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Low Rates Were A Self-Destructive Party That Went On For Far Too Long

A report from Curbed New York. “If you want views of Central Park and at least 6,000 never-before-lived-in square feet from which to admire them, you’ve got a lot to choose from right now: Central Park Tower’s 17,545-square-foot penthouse — ‘a once-in-a-generation residence’ — is on sale for 22 percent off its original asking price of $250 million. On Billionaire’s Row, 23 percent of sponsor units remain unsold, according to an analysis by appraisal firm Miller Samuel. And that’s not counting all the people looking to offload the ones they previously bought, which likely brings the total percentage of trophy apartments seeking buyers closer to 50 percent. The first few ultraluxurious skyscrapers seemed to coast on some combination of FOMO among the megawealthy, bragging rights, and the promise of a sweet return upon flipping. But then more went up. And more. ‘For a while it was like, ‘Oooh, 18-foot ceilings,’ says one broker. ‘Now it’s like, ‘Oh, you also have 18-foot ceilings.’”

“Mostly, though, stuff just sat, gathering dust. At 111 West 57th Street, also known as Steinway Tower, which launched sales in 2019, less than half of the 60 units have sold, according to Miller Samuel. Another issue is the lackluster appeal of many newly created luxury districts. Stephen Ross’s fantasies about the allure of the far (far) West Side have been collapsing, to all appearances: At 35 Hudson Yards, only 50 percent of the units have sold in four years, The Wall Street Journal reported this summer, with some of the larger units trading for discounts of more than 40 percent. Discounts were even steeper — up to half off — for active listings.”

“There’s very little urgency for buyers to buy anything right now, one broker told me, even for much more desirable real estate, like, say, a townhouse on the Upper East Side. Of course they’re not scrambling to snap up penthouses in Hudson Yards. ‘It was supposed to be the fashion, the media, the retail center of the world. It was going to be where Google and LVMH were headquartered. It’s very far from that vision,’ he says. ‘Can we stop calling all these things trophies? It’s in the middle of nowhere.'”

From Newsweek. “After being the poster child for the booming American housing market during the pandemic, Austin has seen its fortunes reverse, as the incredible growth that started in 2020 has evaporated. The Texan city has been at the epicenter of the American housing market correction after house prices reached the national peak of $348,225 in July 2022, according to Zillow. Now prices in Austin are dropping 10 times faster than the national average. ‘There was an explosion of activity in Austin that just got too hot,’ Redfin chief economist Daryl Fairweather told Newsweek. ‘It just had this period of really rapid growth to the point of it turning into a bubble and there needs to be a correction, but I think moving forward, prices will probably stabilize and potentially even grow into the future because it’s still an attractive place to live and a growing job center.'”

“Between July 2022 and April 2023, home prices in Austin fell by 10.2 percent, according to the Zillow Home Value Index, while the national decline was only 1 percent in the same period. It was the biggest decline in the nation, narrowly beating San Francisco’s 10 percent fall, the 9.5 percent slump in Bend, Oregon, and the 9.3 percent drop off in Boise, Idaho.”

The Wall Street Journal. “Foreclosures are surging in an opaque and risky corner of commercial real-estate finance, offering one of the starkest signs yet that turmoil in the property market is worsening. Lenders this year have issued a record number of foreclosure notices for high-risk property loans, according to a Wall Street Journal analysis. Many of these loans are similar to second mortgages and commonly known as mezzanine loans. Mezzanine loans have high interest rates and offer a faster and easier path to foreclose than mortgages. The Journal analysis found notices for 62 mezzanine loans and other high-risk loans this year through October. That is more than double the number for all of last year, and likely the highest total ever for a single year, as higher interest rates and rising vacancies punish the property sector.”

“Foreclosing on mezzanine loans is often quick and easy because they aren’t technically mortgages. These loans took off in the decade following the 2008-09 financial crisis as regulators cracked down on big banks and they became more conservative lenders. Many property owners made up the financing shortfall by borrowing from smaller banks, or by taking out these second loans from debt funds and other nonbank lenders, often on top of bank mortgages.”

“Mezzanine lending became big business for companies such as Blackstone, KKR and Starwood Capital, which collectively lent billions. South Korean asset managers also became big mezzanine lenders, lending against hotels and office towers in cities such as New York and Los Angeles. Finance companies pooled billions from thousands of would-be immigrants in the EB-5 cash-for-visa program, turning them into mezzanine loans to developers. That debt allowed investors to bid up prices while putting in little of their own money, inflating the commercial real-estate market leading up to 2022.”

“Now, real-estate prices are falling and many of these loans are in default, the latest sign that regulators’ efforts to shore up big banks after the 2008-09 crisis have created new trouble spots in property finance. ‘A lot of borrowers have basically said ‘I can’t hold this asset any longer, I can’t keep putting money in,’ said Terri Adler, managing partner at law firm Adler & Stachenfeld. ‘And the lenders have said ‘OK, we’ll take it back.’ Many recent foreclosures are office buildings. Earlier this year, an affiliate of asset manager Brookfield foreclosed on a 48-story tower in Los Angeles after the building’s owner defaulted on a $64.7 million mezzanine loan. Some apartment investors who took on too much floating-rate debt to buy rundown properties with plans to aggressively raise rents are also in trouble.”

“Mezzanine loans helped fund some large deals in the years leading up to 2008. While there were fewer of these loans then, they often had many layers piled on top of each other. ‘Things got so crazy,’ said Kenneth Chin, a partner at law firm Kramer Levin Naftalis & Frankel. ‘I did a deal where there were six levels of mezzanine debt.’ Often loans added up to more than the value of the building. The Stuyvesant Town and Peter Cooper Village apartment complex in Manhattan, which was taken over by lenders following the crash, had 11 layers of mezzanine debt, according to the property’s bond prospectus. Many loans across the country were wiped out when the market turned.”

The Globe and Mail. “Last week, Bank of Canada senior deputy governor Carolyn Rogers took to a podium in Vancouver to deliver a wake-up call to Canadian consumers and investors. ‘We’ve all been through a lengthy period of very low interest rates,’ the central bank’s No. 2 official said. ‘And it may be tempting to believe the low rates that we all got used to will eventually come back. But there are reasons to think they may not. It’s not hard to see a world where interest rates are persistently higher than what people have grown used to.'”

“There’s a temptation to lament for the good old days. But was that era of ultralow rates really so good? Frankly, we may be better off consigning it to the history books. From a monetary-policy standpoint, these barely-above-zero rates posed a serious problem. Interest rates are a central bank’s main weapon – in most times, only weapon – to combat economic shocks. Standard procedure to cushion a fall, and to help lift an economy out of a slump, is to cut rates. But when there’s little to no room to cut, central banks can quickly find themselves out of ammunition to deal with a recession.”

“Perpetually low rates helped feed a frenzy in real estate that set the stage for the housing crisis that the country is now going through. They also helped the national household-debt-to-disposable-income ratio balloon to a record 185 per cent by the time the Bank of Canada started raising interest rates last year. Low rates were a self-destructive party that went on for far too long. Yes, as Ms. Rogers said in her speech, consumers and investors have to prepare for a rate future that doesn’t look like the past. But we needn’t fear it. This is not bad news.”

The Times of Israel. “Since the outbreak of the war with the Hamas terror group, the number of real estate transactions has plummeted to a level lower than the one seen in April 2020 at the height of Israel’s first pandemic lockdown, according to preliminary estimates by the Finance Ministry. ‘The public is currently preoccupied with war matters, the national mood is very low, there is great uncertainty, Israelis are not currently buying apartments and the market has almost completely ground to a halt,’ said Revital Roth, head of the analysis department at business data firm Dun & Bradstreet Israel. ‘It is already clear that the ‘Swords of Iron’ war [the IDF name for the military campaign] is one of the biggest crises that the real estate industry in general, and the construction industry in particular, has confronted.'”

“Even before the outbreak of the war, the Israeli housing market experienced a slowdown in real estate deals as interest rates gradually increased to 4.75% from a record low of 0.1% last year. Higher borrowing costs hit existing and potential mortgage holders hard, with the majority of home loans in Israel tied to variable rates.”

“‘Data published even before the outbreak of the war show a significant slowdown in the sale of new apartments, an increase in the inventory of unsold apartments held by contractors, a decrease in the number of mortgages given to the public, a decrease in construction starts and even the beginning of a drop in prices,’ said Roth. ‘All of these are now joined by the war – where the main problems resulting from it are the shutdown of the construction sites, a severe shortage of manpower resulting from the lack of Palestinian workers and uncertainties regarding the duration of the war and the plan for the compensations and reliefs to be determined by the government.'”

From Bloomberg. “Private equity firms that amassed more than $1.5 trillion of assets in China in just two decades are now struggling to offload once-promising investments they were counting on for hefty returns. With public markets in a slump and offering unattractive valuations, buyout firms are exploring private sales. But mounting concerns about the risks of investing in mainland China have left so-called secondary buyers demanding discounts of 30% to more than 60%, according to people familiar with the market. Haircuts in Europe and the US are closer to 15%.”

“The lack of easy exits — affecting the likes of Blackstone-backed PAG and Carlyle Group Inc. — has shifted the world’s second-largest economy from a vast frontier for buyouts into an uncertain landscape for long-term investing. Demand for Chinese assets cratered in the past few years, with record outflows even from public markets, as the economy struggles to regain traction and concerns mount over the political direction under Xi Jinping. ‘We are in more challenging times, very similar to the way we experienced the global financial crisis,’ said Niklas Amundsson, partner at Monument Group, a global private placement agent. ‘China is completely out of favor and global investors are going to put China on hold for now.'”

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This Post Has 106 Comments

  1. ‘Private equity firms that amassed more than $1.5 trillion of assets in China in just two decades are now struggling to offload once-promising investments they were counting on for hefty returns. With public markets in a slump and offering unattractive valuations, buyout firms are exploring private sales. But mounting concerns about the risks of investing in mainland China have left so-called secondary buyers demanding discounts of 30% to more than 60%’

    via GIPHY

  2. ‘Discounts were even steeper — up to half off — for active listings’

    Wa happened to my safe deposit box in the sky?

    1. The real carnage hasn’t even started yet, as central banks are still pumping created-out-of-thin-air liquidity into the financial system. When the cascading defaults begin, they won’t be able to print them away without causing massive social unrest due to soaring inflation. Long buttered popcorn.

      1. “When the cascading defaults begin…”

        Man I have been hearing this for two years now. Don’t get me wrong I’m all for it but I have a gut feeling this is not going to happen. Prices here in Colorado sticky. Yes some sellers are dropping prices maybe down 3% from the massive 30%+ run-up they experienced since 2021. I don’t get it 6X incomes how-in-the-world can this be?!?

        1. If you can’t wait it out, leave Colorado. Some places will be stickier than others. Is Colorado that special? I’m currently eyeballing places outside of the U.S.

    1. Epoch Times via ZeroSludge — The Psychological Pain of Inflation (11/13/2023):

      “The Bureau of Labor Statistics (BLS) tomorrow morning will report its Consumer Price data from October. The Producer Price Index (PPI) appears the following day.

      There will likely be no real surprise here: inflation will still be running hot around 3.7 percent, confirming what I and many have suspected. Inflation is overall accelerating over the declines earlier this year. That’s bad economic news because it further confirms lower living standards and continues to vex average people juggling multiple jobs, high interest payments on debt, and increased unaffordability of just about everything.

      The people in charge are the ones who shut down economic life, dumped multiple rounds of trillions of individuals and businesses, created an absurdly fraudulent appearance of prosperity, and then allowed the bill to become due in the form of mass and extended depreciation of the currency. It was riches to rags in less than a year. By earlier this year, the entire value of the stimulus was inflated away.

      We watched in real time, in disbelief, as this was happening. Did people really believe that manna was falling from heaven and that there would be no price to pay? Did people actually believe that the key to getting rich was to wake up late, laze around in PJs all day, start cocktail hour at 2pm, and stay up late catching movie after movie on streaming services, and continuing this absurd pattern for the better part of a year or more?

      Despite the ridiculous propaganda coming from the Biden administration, the job market is a mess, with huge losses in full-time employment, even as those jobs are being replaced with part-time jobs. Hiring for the holiday season has become a breeze for many businesses, which is a contrast from the last several years.

      There is a deeper worry to the persistence of inflation. No one likes spending more for less, of course. But the financial squeeze on household finance has a psychological cost too. No matter how much we work, how much we save, how much we reduce our consumption, we just cannot get ahead. This produces a cloud of despair over the human mind.

      Adults ages 35 to 44 were more likely to report that money (77 percent vs. 65 percent) and the economy (74 percent vs. 51 percent) were the factors that cause them significant stress today compared with 2019.”

      Notice that this most profoundly impacted population segment is that which is trying to raise families and build a future. They are finding that they simply cannot. The stress is leading to chronic mental illness, also called depression. Depression, one wag said, is simply anger without enthusiasm. The anger in this case is all about what the ruling class has done.”

      https://www.theepochtimes.com/opinion/the-psychological-pain-of-inflation-5528646?utm_source=partner&utm_campaign=ZeroHedge

      A cloud of despair?

      All of this was done intentionally. They’re not “elites” they are the Parasite Class, and these people want you starving, homeless, and better yet, dead.

      1. “compared with 2019”

        Remember who was president then?

        I left the grocery store yesterday without buying everything I planned to buy, and decided to de-frost some frozen food instead.

        People like Paul Krugman need to get dragged out of the New York Times newsroom and get beaten to death in the street by an angry mob.

        It’s coming, you globalist cockroaches. They did it in France in 1789 over the price of bread, and it will happen again…

    2. Former Iraqi Information Minister Baghdad Bob would blush with shame and mortification if asked to put across the whoopers coming out of the CPI and BLS.

    1. “There has never been a better time to buy in North Gaza, before American taxpayers build it back better.” — Palestine NAR

  6. if this is true heads are gonna roll. 70% ethyl alcohol under an overpass…..

    Although the exact cause of the fire has not been revealed, “there was [malicious] intent,” Newsom said at a news conference Monday afternoon.

    In addition to pallets, sanitizer accumulated during the height of the COVID-19 pandemic was stored under the overpass and helped fuel the flames, according to sources familiar with the probe who were not authorized to discuss details of the investigation.

    https://www.yahoo.com/news/10-freeway-closure-greets-monday-164124371.html

    1. “Officials said the property where the fire broke out was being leased by Calabasas-based Apex Development Inc., which was subleasing the storage site under the overpass without permission from state and federal agencies. The company stopped paying rent, according to Newsom, and had been out of compliance with its lease agreement.”

      Was the sub-lessee still making their payments?

  7. Another issue is the lackluster appeal of many newly created luxury districts.

    Let unsaid: those “luxury districts” are going to be lucrative targets for unchecked vibrancy as NYC’s Death Loop accelerates.

  8. Private equity firms that amassed more than $1.5 trillion of assets in China in just two decades are now struggling to offload once-promising investments they were counting on for hefty returns.

    The same private equity locusts that had unbounded faith in the CCP’s economic management also accumulated vast CRE portfolios in Democrat-Bolshevik malgoverned U.S. urban centers. Methinks we’re going to need a bigger taxpayer bailout.

  9. Some apartment investors who took on too much floating-rate debt to buy rundown properties with plans to aggressively raise rents are also in trouble.”

    Die, rapacious speculator scum. Just die already.

  10. They also helped the national household-debt-to-disposable-income ratio balloon to a record 185 per cent by the time the Bank of Canada started raising interest rates last year.

    That’s some sound economic stewardship, Lil’ Fidel Trudeau & the BoC.

  11. ‘It is already clear that the ‘Swords of Iron’ war [the IDF name for the military campaign] is one of the biggest crises that the real estate industry in general, and the construction industry in particular, has confronted.’”

    The Israeli military has mobilized something like 180,000 reservists to fight the war with Hamas & whoever else piles in. In a nation of only 9 million people, that’s pulling a lot of essential workers from the civilian economy, which is going to take its toll. Luckily, AIPAC can direct its Congressional hirelings to funnel unlimited U.S. taxpayer-funded economic aid to Make Israel Great Again.

    1. “funnel unlimited U.S. taxpayer-funded economic aid”

      You will never be seen as anything more than cattle tax slaves to these globalists.

  12. ‘It just had this period of really rapid growth to the point of it turning into a bubble and there needs to be a correction,’

    Oh, cool, the Redfin peops are starting to notice the bubble. Pretty soon they will claim they predicted it.

    ‘but I think moving forward, prices will probably stabilize and potentially even grow into the future because it’s still an attractive place to live and a growing job center.’

    Yeah, sure…just don’t pass out while holding your breath.

  13. Wall Street is already partying hardy on predicted future rate cuts in response to a recession which isn’t supposed to happen.

    Go figure…

    1. DOW FUTURES +1.04%
      S&P 500 FUTURES +1.33%
      NASDAQ 100 FUTURES +1.70%

      One of Wall Street’s biggest bears says a ‘huge crash’ is coming as markets are in the biggest credit bubble in history
      Jennifer Sor
      Nov 13, 2023, 10:40 AM PST
      stock market crash
      Spencer Platt/Getty Images

      – Financial markets are headed for a “huge crash,” according to Mark Spitznagel.

      – The bearish hedge fund manager told Intelligencer he thinks the US is in the biggest credit bubble in history.

      – Bursting that bubble could “burn down the whole forest,” he warned.
      …
      https://markets.businessinsider.com/news/stocks/stock-market-crash-economy-debt-credit-bubble-interest-rates-2023-11

      1. Dang. I was so hoping the stock market would keep going up indefinitely, thereby continuing to provide ever-increasing truckloads of free money for fat, lazy retired people who do nothing but sit in their recliners watching TV all day.

        1. I started my DJIA investing when it was at 3,000. IIRC I was about 38 at the time. Never knew I could retire fat and lazy at 38. I missed out

    2. Economy
      UBS sees a raft of Fed rate cuts next year on the back of a U.S. recession
      Published Tue, Nov 14 2023 4:41 AM EST
      Elliot Smith

      Key Points

      – UBS sees slower growth, rising unemployment and disinflation to lead the Fed to cut its benchmark rate to a target range ending the year between 2.50% and 2.75%.

      – Arend Kapteyn, UBS global head of economics and strategy research, told CNBC on Tuesday that the starting conditions are “much worse now than 12 months ago,” particularly in the form of the “historically large” amount of credit that is being withdrawn from the U.S. economy.
      …
      https://www.cnbc.com/2023/11/14/ubs-sees-a-raft-of-fed-rate-cuts-next-year-on-the-back-of-a-us-recession.html

    3. Economy
      The ‘R’ word: Why this time might be an exception to a key recession rule
      November 12, 2023 5:00 AM ET
      Heard on Weekend Edition Sunday
      Scott Horsley
      7-Minute Listen

      The ‘R’ word: Why this time might be an exception to a key recession rule

      October’s unemployment rate set off alarm bells in some quarters. That’s because it was a half percentage point higher than its recent low — a jump that by one rule of thumb signals the onset of a recession.

      The monthly jobs report showed the U.S. unemployment rate was 3.9% in October — very low by historical standards but up from 3.4% in April.

      Here’s why that’s worth watching, but may be less worrisome than it seems.

      The Sahm Rule has observed a pattern since 1970

      The rule was formulated by Claudia Sahm, a former Federal Reserve economist, who observed that every time since 1970 that unemployment rose by half a percentage point or more from its low point in the preceding year, it marked the beginning of a recession.

      The logic of the rule is simple: When people lose their jobs, they spend less money, which puts pressure on businesses to cut more workers, and the downward cycle continues. Once unemployment jumps by half a percentage point, it typically keeps on climbing — at least 2 points and sometimes more.

      But Sahm says this time may be different.
      …
      https://www.npr.org/2023/11/12/1212175542/sahm-rule-recession-unemployment-rate

      1. But Sahm says this time may be different.

        I get the impression Dr. Lacy Hunt and Danielle diMartino Booth don’t think to highly of Claudia Sahm. Danielle has sited another similar rule.

        2. And Dr. Lacy Hunt is in the hard landing camp. NPR using an economist favorable to the Biden administration, color me shocked.

  14. “And it may be tempting to believe the low rates that we all got used to will eventually come back. But there are reasons to think they may not. It’s not hard to see a world where interest rates are persistently higher than what people have grown used to.’”

    After this morning’s CPI report I saw a headline on MW stating investors are now looking forward to 4 to 5 interest rate cuts next year…..and they say it like it’s a good thing.

      1. We’re just days away from the biggest consumer spending period of the year. The conspiracy theorist in me says that all of this positive news is complete BS to get consumers on a pink cloud and hopped up to spend everything they’ve got.

          1. Don’t underestimate the value of house plant clippings! People spend a ton of money on them and their environments!! Search Etsy for plant clippings and google IKEA greenhouse cabinet hacks.

  15. It probably hasn’t gone unnoticed in Russia, China, Iran, or North Korea that the demographic that supplied the most dedicated and capable U.S. military warfighters is now rejecting the notion of joining a “woke,” feminized, DEI Armed Forces under a dementia-addled, fraudulently installed Commander-in-Chief to be sacrificed in pointless neocon military misadventures that have nothing to do with “defending freedom.”

    https://mises.org/power-market/fewer-americans-are-interested-fighting-wars-regime

    1. “Russia, China, Iran, or North Korea”

      Real Americans know that the greatest enemy isn’t there, it’s in Washington D.C.

      300+ million guns in the hands of U.S. civilians. You can only p*ss on the kulaks for so long and tell them it’s raining for so long until there’s gonna be some real blowback…

  16. Am having a hard time finding qualified tenants ,in our rural upstate SC area ….We have 2 rather simple requirements, No eviction history, and no Drug issues within the past 5 years ,No. 3 would be being able to afford it , with proven income statements ….That I check ….from a real Job…
    That cuts off probably 90% of people who claim to be needing a place to stay ,like right now,
    Add to that the couple that seemed to qualify , but the husband’s job was with a tree cutting company, I’ve never had anyone that did that for a living that paid the rents for more then 3 months, ever…..
    Ah ,well, it keeps life interesting, to do one’s own rentals, but you tend to lose faith in the inherent goodness of mankind ……

    1. Hubby’s a property manager and having trouble finding tenants for one of his properties. He went on Zillow and found a flood of inventory most likely originating from former STRs given the obscene asking prices. There’s 1,981 houses for rent.

          1. “…breathtaking, sunset views of the City of Poway, evening lights, and hills across the valley…”

            True dat!

          2. This isn’t one of Hubby’s houses but his company requires an income 3X the rent. So a person would have to be making $198K/yr for this property. Poway’s median household income is $119,847.

      2. We recently paid to have a tree taken down and for a new dishwasher because we’re afraid our landlords will raise the rent if we take any expenses to them.

  18. The Language Police™

    The Hill — Trump’s incendiary ‘vermin’ remarks prompt backlash (11/14/2023):

    “Former President Trump prompted backlash for comparing his political enemies to “vermin” who needed to be exposed, with critics drawing comparisons to dictators from decades ago.”

    Here’s the full quote:

    “In honor of our great Veterans on Veteran’s Day, we pledge to you that we will root out the Communists, Marxists, Fascists, and Radical Left Thugs that live like vermin within the confines of our Country, lie, steal, and cheat on Elections, and will do anything possible, whether legally or illegally, to destroy America, and the American Dream”

    Backlash from who?

    Backlash from Communists, Marxists, Fascists, and Radical Left Thugs, that’s who.

    “They’re not sending their best”

  19. Your high-interest rate auto loan is making someone a ton of money (even if you default)

    https://www.thestreet.com/automotive/subprime-auto-loans-reach-new-high?puc=yahoo&cm_ven=YAHOO

    It’s like a blast from the ‘needs-to-never-be-forgotten’ past.

    Financial institutions claimed they had learned a valuable lesson from the 2008 housing crisis that nearly wiped out the global economy.

    About 15 years ago the world learned in real-time the dangers of subprime mortgages in the housing sector after the house of cards built by subprime mortgages, that were then bundled into securities that could be bought and sold by institutional traders on Wall Street, came crashing down around us.

    The cascading effect from the fallout nearly took out the real estate market, the auto industry and stock market as well, leading to one of the worst economic collapses in U.S. history.

    Fifteen years later it seems Wall Street has learned at least one thing: Turning bad auto loans into securities that can be traded can also be a way to make a ton of money without actually producing anything of value.

    Subprime car loans made to people with bad credit backed more than $37 billion of bonds last year, double the amount from 2012, according to a new report from Bloomberg.

    The report detailed the plight of one subprime borrower who was paying more than a 22% annual interest rate on a vehicle note for which they were paying $750 per month. The borrowers inevitably defaulted — they were also paying more than $400 a month for another vehicle — but the offering document from Santander “suggests it built the security based on the assumption that much of the debt would go bad.”

    Lending money to borrowers you know will default is exactly the type of practice that led Congress to pass the Dodd-Frank Act in 2010, requiring lenders to make sure the loans they gave to borrowers were affordable, based on said borrower’s finances.

    But like many laws that come out of Washington, special interests were successful in defanging much of Dodd-Frank, and car dealerships successfully fought for an exemption from being policed by the U.S. Consumer Financial Protection Bureau that was created by Dodd-Frank.

    Santander reached a $550 million settlement in 2020 to resolve allegations that the company knew it was making loans that were likely to default. However, since car dealerships themselves are where most loans are made, the CFPB settlement will probably do little to curb the practice of subprime lending.

    As of June 2023, subprime debt made up about a fifth of the $1.58 trillion in outstanding auto loans, which is the second-largest kind of consumer debt in the country after mortgages.

  20. – Inflation is somewhat less now than before. That’s good and all is well with the world. Everything is awesome! Right?

    – Declining inflation is disinflation, but not deflation, which is negative inflation or declining prices, which we haven’t seen yet…

    – This means of course that ALL of the inflation from pre-pandemic and post-pandemic is cumulative and is still there, and is still growing at 3.2% CPI and 4% core. Still losing 1/2 your $ in 22.5 years at current CPI rate annualized, and don’t forget the estimated 25-50% cumulative inflation since the scam-demic. The price increases are still there, as we all can see as plain as the nose on our faces. Autos. Food. Housing. Nobody needs these, right?

    – Add to this YEARS of negative real (inflation-adjusted) wage “growth” (I.e. shrinkage – George Costanza reference here) and everyone is getting poorer.

    – Inflation is a policy. F the globalists and F Pres. LOLEightyonemillion. Congress has got your six though…

    1. “ALL of the inflation from pre-pandemic and post-pandemic is cumulative and is still there”

      This.

    1. DOW 30 +1.42%
      S&P 500 +1.94%
      NASDAQ 100 +2.12%

      Markets are headed for a decade of austerity as the ‘game of macroeconomic musical chairs’ will stop, investment chief says
      Filip De Mott
      Nov 13, 2023, 11:44 AM PST
      Animated bear and bull faces each other in front of stock charts
      A bear or bull market undefined
      / Getty Images

      – Markets may be headed for a decade of austerity, Research Affiliates wrote in a note.

      – October’s equity correction signaled that the economy was normalizing under high interest rates.

      – Tighter monetary policy will pull down asset prices, while inflation is likely to stay elevated.
      …
      https://markets.businessinsider.com/news/stocks/stock-market-strategy-austerity-us-debt-deficits-yields-inflation-value-2023-11

    2. DOW 30 +1.43%
      S&P 500 +1.96%
      NASDAQ 100 +2.12%

      The Dow Jones has seen a dreaded ‘death cross.’ Here’s what it means.
      Anil Varma
      Nov 14, 2023, 6:20 AM PST
      An American flag hangs behind traders working on the floor of the New York Stock Exchange (NYSE) on October 11, 2019 in New York City.
      The last Dow “death cross” happened in March 2022.
      Drew Angerer/Getty Images

      – The Dow Jones Industrial Average just saw a “death cross” that’s regarded as a bearish signal.

      – The formation involves a short-term moving average falling below a longer-term one.

      – The last time a death cross struck was in March 2022. The Dow then fell 12% over a six-month period.
      …
      https://markets.businessinsider.com/news/stocks/stock-market-outlook-dow-sees-death-cross-in-bearish-signal-2023-11

  22. Here’s a fun article from bizwest:

    LARIMER COUNTY — In what may be the only fully passive home neighborhood in the region, the two partners in Black Timber Builders LLC are marrying modern design with techniques to make an entire neighborhood energy-efficient.

    Passive-home construction uses techniques that achieve a finished product that is 90% more efficient than a traditional home and are so resistant to exterior weather forces that their internal temperature varies little from season to season.

    Sounds good, right? Reduce heating and cooling costs by 90%? One could save a 2-3 thousand a year on utilities.

    In a 40-acre subdivision called the Estates at Donath Lake, in the netherland between Loveland and Fort Collins, the company is building 13 homes — four are built or under construction, two more are designed and ready for construction, and another is in design. The homes are high-end, well-designed and modern structures with lots of amenities.

    The one at 8301 Four Points Court sold in December for $2.7 million. It’s 3,770 square feet on nearly two acres.

    Whut? Almost 3 million for a McMansion? It would take about 500-1000 years to amortize the extra cost.

    And really, what did they do? Maybe extra thick exterior walls with extra insulation, triple glazed windows and extra insulation in the attic and some solar panels? Perhaps some of the extra cost is from the 2 acre lots, but $2.7M?

    2. This is one of my biggest challenges thinking about building a new house.

      I want energy efficiency to an extent, but not to the point where it becomes a luxury, and beyond that a novelty virtue signal.

      I’ve been inside the National Renewable Energy Lab main building in Golden, which at the time of its construction was the most energy efficient commercial building in the country. That place is cold and really dim.

      1. That place is cold and really dim.

        I’ve been there too. And I visited during summer. It was pretty warm and dark inside.

      2. I want energy efficiency to an extent, but not to the point where it becomes a luxury, and beyond that a novelty virtue signal.

        For my build, it came down to air sealing, raised heel trusses (to get full depth insulation over the top plates) and good sized overhangs to shade the summer sun.

        Check out Pretty Good House

  23. Vaccine hesitancy and disinformation was stated as the grounds to censor dispute to vaccine or information on vaccines, during the big Covid Vaccine campaign.
    The first amendment right to free speech doesnt have a right to violate based on vaccine hesitancy or a broad lable of a claim of disinformation.
    You can’t yell “fire” falsely in a movie theater .
    Now a bunch of hate speech laws are being put up . The Supreme Court in the past has already ruled that hate speech is not a defineable term. They have a few specific examples of speech that causes violence, etc.
    For most of my life free speech wasn’t a problem in the USA.
    There were laws against proveable fraud, false advertising, slander, etc, but vaccine hesitancy and disinformation wasn’t grounds for obstruction of free speech.
    Difference of opinion on the same set of facts is simply Ist amendment protected speech .
    High Court never said “Fact checkers” determine what’s disinformation , that will be censored.
    In other words we already have law recourse for people victimized by
    fraud, slander, false advertising , etc.
    In this case the censorship of informed consent, dispute to vaccine and opinion by censored experts, cost a lot of people their lives or caused injury.
    Hate speech new laws are cropping up in other countries, as the One World Order Entities move in on wanting to block free speech, information and opinion so they can defraud and brainwash the world .
    Their AI is scrubbing information and opinion and even words are being changed and free speech is being attacked as a weapon of takeover warfare.
    You can only hear what they want to say, as frauudent as it is, as hateful as it is, as divide and conquer that it is , and as obstructive of opinion on the same set of facts.
    Provoking mass fear and psychosis , and a fraudulent advertising campaign on killer expiermental vaccines, was deliberate and the biggest crime I have ever seen.
    The vaccines are still on the market, when Ist degree mass murderers evade justice.

    1. High Court never said “Fact checkers” determine what’s disinformation , that will be censored.

      Winston Smith (in 1984) was a “Fact checker”.

  25. Yahoo Finance
    The American Dream of homeownership is only for those with deep pockets, new data shows
    Rebecca Chen
    November 14, 2023, 11:18 am

    More first-time homebuyers returned to the market in the last year, but they had to come with bigger wads of cash.

    Between July 2022 and June 2023, first-time homebuyers made up 32% of all buyers, according to the annual report from the National Association of Realtors (NAR) profiling home buyers and sellers using data from 6,817 survey respondents. While that’s still down from the two-decade average of 36.6%, it’s up from 26% recorded the previous year, which was the lowest in the report’s history.

    The uptick in entry-level buyers doesn’t mean homeownership is back on the table for everyone. A large portion of those first-time buyers were wealthier, one of the researchers said, allowing them to circumvent the persistent affordability challenges plaguing the market.
    …
    https://finance.yahoo.com/news/the-american-dream-of-homeownership-is-only-for-those-with-deep-pockets-new-data-shows-191855031.html

    1. A HIMARS barrage of M30A1 tungsten shrapnel rocket artillery would make quick work of these cartel militants.

  27. ‘And that’s not counting all the people looking to offload the ones they previously bought, which likely brings the total percentage of trophy apartments seeking buyers closer to 50 percent’

    But it’s still a sellers market.

  28. ‘Oooh, 18-foot ceilings,’ says one broker. ‘Now it’s like, ‘Oh, you also have 18-foot ceilings’

    And getting the Honduran cleaning lady on a ladder is asking for a lawsuit.

  29. Loyal dog found alive beside hiker owner’s body two months after he went missing (11/13/2023):

    “A Colorado hiker who went missing in August was found dead last month on a rugged peak in the Rocky Mountains — but his Jack Russell terrier miraculously survived, and stayed perched next to his deceased owner’s body for months.

    Rich Moore, 71, of Pagosa Spring, Colorado, had been hiking up the 12,500-foot mountain on Aug. 19, but never returned home, according to Fox News.

    Search-and-rescue crews dropped in by helicopter and combed through the forests just below the peak, then moved toward the trailhead, where they found his car, the outlet reported.

    But they couldn’t find the man — even though they spent more than 2,000 hours searching for him, reports said.

    That was until about two weeks ago, on Oct. 30, when a hunter stumbled across Moore’s corpse more than two miles east of the summit — along with his Jack Russell terrier, Finny.

    Somehow, Finny had survived for more than two months in the wilderness — and didn’t leave his owner’s side.”

    https://nypost.com/2023/11/13/news/colorado-hiker-found-dead-after-missing-for-months-with-his-live-dog-still-by-his-side-report/

    1. “Somehow, Finny had survived for more than two months in the wilderness — and didn’t leave his owner’s side.”

      Some of us are lucky enough to have human friends like that, but not many of us.

    3. Terrier means energetic, and requires lots of attention; not the kind of dog you leave at home while working 40-hrs/wk unless you have acreage.

  30. ‘At 35 Hudson Yards, only 50 percent of the units have sold in four years’

    There are so many like this. Talked about for years like it was the new coming of baby jeebus. Cost a fortune, looked like sh$t from the get go, and sank like a turd in the well immediately and hasn’t hit bottom. REIC people don’t talk about examples like Hudson Yards much.

  31. ‘The Journal analysis found notices for 62 mezzanine loans and other high-risk loans this year through October. That is more than double the number for all of last year, and likely the highest total ever for a single year’

    It is different this time.

  32. ‘A lot of borrowers have basically said ‘I can’t hold this asset any longer, I can’t keep putting money in’

    It’s not an inability to make the payment, it’s good money after bad. This is strategic default reasoning. Sure, the market will come back some day, but not soon enough to save my arse.

    ‘And the lenders have said ‘OK, we’ll take it back’

    What’s their alternative Terri?

  33. ‘Low rates were a self-destructive party that went on for far too long. Yes, as Ms. Rogers said in her speech, consumers and investors have to prepare for a rate future that doesn’t look like the past. But we needn’t fear it. This is not bad news’

    Especially if yer finally getting actual money bank on yer savings! How many trillions of pesos would ordinary people have right now if a market rate return hadn’t been stolen from them for decades? How many bad decisions to speculate were made because returns were so low for so long?

    1. Crypto is still getting bid up tremendously, despite the eventual chash that will inevitably occur when buyers realize they have fallen for a Ponzi asset with no intrinsic worth

      2. Opinion
        Regulating crypto might end it. And that’s just fine.
        By the Editorial Board
        November 9, 2023 at 4:17 p.m. EST
        FTX founder Sam Bankman-Fried leaves a New York federal court on June 15. (Bebeto Matthews/AP)

        A jury didn’t have much trouble this month convicting cryptocurrency wunderkind Sam Bankman-Fried. Some say the conviction proved that the industry has always been little more than a combination of sham and scam. Others say his brand of criminality is just as common in traditional markets as in newfangled ones. We say, why not both?

        Crypto can seem complicated, but what SBF, as Mr. Bankman-Fried is known, did was simple. He took the money customers deposited on the FTX exchange, where they bought cryptocurrencies such as bitcoin in the hope their value would rise, and gave it to a trading firm that he also owned. The firm, Alameda Research, funneled those funds into bets — on existing crypto tokens as well as on illiquid assets that were affiliated with FTX and SBF (“Samcoins,” some called them). Oh, and some of the money went toward bankrolling political campaigns, buying Bahamas real estate for the FTX inner circle and boosting the company’s profile through celebrity endorsements.

        So is this an indictment of crypto or a testament to the ease with which fraudsters navigate the world of finance? Yes and yes.
        …
        https://www.washingtonpost.com/opinions/2023/11/09/sbf-ftx-conviction-crypto-scam/

  34. Tremendous Stress On Households Due To Toronto Home Prices – Nov 8
    Team Sessa Real Estate

    1 hour ago CANADA

    Toronto Real Estate Market Report for the week of Nov 2 – Nov 8, 2023.

    https://www.youtube.com/watch?v=qduEKD2rakc

    23 minutes. “Have they done that already, I thought I had more time” FB story at the beginning.

  35. Iran Boasts of Oil Industry Boom After Biden Sanctions Relief to Partner Venezuela

    CHRISTIAN K. CARUZO14 Nov 2023

    Iran’s state-affiliated Tasnim News Agency claimed on Tuesday that the nation’s crude oil production output reached 3.115 million barrels per day (bpd) in October.

    The continued increase in Iran’s oil production throughout 2023, and October’s surge in particular, was documented after the Biden Administration temporarily lifted oil and gas sanctions on Venezuela’s rogue socialist regime. The Venezuelan socialists are not just a key ideological ally in Iran’s fight against the United States, but an oil business partner for the Islamic regime aiding in lucrative joint business projects.

    The Iranian regime is the world’s top financial backer of terrorism and is long believed to have funneled hundreds of millions of dollars to the Sunni jihadist terror organization Hamas. The increase in profits derived from the boom in oil production output could potentially be used to further fund terrorism.

    Don’tcare
    4 hours ago
    Start checking Biden family banking records now.

    LW No Club
    5 hours ago
    Is there not one thing the Bidenettes won’t do to infect the presidency with outright betrayals on every level?

    Greg Ashley
    4 hours ago
    The Iranian Government doesn’t worry about Climate Change because they don’t have to.

    Avatar
    Lemmings Hotline Greg Ashley
    4 hours ago
    Greta is mysteriously quiet about their “climate apathy “

    https://www.breitbart.com/middle-east/2023/11/14/iran-boasts-of-oil-industry-boom-after-biden-sanctions-relief-to-partner-venezuela/

  36. Biden’s America: Illegals Fleeing Inhospitable Chicago BACK to Venezuela

    by Adan Salazar
    November 14th 2023, 3:14 pm

    Illegal immigrants who journeyed hundreds of miles from Central America through Mexico to come to the US are finding out winters in Chicago suck, prompting many to consider returning to their home countries.

    Speaking to the Chicago Tribune, some Venezuelan nationals commented they were bamboozled by promises of a better life in the US, only to realize the harsh realities of Biden’s America.

    “The American Dream doesn’t exist anymore,” said Venezuelan migrant Michael Castejon, who spoke from a blanket on a bare floor inside a Chicago police station.

    “There’s nothing here for us,” he told the Tribune, as he headed off back to his country of origin.

    The Tribune reports despite hopes of a better education for his stepdaughter, they were unable to enroll her in school even though this was a primary motivation for leaving Venezuela in the first place.

    “How many more months of living in the streets will it take? No, no more. It’s better that I leave. At least I have my mother back home,” Castejon angrily told the Tribune.

    “We just want to be home,” he added. “If we’re going to be sleeping in the streets here, we’d rather be sleeping in the streets over there.”

    https://www.infowars.com/posts/bidens-america-illegals-fleeing-inhospitable-chicago-back-to-venezuela/

    1. “The American Dream doesn’t exist anymore,”

      Translation: I wanted to join the Free Sh!t Army, and they told me it’s full.

    1. Female FDIC workers claim they were pressured to drink, sent photos of male colleagues’ genitals: WSJ
      By Social Links for Shannon Thaler
      Published Nov. 13, 2023, 4:23 p.m. ET

      Bank regulator the Federal Deposit Insurance Corp. was a toxic cesspool of misogyny that didn’t punish male supervisors for vile acts that included sending female co-workers photos of their genitals and having sex with underlings, according to a bombshell investigation released Monday.

      The agency has been slow to discipline sexism in the workplace in the years following the #MeToo movement — perhaps because the agency is the worst offender, the Wall Street Journal reported Monday following a lengthy probe.
      …
      https://nypost.com/2023/11/13/business/female-fdic-workers-describe-sexual-harassment-in-the-workplace-wsj/

    2. ‘No country for creepy old men’: FDIC chief grilled over sex, nude pix at agency
      By Social Links for Shannon Thaler
      Published Nov. 14, 2023, 4:43 p.m. ET

      The embattled head of the Federal Deposit Insurance Corp. was grilled on Capitol Hill on Tuesday — one day after a bombshell investigation revealed the banking regulator has long been a toxic cesspool of misogyny.

      FDIC Chairman Martin Gruenberg, who appeared at a Capitol Hill oversight hearing with other top financial regulators, told the Senate Banking Committee he was personally distraught after the Wall Street Journal’s report on Monday and committed to providing a safe working environment for staff.
      …
      https://nypost.com/2023/11/14/business/fdics-martin-gruenberg-grilled-over-sex-nude-pix-at-agency/

  40. Rates & Bonds
    U.S. Treasury yields have peaked, say strategists for fourth straight month
    By Sarupya Ganguly
    November 14, 2023 3:52 AM PST
    Updated 20 hours ago
    Illustration shows U.S. Dollar banknotes
    U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration Acquire Licensing Rights
    Reuters poll graphic on U.S. 10-year Treasury yield forecasts:
    BENGALURU, Nov 14

    (Reuters) – U.S. Treasury yields will fall in coming months, though not as sharply as forecast previously, according to bond strategists polled by Reuters, who said for a fourth month running in even greater numbers that the 10-year note yield had peaked.

    Those yield forecast upgrades came after news earlier this month of a ‘blowout’ third quarter for the U.S. economy and signs from Federal Reserve officials they will not be cutting the federal funds rate anytime soon.

    The benchmark 10-year Treasury note yield breached the 5% mark last month for the first time since July 2007, more than a full percentage point above its August low of 3.96%.

    Yields on 10-year notes have plunged since early October, in part on safe-haven buying on concerns the war Israel launched against Hamas after the Islamist Palestinian group’s Oct. 7 rampage into southern Israel could escalate.

    Analysts and bond strategists in a Nov. 8-14 Reuters poll, mostly from sell-side firms, stuck to forecasts of declining yields, albeit less sharply than in polls conducted over the past three months.

    The 10-year note yield was forecast to fall 10 basis points to 4.52%, from 4.62% currently, in three months according to the median of 44 strategists, only a fraction of the near-40 basis points falls over a rolling three-month time period in October and September surveys.

    “I think 5% is an important psychological level that brings in buyers, and we could drift through that in response to perky inflation or strong labor market data,” said Thomas Simons, senior economist at Jefferies.

    “However, I expect the data will take a turn for the worse by January, and more rate cuts will start to be priced in to the market, driving yields lower overall.”

    The yield was expected to fall to 4.30% by end-April and to 4.00% a year from now, the poll found.

    Notably, roughly one-third of respondents expected the yield to tread higher than current levels by end-January, with several big banks on Wall Street changing their views to forecast elevated yields in the near-term.

    Yet, when asked whether the 10-year note yield had peaked in the current cycle, an overwhelming 94% majority of respondents, 30 of 32, said it had.

    Forecasters were proved incorrect within days of predicting the very same thing in the three previous monthly Reuters polls.

    “Why the bond market has been wrong a lot is because they thought the Fed would cut rates pretty aggressively. But, we need to see a hard landing for rates to fall significantly,” said Mike Sanders, head of fixed income at Madison Investments.
    …
    https://www.reuters.com/markets/rates-bonds/us-treasury-yields-have-peaked-say-strategists-fourth-straight-month-2023-11-14/

    1. Financial Times
      56 minutes ago
      UK house prices chalk up first annual fall since 2012
      Valentina Romei in London

      The official measure of UK house prices declined year on year for the first time in more than a decade, while rental costs rose at a record pace as high borrowing costs hit the property market.

      Average UK house prices decreased by 0.1 per cent in September compared with the same month last year, down from a 0.8 per cent expansion in the previous month and the first annual drop since April 2012, data published by the Office for National Statistics showed on Wednesday.

      The ONS also reported that private rental prices paid by tenants in the UK rose by 6.1 per cent year on year in October, more than the 5.7 per cent recorded in September and the fastest rate since the UK data series began in January 2016.

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