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Where The Hell Did That Money Go?

A report from the Kansas City Star. “Brand new, move-in ready, maintenance-provided luxury villas in a prime Blue Valley location by award-winning builders? If you’re looking for a quality, maintenance-provided villa in one of Johnson County’s sought-after new home communities, Willow Pointe in The Willows, at 147th Terrace and Pflumm Road, has three move-in ready beauties with significant price drops. But act quickly — these three appealing floor plans at a reduced cost won’t last long in the high-demand villa market.”

WOWT in Nebraska. “The growing western part of the Omaha metro has plenty of new homes that are ready or almost ready for a buyer. While the supply is there, the demand has dropped, likely because of increased mortgage rates. Bryan Hilderbrand with Hildy Homes said this time last year they were getting about five offers per home. Now it’s one or two. ‘Last year was a crazy year,’ said Hilderbrand. ‘I think we closed 98 houses last year where usually 80 is more of a normal for us. Where now this year is a hard-fought 80.’ He and his twin brother Ryan started building homes more than 20 years ago. Since they started they added more than 800 homes to the market. ‘It’s not like last year where the price of the house was this and you wrote the full price and out the door, you went,’ said Ryan Hilderbrand.”

“Real estate agent Ryan Renner said the decreased demand leaves more room to negotiate. ‘If you’re looking to buy this time, sometimes you can get a pretty good deal,’ said Renner. ‘Right now because demand is down a little bit, there are a lot more things that are negotiable when you’re buying new construction. Builders obviously want to sell homes. So they’re looking for different ways to sell homes to people.’ The Hilderbrands say they offer to buy down mortgage rates, cover closing costs, or include perks like certain appliances or fence installations. ‘I think builders in general, especially at Hildy, we’re willing to play ball more. We’ll do whatever we have to do to move houses,’ said Bryan Hilderbrand.”

From Alabama.com. “Are there too many apartments in the pipeline in Huntsville? At least one city councilman believes that is the case. And he’s been making that opinion known by voting against apartments in his district that come before the Huntsville Planning Commission for months. ‘Frankly, occupancy of some of those newer apartments are pretty low,’ Council President John Meredith said at a recent town hall. Meredith said the low occupancy tells him the city is ‘kind of saturated in terms of people willing to pay those prices, because some of the new apartments, they are one-bedroom apartments in MidCity with rents that are higher than a mortgage on a much larger square foot home.'”

“He’s not alone with that sentiment. It’s common on Huntsville Facebook pages for residents to complain about the number of apartment units coming in, and how much the rent is. ‘We have some pretty good paying jobs here, but people aren’t willing to pay those kinds of prices,’ Meredith said. ‘You can call them luxury apartments and put a granite countertop in it, but they’re not willing to pay that kind of price for an apartment, which leads to the second potential problem, and that is, if the investors in those buildings are at an occupancy rate that won’t pay the mortgage to the bank, then they are going to foreclose,’ Meredith said.”

“In terms of land development, Breland Companies President Joey Ceci, whose company is developing Town Madison and Clift Farm, said he would get about four calls a week from developers interested in apartment sites six or seven months ago. ‘That has stopped,’ he said. ‘You don’t have anybody out there trying to buy new apartment sites.'”

The Real Deal on Texas. “Four properties that recently hit the market shine a light on multifamily demand, or lack thereof, in downtown Dallas. It also indicates that demand for apartments in downtown Dallas might not be what it seems. Downtown Dallas is facing a glut of high-end apartments, said Steve Triolet of Partners Real Estate. The trend is likely to continue, too, thanks to a pipeline of almost 4 million square feet of office-to-resi conversions in the area. That equates to at least 1,800 apartments, which would increase the neighborhood’s stock by 20 percent. And that doesn’t account for new apartment projects that are under construction, such as Mill Creek Residential’s 333-unit Modera St. Paul, which is expected to open next year at 400 South St. Paul Street.”

“Brookfield could be looking to offload its downtown multifamily holdings before more office-to-resi conversions come on the market, he speculated. The properties are valued for tax purposes at nearly $120 million, and Brookfield’s tax bill for them was over $3 million this year, according to the Dallas Central Appraisal District. Brookfield has been hard-eyed with various portfolios recently. The investor defaulted on over $1 billion in loans and gave back the keys to office buildings in downtown Los Angeles earlier this year, a head-turning move that put a sharp focus on that city’s struggling office sector.”

Bisnow Washington DC. “Three years after delivering one of the largest developments in Bethesda’s history, Carr Properties is cashing out of the residential component. The developer sold The Elm — a pair of high-rise apartment buildings totaling 456 units — to AIR Communities for $220M, according to documents posted this week to Maryland deed records. The sale comes despite a major slowdown in real estate transaction market, as rising interest rates, a lack of available debt and a gap between buyer and seller expectations have made it difficult to get deals done. These issues have been more pronounced in the struggling office sector, but the region’s apartment market hasn’t been immune: The D.C. area’s multifamily investment sales volume through the first half of this year was down roughly 39% from 2022, according to Delta Associates. The $220M sale price, which pencils out to $482K per unit, is below the property’s latest assessed value of $299M, according to property records.”

From Curbed. “New York City’s Airbnb hosts were having a hard summer. ‘I talked to Airbnb support and they don’t know how to go about this,’ one host wrote on a private forum. Following an extensive period of limbo and legal challenges, the city was gearing up to enforce regulations that would, at least in theory, take thousands of rentals off the platform. A decade of unfettered growth had made hosting something between a lucrative side hustle and a full-time job for thousands of people in the city, but life as the hosts knew it was ending on September 5. ‘I’m petrified,’ one wrote.”

“‘My assets are bound up in my house and I have very little cash flow,’ a host wrote on the city’s public comment forum. ‘Being able to occasionally Airbnb my home has enabled me to make my mortgage payments.’ In public, hosts described Airbnb as a form of public assistance or a godsend second gig. But on private forums, the relationship between platform and third-party contractor revealed itself as a bit more strained: They had fought for Airbnb. Why wasn’t Airbnb fighting for them?”

“On forums, they swap tips on generating contracts for longer-term rentals and ‘squatters insurance’ for legal fees should a 30-day rental turn into an eviction proceeding. Some are dropping their prices 20 to 30 percent to render a monthlong stay affordable; others are looking into ways to charge half of a monthly fee up front, a function Airbnb doesn’t currently afford. And they’re still confused about how to apply for a license or handle bookings made far into the future for short-term stays, stays that are still showing up on Airbnb. ‘I have contacted support so many times,’ wrote one. ‘I’m distraught.'”

The San Francisco Chronicle in California. “Rapper Roddy Ricch, born Rodrick Wayne Moore Jr., has sold his four-bedroom, five-bath Beverly Hills abode. Alas, Ricch bagged just under $5 million—$4,995,000 to be exact—for the house he paid $5.6 million for in 2021. Almost a year after that purchase, the 24-year-old artist put the property on the market for $5,995,000. He slashed the ask to $5,750,000 earlier this year. This summer, the price tag shrank again—to $5,199,000—and spurred the recent sale.”

The Globe and Mail. “Toronto’s housing market waned in August with sales falling for the third straight month, as higher borrowing costs made it more expensive for buyers to get a mortgage. Activity has slowed since the Bank of Canada resumed raising interest rates in June after a four-month break earlier this year. That made it harder for would-be buyers to qualify for a mortgage and reduced the amount they could borrow. ‘This could prompt these buyers to make an offer on a home less than the asking price,’said Jason Mercer, TRREB’s chief market analyst. ‘Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales.'”

Reuters on Canada. “Greater Toronto Area (GTA) home prices fell in August for the third straight month. On a year-over-year basis, the number of home sales fell 5.2%. The average home price edged up 0.3% year-over-year but was down 18.9% from the February 2022 peak. New listings climbed 16.2% year-over-year, showing acceleration after they were up 11.5% in July.”

From STV News. “A short-term let operator claimed the Scottish Government’s plans to introduce a licensing scheme for Airbnb style properties will ‘destroy’ her business. Karen Dirollo, who operates short-term let management firm, Property Shapers, said she feared the proposals would be ‘devastating’ for the industry. She was among those holding a rally outside the Scottish Parliament to demand the Scottish Government stalls plans due to come into force on October 1. Linda McDonald-Brown, who manages 15 STLs across Edinburgh and East Lothian through her business Edinburgh Concierge Company, said she hadn’t yet submitted licensing applications but would by the end of the month. She said: ‘Everything I own, my house and everything like that is totally built on my company.'”

News.com.au in Australia. “A Victorian state MP is demanding the government pay back the tradie victims caught up in the $4.2 million collapse of a lead building contractor. Last month, news.com.au reported that Exel Infragroup Pty Ltd had plunged into liquidation owing $4.225 million to 83 creditors. Synergy Traffice Management’s operations manager, Callum Phillips, owed $63,000, previously asked news.com.au ‘our biggest question is where the hell did that money go?’ he said.”

Reuter on China. “As Shanghai sweltered in a heatwave in June, the car factory where Mike Chen works switched production to night shifts and dialed down the air-conditioning. For Chen, toiling through the early hours in his sweat-soaked uniform, it was the latest slap in the face after cuts in bonuses and overtime slashed his monthly pay this year to little more than a third of what he earned when he was hired in 2016. ‘SAIC-VW used to be the best employer and I felt honored to work here,’ said Chen. ‘Now I just feel angry and sad.'”

“The price war triggered by Tesla has sucked in more than 40 brands, shifted demand away from older models and forced some automakers to curb production of both EVs and combustion-engine cars, or shut factories altogether. Auto worker Liu, 35, said he quit Changan Automobile’s plant in Hefei in July after earning 4,000 yuan in both May and June, rather than the 7,000 he expected each month. Based on his past experiences, Liu was confident he would quickly find another auto job, but the market had turned. ‘The good old days are gone,’ said Liu, speaking on condition of partial anonymity to protect his job prospects.”

“When Chen Yudong, head of Bosch’s China operations visited one of his biggest customers in March, he received an unusual present, a chopping knife with a message engraved on its sheath: ‘Cut decisively through the mess.’ Three months later, he told Reuters that price cuts had been more aggressive in 2023 than in previous years. ‘They’ve been keeping me awake at night.'”

From Bloomberg. “China’s housing crisis has engulfed the country’s private developers, producing record waves of defaults and leaving a shrinking group of survivors. Out of the nation’s top 50 private-sector developers by dollar bond issuance, 34 have already suffered delinquencies on offshore debt, according to Bloomberg-compiled data as of Sept. 1. The remaining 16, including Country Garden Holdings Co., face a combined $1.48 billion of onshore and offshore public bond payments for either interest or principal in September. The monthly amount is the highest until January.”

“‘It is uncommon for close to 70%-80% of the non-state-owned issuers in a major sector to run into default or distress within such a short period,’ said Zhi Wei Feng, a senior analyst at Loomis Sayles Investments Asia Pte. ‘More default is definitely expected by now.'”

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This Post Has 97 Comments

  1. ‘It’s not like last year where the price of the house was this and you wrote the full price and out the door, you went’

    Sound lending Ryan!

  2. “Brand new, move-in ready, maintenance-provided luxury villas in a prime Blue Valley location by award-winning builders?

    Those “maintenance-provided” pledges from builders won’t be worth the paper they’re printed on if the builder goes bankrupt. Yet still the knife catchers flock to sign on Mr. Banker’s line which is dotted.

  3. ‘If you’re looking to buy this time, sometimes you can get a pretty good deal,’ said Renner. ‘Right now because demand is down a little bit, there are a lot more things that are negotiable when you’re buying new construction.

    Stop lying, Ryan. Demand is cratering, and prices are going to follow.

  4. ‘I think builders in general, especially at Hildy, we’re willing to play ball more. We’ll do whatever we have to do to move houses,’ said Bryan Hilderbrand.”

    Thanks, Bryan, but when millions of shacks go to auction, with only the creditworthy & cash buyers allowed to bid, the deals will be a lot more compelling.

  5. ‘That has stopped,’ he said. ‘You don’t have anybody out there trying to buy new apartment sites.’”

    Gimme yer number, Joey. I’ll call four times a week offering to buy yer apartments. Only you might not like my offer of whatever pocket change I happen to have.

  6. The $220M sale price, which pencils out to $482K per unit, is below the property’s latest assessed value of $299M, according to property records.”

    Gosh, what happens if assessed value on millions of apartments turns out to be far in excess of actual market value?

    1. Indeed, nominal value is typically less than the assessed value especially when interest rates are on the rise.

  7. “New York City’s Airbnb hosts were having a hard summer. ‘I talked to Airbnb support and they don’t know how to go about this,’ one host wrote on a private forum.

    Die, speculator scum.

    1. “Being able to occasionally Airbnb my home has enabled me to make my mortgage payments”

      Get a job you bloodsucking parasite.

      1. “Being able to occasionally Airbnb my home has enabled me to make my mortgage payments”

        Then clearly you should never have qualified for that mortgage in the first place.

  8. ‘When Chen Yudong, head of Bosch’s China operations visited one of his biggest customers in March, he received an unusual present, a chopping knife with a message engraved on its sheath: ‘Cut decisively through the mess.’

    You’ve been disrupted Chen.

  9. ‘he would get about four calls a week from developers interested in apartment sites six or seven months ago. ‘That has stopped,’ he said. ‘You don’t have anybody out there trying to buy new apartment sites’

    Joey, I’ll have you know this is THE holy grail of investing.

  10. Karen Dirollo, who operates short-term let management firm, Property Shapers, said she feared the proposals would be ‘devastating’ for the industry.

    Good.

  11. ‘Downtown Dallas is facing a glut of high-end apartments, said Steve Triolet of Partners Real Estate. The trend is likely to continue, too, thanks to a pipeline of almost 4 million square feet of office-to-resi conversions in the area. That equates to at least 1,800 apartments, which would increase the neighborhood’s stock by 20 percent. And that doesn’t account for new apartment projects that are under construction’

    Urban living is a myth Steve, but it’s a laughable joke in a sh$thole like downtown Dallas.

    1. ” 4 million square feet of office-to-resi conversions”

      I thought that office-to-resi conversions were too expensive and it would be cheaper to tear the building down and build new. And long until all these luxury apartments are housing homeless and migrants?

      1. And long until all these luxury apartments are housing homeless and migrants?

        Who else will want to live there?

    1. Another sad story. Nothing to see here though. Its perfectly normal for heathy young men and women to drop dead for no reason at all.

      Woe to those who call good evil, and evil good. May they be smote with extreme prejudice. Come now great smiter, the world awaits your return.

  14. Two headlines on CNBC right now:

    “It’s official. UN says the world just endured its hottest summer on record”

    “Moderna says updated Covid vaccine was effective against highly mutated BA.2.86 variant in trial”

    Weather isn’t climate.

    Covid vaccines are poison.

    2. hottest summer on record

      Not in my zip code and with only 10 years of experience at this location.

      1. The funny thing about it here, having lived here almost 40 years, its always hot this time of year. A degree or two between friends doesn’t mean squatch. The biggest complainers are the Californians. I mean what were they thinking moving here? “Im gonna change the culture of the red state blue, and while I’m at it I’ll change the climate.’

        If we ever get a sane Government here again I hope we can levy a 5k entry tax on all new arrivals. That way we only get the types that appreciate the value of $$$ and hard work. Climate alarmists need to be warehoused in the same FEMA camps with Biology deniers.

        1. “The funny thing about it here…”

          ???

          “The biggest complainers are the Californians.”

          That’s right, and they want it for free too! 🙂

        2. “…If we ever get a sane Government here again I hope we can levy a 5k entry tax on all new arrivals….”

          Doesn’t Australia and New Zealand implement a form of entry fee / financial responsibility bond?

      2. DC area is breaking heat records this week, but the previous records were from a hundred years ago. Was there climate change in 1920?

        1. I don’t know how they can be so pretentious to assume anything about temperature. We have maybe what, a hundred or two years of reliable data? The earth is eons old, at least tens of thousands of years old. Pretty big assumption on the climate alarmists part to say ‘its hotter than ever.’

          1. The temperature guages used to be in the open fields. Now they’re in asphalt parking lots and airports.

  15. From Breitbart:

    “Former president Orange Man Bad warned on Wednesday that “left-wing lunatics are trying very hard to bring back COVID lockdowns and mandates ” to allegedly interfere with the 2024 presidential election.

    “The left-wing lunatics are trying very hard to bring back COVID lockdowns and mandates with all of their sudden fear-mongering about the new variants that are coming. Gee-whiz, you know what else is coming? An election,” the 2024 presidential candidate claimed in a video posted to X.

    “They want to restart the COVID hysteria so they can justify more lockdowns, more censorship, more illegal drop boxes, more mail-in ballots, and trillions of dollars in payoffs to their political allies heading into the 2024 election. Does that sound familiar?”

    The 2020 election was stolen.

    And all the alleged “new variants” are being created in a lab funded by U.S. taxpayers and released on purpose to steal the 2024 election.

  16. From the Omaha piece: “If you’re looking to buy this time, sometimes you can get a pretty good deal,” said Renner. “Right now because demand is down a little bit, there are a lot more things that are negotiable when you’re buying new construction. Builders obviously want to sell homes. So they’re looking for different ways to sell homes to people.”

    The kids are back in school now, and the skies are overcast, so the selling season is winding down. It’s time to cut the fat and make some deals.

    1. A month ago, a house on my block went on the market. It went pending in 3 days and officially closed this week, for more than the asking price. I wasn’t expecting the house to sell so fast, must have been a cash offer.

  17. By making fixed income investments a much more attractive option while driving corporate borrowing costs through the roof, are rising interest rates destined to become ‘death to equities’?

    1. Fast Money
      Treasury yield jump is not ‘death to equities,’ BofA’s Savita Subramanian says
      Published Tue, Sep 5 20238:11 PM EDT
      Stephanie Landsman
      BofA’s Savita Subramanian says she believes the bond move is bullish

      The latest jump in Treasury yields is not “death to equities,” BofA Securities’ Savita Subramanian told CNBC’s “Fast Money” on Tuesday.

      In fact, Subramanian sees the bond move as a positive signal — rather than an ominous sign for the economy.

      “Companies are refocusing on efficiency and productivity rather than juicing up earnings through leverage buybacks and cheap financing costs,” the firm’s head of equity and quantitative strategy said. “Companies are finally focused on efficiency and they have new tools. They have AI [artificial intelligence]. They have automation.”

      Subramanian describes herself as having the most positive view on stocks since the 2008 financial crisis, saying that productivity will drive the next leg of the bull market.

      “We’re past this experiment of QE [quantitative easing] and zero interest rates and negative real rates and all of this really kind of unnerving stuff that has been hard to allow us to actually value equities appropriately,” she said. “Maybe we don’t see as strong of returns from here, but we see more real returns.”
      …
      https://www.cnbc.com/2023/09/05/bond-yield-jump-is-not-death-to-equities-bofas-savita-subramanian.html

    2. Yahoo Finance
      Stocks slide as worries about inflation revive: Stock market news today
      Karen Friar
      Wed, September 6, 2023 at 8:05 AM PDT·1 min read
      In this article:

      Stocks fell on Wall Street on Wednesday, on track for another losing day as lingering concerns about inflation spurred doubts the Federal Reserve will decide to cut interest rates any time soon.

      The S&P 500 (^GSPC) was down about 0.6%, while the Dow Jones Industrial Average (^DJI) dropped around 0.4%, deepening losses. The tech-heavy Nasdaq Composite (^IXIC) was down 0.9%.

      WTI crude oil (CL=F) is trading around its highest level since November, after touching $90 on Tuesday after Saudi Arabia and Russia stuck with output cuts. That reignited worries about “sticky” inflation and weighed on stocks, helping push all three major US gauges to close lower on Tuesday.
      …
      https://finance.yahoo.com/news/stocks-slide-as-worries-about-inflation-revive-stock-market-news-today-110557462.html

    3. It seems like epic uncertainty itself could weaken valuations, not to mention the negative supply shock of rising interest costs and the negative demand shock of debt strapped consumers.

      But maybe the magic of AI will save the day?

      1. Bloomberg
        Markets
        Wall Street’s Stock Market Calls Vary by Firm — and by Floor

        – Outlooks clash under same roof at Morgan Stanley, BNP Paribas

        – Investors focus on profit boost; strategists eye growth risks

        By Alexandra Semenova and Sagarika Jaisinghani
        September 6, 2023 at 7:15 AM PDT

        This year’s astounding run in the S&P 500 Index has left forecasters split about what the world’s largest stock market will do next, and on Wall Street, the biggest disagreements often are emerging within the same firm.

        Take Morgan Stanley. At the company’s brokerage, strategist Mike Wilson says US stocks will fall more than 10% before the year is out. On the asset management side of the bank, portfolio manager Andrew Slimmon reckons they’ll hit a record high.
        …
        https://www.bloomberg.com/news/articles/2023-09-06/wall-street-s-stock-market-calls-vary-by-firm-and-by-floor#xj4y7vzkg

    4. Financial Times
      Markets Briefing Markets
      Global stocks fall as oil price increase spurs inflation worries
      Brent crude rises as moves by Saudi Arabia and Russia to extend supply cuts push price above $90 a barrel
      Daria Mosolova in London an hour ago

      Global stocks fell on Wednesday as firmer crude prices renewed investor fears that it would help stoke lingering inflation and curb global economic growth.

      Wall Street’s benchmark S&P 500 and the tech-focused Nasdaq Composite declined 0.4 per cent at the New York opening bell.
      …

  18. Here we go again. I got an email from my son’s school letting me know someone in his class tested positive for COVID.

    1. What’s the IFR for age 18 and under?

      0.0000000 something percent, unless of course they’ve been injected with the Jim Jones mystery juice, in which case they have a 10+ percent chance of having a heart attack or stroke.

        1. Neither do I, but during the hoax I would catch the 10:00 news once in a while to see what propaganda the enemy was spewing. The shrieking doctors (Get vaccinated, you idiots, or you will die!) were a regular fixture for quite a while.

    3. IMO the big issue will be the whole with-COVID/from-COVID distinction in the hospitals. Mask policy depends on hospital admission data. What I find funny how the doctors keep saying that COVID will increase with the colder weather, while people are getting this in 90° weather.

  19. A Consumer Credit Cycle Has Begun

    https://www.knowledgeleaderscapital.com/2023/09/05/a-consumer-credit-cycle-has-begun/

    With government stimulus over, accumulated savings starting to become depleted, rents soaring, and student loans about to switch back on, it appears a credit cycle has begun where borrowers struggle to fulfill their financial commitments.

    (You’ll need to link on the article in order to read the rest and see the charts hat are referenced.)

    1. “Unlike the 2007-2011 period, the credit cycle is not playing out in the real estate market.”

      They forgot to add “yet” to the end of that sentence. But you can see the progression in those charts. Delinquencies begin with credit card card debt, then auto, and then lastly the mortgage defaults. But once price declines put more and more homeowners upside-down and negative equity then the mortgage delinquencies will lead the pack.

  22. ‘You wussed out’: Dave Ramsey reveals the real reason Americans are going broke — and it’s not inflation.

    https://news.yahoo.com/finance/news/wussed-dave-ramsey-reveals-real-100000006.html

    (a snip or two …)

    He added: “All you do is work for these stinking banks that have better furniture and bigger buildings than you do.”

    Ramsey went on to state that debt has become normalized in America if not throughout the world. It’s now a huge obstacle for those seeking to save money and put that cash toward retirement.

    Yet, instead of paying back debt, consumers seem to be using credit cards and other loan methods to continue funding their daily spending, Ramsey said. Rather than cut back during inflation, consumers chose to make up for the shortfall by borrowing money to maintain their lifestyles.

    Ramsey stated that people’s continual reliance on consumer debt has kept him in the financial advice-giving business for the last several decades and will give him job security for several more.

    1. When all your self worth is tied up in your material possessions and your appearance of wealth the idea of cutting back and getting skinny on your spending is not on option. So pathetic.

      1. “appearance of wealth”

        This is a big one in the trades. All image, all lies, and most of these clowns don’t have two nickels to rub together.

        1. If you don’t have a McMansion, a $100K truck, a large boat, an RV, a motorcycle and maybe a jetski, you are obviously a loser.

          1. “…If you don’t have a McMansion, a $100K truck, a large boat, an RV, a motorcycle and maybe a jetski…”

            Here in SoCal (Newport/Irvine) add yacht to the list.

            As pointed out, if you don’t buy into all this nonsense you are framed up as a ‘loser’.

            While there are some truly wealthy individuals in this area, my gut tells me that 90%+ of all households are living above their means at some level.

            In other words, while many households have healthy incomes, most all that money is used to service existing debt.

            These guys are the true ‘losers’

          6. Probably a good thing

            I don’t know. I have a boat that could be called a yacht, but I’m not pretentious and don’t hang out with that sort.

  23. Dead cat bounce is over. After that brief late spring and summer bounce the areas I’m watching are plummeting again. This morning I watched two brand new homes sold in ‘21 listed 60k and 45k over their selling price in ‘21. Both these homes will lose money if and when they sell. Between closing costs and realtor commissions any profit margin is gone. I haven’t done any more digging but I guarantee these are investor homes. We’re about to see a flood of these kind of listings.

  24. WeWork To Renegotiate All Leases; Plans To Cut ‘Underperforming’ Offices

    https://www.zerohedge.com/markets/wework-renegotiate-all-leases-plans-axe-underperforming-offices

    WeWork CEO David Tolley published a letter on Wednesday morning, indicating the struggling co-working start-up “will seek to negotiate terms with our landlords” and “part of these negotiations, we expect to exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product.”

    Last month, WeWork stated in a 10-Q filing that “substantial doubt exists about the company’s ability to continue as a going concern.” Since WeWork continues to hemorrhage cash and liquidity is running thin, the money-losing business appears to be on its last leg.

      1. WeWork has just got to be the greatest con in history, hands down.

        Billie Sol Estes (50’s, 60’s Con man) must be spinning in his grave with envy.

        Add to WeWork to the long list of other cons including Luxury Student Housing, crypto, NFT’s, many REITS, and the list goes on.

  26. At this point since Climate Change and Panademics could be the means of warfare or takeover of the World, than a global investigation should be launched as to this possible fraud.
    The “trust the Science” isn’t good enough when Science can be bought, censored, bribed , or extorted.
    We just had the globe shut down, based on a global Panademic, where lockdowns, masks and expiermental vaccines were the solution. Cheap medications that were effective were censored and banned, that would of disqualified emergency use of a new technology vaccine.
    Climate Change is suppose to be justification for a radical change to human existence , that amounts to withdraw of what sustains life, amounts to enslavement and control of consumption , you will own nothing and eat bugs.
    And you have specific Entities like the WEF, the UN, Bill Gates ,etc., declaring themselves the Stakeholder Governance that should partner with governments for this One World Order/Great Reset insurrection.
    The WEF, and the UN declaring China the model for response to Panademic, when they were ground zero for this manufactured virus, is ridiculous.
    Private Parties control over free speech and control of the narratives was launched to get compliance to the “safe and effective” vaccine . PCR fake testing was launched to establish a panademic of non sick carriers. The medical system was bribed and extorted into mal practice deaths and fraud of Covid deaths.
    Climate Change and the UN 2030 agenda of sustainable earth , is a take over plot that attempts to take all freedoms from human populations, based on declared Global Emergencies, that can’t be disputed.
    Klaus Schwab has announced that who controls technology controls the World. Whoever controls the narratives controls the world also.
    And the solutions to all the declared global emergencies, like you will own nothing, eat bugs, live in 15 minute Cities, be hacked, and Banks control your consumption , with mandated vaccines, is a take over plot.
    They plan to gut 40 to 50 % of human jobs within 10 years by AI and robots. Private Parties in control of what would be a radical replacement of humans, and funding of government by wage earning taxes.
    This Great Reset agenda where this group dictates the course of human existence, with this anti-humanity force humans into enslavement with no freedoms is a power grab world take over.
    They have launched their pre-planned take over, based on justification by declared Global emergencies, with no dispute allowed to their fraud or their solutions.
    This is warfare against human populations by a Cult of criminal fraudsters who are genocidal , arrogant, psyopathic, reckless and dangerous to the world. They are the biggest threat that the human species has ever faced.
    Don’t comply with this insanity.

  27. “Rapper Roddy Ricch, born Rodrick Wayne Moore Jr., has sold his four-bedroom, five-bath Beverly Hills abode. Alas, Ricch bagged just under $5 million—$4,995,000 to be exact—for the house he paid $5.6 million for in 2021. Almost a year after that purchase, the 24-year-old artist put the property on the market for $5,995,000. He slashed the ask to $5,750,000 earlier this year. This summer, the price tag shrank again—to $5,199,000—and spurred the recent sale.”

    Don’t worry Ricch! It was still cheaper than renting!

  28. We’re Living In A Neofeudal Bubble

    https://www.zerohedge.com/personal-finance/were-living-neofeudal-bubble

    If you listen to conventional economists, everything’s rosy: thanks to the expansion of alt-energy like wind and solar, energy is getting cheaper, batteries will power the new global economy, we’re getting smarter — just look at the rising number of advanced college degrees, wages are finally growing, inflation is trending down, household balance sheets and corporate profits are strong, debt loads are not an issue yet and GDP is rising.

    All this happy news is backed by statistics, of course, but there’s one little problem: all the conventional cheerleaders are living in a bubble of like-minded elites who are insulated from the neofeudal realities of life in the real world.

    Outside the bubble of wealthy, protected elites that generate the statistics and the “news,” the global economy is completely, totally neofeudal–and so is the American economy. What does neofeudal mean? It refers to a two-tiered socio-economic system in which an aristocracy owns the vast majority of the wealth and collects the lion’s share of the income, and uses this financial dominance to buy political and narrative dominance.

    In a neofeudal arrangement, the machinery of governance protects and enforces elite dominance. Cartels and monopolies have free rein to price-fix and exploit, tax revenues flow freely to cartels, elite organizations such as family trusts get tax breaks, and so on.

    In other words, “the market” is rigged and the government maintains the status quo.

    Toiling away to enrich the aristocratic owners of capital are the serfs and peasants, who own a tiny shred of income-producing capital. Their primary assets–the family home and vehicles–are actually income streams for the wealthy who collect the mortgage and auto-loan interest paid by the serfs.

    The core dynamic in neofeudalism is the already-wealthy increase their share of the wealth, and everyone else sees their meager share diminish. As the charts below show, the vast majority of financial gains generated by the US economy flow to the top 0.1% of households.

    (Link on the article for the charts and for the rest of the text.)

    1. but there’s one little problem: all the conventional cheerleaders are living in a bubble of like-minded elites who are insulated from the neofeudal realities of life in the real world.

      That’s giving them too much credit. They’re lying and they know it. As long as they they get richer, who cares what the truth is?

  29. Ominous Beige Book Warns Consumers “Exhaust Savings” As Recession Mentions Soar To 5 Year High

    https://www.zerohedge.com/economics/ominous-beige-book-warns-consumers-exhaust-savings-recession-mentions-soar-5-year-high

    The Fed’s latest beige book released this afternoon was a rather boring affair, one signaling US economic growth was “modest” during July and August.

    What was most interesting within this drab big picture, was the divergence within consumer spending, where according to the Beige Book, “consumer spending on tourism was stronger than expected, surging during what most contacts considered the last stage of pent-up demand for leisure travel from the pandemic era.” But, it’s the other side of the equation that was more concerning, as the Fed found that “other retail spending continued to slow, especially on non-essential items.”

    And the punchline: “some Districts highlighted reports suggesting consumers may have exhausted their savings and are relying more on borrowing to support spending.” Bingo: this is precisely what we said last week in “US Consumers Paid For July Spending Spree By Burning Through $150BN In Savings”, and while the Fed is right that households have burned though savings, it is wrong that they have borrowing capacity to support spending: as we showed last month, households paid down credit card debt for the first time since the covid crash, a clear sign that US consumers are now hunkering down.

    (Access the link to see the charts and to read the rest of the article.)

  30. ‘the low occupancy tells him the city is ‘kind of saturated in terms of people willing to pay those prices, because some of the new apartments, they are one-bedroom apartments in MidCity with rents that are higher than a mortgage on a much larger square foot home’

    DONG!

  32. ‘on private forums, the relationship between platform and third-party contractor revealed itself as a bit more strained: They had fought for Airbnb. Why wasn’t Airbnb fighting for them?’

    They did the brown envelopes and lawyers, made a ton of money and now yer fooked so they don’t care.

  33. ‘This could prompt these buyers to make an offer on a home less than the asking price

    Stop right there Jason.

    ‘Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales’

    OK that’s better, just don’t give it away!

  34. ‘It is uncommon for close to 70%-80% of the non-state-owned issuers in a major sector to run into default or distress within such a short period’

    It’s never happened before Zhi.

  35. The only people who wear masks are prisoners in handcuffs being led in and out of a courtroom.

    And of course all the cucks who wear them voluntarily. See also: Reddit.

  37. Do you have high hopes for China’s property stimulus?

    Or have your hopes been swallowed up by fears of getting sucked down the vortex, and into the CR8R?

    1. Financial Times
      Chinese economy
      China stirs hope in property market with latest stimulus plan
      Beijing seeks to rekindle growth in economically crucial sector but investors remain cautious
      China’s government last week took its strongest steps yet to rekindle demand in the moribund property sector, which normally accounts for more than a quarter of economic activity © AFP/Getty Images
      Joe Leahy and Nian Liu in Beijing yesterday

      For Beijing-based real estate agent Xue, deals have bounced back over the past week in the wake of government measures aimed at propping up the country’s stumbling property sector and the broader economy.

      “The inventory of available properties is decreasing daily,” said Xue, who asked to be identified by one name, adding there were signs that after a long period of falling prices, some homeowners were hoping to raise them again.

      Xue’s upbeat prognosis was not universally shared — other agents reported little change in the market — but high-frequency property market data over the past week showed some increase in buyer interest in the country’s biggest cities, economists said.
      …

    2. Financial Times
      Chinese trade
      China’s renminbi hits 16-year low after exports tumble in August
      Beijing under pressure for more economic support as manufacturing sector struggles to pick up
      Container ships dock at cranes in Nanjing port in China’s eastern Jiangsu province
      China’s exports fell 8.8% in August compared with a year earlier, and imports declined 7.3%. The figures were improvements from July data but reflected continued weakness in the economy © AFP/Getty Images
      Joe Leahy in Beijing and Hudson Lockett in Hong Kong 30 minutes ago

      China’s currency has fallen to its lowest point against the dollar since 2007 after exports shrank for a fourth straight month in August, showing how the manufacturing sector in the world’s second-largest economy is struggling to regain momentum.

      The renminbi edged down 0.1 per cent to a low of Rmb7.3259 per dollar on Thursday, lower than the levels recorded during nationwide pandemic lockdowns last year, after an official release showed China’s exports dropped 8.8 per cent in August compared with a year ago.

      The August exports contraction was less severe than a forecast fall of 9.2 per cent, according to analysts polled by Reuters, and better than the decline in July, when they declined 14.5 per cent, the worst since the start of the pandemic.

      Chinese trade buoyed economic activity during lockdowns, but exporters have struggled this year as foreign customers cut back purchases on high global inflation.

      The Chinese currency, meanwhile, has fallen almost 6 per cent against the dollar this year as disappointing economic data and a strengthening US dollar piled pressure on the exchange rate, despite a number of direct and indirect measures by Chinese authorities to discourage bets against the currency.

      “Crossing this level raises the possibility of the [People’s Bank of China] adjusting the currency band to a weaker level,” said Ken Cheung, chief Asia foreign exchange strategist at Mizuho Bank. China’s central bank sets a daily trading band midpoint around which the renminbi can fluctuate 2 per cent in either direction against the dollar.

      “Tomorrow’s midpoint fix will be quite an important indicator of whether the PBoC is willing to change its approach to currency management and unleash that depreciation power,” Cheung said.
      …

      1. Financial Times
        Opinion Chinese economy
        China’s demand dilemma could spell trouble for the world
        The other G20 countries should signal consensus against Beijing running a big surplus
        Robin Harding
        James Ferguson illustration of a panda bear with a huge cargo box on its back, holding onto a red graph line that has snapped and is falling.
        Robin Harding September 5 2023

        The G20 is supposed to be the premier forum for management of the global economy and the biggest economic issue in the world right now is a chronic lack of demand in China.

        It is therefore more than unfortunate that president Xi Jinping has decided not to attend the summit in New Delhi this weekend, sending premier Li Qiang instead, and highlighting in the process just how few options other countries will have if China tries to solve its economic challenges by falling back on demand from the rest of the world. Since Xi will not be there to address it, the other world leaders should consider in his absence exactly how they would handle this scenario.

        As Brad Setser of the Council on Foreign Relations points out, economic weakness in China has little direct effect on other advanced economies, because China makes so much for itself and buys so little from anybody else. Only a tiny fraction of US output reflects the manufacture of goods and their export to the world’s other economic giant.

        Rather than causing a slowdown elsewhere, the issue is what would happen if China tried to export its way to growth as it did in the 1990s and 2000s. China’s current account surplus already runs at 2 per cent of its enormous economy. If Beijing sought to increase that it would be problematic, but most especially if it did so via policies aimed at holding down the value of the renminbi exchange rate.

        The benefit of such policies to China is questionable these days. With its economy now so big, and its manufacturing trade surplus already so large, it is hard to imagine how foreign demand can make a big enough contribution to offset the faltering housing market.

        A focus on exports, however, fits with Xi’s goal of building Chinese strength in high-technology industry and his distaste for a stimulus aimed at domestic consumption. Encouragement for Chinese citizens to travel at home, rather than go abroad, is one example of how policy can divert demand away from other nations.

        Even if the diversion of demand to China was not enough to generate strong growth at home, it could still cause disruption to the world economy. Most obviously, if China makes its goods more competitive, they will displace production elsewhere.

        More subtly, a current account surplus must be offset by capital flows. The recycling of China’s surplus contributed to easy financial conditions around the world prior to the 2007-08 financial crash, just as the export of German savings to countries such as Greece was part of the build-up to the eurozone crisis in 2011. Such imbalances in the global economy are not a phenomenon anybody should be in a hurry to revisit.

        What then can the rest of the G20 do about it, other than urge China to generate more demand of its own? There are few easy answers.
        …

    3. Financial Times
      Markets Briefing Markets
      Stocks fall as weak China data increases fears over global slowdown
      Dollar rises as investors expect US rates to remain elevated
      Daria Mosolova in London 2 hours ago

      European and Asian stocks fell on Thursday as investors worried over the prospect of slowing global economic growth and high US interest rates.

      Europe’s region-wide Stoxx 600 fell 0.5 per cent at the open, after six straight days of losses, while France’s Cac 40 was down 0.3 per cent and Germany’s Dax gave up 0.3 per cent.

      The downbeat mood spread from China after official data showed trade was weakening in the world’s second-largest economy.

      While not as bleak as analysts had forecast, China’s trade data on Thursday still showed exports falling 8.8 per cent year on year in August, while imports declined 7.3 per cent, in a sign that demand was slowing domestically and abroad. The benchmark CSI 300 and Hong Kong’s Hang Seng both fell 1.4 per cent.

      “Periods of sticky inflation have dented real wages in western economies, while elevated level of interest rates have reduced their purchasing power via higher debt servicing costs,” said Kelvin Lam, senior China economist at Pantheon Macroeconomics.

      “This coupled with the fizzling out of the post-Covid spending spree, resulting in weak demand for discretionary Chinese goods,” he noted.

      While economic growth stumbled elsewhere in the world, US data earlier in the week revealed a flare-up in price pressures, adding to investor doubts that the Federal Reserve would begin to cut interest rates.

      The US service sector had unexpectedly expanded in August, as consumers continued to spend despite the federal funds rate having climbed to a 22-year high over the past year.

      The data bolstered the belief that “even if the Fed is done with its rate hikes, it may need to hold its key interest rate for longer than previously expected if the economy continues to be this strong”, according to Karl Steiner, chief quantitative strategist at SEB Research.

      The dollar, which tends to rise when investors expect higher rates, added 0.1 per cent against a basket of six currencies on Thursday, remaining near its highest level since March.

      While the majority of market participants believe that the US central bank will keep rates steady at its meeting this month, some bet that another rate rise will follow later in the year.
      …

    4. The Wall Street Journal
      LIVE UPDATES
      Stock Market Today: Dow Futures Slip, Apple Stock Sinks Premarket
      Concerns about inflation and interest rates had fed a selloff in the previous session.
      Last Updated:
      Sep. 7, 2023 at 6:20 AM EDT
      Live Coverage Feed
      1 hour ago
      China’s Weak Trade Data Weighs on Stocks
      By Matthew Thomas, Asia Markets Editor

      China’s faltering economy continues to weigh on its stock market, and its currency.

      Shares in mainland China and Hong Kong fell Thursday after data showed a sharp drop in both exports and imports. The yuan slipped, with $1 buying about 7.335 yuan in the offshore market.

      The selling pressure was strongest in the shares of companies that are more dependent on global trade. Semiconductor Manufacturing International, already hurt by U.S. restrictions on its imports, lost 7.6%. Stock in the computer maker Lenovo, which has big demand overseas, shed 3.4%.

      To Read the Full Story
      Subscribe
      …
      https://www.wsj.com/livecoverage/stock-market-today-dow-jones-09-07-2023/card/china-s-weak-trade-data-weighs-on-stocks-VgJfSEujJR3KUr8QhxDX

    5. Trade
      Guide to Forex Trading
      Advanced Concepts
      Beggar-Thy-Neighbor: Meaning and History in Forex
      By Adam Hayes
      Updated June 20, 2022
      Reviewed by Somer Anderson

      What Is Beggar-Thy-Neighbor?

      Beggar-thy-neighbor is a term used for a set of policies that a country enacts to address its economic woes that, in turn, actually worsen the economic problems of other countries. The term comes from the policy’s impact, as it makes a “beggar” out of neighboring countries.

      Key Takeaways

      – Beggar-thy-neighbor refers to economic and trade policies that a country enacts that end up adversely affecting its neighbors and/or trading partners.

      – Protectionist barriers such as tariffs, quotas, and sanctions are all examples of policies that can hurt the economies of other countries.

      – Often, beggar-thy-neighbor policies are not intended to negatively affect other countries; rather, it is a side effect of policies meant to bolster the country’s domestic economy and competitiveness.
      …
      https://www.investopedia.com/terms/b/beggarthyneighbor.asp

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