes will cut it.
I think some “gas guzzling” product lines are going to be retired. Currently, the only ICE cars that can meet the 2026 standards are hybrids. Will automakers be able to make and sell enough of them to offset other models that miss the bar? Or will there be a car shortage?
“how will automakers meet this challenge?”
They can’t, and they won’t.
My Subaru gets 35 mpg highway. When I replace it I want two vehicles, maybe a used Toyota pickup and something small with better mileage. I’ve owned Camry’s, an Accord, a Civic before, the reliability of those 1980’s model Camry’s was some of the best cars I’ve owned.
Plus, isn’ t the CAFE number the “mixed” mpg rating? I have two cars that get low 30’s on the highway. and mid twenties for mixed. One is a four cylinder and the other a V6. I don’t see how those models could be sold in 2026. Even if the 4 banger’s engine were reduced from 2 to 1 liter, I don’t think that would be enough.
1980’s model Camry’s was some of the best cars I’ve owned
They were truly bullet proof.
Anyway, I’m thinking this is going to push up demand for used cars going forward, especially if there is a new car shortage.
And the fun doesn’t stop in 2026. By 2032 the CAFE # is going to be a whopping 58 mpg. Maybe hybrid micro hatches will be able to hit that, otherwise the only choice will be EV’s.
This has me wondering, how will automakers meet this challenge? I don’t think further reducing engine sizes will cut it.
The car companies thought that EVs and hybrids were going to be the vast majority of their sales. And they liked that idea because those vehicles are much more expensive than plain old internal combustion vehicles. The problem is that no one is buying EVs or hybrids at nearly the rate needed to stay in business OR meet the upcoming totally ridiculous CAFE standards.
Ford just lost a billion dollars on their EV division. Toyota has already said that the switch to EV is unrealistic. Nobody is going to buy vehicles that cost too much and can’t be used like ordinary internal combustion powered vehicles. Not everybody has the money to have one or two spare cars, one being a stupid EV.
You can’t force people to buy something that they don’t want and can’t afford. Which is what the plan was all along. The environuts don’t people to have ANY car or truck. So they think that everyone in America will just take this without any protests. Okay, you’re going to tell tens of millions of people that they can’t commute to work anymore. And that you can’t visit friends and relatives in the next state.
Let’s just wait and see how long the CAFE mandates survive and what Californians will do when the government says that they can’t drive their ICV anymore. Even Democrats can’t survive without a car in America.
Do rate cuts normally lead to higher stock prices and increased fund flows into stocks?
Financial Times
Chinese business & finance
Global investors dump Chinese securities as state support hopes fade
Reversal of flows reflects crumbling confidence in promises made by party leaders
A screen showing stock exchange data in Shanghai, China. Pessimism about Chinese equities is becoming entrenched
Hudson Lockett in Hong Kong 5 hours ago
Foreign investors have dumped Chinese stocks and bonds after losing confidence in Beijing’s promises of more help to shore up the country’s wobbling economy.
Financial Times calculations based on data from Hong Kong’s Stock Connect trading scheme show that investors have almost completely reversed Rmb54bn ($7.4bn) in net purchases of Chinese equities that followed a July 24 pledge from the politburo of top Communist party leaders to increase policy support.
Meanwhile, bondholdings of foreign institutional investors fell by Rmb37bn in July to Rmb3.24tn, according to figures released by China’s foreign exchange regulator on Wednesday.
Portfolio managers and analysts said selling, which appeared to slow following the politburo meeting, had gained pace in August and was likely to accelerate in the wake of a surprise cut to a benchmark interest rate this week.
…
China’s Real Estate Crisis Echoes Lehman Moment; Country Garden Warns Of ‘Major Uncertainties’ As Bond Redemption Looms
by Piero Cingari, Benzinga Staff Writer
August 16, 2023 9:47 AM | 3 min read
Zinger Key Points
– China’s financial landscape faces a Lehman-like moment as liquidity crises among real estate developers spillover to the system.
– Protests erupt as shadow banking giant Zhongrong misses payments, raising concerns about the health of China’s $3 trillion shadow banking.
…
https://www.benzinga.com/markets/asia/23/08/33875989/chinas-real-estate-crisis-echoes-lehman-moment-country-garden-warns-of-major-uncertainties-as-bond-r
Financial Times
Opinion Free Lunch
Debt overhang economics with Chinese characteristics
Beijing should avoid the mistakes the west makes again and again — but it probably won’t
Martin Sandbu
Cranes in Shanghai. A huge increase in debt fuelled an unprecedented economic share of construction during China’s pre-Covid decade
Martin Sandbu 6 hours ago
…it seems to me that so much of the current troubles in the Chinese economy can be explained by the debt overhang, that there is much to learn by focusing on that even while putting other issues momentarily aside. For readers in advanced economies in particular — especially those who followed those countries’ debt-driven crises in past decades — the exercise that the flurry of China-pessimistic readings should prompt is this: ask how much of China’s current predicament we can make sense of by comparing it with the US in 2008, the eurozone in 2010, or for that matter Japan in the 1990s?
I think quite a lot. A huge increase in debt fuelled a globally unprecedented economic share of construction during China’s pre-Covid decade, as I wrote about two years ago (see chart). As balance sheets expand — with more people both owning and owing ever more property-related debt, the risk that the value of the assets is no longer thought to cover the value of the liabilities increases. And like in those other places, at some point it becomes clear not all investments were worthwhile, the economy as a whole, and many people and business in particular, are in fact less wealthy than it seemed, and behaviour changes from making sure not to miss out on ways of getting rich to trying to avoid being the one holding the bag for losses.
…
Another Colorado Sun gem. A clip from an article bemoaning that the last supermarket in southeastern Colorado Springs closed. It was a King Soopers and it closed because asbestos was found in the store. Kroger has promised to reopen it after the asbestos is removed.
Here is the clip.
And crime. These people really expect a money losing business to remain open. And if it doesn’t, it’s apartheid. And it also doesn’t cross their minds that the King’s store closing because of government regulations, that it’s hand was forced.
Another clip.
Some people have an interesting definition of “investing”.
Another Colorado Sun gem. A clip from an article bemoaning that the last supermarket in southeastern Colorado Springs closed. It was a King Soopers and it closed because asbestos was found in the store. Kroger has promised to reopen it after the asbestos is removed.
Here is the clip.
And crime. These people really expect a money losing business to remain open. And if it doesn’t, it’s apartheid. And it also doesn’t cross their minds that the King’s store closing because of government regulations, that it’s hand was forced.
Another clip.
Some people have an interesting definition of “investing”.
Another Colorado Sun gem. A clip from an article bemoaning that the last supermarket in southeastern Colorado Springs closed. It was a King Soopers and it closed because asbestos was found in the store. Kroger has promised to reopen it after the asbestos is removed.
Here is the clip.
And crime. These people really expect a money losing business to remain open. And if it doesn’t, it’s apartheid. And it also doesn’t cross their minds that the King’s store closing because of government regulations, that it’s hand was forced.
Another clip.
Some people have an interesting definition of “investing”.
OK, this is weird, I posted these this morning and they didn’t show up until now. I thought they we being censored.
A Colorado Sun gem on “food deserts”
https://coloradosun.com/2023/08/17/king-soopers-closure-colorado-springs/
Here is a little gem from the article:
So, I wonder how long until malgoverned Dem controlled cities start requiring grocers to keep open money losing stores in order to operate their other shops in the city? Of course, that could backfire as retailers simply close everything and choose to only operate in the suburbs, but Dems aren’t known for thinking out the consequences to their actions.
Going a half mile more for grocery shopping now is an emergency! I could care less about this situation in Colorado Springs. I drive 6 miles to my local supermarket. Everybody expects capitalism to give them everything for free.
They ask why businesses won’t “invest” in their communities. Gee, maybe because it’s a money losing proposition and is thus pointless.
And then when they do invest, that’s evil gentrifying and whitening the neighborhood. Social justice, it’s an interesting game. The only winning move is not to play.
Here is a little gem from the article:
So, I wonder how long until malgoverned Dem controlled cities start requiring grocers to keep open money losing stores in order to operate their other shops in the city? Of course, that could backfire as retailers simply close everything and choose to only operate in the suburbs, but Dems aren’t known for thinking out the consequences to their actions.
Here is a little gem from the article:
This section in the article is of special interest:
I would post a clip here, but for some reason I can’t.
Denninger lays out the bubble in a way I hadn’t considered.
https://market-ticker.org/akcs-www?post=249517
Short version:
– Minor respiratory illness allowed/forced remote work.
– Smart boys in blue cities arbitraged by taking their outsized salaries (predicated on high cost of living) and moving to red states, thus driving prices to the moon and hosing the locals.
– Employers have huge leases, and blue cities go into doom loop without property and income taxes and retail traffic. So employers say, get back to the office or you’re fired.
– Smart boys already spent their windfalls from selling blue city real estate. Mortgage rates have doubled. They can’t even sell their red state real estate for nearly what they paid, let alone get back into blue city real estate. They’re hosed, and so are the banks holding their mortgages.
– His estimate: three times worse than 2008.
Nice! Worth saying it twice…
I’m from Texas and I hope they all GTFO. Nice houses that used to cost $175K are now $500K. All the new subdivisions are $700K to $1MM.
Denninger lays out the bubble in a way I hadn’t considered.
https://market-ticker.org/akcs-www?post=249517
Short version:
– Minor respiratory illness allowed/forced remote work.
– Smart boys in blue cities arbitraged by taking their outsized salaries (predicated on high cost of living) and moving to red states, thus driving prices to the moon and hosing the locals.
– Employers have huge leases, and blue cities go into doom loop without property and income taxes and retail traffic. So employers say, get back to the office or you’re fired.
– Smart boys already spent their windfalls from selling blue city real estate. Mortgage rates have doubled. They can’t even sell their red state real estate for nearly what they paid, let alone get back into blue city real estate. They’re hosed, and so are the banks holding their mortgages.
– His estimate: three times worse than 2008.
Sorry if multiple post; network is acting up.
Darwin ????????
https://dnyuz.com/2023/08/17/driverless-car-gets-stuck-in-wet-concrete-in-san-francisco/
– The Babylon Bee – “America’s newspaper of record.”
– Spot on, IMHO.
– I am the banana republican. My fellow Americans are too. They just don’t know it yet. 😉
https://babylonbee.com/news/white-house-assures-americans-were-not-a-banana-republic-were-a-democratic-banana-republic
White House Assures Americans We’re Not A Banana Republic, We’re A Democratic Banana Republic
POLITICS
·
Aug 16, 2023 · BabylonBee.com
“WASHINGTON, D.C. — In response to public outcry that America has descended to the level of a banana republic, the Biden administration assured the American people that the United States is a democratic banana republic.”
“”These wild statements need to stop,” said White House Press Secretary Karine Jean-Pierre. “Any assertion that this country has turned into a banana republic is completely off base. We are a democratic banana republic, in which the people have the illusion of being able to elect leaders who completely wreck everything. It’s an important distinction.””
“The Biden administration released a forceful statement declaring that their prosecution of political opponents was being performed in a very democratic fashion. “Yes, we jail political opponents just like in a banana republic – but the prosecutors are appointed by elected officials. It’s all very democratic,” explained the White House. “Our economic, political, military and moral decline has all been overseen by representatives chosen by a cabal of wealthy elites – but elites who also won elections that citizens could participate in. Those are the facts our critics do not want to admit.””
“President Biden has reportedly brushed off all mention of “banana republic” criticisms. “People keep saying we’re a ‘banana republic,'” he said when questioned by the media. “I’ve never agreed with that. If we are a banana republic, where are the banana trees? Pure malarkey. A taco republic, or maybe a hamburger republic, you could talk me into.””
“At publishing time, the White House continued to deny allegations that the country has fallen to the level of a banana republic and threatened to jail anyone who claimed otherwise.”
“threatened to jail anyone who claimed otherwise”
That part is unfortunately true.
What will happen if more than 1000 people died in Maui?
https://www.thegatewaypundit.com/2023/08/exclusive-is-government-hawaii-lying-about-missing-dead/
The Governor of Hawaii said that more than 1,000 people are still missing. Already the MSM is focusing on climate change and other “natural” causes. They are even defending the actions of the emergency operations chief of Maui for NOT activating the emergency sirens.
This human made disaster may well have more lives lost than the the battleship Arizona had on December 7th. Already the MSM is attempting to minimize the incompetence of Hawaii’s Democrat politicians who literally run the entire state.
if more than 1000 people died
From what I’m hearing, a lot of them are children.
If that list of missing persons doesn’t start decreasing very soon, then there’s a better chance that they’re still in the town–incinerated. Perhaps the authorities who are directing the relief efforts are just as inept as the rest of the Maui government offices. It’s not as if a person who just got burned out of their home could drive to Las Vegas or San Diego. It’s a tiny freakin island!
“It’s not as if a person who just got burned out of their home could drive to Las Vegas or San Diego. It’s a tiny freakin island!”
If these islanders bought home or renter’s insurance then they could find a hotel room among the many on the islands, but if the money bought suds instead then sorry.
I just saw a man bellyaching on the national news, “Where’s the help, who is going to help us?” LOL Sorry cabana boy, time to help yourself and family.
then there’s a better chance that they’re still in the town–incinerated
I’m also hearing the need to identify remains by dental records. One Maui resident compared the aftermath to 9/11; she lived Downtown at the time. NYC had to set up a makeshift morgue in a Brooks Brother store to process all the remains from that day.
Where are dental records stored? Are they stored offsite or even online? If they are stored at the dentist’s office then perhaps they too have been lost?
And you begin to see why these things can take a long time. Brings to mind the missing persons posters following 9/11.
I suppose that insurance companies might keep them; but not everyone has dental insurance.
Where are dental records stored? Are they stored offsite or even online? If they are stored at the dentist’s office then perhaps they too have been lost?
There’s a good chance that the local dental offices also were destroyed. But even if they weren’t, dental records aren’t going to be of much use initially. Why? Say the coroner is holding a skull, he has absolutely no idea who it belongs to. Going to thousands of dental records and looking for a match would take forever. Usually when they ID a person from a skeleton, they already have a good idea who the person is. They know which dental records to obtain and use.
In this case, there could be hundreds if not a thousand of burnt remains found in homes, buildings and cars. Where are they even going to begin? I read that the local police had forced people to evacuate along one road that got blocked and that people died in their cars trying to flee. If this did in fact happen, then this is going to be a bigger disaster than the Titanic!
The fact that they are being so slow with releasing fatality data and the number of still missing people tells me that the situation is overwhelming. Even if it turns out to be 300-400 people, this is an unprecedented disaster. And the President and FEMA and nobody has even gone on TV yet about it.
Maui County has its own medical examiner and coroner department, but it probably only has a couple of doctors. The deaths of people who die if fires or “unattended” by a physician must be investigated by the coroner and police. Every single victim will require an investigation and report for obvious (legal) reasons.
If there are hundreds or a thousand set of remains under all of those burned out structures, there is no way that the local coroner’s office or even the State of Hawaii’s resources will be able to handle this volume. A final death certificate can’t be issued until the underlying cause of death is determined so there’s no way that we’re going to know how many perished in this fire for some time.
The MSM and Democrats probably prefer this situation since they hope that the tragedy will be forgotten with time. This will also give the environmentalist lobby more time to gin up the public to the dangers of Globull Warming. This could turn out to be much bigger than a Hurricane Katrina moment for Biden. It could end up being his “December 7th” moment.
What would have happened if FDR ignored the December 7th attack on Pearl Harbor. Or if he showed up a week later after not mentioning the attack previously. There’s no good reason to have over 1,000 missing persons at this time. This isn’t Los Angeles we’re talking about. It’s a small town on an ISLAND! What in the world is going on there. Forget civil penalties and lawsuits, this thing is criminal in the biggest way possible.
“…this thing is criminal in the biggest way possible…”
From a large Los Angeles news radio station who has reporters on the ground in Maui and have been frustrated by lack of site access and straight information from government entities:
Apparently, two electric providers (Maui Electric and 1 other) are very large donors to Hawaii Governor Josh Green.
Unconfirmed, but you know the old adage “follow the money”..
Just sayin’
If leftist politicians are willing to massacre citizens to make money then the time to take off the gloves is now.
West Maui Land Co., a major water company in Maui, alleged in a letter that five hours passed between its request to divert water and its receipt of approval to do so from Hawaii’s Department of Land and Natural Resources (DNLR).
The company was instructed to contact a downstream farmer to ask about the impacts of a diversion on his operation, and by the time it had received approval it could no longer access the siphon that would have made the diversion work and enabled replenishment of water supply for firefighters.
https://wattsupwiththat.com/2023/08/17/agency-headed-by-indigenous-knowledge-advocate-delayed-water-supplies-that-would-have-fought-hawaii-fires-letter-says/
The water company couldn’t immediately divert water to fight the fires because officials were worried about a single farmer’s taro patch. You can’t make this crap up–and this is just the beginning!
“…this is just the beginning!…”
The tone at Maui news conferences is tense.
According to reports, some news reporters are being asked to take ‘Island sensitivity training’ courses in the name of Aloha spirit before being allowed reporting access. (Not making this up!)
You know when public officials start sandbagging, diverting, deflecting or ignoring public questions, they are hiding something.
Going to be interesting to see where this all goes.
Everything “woke” turns to sh!t.
My own speculative guess is that at the end of the day all this ties into the incredible over-building on Maui and neglect of proper civil engineering with respect to infrastructure (ie water supply).
Electric, water and other utilities all benefit from overbuilding.
And the big money flows upwards to these guys, particularly to those in public office.
We shall see.
“What in the world is going on there.”
These are Pacific Islanders, sleeping the day away under banyan trees, the island version of an Indian reservation. They don’t listen to white guys unless they’re doling-out 12-packs of beer or government checks.
One agent he knows will hire a taco truck for his open houses to attract buyers to homes over $2 million.
They’s some pricey tah-cos…
People who buy $2,000,000 houses don’t eat food from taco trucks. Now if the realtor had a buffet setup with Beluga Caviar, then he might bring in some prospective buyers.
Affordability Causing Problems In Vaughan, Richmond Hill & Markham Real Estate – Aug 9
Team Sessa Real Estate
Aug 17, 2023
Vaughan Home Prices, Richmond Hill Home Prices & Markham Home Prices for the week of Aug 3 – Aug 9, 2023.
https://www.youtube.com/watch?v=MdRXWAKeKao
17:17.
‘They were the people that introduced me to real estate,’ he said. ‘I wasn’t expecting the person I learned the thing from to do that to me’
It can be a seedy business Ben. What was ‘this thing’ exactly?
Working and creating something of value is for the little people.
The classic sign of a grifter.
As the old saying goes, don’t waste your time trying to con an honest man.
‘even those in the upper echelons are looking for a deal…We’re getting showings on properties and nobody wants to pay’
That’s the spirit!
‘The sellers purchased the unit for $2.7-million in 2018. When it came time to sell this year, Mr. Kutyan advised the sellers to list the unit for less than they paid for it. The owners set an asking price of $2.495-million but, after three weeks, the unit hadn’t sold so Mr. Kutyan reduced the price to $2.349-million. Two days after the price cut, the unit sold for $2.315-million’
A very nice Thursday a$$ pounding there Andre, thank you. So all of the minor respiratory illness is gone this Toronto airboxe.
$400K + commission + closing costs
That left a hole
‘I think property prices will very possibly drop next year. The liquidity and preservation value of real estate are much worse than before…All of my friends who bought an apartment over the past couple of years have regretted the decision’
Great job Yu, keep up the good work!
Oh dear….
https://twitter.com/unusual_whales/status/1692288429709771002
‘has to repay 18,000 yuan each month for three apartments bought in the late 2010s when the property was still booming and buyers were betting on persistent price hikes. Adding to her stress, she has not yet been paid for freelance work done this year. ‘The mortgage is now a heavy burden for me,’ said the 34-year-old with a two-month-old, as current market prices have fallen below what she paid’
Now Li, you are a playa! Tree airboxes, in China? Yer set fer life!
‘the late 2010s when the property was still booming and buyers were betting on persistent price hikes’
I guess the verdict is in Dan.
The Band – The Last Waltz – The Weight feat. the staples singers
Jun 5, 2009
a great song from the rockumentary from scorsese
https://www.youtube.com/watch?v=TCSzL5-SPHM
4:34.
How the mighty are fallen.
https://www.reuters.com/legal/china-evergrande-files-chapter-15-bankruptcy-us-court-filing-2023-08-17/
Same thing happened to Long Duk Dong.
Sixteen Candles – “Long Duk Dong’s Greatest Hits” – compilation
https://youtu.be/9qwBuBCTKTU
You’ll live in a $100K tiny house, and you’ll like it.
https://twitter.com/WallStreetSilv/status/1692310045122293873
Those skinny two-floor houses are actually pretty cute. Not much different from the tiny rowhouses you see in old cities such as Frederick, MD, or even on Capitol Hill.
Driver trails burglars breaking into cars near Fisherman’s Wharf
KTVU FOX 2 San Francisco
Aug 17, 2023
The Bay Area is no stranger to auto burglaries and smash-and-grab style thefts, commonly referred to as “bipping” by locals.
A witness captured a brazen auto burglary spree that stretched over several blocks near Fisherman’s Wharf in San Francisco on Wednesday.
https://www.youtube.com/watch?v=ofKALUloNLY
1:29.
Fulton County Fraud Stinks Up The Republic
Bowne Report | Infowars.com
August 17th 2023, 4:21 pm
Will anyone be held accountable for weaponizing the American judicial system?
A courageous Republican Georgia state senator has called for an emergency special session to review a proposal to impeach Fulton County District Attorney Fani Willis on the grounds she’s abusing her position of power by pursuing the bunk indictment of former President Donald Trump.
Georgia State Sen. Colton Moore, representing District 53, announced his move to convene a special session Thursday, saying “an emergency exists” requiring state lawmakers to review Willis’ actions.
https://www.infowars.com/posts/fulton-county-fraud-stinks-up-the-republic/
Traffic — Shouldn’t Have Took More Than You Gave:
https://www.youtube.com/watch?v=JweZ_wzmifw
Did you miss the boat on moving your money from high-risk stocks to risk-free bonds?
Load up on bonds for their juicy yields before the stock-market rally loses steam, says Morgan Stanley
George Glover
Aug 17, 2023, 3:36 AM PDT
NYSE traders
It’s time to consider loading up on US Treasurys, according to Morgan Stanley. Spencer Platt/Getty Images
– It might be time to pile into US Treasurys, according to Morgan Stanley Wealth Management.
– Bond yields have jumped in recent weeks, while the equity-market rally may be losing steam.
– “Investors should consider hedges for their high-priced stocks,” CIO Lisa Shalett said.
It might be time to ditch soaring stocks and pivot to US Treasurys, according to Morgan Stanley Wealth Management’s CIO.
Lisa Shalett said in a note to clients Monday that spiking yields had made bonds much more attractive in recent weeks, signaling that fixed-income assets could be a suitable hedge if this year’s breathless stock-market rally starts to lose steam.
“Investors may want to deploy incoming cash to Treasuries with 4.5% to 5.5% coupons and decent capital gains potential in scenarios where the immaculate soft landing shows signs of vulnerability,” she wrote.
That’s a reference to the dream scenario whereby the Federal Reserve manages to bring inflation down to its 2% target without plunging the US economy into a recession.
Stocks have thrashed bonds this year. The S&P 500 has soared 15% due to cooling inflation and the surge in interest in AI, while both 2-year and 10-year Treasury prices have fallen.
However, bond yields have risen above 4% in recent weeks, while the equity rally has petered out with investors fretting that the Fed might hold interest rates at a higher level for longer as part of its effort to tame inflation.
When Treasury yields rise, they become more attractive to investors relative to stocks because they offer similar returns at a lower risk level.
Investors should buy bonds in case a “Goldilocks” scenario – where both growth and inflation hover at a level that’s “just right” for the economy – doesn’t play out, Shalett said.
“Better-than-feared economic developments have apparently delivered an immaculate soft-landing, emboldening equity investors to price out the potential for further profits recession or an eventual economic recession,” she said.
“While that optimistic scenario could yet play out, paying peak multiples on reaccelerating earnings and assuming Fed rate cuts strike us as counting on a Goldilocks scenario despite unsure odds,” Shalett added. “We believe investors should consider hedges for their high-priced stocks.”
…
https://markets.businessinsider.com/news/bonds/stock-market-crash-bond-yields-treasurys-inflation-investing-morgan-stanley-2023-8
Stocks slide for third straight day as yields continue climb: Stock market news today
Brett LoGiurato and Josh Schafer
Thu, August 17, 2023 at 1:05 PM PDT·1 min read
In this article:
US stocks on Thursday finished sharply lower for a third straight session as a glum August continued on Wall Street.
The blue-chip Dow Jones Industrial Average fell around 0.8%, while the S&P 500 fell around the same amount. The tech-heavy Nasdaq Composite lost more than 1% for the third consecutive day.
Meanwhile, the 10-year US Treasury yield settled just below 4.3%, staying near recent highs. Globally, yields have hit highs not seen since the depths of the Great Recession.
…
https://finance.yahoo.com/news/stocks-slide-for-third-straight-day-as-yields-continue-climb-stock-market-news-today-200402418.html
Financial Times
2 hours ago
Asian stocks down on possibility of further US rate rises
Gloria Li in Hong Kong
Asian equities edged lower on Friday morning, as investors assessed the possibility of further interest rate increases by the Federal Reserve.
Hong Kong’s Hang Seng index shed 0.1 per cent, Japan’s Topix fell 0.4 per cent and South Korea’s Kospi slid 0.3 per cent. The mainland Chinese benchmark CSI 300 was flat.
Minutes from the Fed’s last meeting showed that officials were divided over the need for future rate increases, with some seeing “significant upside risks to inflation”. The US Labor Department on Thursday reported a decline in the number of applications for unemployment benefits for the week ending August 12, adding to the case for tight monetary policy.
…
Are morrtgage rates FINALLY settling back down towards early 2022 levels?
21 hours ago – Economy & Business
Mortgage rates jump back to 2001 levels
Emily Peck, author of Axios Markets
Data: Mortgage Bankers Association; Chart: Axios Visuals
Why is housing affordability so bleak right now? This here chart tells the story.
Driving the news: The rate on the 30-year-mortgage ticked up to 7.16% this week — back to the high last reached in October last year. Before that you’d have to go back to 2001 to find mortgage rates this high.
Zoom in: A calculation from ING’s Chief International Economist, James Knightley, illustrates the issue.
With a 7.16% mortgage rate, the monthly payment on a $417,200 loan (that’s the average mortgage amount taken out last week) works out to $2,820, he says. But at the prevailing mortgage rate back in 2021, you’d pay that amount for a $670,000 loan.
Households that would like to move “are trapped right now,” he writes.
…
https://www.axios.com/2023/08/17/mortgage-rates-2001-loan
“are trapped right now”
Anecdote @6m05s: LA owners who bought in 2020-2021 are selling because they underestimated the costs of ownership and can’t afford their purchases.
Problems in Paradise – It’s Crashing with @MichaelBordenaro (15m16s)
Financial Times
Unhedged Markets
Bond yields gone wild
And the case for a growth rebound at Amazon
A montage of a close-up of the US Treasury building and a line graph
Robert Armstrong and Ethan Wu
3 hours ago
Good morning. Stocks falling for two weeks straight. Bonds too. Is it the end of the world, or is it just August? Some of both? Email us: robert.armstrong@ft.com and ethan.wu@ft.com.
Bonds
Everywhere you look, long bond yields are busting out. The 10-year yield is at its highest since 2007; the 30-year since 2011; and the 10-year inflation-protected yield, since 2009.
There is a simple explanation. Growth appears to be re-accelerating. After this week’s strong retail sales and industrial production reports, the Atlanta Fed’s third-quarter GDPNow projection is at a staggering 5.8 per cent:
[SCARY CHART 1]
This is misleadingly strong, and is very likely to fall as the quarter progresses. But the trajectory of recent economic data cannot be ignored. The economy is simply hotter than most investors expected. The Citi US economic surprise index, which rises when data comes in stronger than consensus expectations, is at its highest point since early 2021:
[SCARY CHART 2]
…
Chinese Yuan is collapsing This financial crisis starts in China this time and then the US crashes in housing.