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The Era Of Ample, Low-Cost Financing Ended Abruptly In 2022

A report from the Atlanta Journal Constitution. “The metro Atlanta housing market stumbled in September under the weight of the highest mortgage rates since 2000. ‘There has been a fairly significant drop-off from last year,’ John Ryan, chief marketing officer for Georgia MLS. ‘And now we are going into the usual seasonal decline.’ The total value of homes sold last month was $2.1 billion, a drop of 18.1% from a year ago. That means much less money for many people whose business depends on sales: brokers, lenders, appraisers, accountants and attorneys. ‘We’ve seen a decrease in the number of appraisers,’ Ryan said. ‘I think that is a sign that the market has really pulled back.’ The latest chill came as mortgage rates climbed again, he said. ‘I think 7% has been a demarcation line.'”

The Dallas Morning News. “North Texas homebuying activity and prices slumped in September as mortgage interest rates surged to their highest point in more than two decades. Amanda Rupley, a real estate agent in Frisco for Compass, said she is seeing multiple offers on some properties while other sellers are having to drop their asking price. ‘It’s really all who you talk to,’ Rupley said. ‘I’ve spoken to some agents who are totally panicking because they have nothing going on, and I’ve spoken to agents who feel like they’re drowning because they’re just full of so much business.'”

NBC New York. “Popular radio host DJ Envy is under scrutiny for promoting a real estate venture of a friend that some investors now say was a scheme. On his syndicated iHeartRadio show, Envy has often promoted the real estate venture of his pal, Cesar Pina. But it’s more than just a passing endorsement. Envy and Cesar teamed up for seminars, including one at the convention center pitching opportunities to flip properties, often in distressed areas of New Jersey. Jose Santiago and his wife, Jessica Ortiz, say they believed investing in a real estate venture in a Paterson neighborhood would be their ticket to the American dream. ‘That’s the reason I got into real estate, so we can actually start flipping properties, buying properties so we can have something for our kids in the future,’ Ortiz told News 4. ‘He’s advertising this all over radio and television, so I thought this was legit,’ Santiago said. ‘We invested $200,000 and it looks like we won’t ever get it back.'”

“Then there’s record producer Anthony Martini, who invested in what he thought was a promising apartment project. ‘I lost a million dollars,’ he said. Martini said he invested because of Envy, someone he’d known for years. His attorney has filed a lawsuit.”

Material Handling and Logistics. “In recent months those involved in industrial real estate (IRE) development have taken a hard look at recent industry trends and what the future holds. Warehousing and distribution services have boomed in recent years, and investors rode that boom. But changes taking shape are resulting in a slowdown in new construction, rising costs and increased technology requirements. ‘Construction loans are expensive and difficult to secure. With most banks tightening lending standards and interest rates doubling during the past 18 months, the era of ample, low-cost financing ended abruptly in 2022,’ the researchers note.”

The Boston Globe in Massachusetts. “In the middle of West Street, a one-block stretch between the Boston Common and Downtown Crossing’s main drag, sit two conjoined, nondescript buildings that encapsulate the current struggles of the downtown office market. Seven years ago, this pair sold for $16 million; late last month, they fetched just a quarter of that at $4.1 million — a warning of the possible distress facing much of the city’s older, less full office stock. At a City Council hearing last week, Councilor Michael Flaherty expressed concern about the impact of increasing vacancy rates — and the decline in real estate values that would likely follow — on city revenues.”

“‘That’s how we pay for our schools. That’s how we pay for our parks, and our playgrounds, and our police department, and our fire department, and public works, snow plowing, tree pruning, snow removal, trash collection, all of it,’ Flaherty said. ‘That’s how Boston ticks.’ And it’s a warning, he said. If property taxes start to fall… ‘that’s a holy-bleep moment for Boston.'”

Yahoo Finance. “JPMorgan Chase CEO Jamie Dimon recently warned about the possibility that interest rates could surge as high as 7%, exposing those in the financial world who took too much risk when rates were low. ‘I am not sure if the world is prepared for 7%,’ he said last month, adding: ‘That will be the tide going out.’ Dimon, according to a person familiar with his thinking, is concerned that some banks didn’t do enough to fix their balance sheets following the events of this spring. The current period reminds him, this person said, of the months following the March 2008 fall of Wall Street investment bank Bear Stearns, which JPMorgan also purchased with help from the US government.”

The Globe and Mail. “Richmond Hill, Ont.-based real estate developer Sunrise Homes has defaulted on a court-ordered settlement to repay the millions of dollars it owes to lenders caught up in the collapse of Canada’s one-time largest syndicated mortgage company Fortress Real Developments Inc. Among the Fortress-connected funds FAAN is seeking to recover were 10 mortgages worth about $95-million (borrowed from 2,900 individuals) that had been administered by Derek Sorrenti and the Sorrenti Law Professional Corp.”

“Naveed Manzoor, managing director at FAAN Advisors Group Inc. stresses that this is not a simple financial dispute; the syndicated mortgage lenders FAAN is working for often invested their life savings into the Fortress/Sorrenti loans. ‘Having dealt with this matter for five years it is really, really sad,’ Mr. Manzoor said. ‘We’ve had people come to our office and say this is my last retirement savings and I need the money otherwise I’m eating canned tuna.'”

The Mirror in the UK. “A half-built seafront housing estate has become a ‘disgusting dumping ground’ occupied only by pigeons, rabbits and vandals, despite its huge £20million price tag. The Sands, a new-build estate in St Mary’s Bay on Romney Marsh, was expected to welcome its first residents in the summer of 2019 but supply issues delayed the build. More than four years on, contractors are nowhere to be seen and the prime site now sits silent, with the incomplete buildings left open to the elements. Bob Thomson, who lives a few doors down from the abandoned estate says the whole 85-home development needs pulling down. He said: ‘It would cost more to put right due to the state it is in. You can see the pigeons living in the buildings with all the broken windows. We used to have security guards living in static caravans to stop people entering the site, but since work stopped anyone can wander on there. Loads of people have been fly-tipping. I think it’s a disgrace.'”

From News.com.au. “Owners of apartments in a defective Sydney building have been left in limbo following the collapse of the block’s builder and developer, Alpine Projects Australia. Rachel Fong-Sim, in her early 30s, owns an apartment in a Campsie building in the city’s southwest, where she lives with her husband. Alpine Projects Australia collapsed into liquidation on September 19 costing all 26 employees their jobs and with debts that “look to be in the millions”, according to liquidator Mohammad Najjar of Vanguard Insolvency. Ms Fong-Sim told news.com.au that after receiving a clean building and strata bill of health when they bought their three bedroom apartment for $685,000 in 2019, problems started to emerge in the 58 unit complex a year later which ‘the owners corporation has had to fork out large amounts of money’ to fix.”

“When Alpine collapsed into liquidation, they had failed to pay at least one of the contractors. Ms Fong-Sim said this contractor is owed $40,000 and has ‘threatened to come in and remove all the fixtures he’s put in.’ She added that they have not heard anything from Mr Najjar and it is not clear whether fixing the remaining defects will be covered by insurance.”

Radio New Zealand. “Golfers blindsided by the sudden closure of a prestigious club on Auckland’s Whangaparāoa Peninsula are taking matters into their own hands and continuing to use the abandoned course. In July, the Gulf Harbour Country Club closed with immediate effect, leaving some members who had already paid hefty fees feeling short-changed. Keep Whangaparāoa’s Green Spaces president Nigel Varey, whose house backed onto the ninth hole, said residents around the course were strongly opposed to more large-scale development at the end of the already congested peninsula.”

“Varey said the golf club was one of the main reasons people bought property in the area. ‘It’s not having to commute for your leisure activity, and we believe we paid a premium for the property on that basis. If you were on the back of a Pak’nSave, the price would be lower, and if you’re here, you pay accordingly.’ Varey said his property had dropped in value by about $200,000 since the club’s closure.”

From Vietnam.net. “Prices have plummeted by over 30 per cent, as many businesses in the city centre have been forced to close down due to poor business operation, leaving landlords with no choice but to accept lower prices in order to attract tenants. Nguyễn Thái Phong, a property owner on Nguyễn Trãi Street in District 1, told Việt Nam News he had to reduce the rental price for his spa salon space from nearly VNĐ100 million per month to VNĐ65 million per month. A number of streets in the downtown area such as Lý Tự Trọng, Hai Bà Trưng, Trương Định and Nguyễn Trãi streets, which were previously bustling with businesses such as hair salons and fashion stores, now remain vacant. With an oversupply of available properties and a decrease in demand, tenants are now in a position to negotiate significantly lower rental prices.”

From Friday Digital. “Malaysia is a tropical country straddling the southern Malay Peninsula and northern Borneo Island. Kuala Lumpur is the capital of the country, which has been ranked the best place to live for 14 consecutive years. It is ‘Forest City,’ a cluster of luxury condominiums located on the southern tip of the Malaysian peninsula. Originally, Country Garden, the largest real estate company in China, began developing Forest City about 10 years ago as a luxury residential area for several hundred thousand people, but now construction has come to a halt.”

“When I drove to Forest City to conduct on-site interviews, the first thing that jumped out at me was a cluster of white luxury condominiums. The rows of condominiums are spectacular, as they are designed for the wealthy, but weeds are growing thickly from the walls of the buildings, and it is easy to see that there are no residents in the area. According to a local real estate agent, ‘Many of the owners originally purchased the condominiums as investment condominiums, and few people live in them.'”

“Entering the sales exhibition hall in Forest City, one could hardly see any customers, except for a few staff members and security guards. A model of the entire development project proudly displays ‘SOLD OUT,’ meaning that all the apartments have been sold out, but one cannot help but feel suspicious. On the sandy beach adjacent to the pools, ‘Crocodiles out, no swimming!’ No barbecues, fishing, fireworks, camping! and all leisure activities are prohibited, and it must be said that the attraction is reduced by half. The model of the exhibition hall for sale at the previous site gave the impression of a bright, sandy beach where one could play freely, and I am afraid that some people may have bought the house without knowing it.”

“A local real estate agent told us, ‘In the past, rooms priced at 20 million yen or even 100 million yen or more per room sold like hotcakes,’ but what became clear during our on-site visit this time was the lackluster apartment complexes that could truly be described as a ghost town.”

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  3. ‘That’s how we pay for our schools. That’s how we pay for our parks, and our playgrounds, and our police department, and our fire department, and public works, snow plowing, tree pruning, snow removal, trash collection, all of it,’ Flaherty said. ‘That’s how Boston ticks.’ And it’s a warning, he said. If property taxes start to fall… ‘that’s a holy-bleep moment for Boston’

    Well, you had to trust the science Mike, fold the envelope or whatever was cow patty of the day while you turned yer city into a broke sh$thole. I’m sure it’ll be fine.

    1. Just imagine, there could be layoffs at city hall, where useless six figure administrators are told their positions are being eliminated.

      Or maybe they’ll just raise taxes?

    1. Daily Mail saved the beheaded babies for the body of this article rather than the headline. For comparison: How Hamas carried out attack that shocked the world: Gunman stormed kibbutz at dawn, shot and burned families alive as they begged for their lives – starting with grandmother, 90 – before ‘beheading babies’; US puts special forces on alert to help Israeli forces locate American hostages as hundreds of brave IDF reservists arrive at JFK to answer call to fight – after terrorists beheaded babies. We’re been played.

        1. So I have a dumb question: I thought Israel had enough firepower to take care of this themselves if they so chose? From my understanding, the Israelis don’t bother with winning hearts and minds, or nation-building, or seizing oil, or saving the children, or spreading democracy. If you’re not too particular about what gets destroyed and who gets killed, war can be pretty cheap.

          1. From my understanding, the Israelis don’t bother with winning hearts and minds, or nation-building, or seizing oil, or saving the children, or spreading democracy. If you’re not too particular about what gets destroyed and who gets killed, war can be pretty cheap.

            It’s amazing how different a war of survival plays out compared to a war of choice.

          1. (A snip from an article …)

            Given that backdrop, the recent claim from the Israeli Defense Forces that it uncovered a decapitation of women and infants by Hamas during its assault on the Kfar Aza kibbutz just 5 miles east of Gaza has been met with as much skepticism as outrage. In the wake of calls to bring clarity to dismiss the doubts about the horrific claim, comments from IDF spokesman Major Nir Dinar succinctly summarized the echo chamber dynamic that has led to supporters of Israel’s cause accepting the report without any evidence. The IDF spokesperson boldly declared that the Israeli military won’t seek further evidence backing up its claim about the mass infanticide it asserts was perpetrated by the terrorist group Hamas because doing so would be “disrespectful for the dead.”

            https://www.zerohedge.com/news/2023-10-11/israeli-officials-refuse-investigate-veracity-claims-mass-beheadings-kibbutz

  5. . ‘He’s advertising this all over radio and television, so I thought this was legit,’ Santiago said. ‘We invested $200,000 and it looks like we won’t ever get it back.’”

    Cry me a river, speculator scum.

    1. NOBODY pays for radios ads upfront…….usually 60-90 days to make sure the ads get some response.

      ‘He’s advertising this all over radio and television, so I thought this was legit,’

  6. Some good news for a Wednesday:

    “The Washington Post plans to cut 240 jobs, or almost 10% of its workforce, through voluntary buyouts, the company announced Tuesday.

    The Post had been “overly optimistic” about its growth in readership, subscriptions and ads for the past two years, interim CEO Patty Stonesifer wrote in an email to staff. “We are working to find ways to return our business to a healthier place in the coming year.”

    https://www.npr.org/2023/10/10/1204939842/the-washington-post-will-cut-240-jobs-through-voluntary-buyouts

    If the Post cut 100% of its staff, would anybody even notice?

    Get a real job you globalist scum.

    1. Every time a Real Journalist gets cast into the Outer Darkness of #BidensEconomy by a failing globalist propaganda mouthpiece, an angel gets its wings.

    3. “We are working to find ways to return our business to a healthier place in the coming year.”

      In a radical departure, you could try putting out real news and real truth instead of DNC talking points & globalist propaganda.

  7. ‘That’s how Boston ticks.’ And it’s a warning, he said. If property taxes start to fall… ‘that’s a holy-bleep moment for Boston.’”

    Sow, reap, Bitchez!

  8. ‘It’s not having to commute for your leisure activity, and we believe we paid a premium for the property on that basis. If you were on the back of a Pak’nSave, the price would be lower, and if you’re here, you pay accordingly’

    You are there and paid accordingly Nigel. Jeebus if a Pak’nSave was nearby you could at least get yer favorite malt beverage on the quick. You don’t even have that.

  9. Those pretty Israeli enclaves ,we visited some of them in the 1980’s ,looked like every 3rd adult had a long weapon on them, and looked like they knew how to use it ,back then …..wonder how they got so disarmed , and why, with where they were at ?

    1. They disarmed themselves. Like idiots. The government just did an emergency relaxing of restrictions and allows citizens to apply for fast track gun permits and up to, get this….100 rounds. You get 100 bullets to defend yourself against Hamas terrorists.

  10. It is the same deja vu all over again. Well-meaning (is there any other kind?) government and political intervention in the free market has always spelled disaster in the long run. The venerable Savings and Loans of the 70s to make house buying possible for unqualified buyers by artificially suppressing interest rates and the subsequent proliferation of Ponzi schemes and other questionable investments which ended in the junk bond crash and destruction of the S&Ls are all lessons in history . . .

    1. I banked with one, Great American, for a while. It began in 1885 as the San Diego Building and Loan Association. It was seized in 1991.

  11. A reader sent these in:

    US Mortgage Rates are at their highest level since December 2000 (7.49%) while Mortgage Purchase Applications have plummeted to their lowest level since 1995.

    https://twitter.com/charliebilello/status/1711532267367968879

    The US has already issued $1.76 trillion in net Treasury securities through September. Will be well over $2 trillion by year-end, trailing only 2020 for the largest net debt issuance of any year in history.

    https://twitter.com/charliebilello/status/1711406355112771933

    The office vacancy rates in Houston (26.4%), Dallas (25.8%), and Austin (24.2%) are among the highest in the country, well above the national average (19.2%). Consequence of many years of overbuilding and the transition to remote work.

    https://twitter.com/charliebilello/status/1711377956142985529

    I’m in Austin now. A local contractor characterized it as “activity has hit a wall.”

    https://twitter.com/DiMartinoBooth/status/1711739469596946560

    Austin, Texas is the only big city market with more available inventory of unsold homes than any time in the last decade.

    https://twitter.com/mikesimonsen/status/1711462101368397965

    At a conference in NYC right now. Head of US real estate just made an interesting point in response to the common statement that “there is so much dry powder on the sidelines.” His response is that, while that might be technically true, the buying power of that dry powder has been reduced dramatically due to leverage going in the wrong direction.

    https://twitter.com/JeremyGlantz/status/1711730716298367100

    I literally just met a woman today who grew up in Austin and her family are developers. She said they buy and sell land to builders and are in trouble right now as the main builder they’ve worked with for 20 years is defaulting.

    https://twitter.com/jimmydean197/status/1711855311852900726

    Almost half of US listed firms have negative profit margins. They have been able to survive in artificially low interest rates and ample liquidity environment. Things have changed though.

    https://twitter.com/MichaelAArouet/status/1711619458081402918

    Who would have thought that bonds perform well when the Fed stops hiking

    https://twitter.com/MichaelAArouet/status/1711624721266045413

    Veteran banker calling for “TARP 2.0” in Op-Ed to help banks with steep unrealized losses on their securities holdings. Proposal would lend up to $1 Trillion against securities that have lost value to Fed’s “meteoric increase” in interest rates.

    https://twitter.com/JackFarley96/status/1711832851593781714

    Over past 6 months, 1-month returns for long-duration Treasury bonds $TLT have been negative ~82% of the time.

    https://twitter.com/JackFarley96/status/1711785466020667595

    They shut off the stimulus firehose and guess what, now you can see see the true state of the US economy.

    https://twitter.com/WallStreetSilv/status/1711846747272577398

    The last time 1-Year Treasuries paid more than the dividend yield on apartment REITs was in 2006-2007. You don’t have to be calling for some GFC-style crash to be on a simple thesis that has home price deflation baking into 2024 & 2025 CPI. I suspect it is coming.

    https://twitter.com/JeffWeniger/status/1711831943799550055

    Before mortgage rates started zooming, it was possible to buy a $309,797 house and have monthly principal and interest of $1,000. With rates now at 7.81%, people who want a $1,000 monthly payment must purchase a $173,475 house.

    https://twitter.com/JeffWeniger/status/1711733380159598995

    Luckily higher rates will send prices back down to earth. The mistake wasn’t higher rates. The mistake was lower rates, they drive up prices.

    https://twitter.com/KevinTartis/status/1711735200353313244

    “China Needs Forceful Action on Real Estate Woes: IMF”
    This is the same IMF that lectured Beijing for yrs that its credit-fueled bonanzas were reckless. And they were. Yet now that there’s pain involved, the world’s bean-counting elite go into panic mode.

    https://twitter.com/ChinaBeigeBook/status/1711921771002343703

    In 2022-23, 45,000 Australian homes were purchased with the assistance of the federal governments ‘Home Guarantee Scheme’, which allows buyers to purchase with a 2-5% deposit depending on their personal circumstances.

    https://twitter.com/AvidCommentator/status/1711935606316777783

    Shocking footage of fast-moving wildfires approaching Villa Carlos Paz in Argentina right now

    https://twitter.com/YourAnonOne/status/1711855341850218980

    For those who were asking, here’s the dollar losses from the areas I didn’t cover last week.

    https://twitter.com/JonFlynnREstats/status/1711788927206449421

    F4T: If the NAHB, NAR, MBA, and Bankers are all writing for a pivot and direction from the Fed along with TARP 2.0 – this looks more like a nuclear explosion rather than a soft landing…

    https://twitter.com/MacroEdgeRes/status/1711884891162616317

    Spreads on BBB CMBS (commercial-mortgage-backed securities) have moved up to 1,351 bps, their widest levels in over a decade. Bond investors are pricing in a wave of defaults to come.

    https://twitter.com/charliebilello/status/1711847042710900805

    Vegas price drops heating up into the winter…

    https://twitter.com/MacroEdgeRes/status/1711800826778583419

    Restaurants…now hairdressers posting on social media that they are suffering from a tapped out consumer. Same thing occurred pre GFC when politicians, the media, the Fed, and the hopium long only and always equity clowns ignored the warning signs.

    https://twitter.com/W_O_R_T_H_1/status/1711772669190844625

    Posses are organizing on Reddit to take down AirBnB locations in their neighborhoods

    https://twitter.com/GayBearRes/status/1711896789673030094

    If history is any guide: The recent steepening of the yield curve from deeply inverted levels suggests that unemployment rates are likely to start rising significantly in the next couple of months.

    https://twitter.com/TaviCosta/status/1711906917952721097

    Florence bans new Airbnbs lets to free up housing for locals
    ‘In 2016 we had 6,000 apartments listed on Airbnb, today we have 14,378..during that time the cost of monthly residential rents leapt 42% ..This year, prices increased by 15%’ #AirbnbSucks

    https://twitter.com/emptyhomes/status/1711750021840826395

    From the Richmond Fed. Rural home owners with mortgages were more likely to be cost burdened by their housing costs than renters!!

    https://twitter.com/JohnWake/status/1711896367071891862

    Typical macro cycle turns are slow to start, but they all end in recession.

    The current modest rise in unemployment is about median for a year in since YC inversion compared to post-war cycles. But it’s usually in this time frame where things start to get interesting:

    https://twitter.com/BobEUnlimited/status/1711791954743415145

    Cue the Canadian short sales

    https://twitter.com/DonMiami3/status/1711893214737912007

    Buying stocks at these elevated prices on expectations of future Fed easing is a fools errand. The type of conditions that would cause the Fed to ease would also lead earnings to significantly disappoint the current lofty growth expectations.

    https://twitter.com/BobEUnlimited/status/1711704517853446489

    1. “The type of conditions that would cause the Fed to ease would also lead earnings to significantly disappoint the current lofty growth expectations.”

      It’s a Catch-22 situation for Wall Street’s bovine herd.

    2. “They shut off the stimulus firehose and guess what, now you can see see the true state of the US economy.”

      COVID stimulus….where to begin. But I agree. This is more impactful than higher rates. It wasn’t until recently that the ERC spigot was shut off. Now the fun begins.

    4. “Restaurants…now hairdressers posting on social media that they are suffering from a tapped out consumer. Same thing occurred pre GFC when politicians, the media, the Fed, and the hopium long only and always equity clowns ignored the warning signs.”

      Ignore the data you’re getting and take a look around. The signs are everywhere that ship is sinking.

    5. “Austin, Texas is the only big city market with more available inventory of unsold homes than any time in the last decade.”

      This tidbit just casually slips by most people but it is an important milestone and something to keep a close eye on. In the past, Texas cities would have massive inventories of foreclosures during the bust phase. So many properties in one city like Austin/Dallas/Houston that one person would have a very difficult time tracking them. The list would require a good sized stack of paper to print it out. If you were trying to track multiple cities, forget it. I strongly believe Texas is going to return to this reality but it takes time for all of these individual situations to get on the list, but they will, one by one until it’s a flood.

      Texas is a weird place. It has lots of ghost towns to choose from right now! I think Dallas and Houston are going to get hammered. I imagine rotting mcmansions will become a big problem there. I think people will be surprised at how fast they deteriorate when no one is maintaining them. My advice would be to look at whatever the suggested opening bid is and offer 50% at most. Cash will be king.

    1. Bloomberg
      Markets
      Largest US Banks Grapple With Worst Write-Offs in Three Years
      Net interest income, new capital requirements also in focus
      Investment-banking revenue expected to drop on M&A slump
      Worsening credit quality suggests banks may have to set aside more money to cover sour loans.
      Photographer: Stephanie Keith/Bloomberg
      By Shelly Hagan
      October 11, 2023 at 3:15 AM PDT

      The biggest US banks are poised to write off more bad loans than they have since the early days of the pandemic as higher-for-longer interest rates and a potential economic downturn are putting borrowers in a bind.

      JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., which report third-quarter results Friday, will join Bank of America Corp. — which comes Tuesday — in posting roughly $5.3 billion in combined third-quarter net charge-offs, the highest for the group since the second quarter of 2020, according to data compiled by Bloomberg.
      …

  13. Someone finally came up with a use for cryptocurrency beyond speculative gambling: Funding terrorist operations.

  14. Markets and economy
    Are bonds a good investment right now?
    9 minute read
    October 09, 2023

    2022 was an unusual year, with both bonds and stocks down at the same time. As a result, you may be questioning the role of bonds in your portfolio and considering whether to move your money from bonds to cash or short-term CDs (certificates of deposit). To help you stay on track with your long-term financial goals, we have answers to some commonly asked questions about bonds that are top of mind.
    …
    https://investor.vanguard.com/investor-resources-education/article/are-bonds-a-good-investment-right-now

    1. Bloomberg
      Economics
      Central Banks
      Fed Is Determined to Bring Inflation Back to 2% Target, Waller Says
      Fed governor reiterates central bank’s commitment to 2% goal
      Waller doesn’t comment on near-term outlook for interest rates
      Waller Says Fed Will ‘Stay on the Job’ to Contain Inflation
      WATCH: ”We have made it very clear that we are determined to bring inflation down to 2%. Not 3%, not 4%,” Federal Reserve Governor Christopher Waller says.Source: Bloomberg
      By Craig Torres
      October 10, 2023 at 10:30 AM PDT

      Federal Reserve Governor Christopher Waller said the US central bank is determined to bring inflation back to its 2% target in a speech that mostly avoided the current state of markets or monetary policy.

      “We have reaffirmed this numerical goal repeatedly since 2012, and, in tightening monetary policy since early last year, we’ve made clear that we’re determined to bring inflation down to 2%,” Waller said in remarks at an event sponsored by George Mason University’s Mercatus Center. “This is why we have taken forceful steps aimed at reducing inflation — and why we will stay on the job to achieve our objective.”
      …

      1. we’ve made clear that we’re determined to bring inflation down to 2%

        It’s vital to keep in mind that they are not only thieves. They are thieves and liars.

        They have already increased the money supply an astronomical amount. They promise to limit the climb from here like they are our saviors.

        Stop crying. I’ll beat you less tomorrow, promise.

  15. Russia Today — Zelensky fears Israel will distract from Western aid to Kiev (10/11/2023):

    “Ukrainian President Vladimir Zelensky has voiced concerns that the security crisis in the Middle East could draw international attention away from his country. He blamed Russia for the Hamas incursion into southern Israel last week.

    “If international attention shifts away from Ukraine, one way or another, it will have consequences,” the Ukrainian leader warned in an interview with France 2 on Tuesday.

    “The fate of Ukraine depends on the unity of the rest of the world,” he added, expressing hope that Washington would ensure continued assistance.

    https://www.rt.com/russia/584640-zelensky-aid-israel-nato/

    U.S. national debt $33+ trillion and growing. Nobody outside the Beltway supports Ukraine. Nobody.

      1. “For those that disagree, ask yourselves this – Are you truly willing to go pick up a rifle and fly to Israel or Gaza to fight and die for either side? If so, then go do it and stop demanding others do it for you. If not, then shut up.”

  18. Is It All Downhill From Here For Brampton, Mississauga & Durham Real Estate? – Oct 4
    Team Sessa Real Estate
    14 minutes ago CANADA

    Brampton, Mississauga, Ajax, Whitby, Pickering Real Estate Market Report for the week of Sept 28 – Oct 4, 2023.

    https://www.youtube.com/watch?v=23dlne1j2OU

    16:43. UHS speculators getting fooked in Brampton in the first minutes.

  19. ‘I’ve spoken to some agents who are totally panicking because they have nothing going on, and I’ve spoken to agents who feel like they’re drowning because they’re just full of so much business’

    I’ve heard it’s normal for 5% of the UHS to do 80% of the deals Amanda.

  20. ‘That’s the reason I got into real estate, so we can actually start flipping properties, buying properties so we can have something for our kids in the future…He’s advertising this all over radio and television, so I thought this was legit…We invested $200,000 and it looks like we won’t ever get it back’

    Ennio Morricone – L’estasi dell’Oro (In Concerto – Venezia 10.11.07)
    SelfDistribuzione
    11 years ago

    Song taken from “The Good, the Bad, the Ugly”, performed in the magical setting of San Marco’s square in Venice and directed by Ennio Morricone himself.

    https://www.youtube.com/watch?v=J3IlqY1CbI0

    4 minutes.

    1. ed $200,000 and it looks like we won’t ever get it b

      Per the article they borrowed the money:

      Santiago and Ortiz took $200,000 in equity from their Florida home to finance the project.

      I was thinking that someone who scrimped and saved $200K might have done some due diligence before shelling it out. But they didn’t save it, they borrowed it, and I’m gonna guess that once they are underwater they will jingle mail and walk away empty handed.

      “I am paying the interest right now every month, and I have nothing,” Santiago said.

      I think this happens because too many people “know someone” who got rich without working or being entrepreneurial, or at least they think they do. Passive riches sounds great, until you lose your @ss.

  21. ‘It would cost more to put right due to the state it is in. You can see the pigeons living in the buildings with all the broken windows. We used to have security guards living in static caravans to stop people entering the site, but since work stopped anyone can wander on there. Loads of people have been fly-tipping. I think it’s a disgrace’

    fly-tip
    /ˈflī ˌtip/
    verb British
    gerund or present participle: fly-tipping

    dump waste illegally.

  22. ‘the first thing that jumped out at me was a cluster of white luxury condominiums. The rows of condominiums are spectacular, as they are designed for the wealthy, but weeds are growing thickly from the walls of the buildings, and it is easy to see that there are no residents in the area. According to a local real estate agent, ‘Many of the owners originally purchased the condominiums as investment condominiums, and few people live in them’

    Here’s some things about this sh$thole that aren’t being mentioned. Forest City was a giant flop from day one. But before that it was an environmental disaster as they uprooted natives and tore up everything. No one ever moved in, it was big news. But it was Country Garden. The big enchilada. So they stubbed their toe.

    Years later, Evergrande craters and that the focus. We got a bad apple.
    Gringos start getting fooked on off-shore bonds, companies are dropping like flies, masses are boycotting mortgage payments or living in unfinished airboxes without running water.

    My point is, Country Garden was supposedly the strongest of the strong when Forest Garden flopped 10 years ago and everything they built in 280 cities was just as flimsy as Evergrande all along.

  23. Antonio Vivaldi – Nisi Dominus RV608, 4th movement – Cum dederit – Latin and English Lyrics
    Rubrum Aurora
    3 years ago

    English translation and Latin lyrics of the 4th movement in Nisi Dominus, RV608, Vivaldi’s most extended and artistically ambitious Psalm setting for solo voice to have survived. It certainly dates from his ‘first’ period, but no one has yet established whether or not it was written for the Pietà. ‘Cum dederit’ conveys drowsiness by being set in a slow siciliana style and employing a distinctive motive with chromatically ascending lines.

    Performed by Andreas Scholl

    The Artwork: The Tondo Taddei, one of the two most famous round bas-reliefs with the Madonna and the child executed between 1503 and 1506 by Michelangelo. It presents the figures of the Child and of St. John in a dynamic action, in a scene of lively everyday life where the child flees in the arms of the mother to the gesture of St. John showing a goldfinch, Carduelis carduelis, symbolizing variously the soul, resurrection, sacrifice and death; and here as a symbol of the passion.

    This video is a dedication to a fellow Vivaldi fan, and a dear friend, Carina.

    https://www.youtube.com/watch?v=BUuL2wktH9I

    5 minutes.

  24. Excellent discussion.

    The Israel Attacks: Beyond the Obvious with Efrat Fenigson (1h43m6s)

    Efrat Fenigson is an independent Journalist, Podcaster, Israeli Citizen & Covid dissident. In the wake of the October 7th terrorist attacks on Israel, she has provided insight into the situation from inside Israel on X (Twitter). Bret and Efrat discuss the current state of affairs and the situation unfolding as we speak.

    Due to the timely nature of this episode, it is important to note that this was filmed at 8PM Israel time on October 10, 2023, and released several hours later.

    It is also of note that at the end of this recording, Efrat hears the sounds of rockets going off nearby. However there was also construction noise near Bret during the entire duration of the episode, not to be confused with sounds of war.

    Note: Hamas was founded in 1987, not 1967 as was inadvertently stated.

  25. Does it seem like Mr Market still doesn’t quite know what hit him since the Fed started raising rates in early 2022?

    1. Yahoo Finance
      Business Insider
      Billionaire Howard Marks joked last year that investors should sell all their stock. Now he still maintains bonds are offering ‘equity-like returns.’
      Filip De Mott
      October 11, 2023, 7:43 pm
      Howard Marks
      K. Y. Cheng/South China Morning Post via Getty Images

      Howard Marks joked recently that investors should dump all stock and buy high-yield bonds.

      However, the Oaktree founder notes that “equity-like” returns are being seen in credit markets today.

      Bonds should make up a larger part of portfolios than in the pre-pandemic era, Marks said in a letter to investors.

      It might be time for credit instruments to make up a much larger part of portfolios — maybe even the majority, billionaire Oaktree Capital founder Howard Marks wrote in his latest investor letter.

      He said that speaking at a conference in December, he jokingly suggested that investors should sell every single kind of equity asset and use the proceeds to pounce on high-yield bonds.

      “But mine wasn’t a serious suggestion, more a statement designed to evoke discussion of the fact that, thanks to the changes over the last year and a half, investors today can get equity-like returns from investments in credit,” Marks explained in the note.

      In his letter in December of last year, Marks said that markets were in the midst of the latest “sea change,” in which investors would be tested by upheavals in the investing landscape. He noted at the time that the roughly 2,000 basis point increase in rates between 1980 and 2020 was probably responsible for most of the investment profits in that era.

      Now, he sees the return of higher interest rates and the end of the easy money era. It’s a change that will make stocks lose their edge over bonds, and one that he says that means strategies that worked in the past aren’t going to be as effective.

      “Bottom line: If this really is a sea change – meaning the investment environment has been fundamentally altered – you shouldn’t assume the investment strategies that have served you best since 2009 will do so in the years ahead.”

      While near-zero interest rates persisted from 2009-2021, not only were credit instruments largely unattractive, levered investing was a widespread strategy in stocks, as investors could juice returns with cheap borrowed money.

      But the sharp uptick in interest rates above 5% has diminished that advantage, and headwinds for equities are piling up, Marks said. Those include a potential economic slowdown, eroding profit margins, higher default rates, less asset appreciation, and shareholder pessimism.

      Meanwhile, bond yields have climbed, offering rates of return nearly on par with equities.

      Where the S&P 500 has returned about 10% annually for the last century, the ICE BofA US High Yield Constrained Index now offers about the same.

      “In other words, expected pre-tax yields from non-investment grade debt investments now approach or exceed the historical returns from equity,” Marks said.

      He adds that the other benefit of credit and fixed income is the fact that they are contractual investments, and rather than being at the mercy of the market, returns come from the contract between investor and borrower.

      The ultra-low rates that followed the great financial crisis were an emergency measure that lasted too long, Marks said, and led to a number of economic inefficiencies. Lowering rates again would take away the Fed’s ability to push rates down in case of future economic slowdowns.
      …
      https://finance.yahoo.com/news/billionaire-howard-marks-joked-last-024303361.html

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