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An Example Of Government Mismanagement

A weekend topic starting with Deseret News in Utah. “These days, just about anywhere along the Wasatch Front you can find workers building houses, pounding nails into wood-framed structures, installing sheet rock or putting finishing touches on homes designed to serve families for years. But do these skilled carpenters earn enough money to afford the homes they are building? Unfortunately, the answer is no in most metropolitan areas. It’s an emphatic no in Utah, especially along the Wasatch Front, where average home prices have outstripped the average wage of a carpenter by a long shot.”

“The average carpenter in Salt Lake City, with an income of $78,000, could afford only 15.6% of a starter home, according to the 2022 AEI report. In Provo, the figure was 8.9%, one of the worst in the nation. The report says ‘Provo is the least affordable metro in the Mountain West.’ Los Angeles was the worst in the coastal West at 4%. Adding to this data, a recent report from the Federal Reserve Bank of Atlanta concluded that houses today are less affordable than they were during the peak of the housing bubble in 2006, which precipitated the Great Recession in 2008.”

Business Insider. “Stocks are poised to tumble as economic pressures mount, and the historic surge in mortgage rates means many Americans are now ‘prisoners in their own homes,’ David Rosenberg says. The Rosenberg Research president laid out several reasons why he believes asset prices have soared to unsustainable highs. He underlined the Fed’s decision to cut interest rates to almost zero in 2020 and 2021, which allowed homeowners to lock in long-term mortgages at rates of 2% to 3%. ‘Fully 85% of mortgagors did so and while this enabled them to escape the impact of higher interest charges as the Fed tightened, these folks ended up becoming prisoners in their own homes,’ he said. ‘They can’t move without a serious financial penalty.'”

“Rosenberg meant that potential home sellers have balked at parting with their dirt-cheap mortgages, and having to pay top dollar and take on a 7%-plus mortgage for a new place. The resulting dearth of existing houses for sale has led to a ‘bubble in home prices that exceeded what we saw in 2005-07,’ he said.”

The Islander News in Florida. “‘There are a number of challenges for us,’ said Ron Shuffield, CEO of Berkshire Hathaway HomeServices EWM Realty. ‘We’re not seeing five offers on every house; we still have some multiple offers, but nothing like we were experiencing during Covid.’ In 1984, when he said he came on at EWM Realty, an acre in Pinecrest was selling for $125,000, and now it’s $3 million. A 5,000-square-foot parcel in Coral Gables, which went for $65,000 in 1984, is now $1.2 million. ‘Someone asked, ‘What’s going to happen in another 30 years? Will we be paying $30 million?’ The answer is probably yes.'”

“‘Our interest rate is not expected to go higher (this year),’ Shuffield said, pointing out that top officials say they weren’t concerned a recession would hit this year. ‘When we flooded the market with liquidity during the pandemic … sure enough, inflation went up,’ he said.”

Yahoo Finance. “The US economy added 187,000 jobs in August. Economists surveyed by Bloomberg had expected the economy would add 170,000. The numbers are not expected to radically change the thinking of most Fed officials heading into their next policy meeting later this month. Last week, Fed Chair Jerome Powell described the labor market’s rebalancing as ‘incomplete.’ Powell has repeatedly noted that getting inflation back down to the Fed’s 2% goal will require ‘some softening in labor market conditions.'”

Daily Mail Australia. “The first major speech of incoming Reserve Bank Governor Michele Bullock has been marred by furious protesters who hurled abuse and handed her a jobseeker form. The six angry demonstrators seized upon comments Ms Bullock had previously made saying she would like to see Australia’s near-record low 3.6 per cent unemployment rate rise to 4.5 per cent to contain rising inflation. ‘Hey Michele, you say 140,000 people should lose their jobs, how do you justify that?’ the protesters yelled out. ‘If 140,000 people need to lose their jobs, I reckon you should go first,’ they said. ‘We’ve started to fill out your form for JobSeeker.'”

Sky News in Australia. “Another Sydney building company has fallen leaving at least 60 creditors out of pocket and owing more than $1 million in debt. Simone Homes’ social media pages can also no longer be accessed. Construction companies have been collapsing at an alarming rate over the past 18 months with ASIC insolvency statistics revealing 2213 businesses went bust during the 2022-23 financial year. According to UNSW Business School banking and finance professor Dr Peter Swan, there are several factors contributing to the grim state of the construction industry.”

“‘COVID lockdowns and hundreds of billions paid to people not to work caused supply shortages, both locally and overseas,’ he said. ‘Lax fiscal policies and massive printing of money by the RBA led to inflation. The cash rate has been raised from almost zero to over 4 per cent per annum. All of these changes have put pressure on builders financially, as has the decline in house prices… far fewer properties are being listed for sale.'”

Stuff New Zealand. “Kataraina Murray’s young age hasn’t stopped her from carefully mapping out her financial future, and home ownership is at the heart of the Pātea teen’s pathway to prosperity. It’s fair to say this 17-year-old intends to go places, already working part-time while juggling her Year 13 studies at Pātea Area School. When she finishes her education in a few months’ time, she’ll head into full-time mahi with a focus on saving money, priming her to take her first step onto the property ladder as soon as she can afford it. In her eyes, home ownership is the most achievable way to build wealth and give her opportunities to realise other ambitions, including travel. Another of her aims was to own other properties and become a landlord, as a means to offer good housing to others.”

“In South Taranaki the value to income ratio is one of the lowest in the country. But even at 4.3 it’s still nearly 50% more than its 2.9 long term average. Despite home ownership being a core facet of New Zealand’s much vaunted egalitarian identity, houses in Aotearoa are among the least affordable in the world.”

The Express. “Mortgage payers face more pain after the Bank of England’s chief economist warned interest rate setters must ‘see the job through’ if soaring inflation is to be reined in. The Bank has already raised its base rate 14 times in a row. A typical new mortgage had a rate of 4.66 percent in July, up from 2.33 percent a year earlier. Lewis Shaw, mortgage expert at Shaw Financial Services, said another hike would be ‘absolutely crazy.’ He said: ‘After everything that households and businesses have been through the past few years, this is the icing on the cake. It’s tantamount to kicking the country when we’re on our knees.'”

From Blog TO. “You don’t need us to tell you how depressing the housing market is lately. With the gap between the cheapest and most costly cities in Ontario hitting $1.6 million and average home prices in Canada continuing to climb, you kinda just wanna lay down and give up. And what’s more depressing is when you see a house like 146 Cummer Ave. (and how “meh” it is) for nearly $2 million. Listed for $1,880,000, the three-bedroom, two-bathroom bungalow is the house equivalent of the Midwest. The only selling features listed are a new kitchen counter, new floors, fresh paint and its ‘move in condition.’ And yet the thing that’s most upsetting about 146 Cummer Ave. is the fact that this home, as is, isn’t even overpriced. When you look at the comparables in the neighbourhood, it’s pretty much bang on target.”

From CTV News. “The federal Liberals are seeing a dive in popularity among younger voters, once the core of their base, falling 23 points behind the Conservatives by the end of August, according to new polling from Nanos Research. ‘I would be very concerned if I were the Liberals,’ said Nik Nanos, CTV News’ pollster and Nanos Research’s chief data scientist. ‘The Liberal coalition that was built in 2015, the movement led by (Prime Minister) Justin Trudeau, is slowly unraveling, and they’ve got to reverse this trend if they want to have any chance to hold on to government.'”

“For voters in the 30-39 age range, while there’s been a closer back-and-forth between the Liberals and the NDP since January, the Conservatives have fairly consistently come out ahead, something Nanos chalks up to ‘economic anxiety.’ ‘What type of young person can afford to buy a home when the value of homes are going up? And it’s a double whammy because interest rates are going up,’ he said. ‘The dream of having affordable housing in Canada is just being shattered right now.'”

From CBC News. “British Columbia Premier David Eby is calling on the Bank of Canada to halt further interest rate hikes, saying people are already ‘hurting’ and another increase might worsen inflation. In a letter Thursday, Eby urged Bank of Canada governor Tiff Macklem to The letter said the Bank of Canada had raised rates 10 times since March last year, with the current interest rate at five per cent, the highest in 22 years. Eby wrote that a Statistics Canada update last month stated that the largest contributor to inflation in Canada was mortgage rates. ‘A rate increase in September is more likely than not going to lead to higher mortgage rates again, directly causing further inflation.'”

“Wal van Lierop, a Vancouver-based venture capitalist, said further interest rate increases will hit most Canadians and affect future growth and investment plans of businesses and governments. ‘The Bank of Canada has no plan other than trying to achieve a traditional goal of two per cent inflation,’ said van Lierop. ‘While that was laudable in the 1980s, I think it is now up to the Bank of Canada to start to innovate and not just use the methods they have used in the past 50 years — basically a sledgehammer of all-across-the-board rate increases.'”

From Newsweek. “A reckoning is coming for the housing sector, according to billionaire real estate investor Jeff Greene, who said the industry will soon ‘get whacked’ as Americans’ savings disappear with the higher cost of living. Green said Wednesday on CNBC’s Squawk Box that the trillions of dollars injected by the government into the U.S. economy during the COVID-19 pandemic are starting to run out—with consequence for the entire sector.”

“‘What’s that going to mean for demand for everything? Retail, office, apartments—every aspect of real estate is going to get whacked, and I think we’re just in the first inning,’ Greene said. ‘In the real world, for most of Americans, what’s happening is the wages have gone up a lot, because we’ve had a booming economy,’ Greene said, mentioning how salaries grew during the pandemic. ‘But all of that happened because of the trillions and trillions of dollars that were going into the economy. If that goes away, you’re gonna have unemployment, you’re gonna have people making less money and pay higher rent.'”

“While wages and salaries grew by 4.5 percent between December 2020 and the first quarter of 2022, the cost of living outpaced them. Adjusted to inflation, wages fell by 4.3 percent at an annual rate over the first quarter of 2022, according to the Peterson Institute for International Economics. Mentioning Florida, whose housing market experienced a boost in demand during the pandemic, Greene said that demand was a direct consequence of the movement induced by the health emergency and it’s now fizzling.”

“According to Greene, all the people in big cities across the countries like New York and Boston who were thinking of retiring to Florida in the following years—between 2022 and 2025—decided to move immediately because of the pandemic. ‘We’ve borrowed a huge amount of demand from the future,’ said Greene, who has more than 80,500 residential properties between Los Angeles, New York, Florida, New England.”

From Townhall. “China’s economy is struggling post-COVID-19. Growth is slower than expected, demographic trends are negative, youth unemployment is high, overbuilding has created a housing crisis and government indebtedness is ballooning. These are only a few of the symptoms ailing the country, and things could get worse. Did any of the Americans who not long ago wanted to implement some of China’s top-down economic policies see this coming? Of course not. We’ve seen these pessimists make similar mistakes before.”

“Indeed, much of the economic narrative of the late 20th century was consumed by Japan’s meteoric rise. Just a few decades ago, many in academic and policymaking spheres made similar predictions about how Japan’s postwar resurgence portended U.S. demise. Many also advocated replacing our free-market policies with the heavy-handed economic interventions that they were confident formed the secret sauce of Japan’s fast growth: industrial policy. A far more significant contributor to Japan’s economic success was overall economic freedom between the 1950s and 1970s. Texas Tech economist Benjamin Powell notes that in 1970, Japan was the seventh-freest economy in the world.”

“As the country transformed its economy into an export factory, it failed to shift to more of an innovation-based economy in large part due to government erected barriers, leaving average citizens with little to show for the ‘success’ of subsidizing the production of lots of stuff for foreigners to consume. As the country entered the 1990s — what is now known as its ‘lost decade’ — it also became known as an example of government mismanagement.”

“Something similar is happening now in China, only on steroids. Japan didn’t have an authoritarian communist government to make big problems even bigger. The only question that remains to be answered is this: Why do we Americans always seem to believe those who tell us that industrial policy is a surer path to prosperity than economic freedom?”

From Mises.org. “Earlier this month, I completed a three-week road trip across America’s east coast, driving through the states of New York, Pennsylvania, the Virginias, and the Carolinas, reaching as far south as Jekyll Island, Georgia. The American road trip is an enriching experience that provides ample opportunity for contemplation about economics and the structure of society. For those of us living in the West, it’s important to recognize our standard of living, on a world scale, is significantly higher than most countries. The American Revolution, the Industrial Revolution, the principles of freedom, liberty, and capitalism can largely be credited for this progress.”

“In 2023, it is disheartening to see how many beneficiaries of such systems strive to adopt economic policies from countries that do not adhere to free market ideals at the core; but lies and propaganda can hold more sway than honesty and logic.”

“As for architecture, the house of the Vanderbilts, the Biltmore Estate, in North Carolina was remarkable. It was Peter Sellers’ movie Being There, where I initially became aware of the estate’s existence. This highlights the influence of the power of film. Despite the present focus on Hollywood delivering social messages over artistic expression, the inextricable link between capitalism and creativity persists. No other country has ever managed to achieve a comparable balance.”

“Lastly, the Jekyll Island estate: a building so beautiful, yet home to one of the world’s greatest atrocities, i.e., planning of the Federal Reserve. Sadly, it all really ties back to central banking. Discussions about central banks, their strategies, decisions, and the speculation regarding their next moves dominate news headlines. Central banking has woven itself so deeply into our society that only a few can, or even want to, consider a world without the Fed. Yet, as far as the American way, which values life, liberty, and the pursuit of happiness, there exists no greater menace, no more of an antithesis, and no larger adversary than a central bank. An entity that holds a legal monopoly over a nation’s currency can hardly be said to provide any benefit to the masses. This reality is substantiated by history, rational thought, and the current state of world affairs.”

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This Post Has 98 Comments

  1. The Townhall piece is worth reading in full:

    ‘In 1984, when he said he came on at EWM Realty, an acre in Pinecrest was selling for $125,000, and now it’s $3 million. A 5,000-square-foot parcel in Coral Gables, which went for $65,000 in 1984, is now $1.2 million. ‘Someone asked, ‘What’s going to happen in another 30 years? Will we be paying $30 million?’ The answer is probably yes’

    Hey Ron: click!

  2. ‘The six angry demonstrators seized upon comments Ms Bullock had previously made saying she would like to see Australia’s near-record low 3.6 per cent unemployment rate rise to 4.5 per cent to contain rising inflation. ‘Hey Michele, you say 140,000 people should lose their jobs, how do you justify that?’ the protesters yelled out. ‘If 140,000 people need to lose their jobs, I reckon you should go first’

    It was actually this article that got me thinking about the topic. People who read financial stuff are used to the concept of central bankers setting up job loss, foreclosure, a$$ poundings, etc. But the general public is used to guberment wanting to help, make us safe! And here we see how the system really works.

    Yes, they steal from everybody to goose the economy, enrich crony’s, create bubbles that hurt the economy and then blow up. And when they do they got one medicine: morer a$$ poundings!

    Wa a great system. Maybe we should get rid of it?

    1. “People who read financial stuff are used to the concept of central bankers setting up job loss, foreclosure, a$$ poundings, etc. But the general public is used to guberment wanting to help, make us safe! And here we see how the system really works.”

      “Yes, they steal from everybody to goose the economy, enrich crony’s, create bubbles that hurt the economy and then blow up. And when they do they got one medicine: morer a$$ poundings!”

      “Wa a great system. Maybe we should get rid of it?”

      \\

      +1. Others have expressed similar thoughts much better than I can. These thoughts still ring true today. Here’s a sampling.

      \\

      “When the righteous thrive, the people rejoice;
 when the wicked rule, the people groan.” – Proverbs 29:2

      “The rich rule over the poor,
      and the borrower is slave to the lender.” – Proverbs 22:7

      “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford

      “During times of universal deceit, telling the truth becomes a revolutionary act.” – George Orwell

      “To the masses, the catchwords of Socialism sound so enticing… so they will continue to work for Socialism, helping thereby to bring about the inevitable decline of the civilization which the nations of the West have taken thousands of years to build up.” – Ludwig von Mises

      “Liberty is always freedom from the government.” – Ludwig von Mises

      “Socialism has been tried on every continent of the globe. In light of its results, it is time to question the motives of [its] advocates.” – Ayn Rand

      “Socialism is the doctrine that man has no right to exist for his own sake, that his life and his work do not belong to him, but belong to society, that the only justification of his existence is his service to society, and that society may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good.” – Ayn Rand

      “Government “help” to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off.” – Ayn Rand

      “When you see that in order to produce, you need to obtain permission from men who produce nothing – When you see that money is flowing to those who deal, not in goods, but in favors – When you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – When you see corruption being rewarded and honesty becoming a self-sacrifice – You may know that your society is doomed.” – Ayn Rand, Atlas Shrugged

      “Interventionism inevitably leads to socialism, central banking inevitably leads to hyperinflation, total cashlessness inevitably leads to total surveillance, and “guaranteed income” inevitably leads to guaranteed enslavement. A deadly poison remains a deadly poison even when ingested in a gradual manner.” – Jakub Bożydar Wiśniewski

      “The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution.” – Thomas Jefferson

      If progressives take over the central bank, they will have power beyond their wildest dreams to advance their destructive ideological agenda through economic policy that bypasses Congress. – Miranda Devine

      \\

      – And finally…

      “I prefer dangerous freedom to peaceful slavery” – Thomas Jefferson

      “A government big enough to give you everything you want, is big enough to take away everything you have.” – Thomas Jefferson

      “The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.” – Thomas Jefferson

      

”The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” – Thomas Jefferson


          2. In Denver, it is legal for Antifa communists to commit murder, as shown by the murder of Lee Keltner by Matthew Dolloff.

  3. ‘laid out several reasons why he believes asset prices have soared to unsustainable highs. He underlined the Fed’s decision to cut interest rates to almost zero in 2020 and 2021, which allowed homeowners to lock in long-term mortgages at rates of 2% to 3%. ‘Fully 85% of mortgagors did so and while this enabled them to escape the impact of higher interest charges as the Fed tightened, these folks ended up becoming prisoners in their own homes,’ he said. ‘They can’t move without a serious financial penalty’

    But these were my winnahs! Dave?

  4. ‘In South Taranaki the value to income ratio is one of the lowest in the country. But even at 4.3 it’s still nearly 50% more than its 2.9 long term average. Despite home ownership being a core facet of New Zealand’s much vaunted egalitarian identity, houses in Aotearoa are among the least affordable in the world’

    At the peak of minor respiratory illness, NZ had shack to income ratios of 9 or 10. Now that’s sound lending.

  7. A reader sent these in:

    As a Realtor and wannabe-economist, all I can ask is where will the money continue to come from? I’ve already been hearing from buyers that the current rates are straining them TODAY. What about in another 12 months when another year of 3, 4, 5+ % of goods and services inflation have further devoured their income? How will they afford housing NEXT YEAR at a further 6.5% price increase + additional rate increases? I’m calling Zillow’s bluff. A housing correction in the next 12-18m.

    https://twitter.com/louied777/status/1696520564054376534

    Just wait until all the WFH people who geographically arbitraged to new locations are called back to office and must sell their negative equity homes…Will roll over to a nasty buyer’s market very quickly.

    https://twitter.com/louied777/status/1696532570455031944

    Bro eliminated the judge 😂

    https://twitter.com/NoCapFights/status/1696903765490831577

    Student loans payments this week topped their pre-COVID level, per the Education Department Cash Collections data, just as real disposable incomes are beginning to slow.

    https://twitter.com/INArteCarloDoss/status/1697616037963767888

    Crash guaranteed!

    https://twitter.com/INArteCarloDoss/status/1697613804136194348

    NFP August added 187 K that’s great right? Well, as I’ve been saying for months, you’re into backward revisions territory here. 60% of this (110 K) were down revised from prior 2 months. UR is 3.8%. This is the part of the cycle where you better have your own models to track data, coz what’s coming from the ministry of truth is inexploitable.

    https://twitter.com/INArteCarloDoss/status/1697590604165738658

    Let me just clarify what’s happening here. It’s not « financial media report ». China is in trouble. Housing sales are down ~30%, starts down ~60% and home prices are down ~10-20% from their peaks in many cities. This is dramatic for an economy where construction (defined widely inc infra + RE services is ~30% of GDP). So no sugar coating here.

    Leading indicators and high frequency data I track have been bouncing back. But not signaling any major growth impulse. What happened here is CNY performed like shit and would have collapsed by more had PBOC not intervened.

    CNY depreciation probably will add 50 bp to growth but there’s really no reason to cheer here as exports remain weak, domestic consumption sluggish and inflation negative. Any further devaluation from here will bump against risk of capital outflows.

    https://twitter.com/INArteCarloDoss/status/1697576598319288561

    Nonfarm Payrolls Aug 187K
    2 month revision subtracting 110K
    UE jumps to 3.8% from 3.5%

    https://twitter.com/NorthmanTrader/status/1697589054898929868

    June payrolls originally reported: 209K
    June payrolls revision one month later: 185K
    June payrolls revision two months later: 105K.
    Yes, what was originally a “strong” 209K has been deflated to 105K two months later (original exp was 230K).

    https://twitter.com/zerohedge/status/1697592054652510380

    209K report: The economy is so resilient.
    Revision to 105K : Who cares, that’s in the past, besides we just got a 185K print. See, the economy is resilient!
    🤦‍♂️😂 Also known as playing tennis without the net.

    https://twitter.com/NorthmanTrader/status/1697594047479595338

    Student Loan interest starts accruing again tomorrow and the first payment is due in a month…Time to pay back your loans deadbeats!

    https://twitter.com/Stephen_Geiger/status/1697324158386856080

    50% of Canadians Are Now Living Paycheck to Paycheck …Thanks Justin Trudeau 🚨🚨🚨 🔊 … sound on

    https://twitter.com/WallStreetSilv/status/1697805662049239372

    The pain is real 🙄 Never forget what they took from us.

    https://twitter.com/WallStreetSilv/status/1697695915602018777

    “Every single monthly payrolls print in 20-23 has been revised lower, a 12-sigma probability and virtually impossible unless there was political pressure to massage the data higher initially and then revise it lower when nobody is looking.”

    https://twitter.com/profstonge/status/1697610502078157019

    1. “Every single monthly payrolls print in 20-23 has been revised lower, a 12-sigma probability and virtually impossible unless there was political pressure to massage the data higher initially and then revise it lower when nobody is looking.”

      Daily I read about China hiding the data and just flat out lying about it. How naive to think isn’t happening here. Might even be worse.

      1. I do ‘t know anyone who thinks it is ‘t happening here.
        I know a senior economist who resigned under Obama due to pressure to cook the books.

    2. “Student Loan interest starts accruing again tomorrow and the first payment is due in a month…Time to pay back your loans deadbeats!”

      Never gonna happen. Just like a majority of those currently maxing out their credit cards will never make a payment. Worried about their credit? Please. These people know they’re already screwed. Don’t get me wrong, when I hear about this kind of irresponsibility it ticks me off. But remember, these younger generations have been trained to be fiscally irresponsible by the PTB. Can you blame them?

        1. I would love to know to the first reaction of the PPP fraudsters when the IRS came calling for accountability. I bet it was pure shock. Because I guarantee you most of them felt they did nothing wrong, and probably still won’t as their anus takes a beating in federal prison.

          1. Because I guarantee you most of them felt they did nothing wrong

            I think they did know they were being crooked, but thought they would get away with it, especially when some of those loans were forgiven.

  8. In anticipation of a major gathering of rural activists a few weeks ago, the Pennsylvania Democratic Party printed out thousands of cards reminding voters to “Vote at Polls: Election Day Tuesday November 8.”

    There was just one small problem: Election Day is Nov. 7.

    Pictures of the mess-up were shared among Democratic insiders around Pennsylvania. It was, to many of them, the latest sign of a state party in chaos.

    “It’s amateur hour,” said a state committee member who, like other Democrats, was granted anonymity to speak frankly about a sensitive matter. “It’s a f@cking disaster,” said a former state party staffer.

    https://news.yahoo.com/amateur-hour-democrats-panic-state-083000698.html

  9. ‘Someone asked, ‘What’s going to happen in another 30 years? Will we be paying $30 million?’ The answer is probably yes.’”

    We’ll have a revolution first. Young people have no future as long as the criminal private banking cartel called the Fed controls our money issuance.

    1. ‘Someone asked, ‘What’s going to happen in another 30 years? Will we be paying $30 million?’ The answer is probably yes.’”

      Minimum wage will go up to $5,000 per hour or something absurd. It’s just numbers.

  10. “‘Our interest rate is not expected to go higher (this year),’ Shuffield said, pointing out that top officials say they weren’t concerned a recession would hit this year.

    They weren’t concerned in 2007, either.

  11. “The US economy added 187,000 jobs in August. Economists surveyed by Bloomberg had expected the economy would add 170,000. The numbers are not expected to radically change the thinking of most Fed officials heading into their next policy meeting later this month.

    These BLS stats are so falsified as to be meaningless. In a couple of months they’ll be quietly revised downward by 50% or so, and the sheep won’t even look up from their grazing.

        1. Everyone I know who is looking for a job says the same thing: for non menial jobs it’s pretty bleak.

          2. Everyone I know who is looking for a job says the same thing: for non menial jobs it’s pretty bleak.

            I check job listings monthly to help me assess salary ranges and which skills are in demand for my industry. Total listings has dropped significantly, and the ones still listed are mostly the scam types or those posted in every single market for the same job.

          3. 2022 – I got 3-5 contacts a week from recruiters for real jobs. Most were internal HR contacts

            2023 – I might have 5-10 contacts the entire year for real jobs from internal HR contacts

            The job market has dropped off a cliff for professionals

  13. “Kataraina Murray’s young age hasn’t stopped her from carefully mapping out her financial future, and home ownership is at the heart of the Pātea teen’s pathway to prosperity. I

    I see what you did there, globalist scum media. How about doing a follow-up series as young Kataraina becomes progressively more disillusioned about her bleak future as the reality of a life of debt serfdom in a WEF looting colony sets in?

  14. Central banking has woven itself so deeply into our society that only a few can, or even want to, consider a world without the Fed.

    The Fed is a cancer that needs to be excised.

    1. Central banking has woven itself so deeply into our society that only a few can, or even want to, consider a world without the Fed.

      What bulksh!t.

  15. How about Zillow’s 99% loan? (1% down) Are we there yet? Oh no, it’s different this time. 🙄 Thank you Zillow for assuring the foreclosure pipeline will be full for years to come….as if that pipeline needed any help.

  16. Does it seem like the Case-Shiller 20-city housing price index turning negative year-on-year for the first time since the Great Recession would be headline news for financial writers?

    So do I. Perhaps the Axios writer doesn’t understand the significance of this development.

    1. Axios Homepage
      Aug 30, 2023 – Economy & Business
      Welcome news for buyers: Home price spike slows
      Matt Phillips, author of Axios Markets
      Data: FactSet; Chart: Axios Visuals

      Home prices are still rising, but at a slower pace.

      Why it matters: Home prices factor into major inflation gauges like the Consumer Price Index but with a significant lag.

      Still, it’s a sign that there’s less price pressure in the pipeline.

      The latest: Two key indexes released Tuesday told a similar story about housing inflation returning to a simmer, a welcome development after the way it boiled over in 2021 and 2022.

      – The FHFA index of home prices showed an increase of 3.0% over the prior year in June, the most recent data available.

      – Separately the S&P CoreLogic Case-Shiller index of the 20 largest housing markets showed a 1.2% decline in June, compared to the prior year.

      Yes, but: As any homebuyer can tell you, affordability is a question of home prices and mortgage interest rates — not to mention taxes and insurance.

      The bottom line: With mortgage rates now above 7%, and home prices continuing to rise — albeit at a slower pace — Americans are facing the least affordable housing market in almost 40 years.
      …
      https://www.axios.com/2023/08/30/home-price-inflation-index-price-slow

    2. Perhaps the Axios writer doesn’t understand the significance of this development.

      Or perhaps his paycheck depends on his not understanding it.

      2. That was my exact same thought!

        But to elaborate a bit on my point, the rate of change in housing prices, and more generally, real estate prices, is subject to what macroeconomists and physicists sometimes term hysteresis: once prices they start falling, they can continue falling for years. A great example is the Japanese property price bubble collapse from 1990 through 2000+. China currently seems to be in the early stages of a similar development. The risk of such patterns turning systemic and globally contagious is heightened when coordinated central bank action to suppress interest rates becomes the dominant driver of real estate prices, completely drowning fundamentals such as use value, as we witnessed over the past decade.

        US hime prices kept falling continuously for years during the Great Recession. It looks like we are in the brink of a similar period, which we can anticipate will be accompanied by rampant lies and denial from the used home seller profession.

  17. “But do these skilled carpenters earn enough money to afford the homes they are building?”

    Even Marx knew this was a problem.

    2. When people who work for a living are priced out of shelter by excessive money printing, the economy is FUBAR.

      1. The Starbucks shuttered both local stores. They couldn’t get workers at $19.75 per hour starting. Now there are no Starbucks, and the rich fûcks have zero options for drive-thru coffee. I LOVE it.

          4. FWIW, they serve a great tasting cup of coffee.

            That I don’t doubt, but these plastic f*cks would never be seen at McDonald’s getting a cup of coffee. Now they have to stand in line at the local coffee house among the hoi polloi.

    3. “analyzes social media data, accurately capturing “emerging narratives”

      The 2020 election was stolen.
      Covid vaccines are poison.
      There are only two genders.

      Capture that, globalist scum.

      1. Like to see Klaus Schwab get teabagged by some ISIS thug before they remove his head from his shoulders, then play soccer with it in the desert.

    2. At some point of forced government green energy conversion, the price and effeciency of fossil fuel as an energy source becomes too compelling to pass up for those not subject to the collective fall-on-our-swords mandate

      2. This is why there is no comparison between petroleum products (diesel, gasoline, kerosene) and alternative fuels such as H2, ammonia (NH3) . Natural gas (~CH4) may be better than gasoline (~ octane) in terms of amount of CO2 released. But liquefied petroleum gas (LPG) will have energy costs associated with its production in refineries. H2 can come from electrolysis of water, but is currently more expensive when compared to steam methane reforming.
        The calorific value of petroleum products is much higher and can be stored without thick heavy pressurized tanks as is required for H2, CH4, LPG.
        It is all hype and a ploy to get grant money / subsidies. No doubt research should be done, but should come at the expense of truth.

    3. Germany Replaces Net Zero With Coal

      Probably got started reviving those coal plants on the same day the U.S. destroyed the Nord Stream pipelines.

  20. “trillions of dollars injected by the government into the U.S. economy during the COVID-19 pandemic”

    Greatest FRAUD of my lifetime.

    1. It’s easy to get pissed at the all the fraud that has taken place with the stimi money through CARES, and rightfully so. But I agree, the crime really was at its source. Because there was only two possible options; they were either complete morons, or they knew all along how it would go down and it was orchestrated. I would hope it’s the first option.

  22. Are you concerned about real estate investors heading for the hills?

    At what point will they start dumping their depreciating HODLings, doing their part to make America’s homes affordable again for people who work for a living?

    1. The housing market is stuck: Americans can’t afford homes, investors aren’t buying property, and economists see little relief ahead
      Phil Rosen
      Sep 2, 2023, 5:15 AM PDT
      The housing market is stuck thanks to high prices, high mortgage rates, and low inventory.
      UCG / Getty Contributor

      – Low inventory, high mortgage rates, and high prices have created a difficult housing market.

      – Homeowners have seen equity climb, but house hunters are having a hard time breaking into the market.

      – Purchases by real estate investors plunged 45% in the second quarter compared to last year.
      …
      https://markets.businessinsider.com/news/commodities/housing-market-outlook-mortgage-rates-homeowners-investors-real-estate-property-2023-8

      1. Low inventory?
        7 million asylum seekers are being housed at taxpayer expense.
        Dozens of millions on welfare housing now renamed affordable housing.
        And the usual suspects are doing the housing and getting the obscene government contracts.

        And with all the homes sucked up for airbnb hotels —-

        There’s your shortage

    2. Not happening. .
      These investors are being paid obscene amounts of currency to house 7 million + asylum seekers.

    1. There’s good money in the homeless industrial complex. And other municipal complexes. There is still a lot of ruin left in San Francisco, so the grifting will continue.

    2. The property tax assessor lowering their own assessment, year after year, without petition. It’s good to be ‘da king!

  24. “A 5,000-square-foot parcel in Coral Gables, which went for $65,000 in 1984, is now $1.2 million.”

    That’s a lot of housing price inflation the Fed has supported over a 39-year period! The annualized average rate is (1200/65)^(1/39) – 1 = 7.8% … quite a bit higher than that 2% target!

    1. HOMEPAGE
      Premium Home
      Markets
      ‘The vast bulk of companies are in big trouble’: A renowned bear who called the dot-com bubble warns a recession is still on the way as bankruptcies rise — threatening to sink even the mega-cap stocks keeping the market afloat
      William Edwards
      Sep 2, 2023, 2:10 AM PDT
      A trader at the New York Stock Exchange puts his hand on his face in September 2008. Richard Drew/AP

      One common reason that economists and investors cite for why the US economy can avoid a recession is that it isn’t all that sensitive to interest rate increases anymore.

      But according to Societe Generale’s Albert Edwards, this notion is misguided, and markets are giving up on the idea of a recession too soon.
      …
      https://www.businessinsider.com/stock-market-crash-recession-outlook-rising-bankruptcies-sp500-bubble-edwards-2023-9

      1. it isn’t all that sensitive to interest rate increases anymore

        Reality approaches gradually, then suddenly. It hits the stoopid directly between the eyes.

  26. ‘The Bank of Canada has no plan other than trying to achieve a traditional goal of two per cent inflation…While that was laudable in the 1980s, I think it is now up to the Bank of Canada to start to innovate and not just use the methods they have used in the past 50 years — basically a sledgehammer of all-across-the-board rate increases’

    Tiff is breaking it off in yer a$$ Wal, as I type.

  27. Navigating the Canadian Real Estate Market: A Storm is Coming – Be Prepared!
    GTA Real Estate Market News and Updates
    Sep 1, 2023
    Thinking about diving into Canada’s real estate market? Hold that thought! Our latest video offers a critical perspective on the current state of affairs. With interest rates on the rise, it’s essential to consider the potential consequences before taking the plunge. In this brief but informative video, we’ll highlight the challenges posed by these increasing rates and why it might not be the right time to buy.

    https://www.youtube.com/watch?v=WQjBF5831sQ

    12 minutes.

  29. Minimum wage is minimum.
    Minimum is not middle.
    Minimum wage was never NEVER meant to buy a middle class home or lifestyle.

    1. Moneywise
      Grant Cardone says buying a home is a ‘terrible investment’ — uses Elon Musk and Warren Buffett’s unique housing situations to make his point. But would the billionaire investors agree?
      Bethan Moorcraft
      Sat, September 2, 2023 at 4:00 AM PDT·7 min read

      Real estate investor Grant Cardone has once again taken a swipe at homeownership — one of the cornerstones of the American dream — calling it a “fantasy,” a “trap” and a “terrible investment” in an interview with Moneywise.

      His comments followed a controversial Instagram post — that he claims to have gotten “a lot of hate” for — where he wrote: “Buying a home without a doubt is the WORST investment people can make, yet it’s also the most common one.”

      What’s behind the multi-family real estate investor’s home-investment vendetta? He says: “A house is never going to pay you. You’re going to pay the house and keep paying the house” — adding that the four walls of your family home are never going to make you rich. To reiterate his argument, Cardone points to some of the world’s wealthiest people.

      “If you look at Elon [Musk] … or Warren Buffett and ask them how they got wealthy, none of them mention their house,” he says. “Elon doesn’t even own a home today [and] Warren owns one home.”

      This is a somewhat skewed view, given that Musk and Buffett are two of the wealthiest people on the planet, who made their riches through business enterprises and investments. For them, a house is a small purchase — but for the average American, it could be the biggest investment you make in your life. Here’s where they all stand on homeownership.

      Cardone says a home is ‘not a good investment’
      …
      https://finance.yahoo.com/news/grant-cardone-says-buying-home-110000018.html

  31. It’s Been Nearly 40 Years Since Buying a House Was This Unaffordable
    By Diccon Hyatt
    Published September 01, 2023
    Home for sale
    Justin Sullivan / Staff / Getty Images

    The last time homes were as difficult to afford as they are now, you could buy a brand-new first-generation MacIntosh computer for the office and an AMC Eagle station wagon in the garage to go with it.

    Key Takeaways

    – A median-priced house costs 38.3% of a typical household income.

    – That’s the most unaffordable rate since 1984.

    – Soaring home prices and mortgage rates have driven up monthly principal and interest payments.

    To buy a median-priced house, a typical income-earning household would have to shell out 38.3% of their earnings to make the mortgage, the highest percentage since 1984, mortgage data company Black Knight said in a report Thursday.

    The double whammy of soaring home prices and mortgage rates have pushed monthly principal and interest payments through the roof.

    Home prices hit record highs for a third month in July, according to Black Knight’s house price index. Meanwhile, the average rate offered for a 30-year fixed-rate mortgage hit 7.23%, its highest since 2001, last week, according to Freddie Mac, edging down slightly to 7.18% on Thursday but remaining close to a multi-decade high.

    Between those two factors, the monthly mortgage payment on a median-priced house has soared to $2,423 by August 24, nearly double over the past two years, according to Black Knight.

    Black Knight’s data is the latest evidence that home buying costs are soaring out of reach for average would-be purchasers, reaching levels of unaffordability not seen within the lifetime of about half the U.S. population.

    One of the major forces driving up housing costs today is the same as it was in the early 1980s. Then, as now, the Federal Reserve was hiking its benchmark interest rate to combat inflation, putting upward pressure on interest rates for mortgages and all kinds of other loans.

    The Fed funds rate got as high as 11% in 1984, more than double its current rate, and the average rate for a 30-year mortgage was double-digits for the entire year, peaking at over 14%, according to Freddie Mac.
    …
    https://www.investopedia.com/40-years-since-buying-a-house-was-this-unaffordable-7964673

    1. “The Fed funds rate got as high as 11% in 1984, more than double its current rate, and the average rate for a 30-year mortgage was double-digits for the entire year, peaking at over 14%, according to Freddie Mac.”

      Wow! Sounds like there’s a lot of room for mortgage rates to go higher from where they are currently. The Fed’s race to contain inflation may have only just begun.

  32. The Wall Street Journal
    Markets
    Rates Are Up. We’re Just Starting to Feel the Heat.
    Homeowners. Car buyers. Landlords. Big businesses. Here’s who stands to lose—and in some surprising cases, win—as interest rates stay high in the years ahead.
    Matt Chase
    By Greg Ip, Joe Pinsker, Will Parker, Walden Siew, Jennifer Williams-Alvarez, Veronica Dagher and Telis Demos
    Updated Sept. 1, 2023 12:04 am ET

    In the decade before the Covid-19 pandemic, governments, businesses and households became addicted to low interest rates, gorging on debt to fund everything from expensive new cars to crisis-fighting stimulus and leveraged buyouts.

    That era was a product of the sluggish, low-inflation environment that prevailed after the 2007-09 global financial crisis, and now it is over. As investors have come to that realization in recent weeks, long-term bond yields have risen to 15-year highs. The Federal Reserve’s federal-funds rate averaged 0.5% from 2009 through 2021. Today it is between 5.25% and 5.5% and markets think it will be around 3.5% for the next decade.

    As yet, this has caused little distress. Growth is chugging along, and even the interest-sensitive housing sector seems to have a second wind.

    The effects will come; just wait. In the first year of the pandemic, many borrowers locked in low-cost funding for many years, effectively delaying any day of reckoning. As that debt matures, higher interest costs will start to bite, unless rates unexpectedly fall back to their old lows.

    Among the most exposed: taxpayers. Federal debt held by the public rocketed from 35% of gross domestic product at the end of 2007 to 93% in the first quarter of this year as Uncle Sam borrowed first to bail out banks, then to prop up growth, then to cut taxes, then cushion the economy from the pandemic, and now to support manufacturing.

    The burden of that debt has been relatively low because the Treasury could borrow so cheaply. But 67% of the debt matures within five years, according to TD Securities. TD estimates the U.S. pays an average rate of 3.4% on that debt, well below current interest rates.

    In the private sector, banks were the first casualty. Three regional lenders collapsed earlier this year, squeezed between the falling market value of loans they made and bonds they bought when rates were lower, and depositors fleeing to higher-yielding investment alternatives.

    American corporations could be next. “In 2020, we had these very unique circumstances where companies didn’t know if the economy would be shut down for another year or how long the Fed’s intervention in the corporate-debt market would last, and they issued a huge amount of debt,” said David Mericle, chief U.S. economist at Goldman Sachs. This has insulated them from the need to refinance as rates have risen in the past year.

    That is going to change. As that debt is refinanced, corporate interest expenses will rise, which can in turn limit companies’ ability to spend, research and hire.

    Individuals meanwhile are already paying higher rates on credit cards and car loans. Interest expense, excluding mortgages, consumed 2.2% of personal income in July, up about a percentage point in two years.
    …

    1. Financial Times
      Exchange traded funds
      Bitcoin price slides after SEC pushes back ETF approvals
      Regulator defers decisions on the first US exchange traded funds that invest directly in the cryptocurrency
      The SEC said late on Thursday that it needed more time to consider seven bitcoin ETF applications
      Scott Chipolina and Steve Johnson in London September 1 2023

      The price of bitcoin sank 5 per cent after regulators deferred approvals of the first US exchange traded funds that invest directly in the cryptocurrency, damping investors hopes for a speedy route to the world’s largest capital market.

      The US Securities and Exchange Commission said late on Thursday in a series of filings that it needed more time to consider seven bitcoin ETF applications, including one from BlackRock, the world’s largest asset manager.

      The fall in the price of bitcoin meant the token had unwound most of the gains it had made after a Washington court this week ruled the agency had been wrong to reject an application by asset manager Grayscale to turn its flagship vehicle, Grayscale Bitcoin Trust, into an ETF.

      The court ruling has put pressure on the SEC to relent from a decade-long policy of refusing ETFs based directly on the controversial token. Crypto advocates have long called for a spot bitcoin ETF, arguing it offers consumers a cheap and safe way to trade the coin, instead of buying it directly from unregulated crypto exchanges.

      Demand for a spot bitcoin ETF has grown this year and more traditional players have attempted to break into the sector. Fidelity, WisdomTree, Invesco Galaxy, VanEck, Bitwise and Valkyrie Digital Assets also had their applications for a spot bitcoin ETF delayed on Thursday.

      But the regulator has argued that it cannot offer investors reassurance that the bitcoin market is not prone to being manipulated. Gary Gensler, chair of the SEC, in July called the crypto market “rife with fraud, rife with hucksters”. Even so, the SEC has approved bitcoin futures ETFs, which track the price of futures linked to the cryptocurrency.

      The Washington court has forced the SEC to review its approach to bitcoin ETFs. It has 45 days to decide whether to abide by the court decision, ask a court to review it or make a direct appeal. The SEC said it was “reviewing the court’s decision to determine next steps”. The regulator is expected to make its decisions on spot bitcoin ETFs in mid-October.

      “We believe it is quite feasible that the SEC will craft alternative arguments to justify continued rejections of spot bitcoin ETF applications based on concerns specific to the spot bitcoin market,” said Mark Palmer, an analyst at Berenberg Capital Markets.
      …

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