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A Lot Of Sellers Have Sour Grapes Because They’re Really Sorry They Missed The Peak

It’s Friday desk clearing time for this blogger. “Housing inventory in the Austin-Round Rock Metropolitan Statistical Area hit the highest levels in more than eight years in September, according to the Austin Board of Realtors. In addition to high inventory, data shows that year-over-year home sales and median home prices dropped across the MSA—by 18.2% and 4.3%, respectively—while active listings increased by 7.8%. Ashley Jackson, 2023 ABoR president, added that it is important for buyers and sellers to understand that the housing market of today is ‘no longer the housing market of the past few years.'”

“Federal agents in New Jersey arrested the longtime business partner of popular radio host DJ Envy in connection to an alleged fraudulent real estate venture. Cesar Pina, often promoted on radio host DJ Envy’s syndicated show was arrested Wednesday on wire fraud. The federal complaint against Pina, 45, claims the man engaged in a Ponzi-like scheme to defraud dozens of victims. Investors have said Pina promised he would rehab and flip a property, with a return of 30% of the profits within months. Dozens of his alleged victims have now filed lawsuits saying they never got their money back. In a number of cases, Pina is accused of getting multiple unwitting investors to buy into one property that generated him a profit of several millions dollars. Pina pleaded not guilty to the fraud charge, and was released on a $1 million bond and electronic monitoring. He is not allowed to leave the state.”

“A New York developer‘s long-stalled quest to erect the Southeast’s tallest residential tower on a prime parcel in Midtown Atlanta appears to be coming to an ignominious end. Miami-based Benmark Capital has filed to foreclose on the Midtown site where Olympia Heights Management had planned the tower, No2 Opus Place. Benmark plans to auction off the $40M loan Nov. 7 on the Fulton County Courthouse steps, according to a foreclosure notice published this week. Olympia Heights bought the 4-acre parcel across from the Four Seasons in 2014 for $22M, but the landlord, run by Shaya Boymelgreen, a New York developer who was banned from selling condos in his home state, increased the debt load since then on the site at 98 14th St. with a string of short-term refinancing deals.”

“Olympia Heights promised luxury and lifestyle typically found in New York, Tokyo, Miami or Los Angeles, including access to a resort-style pool, high-end restaurants, a spa, a wine-tasting and storage room, an Imax theater and 24-hour concierge services. Units on top floors would have had sweeping views of Midtown and Downtown Atlanta. Despite many projected start dates and claims of pre-sale activity, Olympia Heights never began work on the proposed project, other than digging up the site and making pretensions of starting work by bringing in steel beams. ‘I can’t believe that they kept that alive this long,’ Engel & Völkers Atlanta CEO Christa Huffstickler told Bisnow. ‘If you look at Midtown, it’s like this piece of the puzzle that’s been sitting there doing nothing. It’s been nothing but an eyesore.'”

“Months after Pollock Financial defaulted on a loan tied to a South Beach office building, appraisers have cut the value of the building by 84 percent. The roughly 32,000-square-foot building at 340 Bryant Street is now valued at $8.2 million, or $131 per square foot, according to Trepp. The property was previously valued at $52 million, or more than $830 a square foot. Pollock Financial declared it could not pay off $30.7 million across two commercial mortgage-backed securities loans last year. The building’s financial issues stem from WeWork — the co-working firm signed a 10-year lease in 2019, but stopped paying rent in December 2020, according to servicer commentary. Elsewhere in San Francisco, landlords Kennedy Wilson and Takenada have sued WeWork for allegedly breaching its lease at 430 California Street and owing more than $250 million in unpaid rent. ‘The borrower has communicated that they would like to transition title to the lender,’ the commentary added.”

“The fall market in Ontario’s cottage country often brings a flurry of deals. Jeff Strano, a real estate agent with Re/Max Professionals North says the gap between the expectations of sellers and buyers sometimes presents a challenge in the current market. ‘We do have a lot of sellers who have sour grapes because they’re really sorry they missed the peak,’ he says. ‘On the other hand, you have buyers who think the market’s crashing and they want a deal.'”

“Alexis Victor, real estate agent with Royal LePage Signature Realty, says the market in Orillia on Lake Couchiching and towns along the east side of Lake Simcoe has become more balanced after a deep slump in 2022. ‘Last year was like literally standing in quicksand,’ she says of sinking sales and prices. Ms. Victor says cottage prices had soared so dramatically during the early part of the pandemic that some people began to think that flipping a cottage after a few months or a year was a quick way to make money.”

“She points to an example near Brechin, Ont., where Ms. Victor helped buyers reach a deal for the private purchase of a small, vintage cottage in April, 2021. The clients paid $750,000 for the two-bedroom house that backs onto a river leading into Lake Simcoe. Those clients renovated the cottage and sold it in August for $921,000. Eight months later, in April, 2022, the purchasers listed the cottage at 1295 Furniss Dr. with an asking price just below $1.08-million. After a series of price cuts, the property was taken off the market for a while, then relisted in May, 2023 with an asking price of $795,000. It sold at the end of June for $790,000.”

“A three-bedroom cottage on Peninsula Lake near Huntsville, Ont. was listed with an asking price just below $4.3-million in June, 2022. The asking price was cut to $3.75-million in November and Ms. Victor helped her clients to purchase the property at 1021 Sawmill Lane in April for $3-million. Gradually sellers have realized the market has shifted and become more realistic with their prices, says Ms. Victor.”

“China’s troubled property market is showing little signs of a recovery in the short term despite a series of government stimulus measures to help revive activity in the sector which makes up a quarter of the nation’s economic output. Homebuyers, wary of the uncertain economic outlook, have remained on the sidelines, while property developers and agents said sales were still soft following a short-lived burst of activity in major cities like Beijing and Shenzhen. Beijing resident Daniel Song, who was given 3 million yuan ($410,043) by his parents in the beginning of the year to buy an apartment, recently gave up on the idea, concerned about his income security. ‘I am not sure about my career future in today’s economic situation,’ said the 28 year-old computer programmer.”

“An official at a developer who has projects in major cities said its sales during the Golden Week was 20% lower than a year ago, though better than September. The person, who declined to be named because he was not authorized to speak to media, added that sales have dropped again after the holiday ended. ‘In the beginning of the year, the industry expected a bad first-half but a better second-half. But the reality is, it’s a bad first-half and an even worse second-half.'”

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  2. ‘The clients paid $750,000 for the two-bedroom house that backs onto a river leading into Lake Simcoe. Those clients renovated the cottage and sold it in August for $921,000. Eight months later, in April, 2022, the purchasers listed the cottage at 1295 Furniss Dr. with an asking price just below $1.08-million. After a series of price cuts, the property was taken off the market for a while, then relisted in May, 2023 with an asking price of $795,000. It sold at the end of June for $790,000’

    That’s a mighty a$$ pounding yer client took there Alexis.

  3. From the Texas link:

    In Travis County, year over year:
    There was 4.2 months worth of inventory, 1.2 months more than last year. Active home listings were up 9.4% with 4,875 listings. Sales were down 12.7% with 1,085 homes sold. The median home price was down 4.2% to $525,000.

    In Williamson County, year over year:
    There was 3.3 months worth of inventory, 0.2 months more than last year. Active home listings were down 10.6% with 2,873 listings. Sales were down 20.4% with 791 homes sold. The median home price was down 6.1% to $426,752.

    In Hays County, year over year:
    There was 4.7 months worth of inventory, 1.5 months more than last year. Active home listings were up 37.9% with 1,685 listings. Sales were down 30.3% with 341 homes sold. The median home price was down 4.3% to $400,000.

    In Bastrop County, year over year:
    There was 5 months worth of inventory, 1.2 months more than last year. Active home listings were up 23.5% with 610 listings. Sales were down 11.9% with 133 homes sold. The median home price was down 10.7% to $340,000.

    What they aren’t saying: how much is it down from the peak, which was spring 2022.

    2. Williamson county’s property tax rate is very high. I can’t believe that median home price . Pain, pain and more pain.

  5. I noticed the past several months ,that CNN is slowly trying to rebirth itself as a News channel …..with some real news ,instead of the 100% MAGA bashing rag, it’s been for some time now…..It’s free, and that’s a plus …..

  7. (Here is an article …)

    ‘You’ve screwed yourself’: Dave Ramsey gets candid with a woman who cashed out her 403(b) to buy a new home — here’s what went wrong

    https://www.yahoo.com/finance/news/youve-screwed-yourself-dave-ramsey-113000459.html

    (And here is an interesting comment to the article …)

    “Working at a Credit Union I see this all day. The rate of ppl withdrawing money early from IRAs and 40x is staggering and to make matters worse it’s been 99% impulse buying and other poor decisions. The poor keep getting poorer and there is a good reason for it.”

    FWIW.

  8. Pandemic buyers are struggling to unload cottages: Muskoka realtor
    BNN Bloomberg

    Oct 16, 2023

    John Fincham, broker at Re/Max Parry Sound Muskoka Realty, joins BNN Bloomberg to discuss the Ontario cottage market. He says that many cottage owners who bought during the pandemic are now struggling to unload those properties. And as interest rates drive down prices he says cottages located on less popular lakes and listed under $1.5 million dollars could drop by 30% in value in 2024.

    https://www.youtube.com/watch?v=K0t6g7RdOoE

    6:15. Bought on lines of credit against their igloo.

  9. Rates & Bonds
    Analysis: Relentless climb in Treasury yields may have further to run after surging to 5%
    By David Randall and Davide Barbuscia
    October 19, 2023 11:58 PM PDT
    Updated 7 hours ago
    Federal Reserve Chairman Jerome Powell speaks during a meeting of the Economic Club of New York in New York City, U.S., October 19, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights

    NEW YORK, Oct 20 (Reuters) – Some investors believe a bond market selloff that has pushed the benchmark U.S. Treasury yield to 5% may have more room to run, as the Federal Reserve gives little indication of veering from its “higher for longer” mantra.

    Fed Chair Jerome Powell walked a narrow line in his speech before the New York Economic Club on Thursday, saying the stronger-than-expected economy might warrant tighter financial conditions while also noting emerging risks and a need to move with care.

    Still, some traders interpreted his comments as an endorsement of keeping rates around current levels through most of next year. Yields on the benchmark 10-year Treasury, which move inversely to bond prices, rose briefly to 5% late on Thursday, a closely watched level not seen since 2007. Stocks sold off on Thursday with the S&P down 0.85%.

    “The underlying message is ‘don’t be looking for a bailout from the Fed anytime soon,’” said Greg Whiteley, a portfolio manager at DoubleLine. “That gives people the go ahead to take rates above 5%.”
    …
    https://www.reuters.com/markets/rates-bonds/relentless-climb-treasury-yields-may-have-further-run-after-surging-5-2023-10-20/

    1. The real damage isn’t from the Fed’s overnight rate. It’s from QT which affects the 10yr and mortgages. All corporate bonds and fixed mortgages are set based on the 10yr yield. If the Fed isn’t buying and China/Japan/Saudis/Russia aren’t buying, there’s only so much money out there to buy. I think we see 7% and mortgages above 10% next year unless there’s a severe recession or depression.

  10. Sponsored content provided by the Denver Metro Association of Realtors (10/19/2023):

    “While closings are down 20%, home values remain very stable at a median home price of $585,000 in metro Denver, according to the Denver Metro Association of Realtors (DMAR).

    “Values are important to homeowners and there is a lot of stability in the market,” said realtor Joy Dysart with HomeSmart.”

    Price =/= values, Joy.

    “Thanasi Fkiaras is a first-time homebuyer who isn’t letting interest rates deter his dream.

    “Nah, I ain’t scared,” Fkiaras joked. “I come from a family that bought at 19% in the ‘80’s, so I kind of keep that in mind.”

    “Places that are livable, but maybe need updating,” Fkiaras said. “My strategy is – get in when I can and I’ll just refi later,” Fkiaras said.

    https://www.denver7.com/lifestyle/real-estate/denver-housing-market-report-shows-stability-for-current-homeowners-opportunity-for-first-time-buyers

    I’ll just refi later, sure you will.

    1. “Price =/= values, Joy.”

      Huge problem right there. The false sense of security caused by perceived wealth of higher home values leads to all sorts of idiotic financial decisions. Just like during the height of the last bubble, people will spend way beyond their means due to the fact they feel wealthy. It’s an illusion that did, and will, destroy many financially.

  11. It’s Friday. If you get paid today, look at how much federal income taxes you are paying for all of these endless, unwinnable wars.

    https://www.antiwar.com/

    And remember, you’ll never be seen as anything more than cattle tax slaves to these globalist war pigs.

  12. Are you worried the Country Garden default may prove to be a Lehman moment in China’s property crisis?

    1. If there’s a downside to seeing millions of Chinese property speculators getting burned by their CCP overlords, while stiffing offshore private equity locusts, I’m not seeing it.

    2. Wasn’t Evergrande already that moment?

      Also all Lehman did in the end was allow the Fed to shower the entire financial industry with free money and ZIRP for years. Which China is heading towards.

  13. When I was young houses were just shelter. People had the hope of living in a shack for 30 years and maybe paying it off by the time they retired.
    Debt was considered something to avoid for most part. Maybe finance a house and a car, but you had to qualify.
    Medical system wasn’t outrageously expensive, and employers were willing to give you cheap Employer paid for medical insurance as a benefit of the job.
    As the years went by it was implementation of all the rigged systems and looting systems and military endless wars, and Big Pharmacy rise to power.
    Just saying there was economic sanity for a while, that created a strong middle class for a while.
    The powers that be had no intentions of allowing power to the people.

    1. When I was young houses were just shelter.

      When I was young, the cell phone was what you used to call your pappy to have him pick you up from the county lock-up.

    2. When I was young houses were just shelter.
      Same with me, circa 1966. Then houses became an asset to be traded and pumped by Wall Street and big buck hedge funds (rich people).
      Now the average house is way out of reach for the average working citizen.

  15. Investors have said Pina promised he would rehab and flip a property, with a return of 30% of the profits within months.

    No red flags there.

  16. “Months after Pollock Financial defaulted on a loan tied to a South Beach office building, appraisers have cut the value of the building by 84 percent.

    It was only Yellen Bux, but that’s still going to leave a mark.

  17. ‘We do have a lot of sellers who have sour grapes because they’re really sorry they missed the peak,’ he says.

    Fear not, greedheads! The Spring Miracle Revival will see your shack valuations soar to new heights as #Bidenomics ushers in a new era of peace and prosperity! So stick to yer guns and don’t give those special listings away!

    1. “Spring Miracle Revival”

      Souper Bowl Bounce?

      Is there a marketing angle they can try for Leap Day February 29th? Haven’t seen that yet but it wouldn’t surprise me.

  19. Greta Thunberg Deletes Pro-Gaza Post that Includes ‘Symbol of Antisemitism’

    ALANA MASTRANGELO
    20 Oct 2023

    Climate worrier Greta Thunberg deleted her post calling for an Israel-Hamas ceasefire “in solidarity with Palestine and Gaza” after the public noticed that she had an octopus in her photo, in reference to Nazi propaganda that depicted Jews as an octopus with tentacles all over the world.

    https://www.breitbart.com/tech/2023/10/20/greta-thunberg-deletes-pro-gaza-post-that-includes-symbol-of-antisemitism/

  20. ‘A New York developer‘s long-stalled quest to erect the Southeast’s tallest residential tower on a prime parcel in Midtown Atlanta appears to be coming to an ignominious end’

    ‘Opus Place is an under construction development in Atlanta, Georgia, United States. Located in Midtown Atlanta, the development is currently expected to consist of a large residential high-rise, called No. 2 Opus Place, and possibly a smaller tower. Upon its completion, No. 2 Opus Place would be among the tallest buildings in Atlanta and the tallest residential building in the city. The project was first developed in 2014, but underwent a significant alteration in 2016.’

    https://en.wikipedia.org/wiki/Opus_Place

    As usual, the only people that made money were the lawyers.

  21. ‘‘We do have a lot of sellers who have sour grapes because they’re really sorry they missed the peak,’ he says. ‘On the other hand, you have buyers who think the market’s crashing and they want a deal’

    That’s the spirit buyers, hit em when and where it hurts!

  22. (Gotta love the free market.)

    Anheuser-Busch Resorts To ‘Bribing’ Distributors In Effort To Keep Bud-Light On Shelves

    https://www.zerohedge.com/markets/anheuser-busch-offers-distributors-relief-keep-beer-shelves

    Anheuser-Busch’s emergency relief program for beer distributors has been extended by the brewer to keep Bud Light on store shelves after its disastrous ‘woke’ advertising with trans-TikTok star Dylan Mulvaney earlier this year. The move certainly looks like a ‘bribe.’

    The New York Post revealed while quoting a report from Beer Marketer’s Insights that Anheuser-Busch has offered as much as $150 million in relief to distributors since Mulvaney’s Bud Light TikTok video on April 1 sparked nationwide boycotts.

    Some of the financial relief distributors have received are reimbursements for freight and fuel surcharges, as well as an additional week to pay bills to the brewer.

    “I imagine for those that are having some cash flow concerns, this would help somewhat,” one distributor told The Post.

    The report mentioned that the financial aid package to distributors that started in June will be expanded through next spring. That includes sales incentive payments.

    NYPost explained that the “market share recovery incentives” come as beer and liquor stores prepare to “revamp their shelf space in the spring when they look at the last 12 months of sales and determine which products are hot and deserve more space – and which will lose space.”

    Last month, former AB executive Anson Frericks warned that shelf space is “the single largest determinant of sales in a store,” and said there will be a “dramatic shift” for Bud Light following the nationwide boycott.

    Dave Williams, vice president of analytics and insights at Bump Williams Consulting, said retailers closely watch sales figures to determine what brands are given the best shelf space.

    “There’s explosive growth on one side and sharp decline on the other,” Williams said, adding, “This does have that ripple effect where if Bud Light loses space on the shelf, that could make it a longer-term endeavor to claw back to where they were if they’re ever able to do that in the first place.”

    Several months ago, Deutsche Bank analyst Mitch Collett said Bud Light was expected to lose about 25% of its business.

    The latest data from Citi Bank shows AB’s hemorrhaging has continued in the last four weeks (pro subs can find the report in the usual place):

    ABInBev’s beer volumes fell 15.5% in the latest 4 weeks, notably worse than the market at -4.3% as the fall-out from the Bud Light social media campaign persists. Beer price/mix grew 3.0% to leave total dollar sales down 13.0%, deceleration vs last month’s -10.9%. Total value share for ABInBev fell – 489bps and beer value share decreased 534bps. We estimate Bud Light accounts for a little over 30% of the group’s US revenues (c.8% of group). Bud Light volumes fell 30.2% and Budweiser volumes fell 25.6%, compared to -29.9% and -25.3% respectively in the previous 4-week period.

    (Link to the article if you want to see some charts.)

  24. Are you missing out on the fantastic dip buying opportunity the Chinese government is creating in US stocks and bonds?

    1. 2 minute read
      BRICS: China Dumps Another $22 Billion in US Treasuries & Stocks
      Vinod Dsouza
      October 19, 2023
      Chinese Yuan US Dollar BRICS Currency
      Source: Fortune.com

      The BRICS alliance is indulging in massive sell-off by offloading billions worth of US treasuries and stocks. China is on a US Treasury dumping spree as it looks to halt the rise of the US dollar against the Yuan. The Chinese government is defending the weakened Yuan by offloading billions worth of US treasuries and stocks from its reserves.

      BRICS member China dumped $21.2 billion in US treasuries and stocks in August, according to latest data released by the US Treasury Department on Wednesday. This is the highest that the Chinese government sold US government bonds in four years.

      The sell-off comes at a time when the Chinese Yuan fell to its 10-month low against the US dollar. Reports state that the Communist government initiated state-run banks to intervene in the currency markets on behalf of the Central Bank. The bulk of the offload came from state-run banks as they dumped US treasuries and equities worth $21.2 billion.
      …
      https://watcher.guru/news/brics-china-dumps-another-22-billion-us-treasuries-stocks

      1. Imvesting tip for Winnie the Pooh and Associates, Ltd:

        – Buy low, sell high.

        – In particular, don’t dump Treasurys when they are at the bottom of a CR8R.

    1. TECH
      Prosecutors in Bankman-Fried trial compare defense argument to ‘Dumb and Dumber’
      PUBLISHED FRI, OCT 20 2023 1:43 PM EDT
      UPDATED FRI, OCT 20 2023 3:26 PM EDT
      MacKenzie Sigalos
      Ari Levy

      KEY POINTS

      – In a brief to Judge Lewis Kaplan on Thursday, prosecutors compared one of the defense’s jury instructions to a scene in the 1994 comedy “Dumb and Dumber.”

      – Prosecutors say the defense is claiming that FTX customers had a credit to their funds even if the actual money wasn’t in their account.

      – In “Dumb and Dumber,” the character played by Jim Carrey says, “That’s as good as money, sir,” when a briefcase was stuffed with IOUs instead of cash.
      …
      https://www.cnbc.com/2023/10/20/prosecutors-in-sbf-trial-compare-defense-argument-to-dumb-and-dumber.html

  26. From NPR:

    “How did Uruguay cut carbon emissions? The answer is blowing in the wind”

    https://www.npr.org/2023/10/06/1197954251/uruguay-green-energy-carbon-emissions-climate-change

    If one were to read this NPR article, he/she would believe that wind power is a major source of Uruguay’s electricity generation.

    For example (a snip from the article): “In a typical year, 98% of Uruguay’s grid is powered by green energy.”

    Another snip: “In 2011, Uruguay held an auction intended to secure 150 megawatts of new wind power, which would have represented about 5% of the country’s energy generating capacity. After more than 20 different companies threw in their bids, Méndez Galain and his team decided to radically accelerate their timeline for the country’s energy transition.

    “They accepted far more bids than they had originally planned, signing contracts that increased Uruguay’s capacity to generate electricity not by 5%, but by more than 40%.

    “Within a few years of Méndez Galain receiving that phone call inviting him to become the national director of energy, he had achieved what he had set out to do. Uruguay’s energy grid was powered almost exclusively by domestically created, renewable energy, and, adjusted for inflation, consumer prices had gone down. Today, there are more than 700 wind turbines installed across Uruguay’s countryside.”

    But here is what Wikipedia has to say about the matter:

    “Electricity sector in Uruguay”

    https://en.wikipedia.org/wiki/Electricity_sector_in_Uruguay

    “Installed electricity capacity in Uruguay was around 2,500 MW (megawatts) in 2009 and around 2,900 MW in 2013. Of the installed capacity, about 63% is hydro, accounting for 1,538 MW which includes half of the capacity of the Argentina-Uruguay bi-national Salto Grande. The rest of the production capacity is mostly thermal and a small share of wind and biomass.”

    “… a small share of wind and biomass.”

    1. Yahoo
      Yahoo Finance
      Stocks tumble amid bond market pummeling: Stock market news today
      Karen Friar and Hamza Shaban
      Fri, October 20, 2023 at 1:20 PM PDT·1 min read
      In this article:

      US stocks ended Friday’s trading session in the red, as the benchmark 10-year Treasury yield hovered just below 5% in the wake of comments by Federal Reserve Chair Jerome Powell.

      The Dow Jones Industrial Average (^DJI) fell 0.9% or 270 points, while the S&P 500 (^GSPC) shed 1.3%. The tech-heavy Nasdaq Composite (^IXIC) dropped about 1.5%. All three major indexes posted weekly losses.

      Stocks lost ground after Powell signaled the Fed is committed to its “higher for longer” rates stance, which spurred gains in Treasury yields. The benchmark 10-year yield (^TNX) rose briefly to 5% late on Thursday, a closely watched level not seen since July 2007.
      …
      https://finance.yahoo.com/news/stocks-tumble-amid-bond-market-pummeling-stock-market-news-today-200534655.html

    2. National Business
      Stock market today: Wall Street’s worst week in a month closes out with more losses
      File – The New York Stock Exchange signage glistens in the noon sun on October 4, 2023, in New York. (AP Photo/J. David Ake, File)
      (J. David Ake / Associated Press)
      By STAN CHOE
      Associated Press
      Oct. 20, 2023 2:13 PM PT

      NEW YORK —

      Wall Street racked up more losses Friday to close out its worst week in a month.

      The S&P 500 fell 1.3% for a fourth straight drop. The Dow Jones Industrial Average sank 286 points, or 0.9%, and the Nasdaq composite tumbled 1.5%.

      The stock market has been struggling under the weight of the bond market, where the yield on the 10-year Treasury briefly topped 5% late Thursday for the first time since 2007, according to Tradeweb. High yields make borrowing more expensive for everyone, and they slow the economy while dragging on prices for stocks and other investments.

      The yield on the 10-year Treasury was hanging within a hair of 5% early Friday morning, before later easing back to 4.91%. It’s been generally catching up to the Federal Reserve’s main interest rate, which is already above 5.25% and at its highest level since 2001.
      …
      https://www.sandiegouniontribune.com/business/nation/story/2023-10-20/stock-market-today-asian-shares-slip-further-as-higher-us-10-year-treasury-yield-pressures-wall-st

    3. US Markets Closed
      Dow Jones -0.86%
      Nasdaq -1.5%
      S&P 500 -1.26%

      Premium Home
      Markets
      ‘Buckle up’: A notorious market bear who called the 2000 and 2008 crashes warns stocks remain near their highest valuation levels in history — and that the market is ripe for steep and abrupt losses
      William Edwards
      Oct 21, 2023, 2:00 AM PDT
      Stock trades 1987 Black Monday
      Traders on the floor of the New York Stock Exchange work frantically as panic selling swept Wall Street in this Oct. 19, 1987 file photo.
      AP/Peter Morgan

      By many measures, S&P 500 valuations were high at the start of 2023. And yet, the index has performed impressively year-to-date, up 10.7% and climbing as high as 20%.

      Near-term gains like this often cause investors to lose the bigger picture, says John Hussman, the president of the Hussman Investment Trust who called the 2000 and 2008 stock-market crashes. High valuations, despite their little influence on short-term returns, often mean devastating outcomes for investors over a longer period.
      …
      https://www.businessinsider.com/stock-market-crash-bubble-valuations-recession-sp500-prediction-hussman-grantham-2023-10

    4. Bloomberg
      Markets
      Volatility Market Flashes Stock Warning in Fresh VIX Inversion

      – Fear gauge sees front-month ‘backwardation’ first time in year

      – Signal of near-term stress often coincides with equity losses

      A trader looks over computer monitors in the Cboe Volatility Index pit at the Cboe Global Markets, Inc. exchange in Chicago, Illinois.
      Photographer: Daniel Acker/Bloomberg
      By Elena Popina
      October 20, 2023 at 5:16 AM PDT

      Wall Street’s famous fear gauge is sending worrying messages to US stock bulls, betraying growing anxiety in the volatility market over rising tensions in the Middle East and ongoing turbulence in the bond world.

      While the S&P 500 Index’s declines this week have appeared largely orderly, the nearest futures contracts tied to the Cboe Volatility Index — also known as the VIX and a measure of expected swings in America’s benchmark equity gauge — closed Thursday in a pattern known as backwardation. It’s a telltale sign of mounting distress, as traders anticipate more volatility in the near-term than further out in the future.
      …
      https://www.bloomberg.com/news/articles/2023-10-20/volatility-market-flashes-stock-warning-in-fresh-vix-inversion#xj4y7vzkg

      1. [continued]

        Almost all stock-market troughs in the past have occurred during periods of backwardation.

        Typically the VIX futures curve slopes upward, known as contango, reflecting that the outlook for the S&P 500 becomes less certain as the time horizon stretches. That has been the case for most of this year, as Thursday’s session ended the longest streak on record of the front-month future trading below the second-month, according to data compiled by Bloomberg. The flip comes less than three weeks after the VIX spot level briefly moved above three-month contracts.

        “We’re finally seeing the demand for short-term protection exceed the amount of volatility that’s available in the market,” said Steve Sosnick, chief strategist at Interactive Brokers. “There’s this realization that we’ve had a quiet market for some time, but things are changing.”

        The signal comes amid worries that Israel’s war with Hamas will spark a bigger conflict in the energy-producing Middle East, with the US saying its military bases in Iraq and Syria are increasingly under attack. At the same time, volatility has been rampant in the bond market as policymakers wrestle high inflation and American borrowing soars.

        The S&P 500 Index fell 0.9% Thursday, its third straight day of declines. The VIX Index itself closed at 21.4 — far from levels usually associated with major equity selloffs, but above the psychologically important 20 level. It had closed below that for 105 consecutive days, the longest stretch since 2018.
        …
        https://news.yahoo.com/finance/news/volatility-market-flashes-stock-warning-121633063.html

  28. Does it bother you that commercial real estate investing behemoths like PimpCo can stiff their lenders, while at the same time they are raising billions of dollars to snap up properties in a future fire sale?

    If this behavior isn’t a violation of antitrust laws, then we need new laws.

    1. Yahoo
      Bloomberg
      Pimco Fund Walks Away From 20 Hotels With $240 Million of Debt
      John Gittelsohn
      Tue, October 17, 2023 at 1:25 PM PDT·2 min read

      (Bloomberg) — A joint venture tied to a Pacific Investment Management Co. fund surrendered a portfolio of 20 hotels with a $240 million mortgage.

      The properties, located in cities including San Antonio and Carmel, Indiana, were forfeited in a deal that closed in September, according to commentary filed this week by the loan’s servicer. The Pimco portfolio, valued at $326 million when the debt was originated in 2017, was cut 16% to $272.8 million in a December appraisal.

      Pimco declined to comment.

      Commercial property owners are confronting much higher borrowing costs that are weighing on valuations. Wall Street investors including Blackstone Inc. and Brookfield Asset Management Ltd. have defaulted on money-losing properties rather than continue to pay the debt on them.

      The hotels were owned by a 10-year-old Pimco real estate fund that had a 99% stake in a joint venture with a limited liability company linked to hotel operator Steven Angel, according to loan documents. Angel’s Fulcrum Hospitality manages more than $6 billion in assets, according to the company’s website. Angel didn’t immediately respond to a message seeking comment.

      For hotels, rising operating and capital improvement costs have cut into income. Ashford Hospitality Trust Inc. said in July that it would likely return 19 hotels to lenders, while Park Hotels & Resorts Inc. stopped making payments on two San Francisco properties.

      Pimco defaulted on a portfolio of office buildings with $1.7 billion of debt earlier this year but continues to negotiate with lenders “as to the best path forward to maximize recovery,” according to a commentary on the commercial mortgage-backed security.

      Pimco has also been raising money for a new commercial real estate debt fund that seeks to take advantage of market distress as $2 trillion of existing commercial real estate loans are set to mature within five years, according to a presentation to the Pennsylvania Public School Employees’ Retirement System.

      The Pimco Commercial Real Estate Debt Fund II closed to new investors in August after raising $3 billion in commitments, according to a person with knowledge of the fund’s closing, who asked not to be identified citing private information.
      …

      1. “Pimco has also been raising money for a new commercial real estate debt fund that seeks to take advantage of market distress as $2 trillion of existing commercial real estate loans are set to mature within five years,”

        Heads, we win.

        “Pimco defaulted on a portfolio of office buildings with $1.7 billion of debt earlier this year…”

        Tails, you’re screwed.

  29. Re: They’re Really Sorry They Missed The Peak

    Ah, wouldn’t it be great if everybody could sell at the peak? Unfortunately a peak occurs when the highest bidder buys which is a mathematical fact and there is no getting around it. Besides, when a seller sells, the property merely changes hands along with the problem . .

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