So What’s The Problem? The Same Thing It Always Is: Money
A weekend topic starting with the Los Angeles Times. “The high cost of housing is driving Southern California’s biggest challenges. Income is not keeping pace with housing costs. It hasn’t for at least two generations. There’s a metric called ‘housing burden’ that lays the situation bare. Over the last 50 years, it tracks the growing, gaping mismatch between income and shelter costs in Los Angeles County. In 1979, UCLA land experts Leo Grebler and Frank Mittelbach wrote: ‘As a general, time-honored rule of thumb’ house prices in a community ‘should not exceed 2 to 2½ times the annual income’ of its residents. Within a decade, home prices began to drastically violate this rule. If it were applied today, it would mean a four-person household with the median Los Angeles County income of $98,200 could afford to buy a house that cost $245,500. However, the median home price in the county last month, according to Redfin, was $980,000.”
“Taking a longer view, economist Robert Shiller traced rising housing costs in the late 1980s and early 2000s across metro areas globally, including L.A. He pinned a good deal of the blame on ‘irrational exuberance’ that motivated uncontrolled buying. The psychological draw of metro areas such as Paris, London, Sydney and L.A. reinforced the belief that land prices would continue to go up and up. Media fed these perceptions. And housing bubbles blew up. Solutions must come from both the housing and the income side. Increasing the housing supply is crucial. Even more importantly, wages and salaries must climb considerably to make housing affordable again.”
Yahoo Finance. “Core PCE is the inflation measurement most often mentioned by Fed Chair Jerome Powell, who noted last Wednesday that inflation remains ‘well above our longer-run goal of 2%.’ The comments came after the Fed maintained rates in a range of 5.25%-5.50%, the highest level since March 2001, while also forecasting holding interest rates higher for longer than anticipated in an effort to tame inflation. But Powell acknowledged during the subsequent press conference that a rise in core PCE isn’t the only thing that could drive another interest rate hike this year. The Fed is also closely following any economic developments that could stifle inflation’s path downward. ‘The heat that we see in GDP, is it really a threat to our ability to get back to 2% inflation? That’s going to be the question,’ Powell said. ‘It’s not a question about GDP on its own.'”
The Globe and Mail. “Canada’s economy showed little momentum as it entered the second half of the year, with gross domestic product flatlining in July and appearing to rise only slightly in August. Andrew Grantham, senior economist at Canadian Imperial Bank of Commerce, wrote in a note to clients that the transitory nature of some of these economic forces ‘means that weak GDP readings may not necessarily translate into lower inflationary pressures in the near-term.’ ‘However, with retail sales on a clear weakening track, there should be enough evidence that domestic demand is responding to higher interest rates to prevent a further interest rate hike from the Bank of Canada this year,’ he added.”
“‘The GDP growth backdrop in Canada continues to soften, in contrast to sticky inflation prints that are still running above the Bank of Canada’s 2 per cent target,’ Royal Bank of Canada economist Claire Fan wrote in a note to clients. ‘With interest rates already at very restrictive levels, further increases from the BoC and other central banks will remain very data dependent. Firmer-than-expected inflation readings in Canada have increased the odds of another BoC interest rate hike this year. But inflation lags the economic cycle and there are growing signs that the impact of earlier interest rate increases are working to cool the economy,’ she added.”
The Conversation. “As the Bank of Canada prepared to announce its decision on interest rates in early September, Tiff Macklem, the bank’s governor, received imploring letters from premiers spanning both the country and the political spectrum. In their letters, the premiers urged the bank against raising rates again and to think of the ‘human impact of rate increases’ on Canadians already burdened by rising mortgage payments and financial pain. The overt goal of monetary policy is to stabilize the financial system, a priority that disproportionately benefits those in the financial sector.”
“This has become clear in recent decades, beginning with the 2008 global financial crisis and continuing to the COVID-19 pandemic, when central banks around the world began to use ‘quantitative easing’ to stimulate the economy. While monetary policy had previously centered on setting the rates at which regulated banks could borrow, central banks expanded their role by undertaking massive asset purchasing campaigns via quantitative easing. Central banks began supporting not just regulated banks but investment funds, hedge funds and other ‘non-bank financial intermediaries’—also known as shadow banks—that are largely unregulated. This involved tactics like purchasing corporate bonds to stabilize the corporate debt market.”
“Acknowledging this shift, Bank of Canada deputy governor Toni Gravelle said the bank has moved from its traditional role as ‘lender of last resort’ to ‘liquidity provider of last resort,’ promising to ‘resolve market-wide stresses when the financial system cannot find its footing.’ When the working class cannot ‘find its footing,’ however, the Bank of Canada doesn’t extend a helping hand. In 2022, for example, Macklem told employers not to increase wages despite rampant inflation, and told unionized workers not to ask for a raise.”
From CNBC. “Another morning, another move higher in bond yields. These moves are not happening in response to better economic data. They are happening globally, and even in places where the economy is tanking. Take Germany, whose 10-year yields just hit a fresh twelve-year high…even as their economy has been in recession for three quarters and the outlook is so poor that it’s causing national agita; ‘The sick man of Europe is back,’ and so forth. Here in the U.S., the envy of the world for our own cheap and plentiful natural gas supplies, we have echoes of the same problem. The price of U.S. benchmark crude oil hit $93 a barrel yesterday. This will keep upward pressure on gasoline prices, which has already dented consumer confidence, and will continue nudging the CPI higher.”
“Traders say rising energy prices are one reason for the continued rise in global bond yields. ‘One may ask if policy makers fully thought through the various implications to markets, and in turn the economy, of their domestic energy priorities and policies before implementing them,’ one trading desk wrote this morning.”
“And the cost of funding the energy transition is just one of several reasons why global debt issuance has been soaring. There was the massive response to Covid, of course. Plus de-globalization and domestic support initiatives like America’s ‘CHIPS Act’ and infrastructure bills. And all of this–plus the previous decade’s stimulus measures–done in an era of near-zero interest rates. Europe at one point had almost $10 trillion worth of negative yielding debt. Almost a quarter of government bonds globally had negative yields pre-pandemic!”
“Add it all up, and you’re left with a massive debt pile, continued budget deficits, and an enormous amount of global government debt on the market competing for fewer structural buyers as central bank demand has dried up. ‘The epic sovereign bond bubble continues to unwind,’ wrote Peter Boockvar of Bleakley Advisors this morning. Prices for certain poster-child debt, like Australia’s 100-year long bond, have crashed by 75% from their highs.”
Fox Business. “The U.S. housing market has been over the past year walloped by high mortgage rates and a worsening inventory shortage. It may soon face another obstacle; student loan repayments. Real estate experts are bracing for a significant blow to the market when the pandemic-era freeze on federal student loan payments comes to an end at the beginning of October. About 44 million borrowers in the U.S. were affected by the payment pause, which initially began in March 2020 at the onset of the COVID-19 pandemic.”
“Collectively, borrowers are to resume paying about $10 billion a month, according to an analysis from JPMorgan. The potential hit comes at an already precarious time for the housing market, thanks to the astronomic rise in mortgage rates over the past year. In fact, housing affordability is worse today than during the peak of the 2008 housing bubble. The Atlanta Fed’s Housing Affordability Monitor, which compares median home prices and other housing costs with median household income, indicates the median U.S. household would have to spend about 43.2% of their income to afford the median-priced house as of June, according to the index. That is the highest share in data dating back to 2006.”
“About 38.6% of the median household income is currently required to make the monthly payment on the average home purchase. ‘To put today’s affordability levels in perspective, it would take some combination of up to a 28% decline in home prices, a more than 4% reduction in 30-year mortgage rates or up to a 60% growth in median household incomes to bring home affordability back to its 25-year average,’ said Andy Walden, vice president of enterprise research and strategy at Black Knight.”
From The Ascent. “It is a truth, universally acknowledged, that housing is expensive. A huge chunk of our budgets go to housing, and that’s true whether you own or rent. But while housing prices tend to fluctuate, sometimes rising, sometimes falling, rental prices somehow manage to rise every year. And it seems to be getting much, much worse. Indeed, rents are at a record high, with Redfin data showing the median asking rent in August 2023 was $2,052. Even traditionally affordable areas are seeing record highs, with the median asking rent in the Midwest hitting $1,434. These haven’t been slow changes, either. Anecdotally, I’ve heard dozens of stories of rents going up by hundreds of dollars between one year and the next.”
“On the surface, you might think there’s some kind of shortage going on. Are there that many new renters? Are they just not building enough new apartments? As it turns out, they’re building a record number of new apartments — just not the kind we need. More than 1.2 million apartments were added to the market over the last three years. There are expected to be more than 460,000 new rentals on the market this year, and another 1 million added through 2025. Currently, we’re seeing the highest rate of new apartment construction in the last 20 years.”
“So what’s the problem? The same thing it always is: money. About 89% of new apartments built in 2020 were ‘luxury’ apartments aimed at mid- and high-income renters. In other words, of the more than 460,000 new apartments completed this year, only around 51,000 are affordable housing.”
The Gulf Times. “Christine Lagarde’s three blunders as president of the European Central Bank did not cause the revival of right-wing populism across Europe; but they have reinforced it mightily. The first gaffe cost Italy billions, and the ECB many of the reputational gains that Mario Draghi, Lagarde’s predecessor, previously worked so hard to secure. Recall March 2020: The world was gripped by pandemic-induced anxiety and markets were panicking, especially about the solvency of Italy, a country with gigantic debts and no central bank of its own to print money the way the US Federal Reserve, the Bank of Japan, and even the Bank of England could do.”
“When asked at a scheduled press conference if the ECB would stand by Italy’s debt to contain interest-rate spreads (the difference in borrowing costs between member-state governments) within the eurozone, Lagarde did not reassure markets and the public by repeating Draghi’s famous promise to do ‘whatever it takes.’ Instead, she did the opposite, declaring: ‘We are not here to close spreads.’ Within seconds, Italy’s debt-servicing costs skyrocketed.”
“The second blunder was less visible but has had deeper, longer-lasting effects. Ever since the crash of 2008, the ECB has been pushing a wall of money toward Europe’s permanently fragile banks in the hope that they would lend it on to businesses and thereby revive Europe’s flagging economy. After 2014, when official interest rates were negative, the ECB was essentially paying bankers to accept hundreds of billions of euros in their ECB accounts. But instead of lending that money to businesses, the bankers simply kept it in their ECB accounts and continued collecting the bribes the ECB was paying them in the form of negative interest rates.”
“Now that inflation has returned with a vengeance, the same bankers have kept billions parked in their ECB accounts to collect on the higher interest rates, while continuing to pay their depositors minuscule interest. Yet instead of using the ECB’s powers to put the fear of the divine into these bankers, Lagarde has let them run rings around the institution at the expense of small businesses and depositors. Lagarde’s third blunder was her slow reaction to rising inflation, reflecting a long sequence of spectacularly disastrous ECB forecasts. In fairness, Draghi, too, had presided over terrible forecasts while consistently failing to hit the ECB’s 2% inflation target. But the dragon that he could not slay was deflation – negative or very low inflation – which forced him to cut interest rates first to zero and then to minus 0.5%.”
“That all changed under Lagarde, when inflation turned positive – and in a big way. Unlike deflation, inflation hits the entire population, especially workers and middle-class households struggling to make ends meet. Any central banker who fails to anticipate it is thus guaranteed opprobrium from all walks of life. We saw this in the 1970s, and we are seeing it again now – except that this time is even worse.”
“Could Lagarde have done something different? As I argued at the time, yes: She could have increased interest rates earlier to burst the housing bubble while buying (or merely promising to buy) bonds issued by governments, the European Commission, the European Investment Bank, and even private companies, with the proceeds going exclusively to finance a green public investment drive. Instead, she wasted her energy and political capital on calibrating the ECB’s collateral policy to favour phony ESG (environmental, social, and governance) commitments, which did nothing to increase the supply of clean energy just when it was most needed.”
The Washington Times. “Every major economic downturn of the last 110 years bears the mark of the Federal Reserve. In fact, as long as the Fed has been around, it has swung the economy between inflation and recession. Yet Americans, surprisingly, have tolerated it. But we shouldn’t expect that to go on forever. We had three central banks before the Fed, and confined each to the ash heap of history. The problems inherent to central banking are cause to scrap the Fed as well.”
“Every five to 10 years for the last century, the Fed has created, then popped, bubble after bubble, each time taking down swatches of the American economy. Just in the past three decades, the Fed’s low interest rates caused the dot-com bubble in the 1990s, then the housing bubble and a global financial crisis in 2008. Today, there’s an ‘everything bubble’ from the Fed’s panic-printing to bribe voters into lockdowns, yielding the combined risks of 1970’s stagflation and a 2008-style bank collapse.”
“Since its founding, the Fed has stolen 98% of the value of a dollar. It has used those profits to repetitively launch boom-bust cycles and to transfer trillions to the federal government, special interests, and wealthy borrowers. Andrew Jackson did not tolerate such thieving rampages from his central bank. And we need not either.”
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‘Traders say rising energy prices are one reason for the continued rise in global bond yields. ‘One may ask if policy makers fully thought through the various implications to markets, and in turn the economy, of their domestic energy priorities and policies before implementing them,’ one trading desk wrote this morning’
I did mention at the time that allowing a 28 year old bartender to redesign our entire economy might have a downside.
‘And the cost of funding the energy transition is just one of several reasons why global debt issuance has been soaring. There was the massive response to Covid, of course. Plus de-globalization and domestic support initiatives like America’s ‘CHIPS Act’ and infrastructure bills. And all of this–plus the previous decade’s stimulus measures–done in an era of near-zero interest rates. Europe at one point had almost $10 trillion worth of negative yielding debt. Almost a quarter of government bonds globally had negative yields pre-pandemic!’
‘Add it all up, and you’re left with a massive debt pile, continued budget deficits, and an enormous amount of global government debt on the market competing for fewer structural buyers as central bank demand has dried up’
Oh what a tangled web of horse sh$t Jerry and the girls have cooked up!
the cost of funding the energy transition
Funding a fantasy is expensive. It still remains a fantasy though.
“Funding a fantasy is expensive. It still remains a fantasy though.”
\\
“You can ignore reality, but you can’t ignore the consequences of reality.” – Ayn Rand
“Sooner or later everyone sits down to a banquet of consequences.” – Robert Louis Stevenson
“I did mention at the time that allowing a 28 year old bartender to redesign our entire economy might have a downside.”
– I think you’re referring to AOC (Alexandria Ocasio-Cortez, aka Alex Occasional-Cortex).
– Not the brightest bulb in the box, but boy, has she got a bad case of the Socialism bug.
– “Socialism is Western Civilization in retrograde.” – I said that.
– The results are predictable, as each new generation tries to find the “right” version of Socialism, instead of just promoting Capitalism, the only model that actually lifts all boats.
“A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society.” – Ludwig von Mises
“The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture.” – Ludwig von Mises
“Every socialist is a disguised dictator.” – Ludwig von Mises
“The enduring lesson of the 20th century is that socialism is a failure, and free markets are a success. But the politicians keep advocating just a little more socialism.” – Milton Friedman
A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself. – Milton Friedman
“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.” – Milton Friedman
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” – Winston Churchill
– Not the brightest bulb in the box, but boy, has she got a bad case of the Socialism bug
Big ol’ rack on her chest. That’s what got her elected. If she was 300 lbs and ugly as sin, nobody would have ever known who she was.
‘Add it all up, and you’re left with a massive debt pile, continued budget deficits, and an enormous amount of global government debt on the market competing for fewer structural buyers as central bank demand has dried up’
Which is why they want the inflation. They are going to inflate away the debt at the expense of the standard of living of the working class and the poor.
But the government / Fed has to pay the higher interest with more debt. The question is can the debt be inflated away by printing more dollars?
‘On the surface, you might think there’s some kind of shortage going on. Are there that many new renters? Are they just not building enough new apartments? As it turns out, they’re building a record number of new apartments — just not the kind we need. More than 1.2 million apartments were added to the market over the last three years. There are expected to be more than 460,000 new rentals on the market this year, and another 1 million added through 2025. Currently, we’re seeing the highest rate of new apartment construction in the last 20 years’
‘So what’s the problem? The same thing it always is: money. About 89% of new apartments built in 2020 were ‘luxury’ apartments aimed at mid- and high-income renters. In other words, of the more than 460,000 new apartments completed this year, only around 51,000 are affordable housing’
And China runs on coal, builds multiple cities with almost no one in them for decades, has air they can barely breath, but you better give up yer gas stove or we’re all gonna die!
of the more than 460,000 new apartments completed this year, only around 51,000 are affordable housing’
I also don’t forget that much of the existing affordable housing was bought up and value-added into luxury housing. So now nothing is affordable.
How did you lose yer igloo Claire?
Inflation lags the economic cycle.
Income is not keeping pace with housing costs. It hasn’t for at least two generations.
Heckova job, “Zimbabwe Ben” Bernanke, Yellen the Felon, & BlackRock Jay.
“Acknowledging this shift, Bank of Canada deputy governor Toni Gravelle said the bank has moved from its traditional role as ‘lender of last resort’ to ‘liquidity provider of last resort,’ promising to ‘resolve market-wide stresses when the financial system cannot find its footing.’
Tony! Toni! Toné! – If I Had No Loot
https://www.youtube.com/watch?v=dZZQLDx1CtI
When the working class cannot ‘find its footing,’ however, the Bank of Canada doesn’t extend a helping hand.
That’s how oligarchy’s roll.
This will keep upward pressure on gasoline prices, which has already dented consumer confidence, and will continue nudging the CPI higher.”
But…but…Inflation Reduction Act!
If shutting down the government means no more money for Ukraine, it should shut down indefinitely, until Russia wins.
Related article about globalist scum media:
“NBC News is horrified that a US government shutdown may disrupt the pipeline of greenbacks being sent off to Ukraine 5,000 miles away never to be heard from again.
Meanwhile, 10,000 illegals a day are crossing over into the open US southern border.
We are defending Ukraine’s border 5,000 miles away but not our own.”
https://www.thegatewaypundit.com/2023/09/nbc-is-horrified-that-potential-government-shutdown-may/
Zelensky is a parasite and a war criminal.
Every member of Congress voting to send him money is guilty of TREASON.
[“]We are defending Ukraine’s border 5,000 miles away but not our own.”
+1
– Congress no longer represents U.S. middle class. It’s taxation without representation all over again.
– And not to mention, but I will, that the U.S. is BK and can’t afford the level of spending going on now, and truth be told, that’s been the case for many years now. $33T in debt + $200T in unfunded liabilities. Is that a lot?
“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway
“How did you go bankrupt?”
Two ways. Gradually, then suddenly.” – Ernest Hemingway, The Sun Also Rises
“We are defending Ukraine’s border 5,000 miles away but not our own.”
THIS
We are defending Ukraine’s border 5,000 miles away but not our own.”
The people who actually voted for Joe Biden, however many there are minus the ten million+ fraudulent ballots, are fine with this.
are fine with this
Until the invaders show up in masse in their neighborhoods and cause lots of trouble. Then suddenly they demand that the border be sealed.
“Add it all up, and you’re left with a massive debt pile, continued budget deficits, and an enormous amount of global government debt on the market competing for fewer structural buyers as central bank demand has dried up.
Gosh, what happens when all that debt needs to be paid back?
Royal Bank of Canada on Friday said it had injected capital into its Los Angeles-based subsidiary City National to boost the unit’s liquidity and pay down a higher cost of borrowing.
RBC, which bought City National in 2015 for $5.4-billion, said the move is part of management actions to improve profitability at City National. The bank did not disclose how much capital it had injected into the unit.
“An intercompany capital injection has been made into the City National subsidiary, further strengthening the capital and liquidity position of the subsidiary balance sheet, while also being used to pay down higher cost borrowing,” RBC said in a statement .
KBW analyst Mike Rizvanovic said he expects the outlook for City National to remain challenging as interest rates could potentially stay higher for longer.
“The need for such measures is a negative read-through on City National’s health,” Rizvanovic said.
RBC, Canada’s biggest lender, said in the statement that recent intercompany sales of certain debt securities by City National will result in the recognition of realized losses at the unit, which will be “eliminated at the Royal Bank of Canada consolidated level.”
The bank said City National has reinvested most of the proceeds of this intercompany transaction in new securities for its liquidity and investment portfolio, which should benefit net interest margins.
RBC did not offer further comment beyond the statement.
Eric Compton, analyst at Morningstar said re-positioning such securities can be a positive move in the current environment if a bank has the capital to absorb the losses. City National’s assets stood at $95-billion at the end of June.
Regional banks were the epicenter of a crisis earlier this year, triggered by the collapse in March of Santa Clara, California-based Silicon Valley Bank, which triggered massive deposit withdrawals and placed renewed focus on lenders’ financial health.
The Federal Reserve’s aggressive tightening since March 2022 put a lot of banks’ longer-term securities under water, creating investor anxiety over the health of bank balance sheets.
City National’s latest earnings showed losses in the May-July quarter stood at $38-million, compared with a profit of $102-million a year previous.
Those losses materialized as “everything went against us this quarter,” RBC CEO Dave McKay told analysts last month, largely arising from a credit loss on a real estate item, higher costs and rising deposit betas, which measure the sensitivity of a bank’s deposit cost to changes in short-term interest rates.
“We thought we’d have a record year in City National this year, and everything got turned upside down,” McKay said at a conference this month.
https://www.theglobeandmail.com/business/article-rbc-injects-capital-into-unit-city-national-to-strengthen-liquidity/
The gyrations and unintelligible ramblings of a failing debt ridden gambler.
For years, green and socially responsible investments, aka ESG (Environmental, Social, and Governance), have dominated the investing world. However, according to Bloomberg, a seismic shift is underway as BlackRock and other money managers unwound an increasing number of ‘green’ products amid soaring backlash and investor scrutiny.
Data from Morningstar shows State Street, Columbia Threadneedle Investments, Janus Henderson Group, and Hartford Funds Management Group have unwound more than two dozen ESG funds this year. The latest unwind comes from BlackRock, who told regulators last Friday it plans to close two ESG emerging-market bond funds with total assets of $55 million.
So far this year, the number of ESG funds closing is more than the last three years combined. This trend comes as investors pull money out of these funds as the ESG bubble has likely popped.
https://uk.finance.yahoo.com/news/greenwashing-backlash-sparks-esg-exodus-170000683.html
Suddenly, growth and profitability matter.
That’s what happens when the punch bowl is empty
MarketWatch
Markets
U.S. & Canada
The Tell
Investors should shun stocks and bonds as U.S. economy shows shades of 2008, top JPMorgan strategist warns
Last Updated: Sept. 28, 2023 at 7:27 a.m. ET
First Published: Sept. 27, 2023 at 5:05 p.m. ET
By Joseph Adinolfi
Cash is the safest place to be right now, according to Marko Kolanovic
A top JPMorgan Chase & Co. markets strategist is urging clients to shun both bonds and stocks in favor of cash after spotting shades of 2008 in the contemporary U.S. economy.
In his latest note to clients, JPM’s Marko Kolanovic, who earned the nickname “Gandalf” after a series of prescient market calls back in 2015, warned that the U.S. economy looks about to slide into a punishing recession as interest rates and bond yields climb. Neither stocks nor bonds are safe, he said, and urged clients to keep their cash and enjoy…
Despite Gandalf’s wizardly advice to dump all stock and bond HODLings and go to cash, it seems like folks who were in longterm Treasurys when the wheels blew off the Lehman Brothers bus in 2008 made bank.
I’ll try to pull together some data.
This Day In History:
September 15, 2008
Lehman Brothers declares bankruptcy
On September 15, 2008, the venerable Wall Street brokerage firm Lehman Brothers seeks Chapter 11 bankruptcy protection, becoming the largest victim of the subprime mortgage crisis that would devastate financial markets and contribute to the biggest economic downturn since the Great Depression.
…
https://www.history.com/this-day-in-history/lehman-brothers-collapses
Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis
June 18, 2007 5.26%
September 15, 2008 4.12%
December 29, 2008 2.63%
August 2020 2.49%
Conclusion: Gandalf’s a lion..
Buy the debt of a corrupt banana republic, or buy physical precious metals as a hedge against the Fed’s deranged money printing. Decisions, decisions….
You do what works…
Pop quiz: What would have been the total value, including coupons, of a $10,000 investment in 30-year Treasurys made on June 18, 2007,
as of year-end 2008?
Your data are here:
https://fred.stlouisfed.org/series/DGS30
Financial Times
Markets Briefing Markets
US stocks notch quarterly drop against backdrop of Treasury sell-off
Bond yields fell on Friday as investors welcome latest inflation data in the eurozone and US
A montage of a globe and a chart
Markets have been grappling with the prospect of interest rates remaining high for an extended period
Jaren Kerr in New York and George Steer in London yesterday
US stocks registered their first negative quarter of 2023 on Friday, ruling off on a bumpy three months for equities and bonds as investors shifted to the likelihood that although inflationary pressures may be easing, interest rates will probably remain higher for longer.
Wall Street’s benchmark S&P 500 fell 0.3 on Friday and notched a 3.7 per cent decline since the end of June, its first negative quarter in 12 months. The tech-heavy Nasdaq Composite rose 0.1 per cent on Friday, but dropped 4.1 per cent drop in the quarter. That marked its biggest quarterly drop since the three months to the end of June 2022.
Friday’s moves came as US core personal consumption expenditures fell from 4.3 per cent in July to 3.9 per cent in August, the lowest level in almost two years for the inflation gauge, which is closely watched by policymakers.
“Inflation is continuing to decelerate, meaning the Fed’s aggressive campaign is working,” said Carol Schleif, chief investment officer at BMO Family Office. “The challenge is that core PCE remains almost double the Fed’s 2 per cent target, prompting the Fed to keep the possibility of another rate hike in play.”
John Williams, president of the Fed’s New York branch, on Friday said the central bank is “at, or near, the peak level” of its monetary tightening, and expects inflation to moderate to 2.5 per cent in 2024. However, the release last week of the Fed’s “dot plot” of interest rate estimates pointed to fewer rate cuts in 2024 and 2025.
The yield on the benchmark 10-year US Treasury, which this week hit its highest level since 2007, and had its biggest monthly jump in a year, slipped to 4.58 per cent on Friday. Yields were at 4.09 per cent at the end of August.
The two-year Treasury yield, which moves with interest rate expectations, inched up after the inflation data but remained lower on the day at 5.05 per cent. Bond yields move inversely to prices.
…
DOW 30 -0.47%
S&P 500 -0.27%
NASDAQ 100 +0.08%
Bill Ackman and Larry Fink see US Treasury yields hitting 5%: ‘Like literally weeks’
Filip De Mott
Sep 29, 2023, 9:40 AM PDT
Ackman, Bill Ackman
Brian Snyder/Reuters
– Wall Street heavyweights Larry Fink and Bill Ackman see US Treasury yields reaching 5%.
– “That could happen in the very short-term,” Ackman said. “Like literally weeks.”
– This is as persistent inflation will keep pushing interest rates up.
Wall Street heavyweights Bill Ackman and Larry Fink see inflation remaining higher and expect US Treasury yields to soon hit 5%.
Ackman, who is the CEO of Pershing Square Capital, said at CNBC’s Delivering Alpha 2023 conference on Thursday that inflation will be persistently higher, while noting that US yields in the 4% range are still low on a historical basis.
“I would not be shocked to see 30-year rates well through the 5[%] barrier, and you could see the 10-year approach 5,” he said. “And that could happen in the very short-term. Like literally weeks.”
On Friday, the 10-year yield pulled back to 4.565% after surging to its highest level since 2007 earlier in the week. Meanwhile, the 30-year yield eased to 4.697%.
…
https://markets.businessinsider.com/news/bonds/bill-ackman-larry-fink-jamie-dimon-10-year-treasury-yields-2023-9
Wall Street heavyweights Larry Fink and Bill Ackman see
Things are going exactly where they are headed! Outside of the next few minutes, we have no clue. Heavyweights indeed.
Take anything from those psychopaths with a grain of salt
The managed to get in a headline-making interview while saying mothing.
Yet instead of using the ECB’s powers to put the fear of the divine into these bankers, Lagarde has let them run rings around the institution at the expense of small businesses and depositors.
Europe has plenty of sturdy old lampposts that can be repurposed.
THEY LIED THEN, THEY’RE LYING NOW
Doctor Scott Jensen
https://www.bitchute.com/video/Y4W6OwcqsTuA/
1:33.
Covid vaccines are poison.
The problems inherent to central banking are cause to scrap the Fed as well.
The Fed since its clandestine 1913 founding by the robber barons of the era has had just one true “mandate”: to serve as the oligarchy’s chief instrument of plunder against the 99%. We will not have sound currency, honest markets, or a future for our children as long as this criminal private banking cartel controls our money issuance.
Old ,like 20 year old , mobile homes ,on a few acres, in the rural South , are selling for 150K on up, 3 or 4 times what they were going for 5 years ago …Don’t people realize that the mobile homes have a life of 40 years tops? It’s mostly Yanks with cash, buying these up, they think 3 acres is a farm, but it’s red dirt and pine trees ….The mobile home industry has always built trash, from day one, the mobile mini house industry is showing them up now, with approved little houses that should last a lifetime……about the same money, just a bit less space ,but a real house…
Most look like crap after 15 years
I recall during the great recession, that a dilapidated mobile home, with its serial number removed, was abandoned on I-25 on metro Denver’s north side. It sat there for days.
Old ,like 20 year old , mobile homes ,on a few acres, in the rural South , are selling for 150K on up, 3 or 4 times what they were going for 5 years ago
Try $500k-$600k out west. The bubble is in the land, and mobile homes prove it.
REAL ESTATE
‘It’s still a seller’s market’ despite mortgage rates hitting 23-year high
Swapna Venugopal Ramaswamy
USA TODAY
Jessica Geren and her husband, Matt, traded in a 2.75% mortgage rate for a 5.5% adjustable-rate mortgage in July when they sold their home in Ledyard, Connecticut, to buy a new home in Croton, New York.
The 5/1 arm adjustable- rate mortgage loan the Geren’s took provides a fixed interest rate for the first 5 years, after which it switches to an adjustable interest rate for the remainder of its term. Depending on the interest-rate climate then, it could get more expensive.
That was the only way the couple said they could make the math work.
As most homebuyers and sellers are sitting on the sidelines (home sales dropped 15% in August from one year according to the National Association of Realtors), the couple is wading in, despite the painful combination of high prices and rising interest rates.
They, like some, are moving as the option to work remotely evaporates in many sectors. Others are moving to lower cost areas, using the equity in the former house to circumvent high interest rates. But for first time buyers, it remains one of the most challenging times to enter the housing market.
In July, when the Green’s were closing on their home, the 30-year fixed rate mortgage stood at 6.8%. And it has been climbing up since.
At 7.3% the week ending Sept. 28, the 30-year fixed-rate mortgage hit the highest level since 2000, according to Freddie Mac. Meanwhile, home prices continued their upward trajectory climbing 4% from one year ago to $407,100 – the third consecutive month the median sales price surpassed $400,000, according to the NAR.
…
https://www.usatoday.com/story/money/personalfinance/real-estate/2023/09/30/housing-market-update-sellers-market-mortgage-rates/70981233007/
REAL ESTATE
The Fall Of Home Prices
Ingo Winzer
Contributor
I write about investing in local real estate markets.
Sep 28, 2023,01:37pm EDT
If I knew how, I’d short the real estate market. Right now. Because it’s pretty clear that home prices across the country will be falling for years.
The last time this happened, after home prices peaked in 2007, some investors made a killing by shorting the stocks of mortgage companies, Wall Street firms, Fannie Mae and Freddie Mac, and the big banks.
This time that probably won’t work, because the boom in home prices was so rapid and so thin (that’s why it was so rapid) that vulnerable mortgages are a small percent of mortgage portfolios. The big problem in 2007 was the huge number of sub-prime mortgages that eventually produced vast numbers of empty homes because the owners couldn’t make their payments; the risk today is just that some recent homebuyers will walk away from their mortgage if their equity disappears.
…
https://www.forbes.com/sites/ingowinzer/2023/09/28/the-fall-of-home-prices/amp/
“The answer is “income”. Since 2020, home prices are up 40 percent, but income just 13 percent. People with money can push home prices up, but after that, the buying has to be done by ordinary folks, who can’t afford to pay that much; so prices will come down until they can.”
Home prices 8 to 10 times earnings is unsustainable…..period.
A reader sent these in:
Justin Trudeau: “I’m announcing $650 million in new assistance over the next three years to supply Ukraine” 🔊 … 🚨🚨🚨
Meanwhile on the streets of Canada … families cannot afford the cost of housing to either rent or own, food and many of the basics just to get by. Taxes are out of control and people have other priorities. Ukraine isn’t one of them.
https://twitter.com/WallStreetSilv/status/1707242563973898703
Shot: 30 years of 30Y mortgage rates…« But it don’t matter… coz fixed rates… »
https://twitter.com/INArteCarloDoss/status/1707398108236144791
The argument that nobody will move is null. 60% of people break their mortgage within the first 5 years. Life happens and the lessons are expensive.
https://twitter.com/tonybastogne/status/1707400106704515273
A global economy firing on all cylinders! 🤣
https://twitter.com/INArteCarloDoss/status/1707478352485916726
Just close the bloody thing down… incompetent and shameless..
https://twitter.com/INArteCarloDoss/status/1707354480268718295
Average US family health insurance premium…
2000: $6k
2002: $8k
2004: $10k
2006: $11k
2008: $13k
2010: $14k
2012: $16k
2014: $17k
2016: $18k
2018: $20k
2020: $21k
2022: $22k
That’s a 249% increase since 2000 (5.8% per year).
(Note: US CPI inflation has increased 2.5%/year)
https://twitter.com/charliebilello/status/1707418436362437076
The average family health insurance premium has increased 249% since 2000. Biggest beneficiaries of this massive increase: health insurance companies. UnitedHealth (largest US insurer) is up 4,120% since 2000 vs. 340% gain for the S&P 500. $UNH
https://twitter.com/charliebilello/status/1707450619663929730
October kicks off with China Golden Week: “China’s worsening property crisis and stronger dollar has delivered a one-two punch to the embattled Yuan. On Monday, it came the closest to the limit of the band since last October.” You don’t say.
https://twitter.com/SuburbanDrone/status/1707494718727204865
For the past year, bulls have been pretending that interest rates are going down. Now they’re d@ck in hand.
https://twitter.com/SuburbanDrone/status/1707205064891171018
Sep monthly trends are strongly deflationary across the board in EZ. Some countries like Netherlands are already in deflation y/y and Germany is quickly racing behind to join.
https://twitter.com/INArteCarloDoss/status/1707674856269971915
US AUG. PENDING HOME SALES FALL 7.1% M/M; EST. DOWN 1%
US AUG. PENDING HOME SALES FALL 18.8% FROM PREVIOUS YEAR
https://twitter.com/faststocknewss/status/1707394909534400921
Senator Feinstein Death Not Expected To Affect Re-election Campaign
https://twitter.com/TheBabylonBee/status/1707753376107143181
30-year fixed mortgages now over 8%. No one can afford to buy now. Rents shooting up too. Time to implement my plan of tax-free, government-backed 3% mortgage bonds to make homeownership accessible again. #Kennedy24
https://twitter.com/RobertKennedyJr/status/1707799442420887835
Blackstone is selling a building in San Francisco for $82 million
They bought the property for $245 million just 5 years ago in 2018!
Buying SF real estate within the next year or two just might be the best opportunity within any asset class
Who here is going to take advantage?
https://twitter.com/TripleNetInvest/status/1707747883779547647
Everyone joining in here to sh$t on Barry Sternlicht
https://twitter.com/GRomePow/status/1707908061082321098
Barry stressing, didn’t hear him saying the fed was wrong for all those ZIRP years.
https://twitter.com/Mazzad12David/status/1707782380008960448
$725K cost apartments are now “Workforce Housing” What exactly are we doing here?
https://twitter.com/realest49919420/status/1707769790041825346
You can’t make this up:
1. Median Mortgage Payment: $2,900
2. Median Rent Price: $1,900
It now costs ~$1,000/month more to buy a house than to rent.
Meanwhile, the average new car payment is now at $750/month.
The average interest rate on a used car loan just hit a record 14%.
All while credit card debt hit $1 trillion for the first time ever with record interest rates of 25%.
Basic necessities are becoming unaffordable for Americans.
https://twitter.com/KobeissiLetter/status/1707745578761752735
As rising mortgage rates push buyers to the brink, sellers are starting to cut prices
https://twitter.com/HousingWire/status/1707849869761908916
You dont want to know whats about to happen to Canadian real-estate. Ill give you a hint….. 🔊
https://twitter.com/Tablesalt13/status/1707837112446271933
3 months ago I said that banks will call in loans for technical reasons. People here exploded with “Banks don’t want to own your real estate!” From @kylematthewsceo: “Banks are starting to play technicalities with borrowers, calling loans due in full for technical default over simple reporting errors”
https://twitter.com/constantraise/status/1707779764327727474
In the 1960s you could be a high school graduate and afford a house, multiple cars, toys, wife at home, kids and a guaranteed retirement. In 2023 a degree barely covers the rent and bills and if you’re lucky you keep your job until you die. Why isn’t the populace exploding with anger?
https://twitter.com/GRomePow/status/1707817360617517373
According to the Caldwell Banker guest on CNBC, due to the thriving stock market and substantial income, people can comfortably handle an 8% interest rate for a million-dollar home. She definitely has some mental deficit. The bubble is f@cking real
https://twitter.com/TheImpaler83/status/1707831120887161132
We need home PRICES to come DOWN not mortgage rates.
https://twitter.com/soldatthetop/status/1707799865017676258
This is incredible: Interest rates were literally at 5,000 year lows over the last decade, according to Bank of America. Now, we are right around the historical average. However, rates have been rising near the fastest pace in history. Many people have not experienced inflation this high and interest rates at these levels in their adult lives. This is why rising rates are coming as a shock to consumers. The era of low rates and “free” money is officially over. Higher rates are the new (and old) normal.
https://twitter.com/KobeissiLetter/status/1707803721604702447
Current new homes under construction are tracking the 2008 Financial Crisis with a 96% correlation, per HUD data.
https://twitter.com/MacroEdgeRes/status/1707798387972592010
We made the press again @TrishaFLsun The Housing Market Is Defrosting in Florida’s Microwave
https://twitter.com/JuliusMiami/status/1707568180191699006
dianne feinstein voted yesterday at 1145am and now she’s dead
https://twitter.com/user84829272/status/1707749354172211579
Thoughts from a bottle: This cycle has elements from many cycles – the inflation risk remains after the worst inflation crisis in 4 decades, massive asset bubble (tech, AI, & other sh$tco sectors), housing recession materializing, credit & banking sector risk, bond crisis…
https://twitter.com/DonMiami3/status/1707968012270149947
in search of a 3 bedroom home for under $500k
seattle: 6
new york: 336
chicago: 2,378
https://twitter.com/pushtheneedle/status/1707816369407013107
CITI CEO SEES CRACKS FORMING IN US CONSUMERS WITH LOW FICO SCORES
Lower-FICO consumers likely correlated with the lower-income cohorts that I’ve previously highlighted as being most at risk of credit stress, in part b/c their accumulated pandemic-era savings appear to have mostly been depleted (in real terms at least if not nominal).
https://twitter.com/Econ_Parker/status/1707775500226044004
A Strong & Healthy Housing Market: 😂😂😂
https://twitter.com/texasrunnerDFW/status/1707787647035297906
There’s a “housing shortage” haven’t you heard?
https://twitter.com/NipseyHoussle/status/1707892907233996983
Maybe send a wellness check to this realtor who was taking shots @ you in early 2022. 😂😂😂😂
https://twitter.com/ManyBeenRinsed/status/1707552149645705306
and yes, that was the actual title on my business cards.
https://twitter.com/StephenPunwasi/status/1707944627263729686
Canada’s GDP flat in July, despite population ‘exploding’
https://twitter.com/daniel_foch/status/1707866215375315249
Canadians are getting poorer. Setting aside the pandemic, real per capita GDP is now contracting at the fastest rate since the Financial Crisis. Data includes advanced estimates for August.
https://twitter.com/BenRabidoux/status/1707738294329483600
Last year an investor purchased a Target in Portland for $16,000,000 and a 4.25% CAP. Yesterday it was announced that due to crime and theft they are closing this location down and 2 others in Portland. What’s the lesson here?
https://twitter.com/GellnerDavid/status/1707128865360117916
Well, that didn’t take long
https://twitter.com/CamCassidy/status/1707377937710780536
International students are: “an asset that is very lucrative” Since when do we refer to people as assets that are very lucrative? Why is Canada so eager to exploit these poor “assets” for profit? Forcing them to live in deplorable living conditions so colleges can profit?
https://twitter.com/JohnPasalis/status/1707224152313045005
More properties are being listed Vacant on TRREB than the peak of 2022: What do you think this means?
https://twitter.com/daniel_foch/status/1707352468382699608
Holy crap guys. The government has fully lost control of the bond market. It is a runaway train. This is going to be BAD. 2019 mortgages takers are going to be renewing in the 7s. They have no clue.
https://twitter.com/Tablesalt13/status/1707092732848554229
Why so glum, Canada? One of the weakest readings on record in Sept per Conference Board.
https://twitter.com/BenRabidoux/status/1707042378744271008
You can still buy $100k houses. Where?
Milwaukee
Toledo
Columbus
Akron
Indianapolis
St. Louis
Cleveland
Detroit
https://twitter.com/ResilientRei/status/1706996121753563215
I know there’s hope that the office market is stabilizing but in San Francisco in Q3 net absorption was negative 2 million square feet on just 800,000 square feet of new leases:
https://twitter.com/conorsen/status/1706985011730125260
Class action against Toronto real estate industry over commissions gets green light
https://twitter.com/daniel_foch/status/1706978839044227436
In the past year, communication services and real estate companies worldwide have paid out more than they earned. As a result, they will struggle to grow. Real estate firms, in particular, have seen returns on equity dry up.
https://twitter.com/ValuablOfficial/status/1706976951288860954
‘As rising mortgage rates push buyers to the brink, sellers are starting to cut prices’
Why that’s savagely unhealthy Logan, and a couple of years late!
“A Strong & Healthy Housing Market: 😂😂😂”
The post attached to this was hilarious. Some serious feet stamping and panic going on there.
+1
Comedy gold. Like the Greedheads are going to maintain a united front when the Fed’s Everything Bubble bursts for real.
Any idea why the name is concealed? It is a made up name anyway so there should be no privacy law violation.
“Basic necessities are becoming unaffordable for Americans.”
It’s a cost of living CRISIS, and something that the Parasite Class blindly ignores.
These are the circumstances that will lead to something like the French Revolution.
It’s a cost of oligarchy crisis.
a cost of living CRISIS…something like the French Revolution.
I appreciate the anger. However, I think that for most people it is more of a lifestyle crisis. What would life look like if we lived within our means? Anyone who does anything useful can eat for a month on a couple of days earnings, so that isn’t a crisis. We’d build smaller houses. Nobody really needs 1000 ft2 per person. Nobody used to even want that. Is a shiny 1/2 ton pickup daily driver for one person and no cargo necessary (guilty here)? My parents started their married life with no car. Their parents got one late in life. And so on. And most are in debt up to their eyeballs for what they don’t need.
There won’t be reform in government until after there is reform at the family level. JMO. It can be intentional or it can be a painful breaking down. I guess most people will wait to be crushed by reality, and blame those they elected for spoiling the future.
BTW, if you’re considering cheering for the French Revolution, you’re wishing for Socialism, which isn’t the good life at all. Better to call for honesty and rooting out of corruption and elimination of wasteful spending. We still have a system where we can get what we want in government if we act wisely.
BTW, if you’re considering cheering for the French Revolution, you’re wishing for Socialism, which isn’t the good life at all.
I get that he wants to see the parasite class guillotined, but they will retreat to safe locales before it could come to that.
And yes, for many it is a lifestyle crisis. I see many who have much smaller incomes than I do drive better vehicles, vacation more, eat out often, etc.
But there are also many who drive beaters and have to hit food banks, even though they work. Their anger I fully understand. But I also think that most people won’t revolt until they have nothing left to lose, and we are not there yet.
To be fair, raising anklebiters can require lots of belt tightening.
“To be fair, raising anklebiters can require lots of belt tightening.”
Yes it did.
“What would life look like if we lived within our means? Anyone who does anything useful can eat for a month on a couple of days earnings, so that isn’t a crisis. We’d build smaller houses. Nobody really needs 1000 ft2 per person. Nobody used to even want that.”
Between my day job and the house, today is my 26th consecutive day of working.
Five more weekends after this one and I’m probably calling it for the year.
Looking forward to your build next year.
New Edition — Cool It Now (single version):
https://m.youtube.com/watch?v=pLyqetnEyFM&pp=ygUXY29vbCBpdCBub3cgbmV3IGVkaXRpb24%3D
Camping on private land that is OWNED, not on borrowed money to own, just a few miles from the house. I keep all my yard tools here.
“A reader sent these in:”
– Great posts Ben! Thank you!
\\
– Highlights here, but all are real gems:
1)
Justin Trudeau: “I’m announcing $650 million in new assistance over the next three years to supply Ukraine” 🔊 … 🚨🚨🚨
Meanwhile on the streets of Canada … families cannot afford the cost of housing to either rent or own, food and many of the basics just to get by. Taxes are out of control and people have other priorities. Ukraine isn’t one of them.
– That sounds a lot like the U.S. foreign policy in Ukraine. Internationally coordinated Globalist scum policy that is: “You will eat bugs and own nothing!” The sheeple don’t get it yet.
2)
The argument that nobody will move is null. 60% of people break their mortgage within the first 5 years. Life happens and the lessons are expensive.
– So many with 3% rates locked in may not really be locked in. Let’s check back in 5 years.
3)
Just close the bloody thing down… incompetent and shameless..
– This is about the EZ ECB, but equally applies to the U.S. Fed. Central Banks + fiat currency are a pox upon the world. The banks of evil.
“I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. … You are a den of vipers and thieves.” – Andrew Jackson, 1834, on closing the Second Bank of the United States; (unabridged form, extended citation)
“The bold effort the present (central) bank had made to control the government…are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.” – Andrew Jackson
4)
The average family health insurance premium has increased 249% since 2000. Biggest beneficiaries of this massive increase: health insurance companies. UnitedHealth (largest US insurer) is up 4,120% since 2000 vs. 340% gain for the S&P 500. $UNH
– Nothing to see here. Move along. Move along.
5)
30-year fixed mortgages now over 8%. No one can afford to buy now. Rents shooting up too. Time to implement my plan of tax-free, government-backed 3% mortgage bonds to make homeownership accessible again. #Kennedy24
– This is so wrong! All that would do is keep prices elevated and require more gooberment intervention. Why are politicians so economically ignorant? Get a clue! Let markets set rates dumb-a$$!
6)
You can’t make this up:
1. Median Mortgage Payment: $2,900
2. Median Rent Price: $1,900
It now costs ~$1,000/month more to buy a house than to rent.
Meanwhile, the average new car payment is now at $750/month.
The average interest rate on a used car loan just hit a record 14%.
All while credit card debt hit $1 trillion for the first time ever with record interest rates of 25%.
Basic necessities are becoming unaffordable for Americans.
– All is proceeding according to plan. American version of Arab Spring coming soon to a MSA near you.
7)
In the 1960s you could be a high school graduate and afford a house, multiple cars, toys, wife at home, kids and a guaranteed retirement. In 2023 a degree barely covers the rent and bills and if you’re lucky you keep your job until you die. Why isn’t the populace exploding with anger?
– Populace: Get a clue!
8)
Thoughts from a bottle: This cycle has elements from many cycles – the inflation risk remains after the worst inflation crisis in 4 decades, massive asset bubble (tech, AI, & other sh$tco sectors), housing recession materializing, credit & banking sector risk, bond crisis…
– I’m sure it’s fine! Soft landing dead-ahead!
9)
I know there’s hope that the office market is stabilizing but in San Francisco in Q3 net absorption was negative 2 million square feet on just 800,000 square feet of new leases:
– But SF, CA has class and vibrancy! Everyone wants to live and work there! Not! Think Socialist, third-world sh*t-hole.
Canada’s GDP flat in July, despite population ‘exploding’
Looks like all the “newcomers” are joining the Free Sh!t Army.
Last year an investor purchased a Target in Portland for $16,000,000 and a 4.25% CAP. Yesterday it was announced that due to crime and theft they are closing this location down and 2 others in Portland. What’s the lesson here?
Don’t be a bagholder.
Preface: Rep. Barbara Lee is running for Diane Feinstein’s Senate seat.
The Clinton Foundation Is Involved In Corruption That Would ‘Make Even Hunter Biden Blush’: Foxx (7m12s)
On Thursday, Rep. Virginia Foxx (R-NC) discussed a proposed amendment on the House Floor.
Does it seem like a highly contagious fear epidemic has spoiled the Wall Street bull party?
‘I see more fear than any time in my business career,’ says BlackRock’s Larry Fink
Published: Sept. 29, 2023 at 6:38 a.m. ET
By Barbara Kollmeyer
comments
Larry Fink takes part in the CEO roundtable discussion during the New Global Financial Pact Summit at the Palais Brongniart in Paris on June 22. ludovic marin/Agence France-Presse/Getty Images
‘What the world is missing today is hope. I see more fear than anytime in my business career.’
— Larry Fink
That was BlackRock’s chairman and CEO, Larry Fink, at the Berlin Global Dialogue 2023 conference on Friday, saying that, while he is an optimist, there’s a dire current shortage of optimism in the world.
“We have big changes in labor, we have higher wages, companies adapt, business adapt,” he said, going on to add that a lack of “hope” is the biggest problem facing the world right now.
“What’s going on in China is a great example of fear,” he said, commenting on how consumers are saving 35% of their disposable income, following the COVID-19 outbreak in that country.
…
https://www.marketwatch.com/story/i-see-more-fear-than-anytime-in-my-business-career-says-blackrocks-larry-fink-7c38f9ef
‘I see more fear than any time in my business career,’ says BlackRock’s Larry Fink
That’s because you know there is a possibility your head is going to be separated from the rest of your body due to your terrible deeds. Sleep well – or not…….
Extreme fear is haunting markets again. Here’s why investors are running scared
Analysis by Anna Cooban, CNN
Published 8:56 AM EDT, Thu September 28, 2023
London CNN —
Investors are really nervous right now.
CNN’s Fear and Greed Index, which tracks seven indicators of market sentiment in the United States, tipped into “extreme fear” Thursday for the first time since March, when a banking crisis was sowing panic among investors.
Today it is a painful mix of rising oil prices, expectations of “higher for longer” interest rates in the US and Europe, and a Chinese economy stuck in the doldrums that is stirring their fears.
Oh, and the US is yet again on the precipice of another government shutdown, an event that could result in a downgrade to its credit rating and lead to volatility in US stocks.
Michael Hewson, chief market analyst at stockbroker CMC Markets, told CNN that the US and Europe could “well be heading for a prolonged period of stagflation” where rates “are higher for longer” and economic growth slows to the point where “we could see a recession.”
Following a bruising 2022, stocks around the world have recovered most of their losses. The S&P 500 index (SPX) has risen 11% since the start of the year, the tech-heavy Nasdaq (NDX) 33%, and the Stoxx Europe 600 (STOXX) 5%.
But, in the past few weeks, cautious optimism has given way to worry. Since mid-September, stocks on the S&P 500 and the Nasdaq have dropped by 5% and 6% respectively. The Stoxx Europe 600 has fallen 3.3%.
‘Higher for longer’ interest rates
The world’s major central banks have spent the past two years hiking borrowing costs in a bid to control runaway inflation.
High interest rates typically put pressure on stocks, since investors tend to favor bonds when they offer comparable returns as they are safer. Elevated rates also mean companies can expect to pay more interest on their debt in the future, eating into future cash flows.
Earlier this month, hopes that falling inflation in the US could soon trigger a reversal of monetary policy were tempered by indications from the Federal Reserve that it could hike rates once more this year and expected to make fewer rate cuts in 2024.
Robust economic growth in the US has fueled concerns among Fed officials that inflation could surge again, meaning rates would need to stay higher for longer to cool demand.
…
https://www.cnn.com/2023/09/28/investing/stock-market-extreme-fear-explainer/index.html
“higher for longer”
Who at the Fed has the job of coming up with these catchy PR sound bites?
Good slogan for an ED med.
Wouln’t that have to be “harder for longer”?
Fear is in the air. You can see it in all the social media and YouTube comments. The panic driven rabid responses defending home prices, even in the face of mountains of evidence, is such a tell that all these bag holders are freaking out. Fear of getting schlonged now rules the day. That low drone that you hear, that is building by the moment, is the collective sound of feet stamping worldwide.
+1
Anybody who bought (borrowed to buy) in 2022 is in for a world of pain.
I see more normalcy bias and willful self-delusion than fear. Only an infinitesimally small percentage of people are awake & aware, as far as I can tell.
It’s tough for the bull herd to remain calm with Damocles’ sword of 5% long term Treasury yields suspended over their heads, hanging on by a thread.
https://m.youtube.com/watch?v=wWBiLeVy45k
what happened during that mad summer of 2020 – and to ask: what exactly came over us?
https://www.yahoo.com/news/time-admit-black-lives-matter-060000239.html.
Remember when we treated viruses with soup, Vitamin C, and plenty of rest, instead of Communism?
“Remember when we treated viruses with soup, Vitamin C, and plenty of rest, instead of Communism?”
+1
Which is it: Housing prices are declining or soaring? It’s so confusing.
US Housing Market Soars Nearly 50% Since Pre-Pandemic Level in February 2020: Zillow | The Epoch Times
https://www.theepochtimes.com/real-estate/us-housing-market-soars-nearly-50-since-pre-pandemic-level-in-february-2020-zillow-5501152
“The housing market in the United States has shown remarkable recovery so far in 2023, with a new Zillow estimate putting the overall value of the market at $51.9 trillion, $1.1 trillion higher than the previous peak reached in June 2022. That total value also represents a 49 percent increase over home values prior to the start of the pandemic in February of 2020.”
Exactly. It means a massive crash is unavoidable.
Incomes haven’t increased 50%. And interest rates have nearly tripled. Result? Kaboom!
“It’s so confusing.”
Realtors are liars.
“That total value also represents a 49 percent increase over home values prior to the start of the pandemic in February of 2020.”
Zillow: ‘No bubble here…’
What if Costco gold sales are an indicator that the public is catching on to the Fed’s fiat currency fraud?
https://twitter.com/zerohedge/status/1708127089524658662
“It’s a dry heat, Dianne.” — Former Senator John McCain
🔥
🙂 🙂
what an excellent read:
The Ministry of Failure is hiring, as their decades-long expansion is accelerating. You probably don’t know about the Ministry, but you see its handiwork everywhere. The principle behind the Ministry’s existence and its raison d’etre is simple: failure is more profitable than efficiency.
https://www.zerohedge.com/political/now-hiring-ministry-failure
Speaking of ministries, the Biden regime is redoubling its efforts to stand up a Ministry of Truth as millions of former sheeple are becoming red-pilled & citizen journalists on social media are calling BS on approved globalist Narratives & DNC talking points propagated by the MSM.
https://www.telegraph.co.uk/news/2023/09/23/joe-biden-disinformation-free-speech-democrats-fake-news/
IIRC, Jacinda Ardern, while still the Kiwi PM, said that the gooberment is the only source of truth.
(NOTE: This post has nothing to do with housing.)
Supporting Ukraine Is ‘Tough & Painful’ Amid Growing War Fatigue, UK Foreign Secretary Admits
https://www.zerohedge.com/geopolitical/supporting-ukraine-tough-painful-amid-growing-war-fatigue-uk-foreign-secretary-admits
In a fresh interview, UK Foreign Secretary James Cleverly has acknowledged “growing anti-Ukrainian sentiment” among Western allies and the public, but has urged leaders to not waiver in their support, despite the current situation being “tough and painful”.
Interestingly, the words came in an interview where a big focus was the potential for another Trump presidency in the US. When asked about Western reluctance in some corners to stop aiding and supplying Ukraine, he asserted that the situation “will just get worse” if Kiev doesn’t receive the support needed against Russia. Cleverly conceded that the war is “putting pressure on countries all over the world.”
“If we don’t stick with our support to Ukraine, if we send the signal that aggressors can prosper, then all the problems that we are currently facing: those inflationary pressures on food and on fuel, the political pressure that comes from having a conflict like this, they will just get worse,” Cleverly said.
“Which is why the UK’s government position is resolute. We make that point to all our international partners. This is tough and this is painful,” he acknowledged. “But it will only be more tough and more painful if we falter.”
Fatigue, he underscored, “is something we have got to deal with,” and is a “big thing”.
The interviewer had opened this segment of questioning by calling attention to the “growing anti-Ukrainian sentiment being used in election campaigning like that in Poland, which has seen the ruling Law and Justice (PiS) party ban Ukrainian grain imports (with similar bans in place in Slovakia and Hungary)…” In Poland, this has further involved the government ordering the “end of benefits for refugees fleeing the war” and even halting future weapons supplies.
The Saturday published interview comes on the heels of Ukrainian Finance Minister Sergey Marchenko having recently admitted those allies still willing to give Kiev money is “growing smaller and smaller.”
Additionally, billions more for Ukraine is now in doubt as Republicans in the House of Representatives fight over whether to include it in next year’s government funding bill, making a govt shutdown imminent.
In Canada, the ‘NaziGate’ fiasco in parliament is also a big setback for Ukraine and its supporters, proving a public embarrassment which is likely to result in waning public support for the whole Ukraine cause.
Still, even if Western military hardware and advanced missiles and tanks continue to be handed over the Kiev, some Ukrainian officials have admitted it’s “too little, too late” now that Russian forces are dug in over broad swathes of the east, also behind miles of mine fields.
Given that Ukraine is trying to forcefully repatriate young men who fled the country to avoid conscription shows that they are running out of boots on the ground. The Euros are aware of this, and they don’t want to send their own troops to the war.
It might be time for Zelensky to quietly pack his bags and go into “exile”.
And speaking of politically placed members of the tribe, Mexico has a presidential election next July: Xochitl Galvez, a mestizo woman is running as a coalition candidate against the ruling party’s (MORENA) candidate, Claudia Sheinbaum. The globalist media makes it sound like Sheinbaum is a shoo-in. MORENA has delivered free sh!t (a pittance by US standards) and I expect Sheinbaum to promise even more. Not a word about dealing with the cartel violence and ultra violent crime sweeping the country. I suppose that neither candidate wants to be shot.
In Canada, the ‘NaziGate’ fiasco in parliament is also a big setback for Ukraine
Ironically, it just proves that Canadians know nothing about recent history. Anyone who doesn’t immediately recognize that an old Ukrainian who fought the Russians was 99.99% sure to have worn a Nutzie uniform is an idiot. Is it also not obvious that after the war, after hanging a few big names, the rest were forgiven and we embraced the Germans as friends and allies? Against Russia, who just a few minutes earlier were our biggest ally!
I don’t mean to applaud the SS, just mean to mock stoopid.
Is it wise to encourage shadow banks to engage in high risk gambling activities by peemptively deeming them too-big-to-fail and setting up bailout arrangements before they are needed?
Or is it better to just let them CR8R, then implement ad hoc mop-up measures in the aftermath?
Financial Times
Shadow Banking
Regulators turn up heat on shadow banks after market blow-ups
Policymakers tackle unintended consequences of post-financial crisis reforms in era of high interest rates
Laura Noonan and Katie Martin in London yesterday
Global financial regulators are preparing a clampdown on so-called shadow banking as they confront the unintended consequences of previous waves of reform that pushed risks into hidden corners of the financial system.
Policymakers have been warning all year — with mounting alarm — about the risks and sizes of bets taken by some hedge funds and private equity houses. But now, fears that rising interest rates could derail some of their mammoth bets is turning that talk in to action.
In recent weeks, the UK’s top financial regulator has drawn up plans for a probe into private capital valuations, while the Bank of England has declared such “non-banks” to be so important that policymakers should create a new facility to lend directly to them in times of crises.
Global watchdogs at the Financial Stability Board have launched a new review that could limit hedge fund leverage and increase transparency on their borrowings. In the US, the Securities and Exchange Commission has brought forward policies on fund transparency so stringent that some are suing in a bid to stop them.
Together, the non-banks on regulators’ radar — which include hedge funds, pensions and insurers — account for 50 per cent of global financial services assets.
“Clearly there is work we still need to do,” Klaas Knot, chair of the FSB, told the Financial Times. “We are moving from policy development to policy implementation,” he said.
…
New Trouble for EvergrandWhat the Numbers Show
Real Estate Crisis, Explained
Risk From Shadow Banks
A Test of Xi’s Control
Real Estate Crisis Triggers New Alarms Over China’s Shadow Banks
A financially troubled firm has stopped paying investors, risking panic and testing the Chinese government’s resolve to take on debts from its property crisis.
A squat office building of Zhongrong fronted in glass windows and narrow vertical columns with several cars parked on the street in front.
The Beijing headquarters of Zhongrong International Trust, which held $86 billion in investments in 2022.
Credit…Florence Lo/Reuters
A squat office building of Zhongrong fronted in glass windows and narrow vertical columns with several cars parked on the street in front
By Daisuke Wakabayashi and Claire Fu
Reporting from Seoul
Sept. 22, 2023
阅读简体中文版閱讀繁體中文版
An accountant in northeast China deposited her life savings and received a letter guaranteeing her investment in a trust firm. Workers at a state-owned utility pooled money from friends and relatives believing that their investments were backed by the government. A man sank $140,000 into an account that he was told would make a 10.1 percent annual return.
They are among the hundreds of thousands of Chinese investors confronting a distressing reality: Their investments with Zhongzhi Enterprise Group, a financial giant managing $140 billion in assets, and its trust banking arm, Zhongrong, might be at risk. Starting in July, companies affiliated with Zhongzhi missed dozens of payments to investors. They have offered no timetable for when people will be paid, fueling concerns that one of China’s largest so-called shadow banks may be near collapse.
In a brief statement last week, Zhongrong said some investment products were “unable to be paid on schedule” because of “multiple internal and external factors.” It did not mention whether investors would get their money. Zhongzhi has not made any public statements about its finances, and it did not respond to an email seeking comment.
…
https://www.nytimes.com/2023/09/22/business/china-economy-trusts-zhongrong-zhongzhi.html
“‘As a general, time-honored rule of thumb’ house prices in a community ‘should not exceed 2 to 2½ times the annual income’ of its residents. Within a decade, home prices began to drastically violate this rule. If it were applied today, it would mean a four-person household with the median Los Angeles County income of $98,200 could afford to buy a house that cost $245,500. However, the median home price in the county last month, according to Redfin, was $980,000.”
I have a mindlessly simple solution:
The Wall Street money needs to get washed out to restore affordability. If federal government housing agencies like the Fed and the evil GSE twins, Fannie and Freddie, would just stand back and stand by, instead of jumping in with bubble ressusitation measures like Quantitative Easing, the whole real estate investing shit cart would collapse of its own weight, and housing affordability would be restored. After this played out, Wall Street could refocus its resources on less harmful investing enterprises, like cryptocurrencies.
Wall Street money needs to get washed out to restore affordability
Nothing washes out the rats like massive losses. With tens of millions of recently mortgaged house holders hanging onto the cliff of insolvency by their fingertips, the Wall Streeters are looking at a world of hurt.
Wheat futures …
https://finviz.com/futures_charts.ashx?p=w&t=ZW
When this Ukraine war nonsense started in April of last year the MSM had it that the world’s population was going to starve and wheat prices acted accordingly. No look at wheat prices.
A related article …
https://www.zerohedge.com/commodities/wheat-prices-record-most-consecutive-quarterly-declines-gfc-meltdown
‘While monetary policy had previously centered on setting the rates at which regulated banks could borrow, central banks expanded their role by undertaking massive asset purchasing campaigns via quantitative easing. Central banks began supporting not just regulated banks but investment funds, hedge funds and other ‘non-bank financial intermediaries’—also known as shadow banks—that are largely unregulated. This involved tactics like purchasing corporate bonds to stabilize the corporate debt market’
‘Acknowledging this shift, Bank of Canada deputy governor Toni Gravelle said the bank has moved from its traditional role as ‘lender of last resort’ to ‘liquidity provider of last resort,’ promising to ‘resolve market-wide stresses when the financial system cannot find its footing’
It is different this time.
The Fed’s mission creep definitely reflated the bubble, just at the point when it was beginning to seriously deflate.
‘Extremely Frustrating’: Homeowner Lives In Van While Deadbeat Tenant Lists Unit On Airbnb — Here Are 2 Hassle-Free Ways To Invest In Real Estate
https://finance.yahoo.com/news/extremely-frustrating-homeowner-lives-van-161023735.html
Investing in real estate often seems straightforward: Purchase a house, lease it and receive monthly rent from the tenant.
But reality doesn’t always follow the script, as Jason Roth of Seattle can attest.
Roth rented out his home in Rainier Valley but the tenant stopped paying rent. Roth is now owed $29,000 in unpaid rent plus utilities.
Roth is living in a van with his dog Wally, KIRO 7 News reported.
“It’s frustrating, extremely frustrating. It’s something I can’t fully wrap my head around,” Roth told the station.
The delinquent tenant also has listed the downstairs unit for $434 per night on the short-term rental platform Airbnb.
“At the very least he’s generating $2,000 a month, and it’s more than likely that he’s generating close to $3,000, possibly even $4,000, depending on the month,” Roth said.
“So, not only is he not paying me, but he’s generating an income through the basement Airbnb unit, and meanwhile, I’m having to pay the utilities for that unit.”
Roth is waiting for an eviction hearing. In King County, it takes about 12 months to go through the eviction process. According to KIRO 7 News, Roth will be looking at $50,000 in losses “before all is said and done.”
The city, which gave the tenant a short-term rental license, said that the license is not valid “because it was obtained using inaccurate information about ownership of the property.” And Airbnb has taken down the listing.
Roth’s situation shows that being a landlord is not just about collecting rent and enjoying passive income. If you don’t want to deal with the hassles of being a landlord, here are two hands-off strategies to tap into real estate.
The US housing market is starting to flash a few rays of sunshine for homebuyers
Filip De Mott
Sep 30, 2023, 8:50 AM PDT
A realtor exchanging keys with a homebuyer.
Getty Images
– The US housing market is starting to flash a few rays of sunshine for prospective homebuyers.
– Inventory is growing at a time of year that usually sees declines, Altos Research said.
– And Redfin reported that more home sellers are lowering their asking prices.
…
https://markets.businessinsider.com/news/stocks/us-housing-market-homebuyers-home-prices-inventory-sellers-asking-rates-2023-9
‘The epic sovereign bond bubble continues to unwind,’ wrote Peter Boockvar of Bleakley Advisors this morning. Prices for certain poster-child debt, like Australia’s 100-year long bond, have crashed by 75% from their highs’
via GIPHY
‘When asked at a scheduled press conference if the ECB would stand by Italy’s debt to contain interest-rate spreads (the difference in borrowing costs between member-state governments) within the eurozone, Lagarde did not reassure markets and the public by repeating Draghi’s famous promise to do ‘whatever it takes.’ Instead, she did the opposite, declaring: ‘We are not here to close spreads.’ Within seconds, Italy’s debt-servicing costs skyrocketed’
It couldn’t have worked better if she planned it that way.
Time for nations to leave the EU and the Euro. And in Italy’s case, time to put the invaders in Lampedusa on boats and ship them back to Africa, at gunpoint if necessary.
The Jesus And Mary Chain – Reverence:
https://m.youtube.com/watch?v=Fs-VSDOirWY&pp=ygUaamVzdXMgbWFyeSBjaGFpbiByZXZlcmVuY2U%3D
Jane’s Addiction- Ted, Just Admit It:
https://m.youtube.com/watch?v=1CpRCc4Jre8&pp=ygUjamFuZSdzIGFkZGljdGlvbiB0ZWQganVzdCBhZG1pdCBpdCA%3D
Radiohead — Palo Alto:
https://m.youtube.com/watch?v=mrYTsLgCidQ&pp=ygUTcmFkaW9oZWFkIHBhbG8gYWx0bw%3D%3D
I love the lyrics of this song, and I can’t believe it’s been 20 years since it was released.
The Verve — Three Steps:
https://m.youtube.com/watch?v=VFiM4FORyC8&pp=ygURdmVydmUgdGhyZWUgc3RlcHM%3D
fixed housing costs
Pretty fixed, correct. I built it not very long ago. Wrote all about it here too. My hands are not soft at all. I work with them every day, for fun.
I will look forward to the build reports next year, for sure.
You’re an unpleasant angry little bully “46” and all the dingleberry. I saw how you picked on one of our lady readers the other day. Quite the display. Absent of kindness of any sort, I don’t think we can rely on you to help fix anything.
Quite the display.
And a vile remark towards Lane from sc.
Forbes
Money
Markets
Stock Market Selloff Is Confirmed
John S. Tobey
Contributor
Sep 30, 2023,11:14am EDT
Picture of stock market chart rolling over and then falling
Will next move be another October drop?
Last weekend I explained how that week’s market decline carried many negative factors, but needed a second week’s confirmation to be taken seriously. That confirmation has happened. Here is the last two week’s selloff picture…
The last two week’s clear downside pattern not only confirms a weak stock market, it opens the door to the possibility of new bear market lows. After all, the many negative fundamentals continue to be in full force.
But, didn’t the 2022 bear market end?
No.
The so-called bull market was simply a rebound of sorts because last year’s worrisome predictions (particularly of a serious recession) became less dire. Also, the next bull market will have totally different upside drivers than the previous one. That is far from happening.
…
https://www.forbes.com/sites/johntobey/2023/09/30/stock-market-selloff-is-confirmed/?sh=7d919de266c9
I just saw an advertisement today for a 4 bedroom 2 bath home for rent in Valinda, CA for $4000 a month. Valinda has terrible schools and gang activity. This just shows the insanity in LA now