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If You’re An Investor Holding Multiple Properties, You Can Only Sit There So Long And Wait

A report from the Philadelphia Inquirer in Pennsylvania. “Student loan payments resume this month, and millions of borrowers across the region are rearranging their budgets. Kenneth Blair Jr. is increasingly anxious as his payment due date approaches. ‘My payments are the equivalent of a mortgage,’ Blair said. (He and his wife also have a mortgage payment, monthly car and insurance payments, and two children to support.) ‘I don’t think the numbers the loan servicers are coming up with are realistic. At the current rate, I’m going to be very honest with you, I don’t know how I can make that payment.’ Though his wife has less student loan debt, she will also see her payments resume at the end of the month. She is waiting, too, for word on whether she can qualify for lower payments. ‘We’re living from check to check. … We are looking at maybe $300 to $400 left after we pay our bills,’ said Blair.”

From Vail Daily. “Price appreciation has certainly elevated values and combined with higher interest rates hovering in the 7% range, it’s become increasingly challenging for buyers seeking financing to purchase a home in Eagle County. The good news is that inventory levels are seasonally appropriate (though the market needs much more) and buyers are facing less competition for homes. Scott Marino, a broker associate with Berkshire Hathaway HomeServices Colorado Properties and a Down Valley market specialist, says that the single-family home under $1.5 million is still lagging behind. ‘Buyers have proven they are not going to overpay for a home outside fair market value, particularly with the higher interest rates,’ Marino said. ‘I am seeing some seller hesitancy about listing their property and having to pay more for a new home. But it works both ways. If prices drop, sellers will typically get less for their home.'”

The New York Post. “A Soho loft owned by art consultant and former Chelsea gallerist Sara Tecchia is back on the market for $11.6 million — a 50% price slash from its original $23.25 million in 2015. Tecchia bought the three-bedroom, 3½-bath home at 50 Wooster St. for $7.45 million in 2010.”

KTVU in California. “The San Francisco home that appeared in ‘The Princess Diaries’ movie just dropped its price. It was originally being offered for nearly $9 million, and now it’s going for $6.5 million, the San Francisco Chronicle first reported. The house was staged as the high school of the main character, who was played by Anne Hathaway. The 100-year-old home is located on the edge of the Presidio, and features four bedrooms and three-and-a-half bathrooms.”

Bisnow on California. “ACORE Capital is the new owner of a five-building Orange County office complex purchased at a foreclosure auction. The nearly 500K SF Aliso Viejo property traded hands for $70M, a steep discount from the $157M Boston-based Rockpoint paid for it in 2018, the Orange County Business Journal reported. The latest sale works out to about $143 per SF for the property. ACORE provided the financing for Rockpoint’s purchase five years ago. Lenders often have an advantage in auctions where they have foreclosed because outstanding debt on a property can be used as credit on their bid, The Real Deal reported. There was nearly $132M of unpaid debt tied to the property when ACORE foreclosed, the OCBJ reported.”

Floor Daily. “Last year, the U.S. flooring industry posted 3% growth for a total of $28.195 billion at mill sell, according to Market Insights LLC. Strong activity in the commercial market helped offset losses from the second half of the year in the residential market. Business began to slow significantly in the second quarter and continued to decline for the balance of the year, with both residential remodel and single-family builder business tailing off. Supply chain constraints coupled with heavy demand in 2021 led to a frenzy of import orders. In categories like laminate, engineered wood and area rugs, people were ordering anything that resembled a flooring product. Then supply chains started to clear and product began to flow through the ports and across the country-just as demand dried up-leaving flooring businesses, saddled with huge volumes of product and too few customers to buy it all, distressed and vulnerable.”

“Hardwood business, which is primarily residential, was down about 10% last year. Activity was high at the beginning of the year, but supply chain issues caused bottlenecks. And as demand quickly cooled, oversupply from 2021 hit the market, including from imported engineered woods that had been stuck in transit. That oversupply of engineered wood imports impacted demand for domestic production and also led to a plunge in imports last year of about 21%.”

CTV News in Canada. “A new mortgage phenomenon is popping up across the country and in Windsor-Essex that sees homeowners facing extended mortgage terms of 50, 60 or even 70 years. Rasha Ingratta, a mortgage advisor with Mortgage Intelligence in Windsor, says about 10 per cent of the calls she is receiving are tied to this issue. ‘With the calls that I’m getting, I just want people to not panic,’ Ingratta told CTV News. ‘The best option is to either increase your payment if you can [or] refinance if you can.'”

“The Office of the Superintendent of Financial Institutions (OSFI) has received similar reports of negative amortization, but is downplaying their significance. The OSFI is an independent federal agency regulating and supervising 400 federally regulated financial institutions like banks and credit unions. OSFI declined an interview request from CTV News and instead pointed to a recent statement on the matter. ‘These kinds of projected amortizations are not realistic and do not represent what borrower’s actual repayment period will be,’ reads part of the statement. ‘In most circumstances lenders will restore borrowers to their contractual amortization period.’ The OSFI statement also characterizes these renewal term extensions as ‘hypothetical’ and goes on to say in some cases ‘an infinite amortization period’ could be produced by the repayment calculation.”

“Ingratta has been working in the mortgage lending industry since 1999 and said this a new problem arising from rising interest rates, spurred by the Bank of Canada’s attempt to get inflation inline with its two per cent mandate. ‘We haven’t really seen this before,’ said Ingratta. While the issue is popping up in Windsor, many of the calls Ingratta receives are from outside of the region. The dour financial picture is leading many of her clients to pursue alternate housing arrangements, including multi-family homes. ‘I’ve seen situations where people have moved in together,’ said Ingratta. ‘We are going to see that.'”

The Canadian Press. “Toronto-based realtor Davelle Morrison with Bosley Real Estate Ltd. said that with high-interest rates, ‘people are really feeling the pinch.’ ‘You just don’t have as many people in the market right now looking,’ she said. ‘For the people who are in the market and looking, it’s a great opportunity for them, simply because they have less competition.’ BMO Capital Markets economist Robert Kavcic said demand is struggling a bit under the pressure of higher mortgage rates. ‘Back in the spring, we had a bit of a bounce in prices because listings were really being held back and that’s just not the case now,’ Kavcic said. ‘So the market balance is kind of tilting and I think there’s probably some downward pressure on prices across a few markets.'”

“He said many potential buyers held off earlier this year due to weak market conditions, but that could change heading into 2024. ‘Now you’re getting to the point where if you have to move properties, or if you have to move jobs or locations, or if you’re an investor holding multiple properties, you can only kind of sit there so long and wait.'”

“Morrison said the downward price trend in the Toronto region has also provided opportunities for some to buy properties that would have otherwise been unaffordable in recent years. For a first-time buyer client looking to buy a condo with two bedrooms on a $1-million budget, Morrison said she was able to find a house instead. ‘They were contemplating whether they should buy or not buy because interest rates are high, but when we were looking at the fact that some of the houses now are available below $1 million, they realized that this is actually an opportunity,’ she said. ‘They can get a ‘deal’ on a house in Toronto now because prices are slightly lower than they used to be.'”

The Telegraph in the UK. “Neil Webster, who is in his 70s and trying to downsize to Gloucestershire to be closer to his children and grandchildren, said stamp duty was the least of his worries. His four-bedroom house in Preston has been on the market for 10 weeks, and still has not attracted any offers. ‘The house is ideal for a family but we’ve had to reduce the price by £20,000,’ he says. ‘The market is flat as a pancake, I know homes that have been on the market for 18 months. If and when we get a reasonable offer, we will take it. But we are competing against the new builds. In this area there are fields of them, and I just think: this house isn’t going anywhere.'”

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This Post Has 94 Comments

  1. ‘A new mortgage phenomenon is popping up across the country and in Windsor-Essex that sees homeowners facing extended mortgage terms of 50, 60 or even 70 years. Rasha Ingratta, a mortgage advisor with Mortgage Intelligence in Windsor, says about 10 per cent of the calls she is receiving are tied to this issue. ‘With the calls that I’m getting, I just want people to not panic’

    That’s some sound lending right there Rasha.

  2. ‘For a first-time buyer client looking to buy a condo with two bedrooms on a $1-million budget, Morrison said she was able to find a house instead’

    That’s the spirit Davelle!

  3. (This article is too long for it to posted here in its entirety. A few snips will be all that is offered.)

    The Great China Boom is going bust

    https://www.businessinsider.com/china-xi-jinping-economy-real-estate-debt-bust-american-companies-2023-10

    We’ve reached the end of an era for the Chinese economy.

    For the past three decades, China has been on the upswing of a supercycle that saw an almost uninterrupted expansion of the country’s capacity to manufacture, appetite to consume, and ability to project power across the world economy. The Chinese Communist Party relentlessly pursued economic development over all else, even when that single-mindedness pushed the party to make debilitating policy mistakes — creating a massive bubble in the property market, sidling provinces with loads of debt, and failing to transition away from an overreliance on investment. There was no time to stop for corrections while China’s mind was on money alone.

    This era of expansion was not only a boon for Beijing, it also helped fuel global demand. Countries relied on China’s hunger for speedy modernization and industrial might to supercharge their own development. Even American companies saw China as the next great global market — and made bets accordingly.

    They lost those bets.

    1. The current state of Colorado’s real estate market (10/13/2023):

      ““Buyers really have the opportunity to be picky right now. They can spend a full weekend looking at homes before they have to make a decision rather than making a decision on an hourly basis because there’s 15 other people lined up,” said Matt Leprino, spokesperson for Colorado Association of Realtors.”

      A full weekend?

      “After a slight downward trend earlier this year in the statewide median home price, the single-family home price rose nearly 3% to $575,000.

      Across the state, the townhome and condo market also rose by 2.6% to a $425,857 median sales price.

      Digging into Denver metro data, the single-family median home price rose year-over-year to 3% at $620,000.”

      https://www.denver7.com/news/360/the-current-state-of-colorados-real-estate-market

      Eight times median incomes that’s some sound lending right there. Better hurry the weekend is half over.

  5. Am old enough to remember the Japan thing ,in about 1990, they were selling pint size housettes on 60 year payment plans ……they sure got theirs,
    Also, I’m getting lots of letters offering me “Cash” for little pockets of land ,or even lots in town, from several states away……what exactly is that, a scam of some sort…….?
    I remember several years ago ,a car guy told me he puts in dozens of lowball offers on old ,but desirable , junker cars , about 5% will fall for it ,he claimed …….what a sorry way ,to do it,seems to me …

  6. ‘I don’t think the numbers the loan servicers are coming up with are realistic.

    I believe we refer to this as the “denial” phase.

    1. “We’re living from check to check. … We are looking at maybe $300 to $400 left after we pay our bills,’

      I suggest you start trapping those squirrels in your yard. I’m sure there’s a lot of recipes on YouTube.

      1. I have yet to see a student loan breakdown by major. Instead, they interview a dozen people and call it news. But I don’t think I’ve seen a single STEM major default on the loans.

      2. $300 to $400 left

        Cheer up. There are plenty of people who live comfortably on that.

        Ask your library or used book seller for a copy of “The Poacher’s Bible”.

        1. Right?! They can still save about $4,000 a year. That’s not living paycheck to paycheck. Boo hoo

  7. “A Soho loft owned by art consultant and former Chelsea gallerist Sara Tecchia is back on the market for $11.6 million — a 50% price slash from its original $23.25 million in 2015.

    “Art consultant”? Get a real job, Greedhead Sara.

  9. Era of ‘Unquestioned and Unchallenged’ Climate Change Claims Is Over

    Authored by Alex Newman via The Epoch Times

    Leading voices in the climate community are in an uproar as their warming hypothesis comes under fresh assault by new scientific papers.

    The authors of the papers are being attacked and say that “activist scientists” threatened by the new findings are “aggressively conducting an orchestrated disinformation campaign to discredit the papers and the scientific reputation of the authors.”

    Indeed, from insults on social media and furious blog posts to Freedom of Information Act (FOIA) requests demanding emails from a journal editor and federal scientist, the controversy is getting heated.

    Several scientists who spoke with The Epoch Times expressed shock at the tactics used against those whose latest research is casting renewed doubts on the official climate narrative.

    https://www.gulf-insider.com/era-of-unquestioned-and-unchallenged-climate-change-claims-is-over/

    1. “Several scientists who spoke with The Epoch Times expressed shock at the tactics used against those whose latest research is casting renewed doubts on the official climate narrative.”

      Lol. These scientists need to get out more, perhaps read up on what happened to other doubting scientists such as Judieth Curry.

    1. “We have tenants that haven’t even paid f**king rent for like 9 months!” Cardi vented. “9 months!”

      Sorry to have to tell you this Cardi but they ain’t tenants they’re squatters.

    2. Let’s not even talk about the Dominican Republic Airbnb that this *coughcough* bought me.

      Careful there Cardi, next thing you know you’ll be voting for T***.

  11. Some good news for a Sunday.

    Russia Today — Ukraine’s counteroffensive has completely failed – Putin (10/15/2023):

    “In a short interview, released by the Rossiya 1 channel on Sunday, Putin was asked to comment on recent statements by some Ukrainian officials, who acknowledged that their operation was stalling and failing to meet Kiev’s schedule.

    “As for the counteroffensive that is allegedly stalling – it has failed completely,” the Russian leader replied.

    https://www.rt.com/russia/584955-ukraine-counteroffensive-completely-failed/

    U.S. taxpayers could you imagine having a government that cares more about its own border than that of Ukraine, which isn’t even a real country?

    Nobody outside of the Beltway supports Ukraine. Nobody does.

    Russia is winning, God wills it ✝️

  12. Remember 2019 when this country had a semi-functioning economy?

    New York Post — Overwhelming majority of Americans think US is trending downhill (10/15/2023):

    “A whopping 78% of US adults believe the country is trending in the wrong direction, according to a poll that was taken in the days after former House Speaker Kevin McCarthy (R-Calif.) was voted out of his post by members of his own party.

    Only a mere 21% felt that the US is heading in the right direction, according the Associated Press-NORC Research Center.”

    https://nypost.com/2023/10/15/overwhelming-majority-of-americans-think-us-is-trending-downhill/

    78 percent is that a lot?

    “This sucker could go down” — George W. Bush

      1. They voted to kill babies and cut off 5th graders’ b–bs. You think they’re keeping track of anything else?

  13. Gateway Pundit (10/14/2023):

    “Who in God’s name needs a weapon with 100 rounds in the chamber? The weapon is only meant for one thing. To kill people!” Unelected Occupant said during remarks at the 2023 Human Rights Campaign National Dinner on Saturday night.

    Unelected Occupant in January delivered remarks at the National Action Network Martin Luther King, Jr. Day breakfast in which he threatened millions of conservatives.

    “I love my right-wing friends talking about how the tree of liberty is watered with the blood of patriots. If you want to take on the federal government, you need some F-15s. You don’t need an AR-15″

    https://www.thegatewaypundit.com/2023/10/joe-biden-who-gods-name-needs-weapon-100/

    Who needs 100 rounds?

    Somebody capable of resistance to and overthrow of tyrannical government, that’s who.

    1. American Greatness — The Left Would Grab Your Guns In a Minute If Patriots Stopped Defending the Constitution (10/10/2023):

      “As of now, many Americans still believe gun control does not end in total disarmament. But if the last 99 years of gun control (since the codification of the National Firearms Act) have taught us anything, it is that the anti-gun lobby is never satisfied with gun policy.

      The Left knows Americans understand the value of an armed populace, so now they work to trick Americans into “gun violence prevention” because the previous “gun control” lobby was failing. Make no mistake, they’re the same, and work towards the same goal of total disarmament—one just markets better to moderates.

      The Left has failed to convince a majority of Americans that the Second Amendment is inherently bad, but “progressives” can pull on your heart strings and manipulate voters into supporting anti-2A laws framed as “safety” measures. If you can tie “gun violence” to public health, people might just go along with it in the belief that they’re working towards the common good.

      If the “progressive” Left is actively telling Americans that the Constitution is a hindrance to their safety, how can we expect Americans to cherish and defend it? Well, we cannot, and they know this.

      Any action that even slightly violates the Constitution is terrible for the American people, as it erodes the very fabric that patriots died to protect. A fabric, tied together with freedom and liberty, intended to provide a means of representative governance checked by citizen militias.

      But the Left does not view the Constitution that way. They see a wall that must be reduced and eventually toppled to allow for full control. They actively seek a large, taxpayer funded government that “takes care” of its people. People who have no means of ensuring just laws and constitutional freedoms are protected because they no longer have the ability to fight against injustice.”

      https://amgreatness.com/2023/10/10/the-left-would-grab-your-guns-in-a-minute-if-patriots-stopped-defending-the-constitution/

      300+ million guns in the hands of U.S. civilians, you globalist sh*tbags.

      #DoNotComply

    2. As I used to tell my Idiot liberal co workers you don’t need a weapon to take on the government, you need it for when the government fails to protect you .

  14. Many of Us Are Living Paycheck to Paycheck. That’s Bad for the Economy.

    https://finance.yahoo.com/m/05a73235-619f-3337-8a89-987ee9ac1564/many-of-us-are-living.html

    Many Americans are living in financial distress, at least some of the time.

    That’s the message of a recent Harris Poll, and it’s bad news for economic growth.

    About 65% of working Americans say they frequently live paycheck to paycheck, according to a recent survey of 2,105 U.S. adults conducted by The Harris Poll, asking questions supplied by Barron’s. About 30% of households report that they run out of money at the end of every month, while 35% say they don’t have money left at the end of most months.

    While the number of people living on the edge financially has an immediate effect on household well-being, there are also longer term economic costs, including higher debt levels and uneven retirement readiness. Those trends could also dampen overall economic growth.

    Unsurprisingly, people earning less tend to struggle more, but even those considered well off are vulnerable to paycheck shocks. About 78% of Americans earning less than $50,000 a year report they live paycheck to paycheck, according to the survey. Yet 51% of Americans who make more than $100,000 a year say they still run out of money.

    Living paycheck to paycheck is a fairly “ubiquitous” circumstance, says Fiona Greig, Vanguard’s global head of investor research and policy. That’s because U.S. adults generally tend to need a bigger cash buffer than they anticipate. Additionally, she says, many consumers are facing higher living expenses as inflation erodes their purchasing power.

    The latest Harris survey data show a higher percentage of Americans living paycheck to paycheck than the roughly 60% reported in August in the Reality Check: Paycheck-To-Paycheck research series. The difference likely is due to differences in the survey population, and rising energy costs that hit consumers’ budgets in recent weeks. At the end of September, gasoline averaged $3.83 a gallon nationally, two cents more than in August, and seven cents more than a year earlier, according to AAA.

  15. I’m in the same room with a broadcast TeeVee for the first time in longer than I can remember. Eating breakfast in a cafe with ABC News on and it’s all globalist propaganda bullsh*t about the newest false flag phony war.

    None of these phony wars are of any benefit whatsoever to United States taxpayers. None of them.

    All wars are bankers’ wars.

    Bob Dylan — Masters Of War:

    https://m.youtube.com/watch?v=JEmI_FT4YHU&pp=ygUYYm9iIGR5bGFuIG1hc3RlcnMgb2Ygd2Fy

  16. Propaganda and lies.

    HuffPaint — Disinformation Researchers Are Feeling The Heat Ahead Of 2024 (10/13/2023):

    “Kate Starbird had been studying online conspiracy theories for years when she realized last year that she was at the center of one.

    “I can recognize a good conspiracy theory,” she recalled to HuffPost. “I’ve been studying them a long time.”

    Right-wing journalists and politicians had begun the process of falsely characterizing Starbird’s work — which focused on viral disinformation about the 2020 election — as the beating heart of a government censorship operation. The theory was that researchers working to investigate and flag viral rumors and conspiracy theories had acted as pass-throughs for overzealous bureaucrats, pressuring social media platforms to silence supporters of former President Donald Trump.

    The year that followed has changed the field of disinformation research entirely.

    Republicans gained control of the House of Representatives last fall, and Rep. Jim Jordan (R-Ohio) — a key player in Trump’s attempt to overturn the 2020 election results — began leading a “Weaponization of the Federal Government” committee shortly thereafter. Among other things, the group zeroed in on researchers who rang alarm bells about Trump’s “Big Lie” that the election had been stolen.

    https://www.huffpost.com/entry/disinformation-research-2024-elections_n_65298e20e4b0a304ff702214

    The field of disinformation research?

    Sounds like a jobs program for useless eaters with a Masters Degree in Obama Studies and no useful, productive skills whatsoever.

    The 2020 election was stolen.

    1. The second guy (Martinez) might have a chance at being successful building and renting shacks in Joshua Tree. Meanwhile, you have to see the photos of first guy (Gatz). He looks like the type that’s going to be found a year from now half-eaten by rattlesnakes.

  18. Are you convinced the US stock market is currently a safe place to HODL your wealth, despite the major CR8R events playing out elsewhere in the international financial landscape, including Chinese real estate and US Treasurys, not to mention the resemblance of the current financial situation to that of October 1987?

    1. Today’s stock market looks a lot like 1987’s, but that doesn’t mean an October crash is imminent
      Matthew Fox
      Oct 15, 2023, 5:30 AM PDT

      – Today’s stock market looks a lot like 1987’s, but that doesn’t mean an October crash is going to happen.

      – Ned Davis Research highlighted the key similarities and differences between now and 36 years ago.

      – “While there are several high-level similarities, not enough line up to conclude that a crash-like event is likely.”
      …
      https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-looks-like-1987-no-october-crash-2023-10

    2. Treasury bond auctions have been ugly lately, and weak demand could be a ‘canary in the coal mine’
      Filip De Mott
      Oct 14, 2023, 5:45 AM PDT
      A US Treasury payment check. Douglas Sacha/Getty Images

      – A recent string of Treasury auctions has suffered from weak investor demand.

      – Strategists at TD Securities raised the question of whether it’s a “canary in the coal mine.”

      – But Ed Yardeni thinks yields are already at the right levels to start bringing back demand.
      …

    3. A Wealth of Common Sense
      The Worst Bond Bear Market in History
      Posted October 13, 2023 by Ben Carlson

      In 1950 long-term U.S. government bonds yielded a little more than 2%.

      By the end of that decade they would hit 4.5%. Yields jumped to 6.9% by the end of the 1960s and 10.1% by the end of the inflationary 1970s.

      Then they skyrocketed in the early-1980s, going from just over 10% at the end of 1979 to nearly 15% by the fall of 1981.

      In a little over 30 years, bond yields went from 2% to 15%.

      Surely, the bond market crashed…right?

      Surprisingly no.

      Long-term bond performance wasn’t great, that’s for sure, returning just 2.2% per year from 1950-1981. But there wasn’t a crash like we’re seeing today.

      In fact, the worst calendar year return for long bonds in this period was in 1967 when they fell a little more than 9%.

      We’ve seen far greater losses in long bonds this century. Last year they were down 26%. In 2013 long-term Treasuries fell 12%. In 2009 they declined by nearly 15%.

      The bond bear market of the 1950s through the early-1980s was more of a death-by-a-thousand cuts. And the source of those cuts was inflation. Sure, annual nominal returns were positive at a little more than 2% per year but inflation was in the 4-5% range over that period.

      The long bond crash was on a real basis, not nominal. From 1950 through the fall of 1981, long-term Treasuries lost almost 60% of their value on an inflation-adjusted basis.

      The change in rates back then was gradual. That’s not been the case this time around.

      Yields on 30 year Treasuries have gone from a low of around 1% in March 2020 to nearly 5% a little more than three years later.

      That aggressive re-rating in yields has led to a crash this time around.

      This chart from Datatrek shows the crash in long-term bonds is now roughly the same magnitude as the crashes in the stock market during the dot-com bust and the Great Financial Crisis:

      Plus the crash is longer in bonds than it was for those two stock market blow-ups.

      Long-term bonds are getting massacred.

      The same is true of 10 year Treasuries. Bank of America says this is the worst bear market in the benchmark bond ever:

      I actually had to look up what happened from 1835-1839 to cause a 56 month bear market in bonds. Apparently, President Andrew Jackson made it his goal to pay off the national debt in the United States in its entirety. It led to one of the biggest financial crises in American history. The U.S. economy cratered 33%.

      Whoops.

      One of the strange parts about living through the worst bond bear market in history is there doesn’t seem to be a sense of panic.

      If the stock market was down 50% you better believe investors would be losing their minds.

      Yes, some people are concerned about higher interest rates but it feels pretty orderly all things considered.

      So why aren’t people freaking out about bond losses more?

      It could be there are more institutional investors in long bonds than individuals. There are lots of pension funds and insurance companies that own these bonds.

      It’s going to take a very long time for investors to get made whole but you can hold these bonds to maturity to get paid back at par.

      The risk-reward set-up in long duration bonds in 2020 was awful. There was only downside with little-to-no upside. Investors have had an escape hatch in bonds in T-bills and short-term bonds. It’s not like individual investors hold long bonds for their entire fixed income exposure.

      Don’t get me wrong, there are plenty of investors who have lost their shirts in long-term bonds. Just look at the growth in assets versus the performance of TLT:

      Money has been flowing into this fund during the crash. Investors have been wrong trying to catch a bottom here (or a top in rates I should say) but this makes sense in the context of interest rates.

      Rates on bonds are higher now than they’ve been since 2007 almost across the board.

      The crash has been painful to live through but ripping the bandaid off this time around as opposed to the death-by-a-thousand cuts during the last bond bear market should be preferrable to investors.
      …
      https://awealthofcommonsense.com/2023/10/the-worst-bond-bear-market-in-history/

      1. “It’s going to take a very long time for investors to get made whole but you can hold these bonds to maturity to get paid back at par.”

        I never understood how HODL ing CR8Red investments to maturity was supposed to make you whole. Do you have to ignore higher for longer inflation to make the math work?

    4. How many ‘vacant homes’ does China have right now? A former statistics official has an eye-opening prediction
      BY Will Daniel
      September 25, 2023 at 10:41 AM PDT
      Residential buildings in Chongqing, in southwest China.
      STRINGER/AFP/Getty Images

      While the U.S. is facing a housing shortage and affordability crisis that has Gen Zers questioning whether they’ll ever be able to achieve the idealized, white-picket fence American Dream, China is in the middle of a very different kind of housing nightmare. Years of debt-fueled overbuilding have left the country with rows and rows of empty homes—as well as almost entirely vacant “ghost cities.” And now a former government official says the number of empty residences is so big that a country of 1.4 billion people is struggling to fill them.

      “How many vacant homes are there now?” He Keng, the former deputy head of China’s statistics bureau, said at an event in the southern industrial city of Dongguan over the weekend, Reuters first reported. “Each expert gives a very different number, with the most extreme believing the current number of vacant homes are enough for 3 billion people.”
      …
      https://fortune.com/2023/09/25/china-housing-crisis-how-many-vacant-homes-evergrande-country-garden/

    5. Financial Times
      German economy
      Germany calls for more immigrants to fix its shrinking economy
      Habeck blames slowdown on higher rates, global trade woes and a ‘desperate’ shortage of skilled workers
      Robert Habeck
      German economy minister Robert Habeck has called for an increase in skilled immigrants to bolster the country’s ageing workforce
      Martin Arnold in Frankfurt
      October 11 2023

      The German government has slashed its economic forecast, warning that output would shrink 0.4 per cent this year, while admitting it must overcome “major structural challenges” including a “desperate” shortage of workers.

      Robert Habeck, economy minister and vice-chancellor, blamed the grim outlook for Europe’s largest economy on the energy crisis triggered by Russia’s full-scale invasion of Ukraine, a sharp rise in interest rates to tackle inflation and slowing global trade, while calling for an increase in skilled immigrants to bolster its ageing workforce.

      “Companies are desperately looking for workers, craft businesses have to reject orders, and shops and restaurants have to limit their opening hours,” he said on Wednesday. “And it’s not just about skilled workers — we notice in every possible corner that we simply lack workers.”
      …

      1. ‘Robert Habeck is a German Green politician and writer who has been serving as Vice Chancellor of Germany, Federal Minister for Economic Affairs and Climate Action in the cabinet of Chancellor Olaf Scholz and as a Member of the German Bundestag for Flensburg – Schleswig since 2021.’

        Greens are on their way out in Germany.

        2. Green sounds nice. Who wants to breath smog or drink polluted water, right?

          But it’s one thing to take a common sense approach to the environment, and quite another to embrace the zealotry of Net Zero, which is both unfeasible and unnecessary. The German people have learned the hard way the Net Zero is the road back to the stone age..

          1. I’ve noticed that this thing began to unravel as soon as the rubber hit the road. When it was all talk deadlines were set, preparations made, chest beating. Implemented and crater.

          2. Fair enuf. Simplistic, extreme solutions work well for political organizing and fundraising purposes, but not so well as practical policies.

    6. Market Valuation: Is the Market Still Overvalued?
      by Jennifer Nash, 10/3/23

      Here is a summary of the four market valuation indicators we update monthly.

      -The Crestmont Research P/E ratio

      – The cyclical P/E ratio using the trailing 10-year earnings as the divisor

      – The Q ratio, which is the total price of the market divided by its replacement cost

      – The relationship of the S&P composite price to a regression trendline

      To facilitate comparisons, we’ve adjusted the two P/E ratios and Q ratio to their arithmetic means and the inflation-adjusted S&P composite to its exponential regression. Thus the percentages on the vertical axis show the over/undervaluation as a percent above mean value, which we’re using as a surrogate for fair value. Based on the latest S&P 500 monthly data, the market is overvalued somewhere in the range of 70% to 126%, depending on the indicator, down from last month’s 73% to 130%.

      We’ve plotted the S&P regression data as an area chart type rather than a line to make the comparisons a bit easier to read. It also reinforces the difference between the line charts — which are simple ratios — and the regression series, which measures the distance from an exponential regression on a log chart.

      Market Valuation Methods (Crestmont P/E, P/E10, Q-Ratio, and Regression to Trend) adjusted to arithmetic mean

      The chart below differs from the one above in that the three of our market valuation indicators, Crestmont P/E, P/E10, and Q-Ratio, are adjusted to their geometric mean rather than their arithmetic mean (which is what most people think of as the “average”). The geometric mean increases our attention to outliers. In our view, the first chart does a satisfactory job of illustrating these four approaches to market valuation, but we’ve included the geometric variant as an interesting alternative view for the two P/Es and Q ratios. In this chart, the range of overvaluation would be between 87% to 136%, down from last month’s range of 91% to 140%.
      …
      https://www.advisorperspectives.com/dshort/updates/2023/10/03/market-valuation-is-the-market-still-overvalued

    7. Opinion
      Macroscope
      by Kerry Craig
      Why US economy’s soft landing hopes could easily slip into recession

      – The view that the US economy will achieve a soft landing is increasingly becoming consensus, driven in part by encouraging GDP growth figures

      – However, reports on credit card debt, oil prices and continued political dysfunction in Congress could turn a soft landing into a slippery slope to recession

      Kerry Craig
      Published: 5:30pm, 13 Oct, 2023
      Why you can trust SCMP

      In the video game Mario Kart, players race around a track avoiding obstacles such as banana peels that would cause them to spin off and crash. As the US economy has been picking up speed, investors are wondering whether slippery banana peels could see the economy lose control, as well as what form these may take.
      The soft landing view of the US economy is increasingly becoming consensus as the resilience in data continued to build through the third quarter of the year. In fact, the Atlanta Federal Reserve’s GDPNow growth tracker estimates that the economy expanded by 5.1 per cent in the third quarter of the year. This would be a remarkable outcome if it holds.

      Even if the reality falls short of this estimate, the US economy likely expanded by more in the three months to the end of September than many economists and market watchers had expected.
      Having said that, this is likely a high water mark for the economy as growth is likely to slow in the coming quarters, and the risk of dipping into recession should not be dismissed.
      …
      https://www.scmp.com/comment/opinion/article/3237688/why-us-economys-soft-landing-hopes-could-easily-slip-recession

    8. Markets
      One of the most accurate Wall Street strategists in 2022 shares 3 reasons a recession is still on the way — putting stocks in danger of a significant pullback
      William Edwards
      Oct 14, 2023, 2:52 AM PDT

      When new employment data comes out, investors in large part tend to take it at face value. But revisions to this data are often just as important as the initial releases, as they can dramatically reshape the narrative around the health of the US economy, for better or for worse.

      According to Michael Kantrowitz, the chief investment strategist at Piper Sandler, strong initial unemployment claims data that ended up being revised downward has gotten investors into trouble in prior recessions. And he suspects it’s happening again.
      …
      https://www.businessinsider.com/stock-market-crash-recession-prediction-sp500-outlook-unemployment-claims-kantrowitz-2023-10

    9. Michael Pento (popular guest on the youtube financial channels) is predicting that the bust will finally happen in March. That’s when

      1. The reverse repo market runs out of liquidity (I never quite understood this part)
      2. Bank Term Funding program will end. That was the one-year program that backstopped Silicon Valley Bank et al. Well it’s not going to work, and those banks will fail yet again. If Jay tries to bail them out again, inflation goes right back up.
      3.Lag effects of high interest rates kicks in finally. That’s going to kill the zombie companies (30% of Russell 2000), the employment market, at the real estate market.

      So it’s all going to hell in March, says Pento. Can’t wait.

    10. Do you expect Goldilocks to arrive by Christmas, to help Santa deliver toys to all the good girls and boys?

      1. Economy
        The Fed’s own economists are predicting a Goldilocks scenario: No recession, falling inflation, and flat unemployment
        Theron Mohamed
        Oct 12, 2023, 7:01 AM PDT
        Federal Reserve Chairman Jerome Powell holds a news conference following a closed two-day Federal Open Market Committee meeting in Washington, U.S., September 18, 2019. REUTERS/Sarah Silbiger
        Federal Reserve Chair Jerome. Reuters

        – The Federal Reserve’s economists are predicting a so-called Goldilocks scenario, Fed minutes show.

        – They expect growth, flat unemployment, and inflation to fall to around 2% between 2024 and 2026.

        – Fed staff don’t anticipate a recession after raising it as a distinct possibility earlier this year.
        …
        https://www.businessinsider.com/fed-minutes-economy-forecast-recession-inflation-unemployment-goldilocks-federal-reserve-2023-10

        1. The Fed’s own economists are predicting a Goldilocks scenario

          If a recession is The Fed’s kryptonite, then of course they will.

  19. Image file for Jeff — Max Fill Edition:

    https://ibb.co/0VFsz4y

    Think you can’t afford a house?

    Go buy a teardown for cash, do all of the demo yourself, and build a new house, it’s that easy.

    Soft, soft, city boy hands need not apply. Stick with your video games, obesity, and Reddit.

    1. One of my sons and his wife built a honeymoon cottage on his inlaws’ property, rather than fork out a pirate’s randsom to Wall Street landlords for the privelege of renting in San Diego. He also graduated from college debt-free and has a positive net worth in his mid-20s. I am proud of his resourcefulness.

      And screw the carpet bagger Wall Street behemoth landlords.

  20. Have you considered time travel back to 2022 in order to buy a house at the best time, ever?

    Don’t know how this is supposed to work, but if relitters suggest it, then I guess it’s possible.

    1. Real Estate
      Should I wait for housing to crash further before I buy a house? 3 reasons the end of 2022 could be the very best time to jump in
      By 15 years and a million miles, it’s not 2008.
      Couple Buying House For First Time Looking At House Survey In Empty Room.
      Monkey Business Images/Shutterstock
      By Amy Legate-Wolfe
      Oct. 13, 2023

      Homebuyers eyeing a housing market plunge continue to run up against bad news. Over the past two years, interest rates have climbed — which in turn has impacted mortgage rates.

      Yet that’s created a fascinating tilt towards a buyer’s market. Homebuilders expect weaker housing conditions won’t rebound until 2024, according to a National Association of Home Builders/Wells Fargo Housing Market Index report. It’s the lowest level the NAHB has seen since 2012, discounting the plunge during the 2020 pandemic.

      According to the latest data from the National Association of Realtors (NAR) home sales were down 0.7% in August. Meanwhile July 2023’s sales were down 16.6% year-over-year.
      …
      https://moneywise.com/real-estate/why-2022-could-be-the-best-time-to-buy-a-house?utm_source=push&utm_medium=push&utm_campaign=push&utm_term=push_10_15_23&utm_content=push_23594

  21. A good time to offload was last year. We’re now one year into price declines in some/many areas. That will likely continue into next year and possibly beyond as RE price momentum is linear. For investors who dove into an over-bought market a haircut is pretty much a given. Cutting losses seems a sensible plan, while there’s still some lingering frothiness.

    1. It’s amazing to me that investors don’t dump en masse, before price declines put them so underwater that they can never repay the loans that funded their investments.

      Wouldn’t it be prudent to cut losses early, rather than risk becoming a naked swimmer flopping around on the beach once the tide has fully receded?

  22. Default risks loom for nearly $2 trillion of junk-rated debt as US companies hit with higher interest rate

    https://www.yahoo.com/finance/news/default-risks-loom-nearly-2-201501420.html

    Default and refinancing risks are climbing for US companies over the next several years, Moody’s said.

    Junk-rated firms have $1.87 trillion in debt maturing over the next five years.

    Strategists said speculative-grade credit faces more pain amid higher rates and tighter financial conditions.

    Non-investment grade US companies face growing refinancing and default risks with interest rates expected to stay high and financial conditions for borrowers tightening, according to Moody’s Investors Service.

    The ratings agency says about $1.87 trillion of junk-rated debt is maturing between 2024 and 2028. That signifies a 27% jump from the $1.47 trillion recorded in last year’s study for 2023-2027.

    Debt maturing in the next two years accounts for about 18% of the five-year total, Moody’s said, though the absolute amount for those two years has surged 25% compared to last year’s study, to hit $333 billion.

    Moody’s analysts expect the US speculative-grade default rate to peak at 5.6% in January 2024, before easing to 4.6% by August 2024.

    “The increase — reflecting higher maturities for revolving credit facilities, loans and bonds — comes amid weak macroeconomic and credit conditions, raising companies’ refinancing and default risk,” Moody’s strategists said.

    The heightened risks stem from the Federal Reserve’s historic interest rate hiking campaign and the end of the easy-money era. A higher-for-longer rate environment puts pressure on businesses because borrowing becomes more expensive and investors will demand a higher yield for holding riskier corporate debt.

    Companies with ratings of B2 or below have to pay off $206 billion in debt coming due in 2024 and 2025, which will then balloon to roughly $1.1 trillion from 2024 to 2028.

    Moody’s pointed out that the issuance of credit remains low, with US marketed bank credit facilities for January to September 2023 down 24% compared to the same period in 2022.

    “Year-to-date bond issuance is up 26% but remains below pre-pandemic levels, reflecting investors’ reluctance to lock in fixed- coupon income while interest rates were rising and companies awaiting a more favorable market environment,” the strategists said.

    They note though that borrowing costs have come down in the last year as market sentiment has improved and recession fears have ebbed.

    Meanwhile, Moody’s said the “pull-forward” effect and “amend-and-extend” activity heighten refinancing risk for some corporate loans.

    “Companies’ tendency to refinance several tranches of debt in a single bank credit agreement when the first tranche, typically a revolver, comes due could more than double their 2024-26 bank debt maturities to over $1 trillion, representing 80% of the total five-year bank maturities.”

    And, as the share of maturities of lower-rated debt climbs, so too will the risks associated with refinancing.

    Debt from distressed companies, or those rated Caa and lower by Moody’s, account for 19% of 2024-2025 maturities. That’s up from the 16% due in the first two years of last year’s study. An increasing number of companies may find it harder to refinance maturities at interest rates they can afford, Moody’s said.

    1. More than a few blue chips have sold a lot of bonds to pay for stock buybacks. Not sure how long term those bonds typically are, but if they have to start rolling them over to higher interest rate bonds that will hit them on the bottom line.

      1. You would think that breaking the debt-funded gambling addicts’ addiction to free money would have SOME economic consequences, wouldn’t you?

    1. A not-so-warm welcome for thousands of migrants now sleeping outside in Chicago

      “It’s so cold here, but we have nowhere to go. We don’t have anyone here,” she said in Spanish.

      They really were expecting a free apartment and other free cheese.

      Chicago Giving Migrants $9,000 In Rental Assistance

      With Abbott threatening to send more than 1,000 migrants every day,

      Until they run out of money. Maybe they can give the migrants two choices: stay and freeze this winter, or we can fly you back home on a charter flight. Oh,and when you get home please tell all your compadres and amigos about how cold winters are in Gringolandia.

  24. (Here is an article that makes for a fun read …)

    ‘A scary situation’: As Wall Street assails Harvard, students worry about their futures

    https://www.yahoo.com/finance/news/scary-situation-wall-street-assails-220135357.html

    There’s an old joke that goes: The hardest thing about Harvard is getting in. But simply being on campus this week has put that idea to the test.

    (Oh? How so?)

    It started when dozens of student groups issued a statement holding Israel’s government “entirely responsible” for the violence that Hamas unleashed in Gaza. That, in turn, prompted billionaire hedge fund manager Bill Ackman to demand that his alma mater disclose the names of students who are members of the signatory groups — even those who didn’t know about the statement — so Wall Street firms could avoid hiring them. Adding to the tension, a truck roamed campus displaying the names and photos of students alleged to be involved with the statement.

    It was a strange position for Harvard to find itself in. The university has long enjoyed a place of honor among the power elite. It sends more graduates into the bulge bracket banks than any other school. Large law firms also love hiring from Harvard, and Silicon Valley loves to place big bets on the university’s graduates. Over the past three years, according to Crunchbase, about one of every 10 dollars invested in early-stage startups went to Harvard alumni.

    But Ackman’s broadside exposed a deeper rift among conservative industries like Wall Street and Big Law and the campuses they’ve historically recruited from. As a new generation of graduates has emerged, they have found themselves and the campus culture they’re a part of increasingly at odds with the values and expectations of the big banks and white-shoe law firms they’ve been trained to staff. In the past week, for example, an NYU law student lost a post-grad job offer over their statement blaming Israel for the Hamas attacks. A petition to oust a Yale professor who posted pro-Palestine messages on social media, meanwhile, has garnered 40,000 signatures. And Marc Rowan, the CEO of the private equity giant Apollo, called for leaders at his alma mater, the University of Pennsylvania, to resign for failing to condemn antisemitism to his satisfaction.

    Ackman, in his initial tweet about Harvard, said that “a number of CEOs” shared his desire to publicly out the Harvard students who condemned Israel. Other business leaders were quick to echo his calls, winning plaudits on social media. “Members of these Harvard clubs should not get a pass tomorrow for being bad decision makers today,” Meyer Davidoff, CEO at Invictus Pharmacy, declared on LinkedIn. “Book smart does not make you life smart.”

    Pranjit Kalita, founder and CIO of Birkoa Capital Management, likewise cheered on Ackman. “Great job calling these institutions like Penn and Harvard out!” he wrote on LinkedIn. “I think it’s important that people understand free speech doesn’t mean free from consequences societally or politically or culturally.”

    Such comments represent a sea change in the cozy relationship between Harvard and the elite institutions where its alumni have traditionally forged their careers. An investor at an asset management firm in Silicon Valley privately told Insider that he recently spoke to a hedge-fund founder who made no bones about how he approaches hiring. When a résumé hits his desk, the founder said, he skips over the sections on experience and education and instead races to the bottom of the page, where applicants list their “activities.” Then, if he sees something he doesn’t like, he will simply “rip up” the résumé and reject the applicant as a “bad cultural fit.”

    For Harvard students — especially those in the business and law schools — having prominent leaders in your chosen profession openly declare that they won’t hire graduates who hold political views they disagree with is not an academic issue — it’s an existential threat. In a visit to Harvard, Insider spoke with a range of students about the backlash to the statement on Israel. Many expressed qualms about the tone of the letter, or the way it was handled. But even some who opposed it felt that the threats against its signatories had gone too far.

    One MBA student, who thinks the statement was “too strong,” believes it is unfair for companies to demand the names of students who signed it. (Like most students, she spoke on the condition of anonymity, given the potential for reprisals.) Similarly, a Jewish graduate student in Middle Eastern studies said he is “frustrated and angry and sad” to see the truck circling campus branding signatories as antisemitic.

    “My take is everyone is free to hire or not hire who they want,” he said. “But I don’t think anyone’s personal information should be made public. I don’t think a 19-year-old who feels something right now and decides to put their name on something should have the rest of their lives decided in this moment. We’ve all done things that we would rather we hadn’t.”

    (Yes, and these things we did while young have consequences.)

    Several students argued that it is understandable that employers might refuse to hire someone who continued to support the letter’s stance on Israel. Eden Mendelsohn, a first-year MBA student who is Jewish, viewed the statement as supporting murder. “If I walked into a job interview and I said, ‘Oh, I think all men deserve to be murdered’ or ‘Oh, I think all people from the Midwest deserve to be murdered,’ no one would even think twice about saying, like, that’s not a stance,” she said. “That’s just evil.”

    That’s precisely how many business leaders viewed the student statement. To them, it’s a question of sensitivity to others — a value they have come to feel is missing in what they see as the “cancel culture” environment of elite schools like Harvard.

    “It’s important if you want to be involved in a small, high-performing, high-stress firm, that your brain is formed sufficiently and you’re socialized enough that you can actually maturely handle people who don’t agree with you,” the private-equity investor said. “The real world is not college. And they’ve been coddled in college, where anyone who has a dissenting point of view is silenced.”

    It’s ironic, of course, to accuse students of silencing dissent when Ackman and other business leaders are seeking to do exactly that. One of the original purposes of a liberal arts education, after all, was to create a space where students and faculty alike could express dissent without fear of reprisal.

    (That last sentence I find especially funny.)

    But now, some Harvard students fear that the backlash from the business community will have a chilling effect on student speech. Like it or not, they say, students have to think about how expressing their views could affect their financial and professional prospects. That’s especially true when Wall Street billionaires are posting on X, formerly Twitter, and professional network LinkedIn has become a home for all kinds of sharing. There’s every chance today that what’s said on campus won’t stay on campus.

    A first-year law student told Insider that students would be wise to think through what voicing their opinions could mean for their future employment, especially in a buttoned-down field like law. “The general advice,” he said, “is to keep your opinions to yourself for the most part.”

    A second-year law student, who was appalled by the letter, likewise sympathized with fellow students who were unnerved by having their words provoke such ire beyond the campus. “There is a real employment consequence for people — and that is a scary situation,” she said. “We are all here with a lot of student loans, and we need to work.”

    (I like this last sentence as well. Think: Debt slave.)

    1. “If you wish to learn who rules over you, simply find out who you are not allowed to criticize.” — Voltaire

    2. There’s an old joke that goes: The hardest thing about Harvard is getting in.

      These days, especially if you are white or Asian.

      Yes, and these things we did while young have consequences.

      Reminds me of a soon to graduate knucklehead a few years ago who posted a video where she said she wanted to stab people she didn’t agree with. Her job offer, from a Wall St. firm or bank IIRC, was withdrawn and she then posted a tearful video about how it was unfair that her $100K job offer went up in smoke. She was just kidding about stabbing people!

  26. ‘Lenders often have an advantage in auctions where they have foreclosed because outstanding debt on a property can be used as credit on their bid’

    Yeah, and an inmate can use served time toward his sentence.

  28. ‘These kinds of projected amortizations are not realistic and do not represent what borrower’s actual repayment period will be,’ reads part of the statement. ‘In most circumstances lenders will restore borrowers to their contractual amortization period.’ The OSFI statement also characterizes these renewal term extensions as ‘hypothetical’ and goes on to say in some cases ‘an infinite amortization period’ could be produced by the repayment calculation’

    I am trying to follow this and the statement is technically correct. These mortgages can’t exist in this system for long and we’re witnessing how the rope runs out for loanowners.

  29. Analyzing Innisfil Real Estate : Over 6 Months Of Supply
    Mark Turcotte
    4 hours ago

    In this insightful analysis, we delve deep into the current situation, focusing on the significant supply of over 6 months. Buckle up as we navigate through the key factors affecting Innisfil’s real estate landscape.

    https://www.youtube.com/watch?v=diw3ZHukKZ0

    12:21. Oh dear…

  30. Image file for all the taxpayers — Welcome Back To Denver Edition:

    https://ibb.co/WkGbqC0

    By the Englewood King Soopers. After spending all weekend in a small town (try that in a small town) this is what I inevitably come home to.

    And yes, Denver did vote for this.

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