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Housing Bubble Predictions For 2024

What are your predictions for the housing bubble in 2024? Six months ago, “1) Global residential real estate (RRE): It’s a big fat ugly bubble.
2) U.S. RRE: It’s also a big fat ugly bubble; a microcosm of the global one. The U.S. central bank, the Fed, is doing stealth QE already. There are many components of liquidity and stimulus: RRP, BTFP, TGA, Fed acct. losses, GSEs, etc. In a normal world, asset bubbles always burst. The Fed is trying to prevent the collapse of “The Everything Bubble” that they purposefully inflated. If it bursts, then we have some amount of deflation and falling prices. Deflation is kryponite to the Fed. They want to steal your $ via inflation. We’ll see what wins out here. In any case, the outcome won’t be nice. U.S. commercial real estate (CRE), is currently a smoldering dumpster fire that everyone is ignoring. This should turn out OK. /s
3) Central banks are out of control and are, along with complicit governments, the direct cause of asset bubbles via easy (fiat) money.
4) Governments are swinging left and embracing Socialism and the globalist agenda.
5) The Great Reset involves continued wealth transfer from everyone else to the elite class. The end game here is CBDCs. Think 666 and you won’t be far wrong. The collapse of “The Everything Bubble,” ushers in the New World Order.
7) Of course I could be wrong (hope so). Have a nice day 🙂”

One year ago, “With inflation well above the Fed’s target level of 2%, it will continue raising interest rates into 2023 and beyond, while ignoring the crescendo swell of wailing and gnashing of teeth by Wall Street’s risk asset HODLers.”

The Arizona Republic. “Higher mortgage rates put the brakes on metro Phoenix’s frenzied housing market in mid-2022, but rates started dipping in December. Last month’s sales pace was the third lowest for a November during the past two decades. There were only fewer home sales during the month in the housing crash years of 2007 and 2008. Market watchers think if 30-year mortgage rates drop between 6.5% and 6% that could be the sweet spot for homebuyers. ‘The housing market will start back up in January,’ said Tina Tamboer, senior housing analyst with The Cromford Report about metro Phoenix. ‘Not only are buyers on the fence, but so are sellers who have low mortgage rates.'”

The San Gabriel Valley Tribune. “Let me make one prediction about California’s housing market in 2024. The number of purchases will increase. Could sales go any lower after crashing into history’s basement this year? The 259,100 pace of existing single-family home sales in 2023 broke the previous bottom of 290,500 in 2007 as that bubble burst into the Great Recession. Consider that 2023’s homebuying crash was the result of a 42%, two-year drop in sales. The main culprit was the Federal Reserve, which rapidly boosted mortgage rates from historic lows to battle pesky inflation. And dare I mention that amid the homebuying’s steep descent of 2005-07, California prices also rose 5%? That bubble-bursting era’s price implosion of 50% came in 2008-09.”

Hoodline in California. “The volatile housing market in the Bay Area continues to stir debate among experts, with Zillow projecting a steep decline in home values for San Jose over the next year, while local real estate agents maintain bullish expectations. The San Francisco Chronicle reports that Zillow sees the average home value in the San Jose metro area, which includes locales such as Palo Alto and San Benito County, to tumble from $1.46 million in November 2023 to $1.37 million by November 2024, predicting the most significant drop across the country’s major metros at 6.1%.”

“Meanwhile, San Francisco’s real estate landscape doesn’t look much rosier according to Zillow data, with average home values there falling 6.4% to $1,234,246 over the past year and houses going to pending in about 23 days, as shown by a Zillow listing.”

The Dallas Morning News in Texas. “2023 was the worst year for the commercial property industry since the Great Recession, with debt costs doubling and lenders slamming the window on loans for many purchases and new construction. ‘The tone in July was pretty optimistic,’ said Andrew Alperstein, a real estate partner with PwC. ‘By the time we got to September it had turned pretty pessimistic. I think it’s going to be an interesting early 2024.’ The biggest price declines so far have been for D-FW office buildings. ‘We expect asset prices to continue to slide into 2024 due to repricing due to the fastest rate hike in 40 years,’ said Bill Kitchens, director of market analytics at CoStar Group. ‘Office assets will lead price declines in Dallas-Fort Worth. We expect pricing to be down 13% from today to the end of 2024,’ he said. ‘From peak pricing in 2022 to the expected trough, we expect pricing to be down 24%.'”

From Fortune. “Sooner or later, commercial real estate’s day of reckoning had to come. Following an era of ‘cheap money’ that stretched all the way back to the 2008 housing crash and Great Financial Crisis, fueling an ‘everything bubble’ that coincided with an age of ‘superstar cities’ and their mega-valuable office buildings, the higher interest rates of 2023 were a shock. Research firm Capital Economics estimates a $590 billion loss in commercial real estate property values this year. But just how bad will things get in the new year? Capital Economics, for its part, predicts another $480 billion wipeout in commercial real estate values next year, and another $120 billion loss in 2025, for a 24% peak-to-trough value decline.”

“‘A lot of what’s going to drive next year is just continued maturities,’ or debt coming due at a time when refinancing isn’t so cheap, said Kevin Fagan, head of commercial real estate analysis at Moody’s Analytics. ‘It’s going to be a rough year for office next year…the maturities that are coming through, we’re seeing about 75% of them are going to be in trouble,’ Fagan said. He said they will likely have low revenue (in the form of rents) relative to their loan amount, among other factors that lenders find undesirable, and will be hard to refinance for borrowers without putting a lot more equity in. ‘It’s going to be a pretty bloody headline year,’ Fagan said.”

Yale Insights. “‘We’ve had a change, perhaps a permanent change, in the usage of space,’ said Yale SOM’s Andrew Metrick. Swipe card data show about half as many people coming into offices as pre-pandemic. ‘There ain’t no way we’re going to keep the same amount of commercial real estate if that stays steady,’ he explained, adding that estimates have office building valuations down about 30%. With the failures of Signature Bank and First Republic Bank following Silicon Valley Bank’s collapse, according to all the technical definitions, we had a banking crisis in 2023. It wasn’t terrible as crises go, but ‘it happened outside of a recession, which is really, really rare,’ Metrick said. The driver wasn’t banks’ credit losses, but the runup in interest rates as the Federal Reserve tried to end inflation. ‘In the United States, we’ve never had interest rates go from zero to 5%,’ he added. ‘We’ve had larger increases in interest rates, but they were starting with a higher base.'”

“‘Historically, for every one percentage point increase in the policy rate from the Fed, banks take 1% hits to their capital over the next eight quarters,’ Metrick said. That’s a tradeoff policy makers are willing to make to cool the economy, but ‘if banks lose 5% of their capital, there are going to be a lot of banks in trouble,’ he warned. Awareness of the past pattern has banks nervous. As a result, they will be cautious lending to the owners of commercial real estate while interest rates stay high and, Metrick explained, ‘we have this structural adjustment that we pretty much know is coming.'”

The Toronto Sun in Canada. “How many of us are counting down the days until we can turn a new page and leave 2023 in the past? This year has been a rollercoaster – and not the fun kind. But as the year winds down it feels like there may be some cautious optimism out there, particularly in the real estate market, an arena still recovering from the bends of the high highs and low lows served up though the pandemic to today.Already we have narratives being spun that we are about to witness the market ignite once again. The central assumption seeming to be that while these elevated rates have been horrendous for affordability, the real problem has been consumer confidence in a falling market.”

“Even if one could comfortably swing the payment on a prospective property, the idea that they could be catching a falling knife with a market in free fall doesn’t do much to motivate a buyer. Instead, the boosters insist, the bottom is in – smart to get out there before competition returns and prices shoot up again. I don’t like making predictions, particularly in a format that may well exist on the interwebs in perpetuity. Too much is at play. And these past 18-months have shown us exactly what the stakes are. 2024 be kind.”

Business Insider. “China’s economy has yet to fully bounce back from its stringent lockdowns of the pandemic. And according to the Conference Board’s China Center for Economics and Business, the growth struggle will continue into 2024. What looked like a demand-fueled rebound in the first quarter of 2023 later fizzled as indebted real estate giants like Evergrande and Country Garden flailed, aging demographics and soaring youth unemployment weakened the labor market, and the country tipped into deflation.”

“‘The downturn is structural, and likely to be permanent,’ the Conference Board said. ‘Chinese households have lost confidence in property as a channel for wealth accumulation. It is hard to predict when the sector will stabilize; but, when it does, it won’t go back to being such a key growth driver as in previous decades.'”

This Post Has 105 Comments
  1. ‘The tone in July was pretty optimistic,’ said Andrew Alperstein, a real estate partner with PwC. ‘By the time we got to September it had turned pretty pessimistic’

    I hope no one overpaid in that bout of optimism Andy.

  2. ‘The housing market will start back up in January’

    Yer really going out on a limb there Tina, considering November/December is always hibernation in that giant sh$thole.

    1. Pshaw with yer naysaying, Ben “Alex” Jones. Suzanne’s research confirms that the Spring Miracle Revival is baked in the cake. So step right up to BTFD, FBs!

  3. Not sure what percentage of homeowners, own their homes free and clear, it’s higher then you may think, In canada ,even with their crazy property bubble , it’s almost 40%…
    Being a slave to the Banker and his tricks , means you never really own anything, it’s all in the hazy future…We’re fortunate to be among that number, own it all , but it didn’t happen overnight, i assure you…

    1. It depends on who you include in that 40%. If you include the investors who buy homes for cash to rent out, that figure might be higher than 40%. If you’re talking about end-consumers who lived long enough and well enough to burn a mortgage, 40% seems high. Either way, that 40% will decline like mad in the next 5 years. Investors are ditching homes because there’s no appreciation and nobody can afford the rents. And the older folk are going to either sell out and have fun fun fun, sell out and spend the proceeds at the nursing home, or die and leave a decrepit Rust-Belt house to their kids, who will offload the thing in a week.

  4. This will spill over into housing, and none of it in a good way, but yes housing related:

    The acceleration of the weaponization of “climate change” to make everything about your housing more expensive, less comfortable, less convenient. Too many examples to list them all, but the primary one is the push to ban natural gas.

    And the intention of all of this is to make you less free.

    1. Related article.

      And yes, most of this was the result of arson.

      NPR — Wildfire smoke this year woke up places unaccustomed to its effects. Now what? (12/29/2023):

      “This summer, millions of people across the eastern U.S. woke up one June morning to apocalyptic orange skies and thick, choking wildfire smoke.

      Over the summer, massive Canadian wildfires blanketed central and eastern North America with smoke that lingered on and off for months, sending hundreds of people to the hospital. The unprecedented smoke, which showed up in parts of the country where it had never before been a problem, highlighted the growing and inescapable health risks from climate-related issues. And it showed how far many places have to go to help people protect themselves from the risks.

      “We all out here [in the West] have been keenly aware of wildfires for some time now,” says Scott Fendorf, a geoscientist at Stanford University, who is based in California. But this year, he says, that awareness spread to people in the middle of the country and the East Coast. “They really understood what we’re facing now–and that they’re not spared from it either.”

      Controlled burns, Fendorf says, could help reduce the extra burnable material in forests, making explosive wildfires less likely. “If we’re really controlling severity, fire severity by doing control burns, that could end up being a huge bonus in terms of our health ramifications,” he says.”

      And the article’s predictable conclusion:

      “The other key strategy, he says, is stopping another intensifier of wildfires: human-caused climate change.”

      The lifestyles of the rich, the Parasite Class, will not change. Only yours will. And if they get their way, all of this ends with your enslavement.

    2. Related article.

      The Guardian (via Archive) — Climate scientists hail 2023 as ‘beginning of the end’ for fossil fuel era (12/30/2023):

      “Global efforts to slow a runaway climate catastrophe may have reached a critical milestone in the last year with the peak of global carbon emissions from energy use, according to experts.

      A growing number of climate analysts believe that 2023 may be recorded as the year in which annual emissions reached a pinnacle before the global fossil fuel economy begins a terminal decline.

      The milestone is considered a crucial tipping point in the race to drive emissions to net zero. But for many climate experts it’s an inflexion point that was due years ago and which, although encouraging, falls far short of the rapid reduction the world needs.”

      And a reminder that after the Bolsheviks overthrew the Czar, they moved into his royal palace and dined on his gold china. You think it’ll be any different this time? Because it won’t.

    3. “..but the primary one is the push to ban natural gas…”

      California has now banned the use of Natural Gas in all new construction.

      Eventually, they will come after existing construction.

      (Guess they must be upset about that pot of hot tea I make every morning before reading the HBB).

      How ironic, there are so many natural sources of methane, including decaying vegetation, volcano outgassing and so forth. Mother nature is a methane producing machine.

      Here’s a puzzler: So much has been made about cattle farting methane. So lets go back in time a few hundred years when tens of millions of buffalo roamed the west. Did farting buffalo (who, BTW are *much* larger than typical cattle), bring the world to an end? Just Sayin’

      1. “Mother nature is a methane producing machine.”

        On a foggy day those steamy Central Valley feedlots can get pretty ripe lowering the IQ of the workers there.

  5. As though commercial real estate didn’t aalreaady have enough problems, bricks&mortar retail outlets facing grab’n go shoppers may have an increasingly difficult time competing with Amazon and the likes, whose virtual store security issues may be less expensive to address than shoplifting in an era when it is culturally acceptable, unpoliced, and almost legal.

    This could lead to many more retail store closures, lost work opportunities, elimination of local physical shopping for those without good credit and internet access, charges of redlining, etc. And the real estate may sit vacant or go on fire sale without retail tenants.

    1. CRIMINAL IMPACT ‘Stores will close,’ Walmart’s CEO confirms after retail bloodbath in 2023 saw major retailers shut up 3,000 locations
      Some retail giants have cited theft as a top reason for closures
      Jacob Willeford
      Published: 11:27 ET, Dec 27 2023
      Updated: 8:37 ET, Dec 28 2023

      WALMART CEO Doug McMillon has predicted a retail bloodbath this year that saw several companies close nearly 3,000 locations.

      In December 2022, McMillon noted that theft rates at Walmart alone were “higher than what it has historically been” and called it a significant “issue” facing the industry.

    2. “…increasingly difficult time competing with Amazon and the likes…”

      Another big issue (at least here in SoCal) traffic congestion and parking.

      In Orange County, driving / parking to practically anywhere has devolved into battlefield conditions. People are mad and stressed out even before they enter the storefront. (Never mind dodging parking lot motorists texting while searching for a parking spot, panhandlers and the homeless). Not like this even 5 years ago.

      Nowadays, I can get anything I need via Amazon, Ebay, etc. One exception is groceries but prices are so high it almost doesn’t matter anymore.

      1. Yes. One of the best benefits of the pandemic was the disappearance of traffic from SoCal roadways. I had driving times around LA that I don’t expect to enjoy again until the next pandemic.

  6. “Let me make one prediction about California’s housing market in 2024. The number of purchases will increase.”

    Let me make another prediction: As sales increase, prices will continue to fall. There are only so many rich investors out there with buckets of money and boxes of stupid who are willing and able to pay peak 2022 prices in a 6%+ mortgage rate environment. As market breadth increases, so will the number of credit-constrained buyers unable to pay pandemic stimulus era wishing prices. And investors who are not owner-occupants may tire of HODLing falling knife investment properties, leading them to dump inventory, adding downward price pressure on the supply side. The Fed won’t be able to lower rates much without reigniting inflation, so you can expect higher for longer rates to continue.

    If you want to see where all of this leads, I suggest reading some articles about the real estate situations in Germany and China, which I will try to keep posting here for your convenience.

    1. German housing prices at record low
      Residential property prices fell by 9.9% year-on-year, the steepest decline since the start of data collection in 2000, the federal statistics office said on Friday.
      By Reuters
      Published on 22/09/2023 – 15:23•
      Updated 10/10/2023 – 10:01
      The sun sets behind the coal-fired power plant Scholven of the Uniper energy company in Gelsenkirchen, Germany
      AP Photo/Martin Meissner

      Residential property prices in Germany have fallen by their steepest decline since data collection began in 2000, with larger cities seeing harsher drops.

      German housing prices fell by the most since records began in the second quarter as high interest rates and rising materials costs took their toll on the property market in Europe’s largest economy, according to government data.

      Residential property prices fell by 9.9% year-on-year, the steepest decline since the start of data collection in 2000, the federal statistics office said on Friday.
      Prices fell by 1.5% on the quarter, with steeper declines in larger cities than in more sparsely populated areas.

    2. China Economy
      China’s big property market problem will take at least 4 to 6 years to resolve
      Published Wed, Dec 6 2023 7:23 PM EST
      Evelyn Cheng

      Key Points

      – China has a big problem within real estate that will take at least four to six years to resolve, according to analysis from Oxford Economics Lead Economist Louise Loo.

      – “However one slices the data, the existing excess supply in the market is likely to take at least another four years to unwind, absent a meaningful pickup in demand,” Loo said in a report Tuesday.

      – On the extreme end, residential construction in the relatively poor province of Guizhou could take well over 20 years to complete, Loo said in an email, while it will likely take at least ten years in several other provinces such as Jiangxi and Hebei.

  7. The state of amerika:

    Could not stand or walk for prolonged periods’

    they really put one over on this generation a “democracy defenders” tee shirt,,,huh?

    Shenna Bellows is the Secretary of State for Maine. Bellows issued a decision on December 28 denying former President Donald Trump ballot access in that state.

  8. Since Ben has kindly proposed this predictions thread, here is my
    stopped clock recession prediction from a couple of days back:

    Was recession permanently avoided in 2023, or merely postponed?

    I predict the debate will continue until at least one of these three doors is entered:

    1) recession begins
    2) inflation drops below 2%
    3) the Treasury yield curve normalizes

    1. I am enjoying 5% on uninvested cash in my Fidelity money market (SPAXX) and just opened a 15 month CD at Credit Union of Colorado at 5.25% APY. Haven’t had rates like this since 2008 with now-defunct AmTrust Bank.

      And the Wall Street pig men want to take that all away to get their 0% play money back to enrich themselves at the expense of people who actually work and produce (they produce nothing).

      1. 5.25% CD interest is well below the rate of true inflation. I’d rather trade my debauched Yellen Bux for physical precious metals and life’s essentials while I can still get them.

    2. The counter narrative to ‘soft landing’ is ‘short, mild recession.’ Anything beyond that, and it’s ‘nobody could have seen it coming,’ and panic among risk asset HODLerz.

      1. The Fed will lower interest rates under 3% as a mild recession leads to a ‘soggy 2024,’ UBS chief economist says
        Filip De Mott
        Dec 30, 2023, 5:30 AM PST
        In this photo taken while zooming with a slow shutter speed Federal Reserve Board Chair Jerome Powell speaks during a news conference about the Federal Reserve’s monetary policy at the Federal Reserve, Wednesday, Dec. 13, 2023, in Washington.
        Alex Brandon/AP Photo

        – The Fed will cut interest rates below 3% by next December, UBS chief US economist Jonathan Pingle said.

        – Cuts will start in March and accelerate in the second half of the year, he told CNBC on Friday.

        – “We think we’re going to end up with a relatively soggy 2024 when we look back at the end of next year.”

        The Federal Reserve will likely bring interest rates below 3% by next December, as a pullback in consumer spending will trigger a mild recession in 2024, UBS chief US economist Jonathan Pingle told CNBC on Friday.

        This would imply more than 225 basis points in cuts, representing a much deeper Fed pivot than many on Wall Street expect, with markets pricing in about 150-175 points by the end of 2024.

        It also goes well beyond the central bank’s own projections of 75 basis points in cuts next year, which would lower the fed funds rate to 4.50%-4.75% from 5.25%-5.50% now.

        Pingle expects the Fed’s easing cycle to start with a quarter-point cut in March, followed by similar cuts in May and June to keep pace with cooling inflation.

        “We see the economy slowing and then the Fed picking up the pace in the second half of the year, taking rates below 3% at the December meeting,” he predicted.

        By the middle of 2024, Pingle sees the economy slowing, sending the inflation rate close to the Fed’s 2% target and allowing central bankers to ease more rapidly to “prevent worst-case economic scenarios from unfolding.”

        Still, his baseline outlook assumes a mild recession, largely due to consumer spending finally losing momentum, he explained.

        Through 2023, consumers drove economic resiliency due to wealth effects, high savings, and help from household re-leveraging. While fiscal support also boosted balance sheets, these forces will provide less support deeper into 2024, he added.

        This will lead to a broader growth decline, as industrial sectors won’t see much expansion without help from consumer spending.

        “We think we’re going to end up with a relatively soggy 2024 when we look back at the end of next year,” Pingle said.

    3. Yahoo Finance
      JPMorgan warns of ‘catch-22 situation’ for stocks next year
      Mariela Rosales and Brad Smith
      December 11, 2023
      In this article:

      JPMorgan (JPM) is warning investors of a ‘catch-22 situation’ for U.S. stocks next year. JPMorgan Chief Market Strategist Marko Kolanovic said, “This is a catch-22 situation… This would imply that we would need to first see some market declines and volatility during 2024 before easing of monetary conditions and a more sustainable rally.”

  9. Because Biden wants to be re elected the democrats will pressure the FED to lower interest rates. I predict the stock market will continue to make gains for a few months and they will fake inflation numbers. Second half of 2024 IDK but I think 2025 will be bad.

    2024 Sell in May and go away.

    1. I don’t think they can fake grocery or gas prices. We might limp through 2024, but you’re right that 2025 will be the hard landing.

    2. It’s hard to say. On one hand it would make sense for the Dems to prop everything up with tape and bailing wire until the election. On the other hand, they have no intention of stopping the invasion, which will make things worse.

    3. I predicr the Fed will remain politically tone deaf to anything Biden may want.

      They won’t deliberately crash the economy, but also will not risk reigniting inflation and replaying the 1970s era of double digit inflation to improve Biden’s reelection prospects.
      Remember, Powell read Volcker’s book. He could find a much worse historic role model.

      However, Biden has nothing to fear, because…soft landing!

      1. Finance and economics | A spotter’s guide
        Will America manage a soft landing in 2024?
        Policymakers rarely bring down inflation without a recession. This time they might
        The sun rises behind the skyline of lower Manhattan and One World Trade Center in New York City.
        image: Getty Images
        Dec 29th 2023

        Could 2024 be a year unlike any in America’s post-war economic history? Never since 1945 has annual inflation, measured by the consumer-price index, fallen from above 5% to below 3% without a recession at the time of the fall or within the subsequent 18 months.

        Yet professional forecasters surveyed by the Federal Reserve Bank of Philadelphia say that at the end of 2024 headline annual inflation will be 2.5%, whereas real GDP will grow by 1.7% over the course of the year—roughly in line with its long-term trend. Financial markets are rejoicing at the prospect of such a “soft landing”.

      2. I wonder if the Brandon regime will resort to taxpayer bribes. Like temporarily suspending Social Security contributions, new stimmie checks, etc. Not sure if they can do that with just an executive order or if Congress will have to pass bills. Of course, if the House says no, then Brandon can accuse them of being mean and not caring.

        And speaking of that, where is Joetato getting all the money to fly the invaders around the country and for those $5000 gift cards? Was that tucked away in the “Inflation” act?

      3. However, Biden has nothing to fear, because…

        Biden has dementia and won’t remember what happened yesterday let alone understand what is going on today.

  10. Not housing but 2024 specific news.

    Westword — Colorado’s Single-Use Plastic Bag Ban: What to Know (and Use) in 2024 (12/29/2023):

    “Starting January 1, retail stores in Colorado are banned from giving customers single-use plastic bags to hold their purchases, including bags at supermarkets, liquor stores, clothing shops and even pharmacies. Affected businesses have until June 1 to use up their existing inventory of plastic bags, but they cannot buy any more — and some stores have already run out before the New Year.

    This is all because of a state law passed in 2021 intended to mitigate the impact that plastic pollution has on Colorado’s environment. The law rolled out gradually, establishing ten-cent fees on plastic bags at the beginning of 2023 and now banning them altogether.

    Small stores that only operate in Colorado and have three or fewer locations are exempt from the ban on single-use plastic bags, which also doesn’t apply to small plastic bags that are used to hold specific items like prescription medication in pharmacies or produce and meat in grocery stores.”

    ^ That last paragraph is how I get my trash bags. Buy a single apple, banana, sprig of broccoli each in its own plastic produce bag, carry them out of the store in the re-usable bag, then I have bags for a week.

    Warmist control freaks = FAIL

    1. We’re getting the same thing here in Maryland. Anne Arundel County and Prince George’s County are both banning plastic bags. They’re still allowing the thin plastic produce bags.

      I was in Wal-Mart in Anne Arundel County yesterday, and all the plastic bags had been removed. They were making people buy $1 reusable bags at checkout. Everybody was caught off guard for sure.

      But IMO if they really want to be environmentally friendly, they need to charge a deposit for plastic water bottles. But even then I think people would just pay the money and toss the things into the river.

      1. But IMO if they really want to be environmentally friendly, they need to charge a deposit for plastic water bottles

        Why does it matter if they don’t really get recycled anyway? Most “recycling” is just a feel-good measure these days — it all ends up in the trash, or worse, in the ocean.

        Did a quick search to back up my statement’s an NPR article:

        1. Even with or without recycling, it’s still difficult for me to watch people — largely immigrants — at Costco and Wal-Mart loading carts with cases and cases of bottled water. Maybe we should educate our immigrants that our tap water is safe to drink, and can be filtered through a Brita or even a Berkey if they are so inclined.

          Admittedly, I do buy some bottled water, but that’s for either car travel or prepper stock. 75% of the time I just filter tap water. That would really cut down on the plastic bottles.

          Meanwhile, I’ve taken a liking to those Bubly and St. Croix waters. They come in aluminum cans, which do recycle extremely well.

    2. Amazon sells those bags in boxes of 100 or more. I’ve thought about buying one and taking the box to the store and tell the bagger to use them

  11. Ferocious Firefight Between Mexican Military and Cartel at US Border
    by Dan Lyman

    December 30th 2023, 9:53 am

    A fierce gun battle between Mexican soldiers and cartel operatives erupted at the southern border this week, according to reports.

    On Friday at around 4 p.m., Mexican forces reportedly confronted armed criminals in the town of Sonoyta, just half a mile from the port of entry in Lukeville, Arizona, one of the busiest human smuggling and illegal migration corridors in the worl

    Sonoran authorities provided an update on Friday night, saying, “Five detainees, tactical equipment, weapons and 13 vehicles seized after an operation against criminal groups in Sonoyta.”

    “At this moment, an operation coordinated by SEDENA, National Guard, State Police, AMIC and Municipal Police is active to preserve the tranquility of the inhabitants of the area.”

    John Fabbricatore

    Longer video of the gun fight between the cartel and GOM in Sonoyta MX, about half mile southwest of the Lukeville Port of Entry. Video is about 3 minutes long.

    1. How pricey is the stock market now? Just compare it with the January 2022 bull-market high.
      Last Updated: Dec. 30, 2023 at 5:44 a.m. ET
      First Published: Dec. 28, 2023 at 7:10 a.m. ET
      By Mark Hulbert
      U.S. stocks today are more expensive than at almost any other time
      [Photo of a bull in a china shop]

      The U.S. stock market is a better value today than it was at the bull-market peak in early January 2022.

      This is timely information because the stock market is now trading at, or slightly above, the levels it reached then. One of the hoped-for benefits of a bear market is that it will work off the valuation extremes that existed at the end of the immediately preceding bull market, and by so doing creating the valuation foundation that enables stocks to surpass their previous peaks and rise to significant new highs.

      1. I’ve seen two black swan events in the past 5 years. The first was COVID evolving from Delta into Omicron (not COVID itself), and the second was Elon Musk buying Twitter.

          1. I can’t agree. A black swan is unpredictable, and a global pandemic has been predicted for decades, which is precisely why there was such a response. What was not predicted was the sudden lessening of severity.

            And I don’t think anyone predicted that Elon Musk would disrupt the media monopoly.

          2. Never mind that COVID was a bioweapon and the genetic juices are genocidal molecular weapons of mass destruction.

    2. Rates & Bonds
      Biggest two-month rally in decades rescues beaten-up bond markets
      By Harry Robertson
      December 29, 2023 2:46 AM PST
      Updated a day ago
      U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

      LONDON, Dec 28 (Reuters) – A huge two-month rally in bond prices, powered by expectations that central banks will soon be cutting interest rates, has rescued fixed income markets from an almost unheard-of third straight year of declines.

      The U.S. 10-year Treasury yield , the benchmark for borrowing costs globally, has dropped 46 basis points (bps) in December after falling 53 bps in November. Its two-month fall is the biggest since 2008, when the Federal Reserve was slashing rates during the global financial crisis.

      ICE BofA’s global broad bond market index, which includes government and corporate debt, has rallied roughly 7% over the last two months – its strongest eight-week period on record, according to LSEG data which goes back to 1997.

      The sharp drop in yields, which move inversely to prices, has eased pressure on companies and households as well as housing markets and governments that in October faced the steepest borrowing costs in more than a decade.

      It has also been a balm for highly indebted countries such as Italy, where bond yields are poised for their biggest monthly fall since 2013.


      Central bankers abruptly changed their tone on inflation in December, fuelling investors’ rate-cut bets. That followed a blockbuster November, when data showed U.S. and European inflation falling much faster than expected.

      “We were surprised by the strength of this rally,” said Oliver Eichmann, head of rates fixed income EMEA at asset manager DWS.

      The Fed’s Christopher Waller and the European Central Bank’s Isabel Schnabel, both previously renowned monetary policy hawks, softened their language in December and acknowledged – in Schnabel’s words – a “remarkable” fall in inflation.

      The Fed triggered fresh market euphoria when it used its December meeting to say that rate hikes were over. Fed Chair Jerome Powell notably declined to push back against market bets on deep cuts next year, although the Fed’s “dot plot” envisaged three 25 bp cuts in 2024, compared to the more than 150 bps priced in by markets.

      “That was a surprise,” said Jamie Niven, bond portfolio manager at asset manager Candriam. “And it does leave you with the question, what are they seeing that maybe the market isn’t?”

    1. Stock Market Rally Looks Strong Into 2024: Nvidia Sets Up After Monster Run; Tesla Deliveries Due
      ED CARSON 10:06 AM ET 12/30/2023

      Dow Jones futures will open Monday evening, along with S&P 500 futures and Nasdaq futures, following the New Year holiday weekend. Tesla deliveries are expected before Tuesday’s open, along with figures from key EV rivals.

      The stock market is in strong shape to start 2024 after the Nasdaq’s best performance in 20 years. A strong market rally has been in force since the end of October, with the major indexes on a nine-week win streak. The S&P 500 is just below all-time highs.

  12. ‘Chinese households have lost confidence in property as a channel for wealth accumulation.

    By extension, they’ve also lost confidence in the CCP’s stewardship of the economy. Meanwhile, the bag holders who pre-paid for 1.5M skyboxes that will probably never be handed over to buyers are going to be stamping their little feet to no avail. Gosh, I hope none of them take out their rage on the CCP Comrades of Proven Worth.

    1. take out their rage on the CCP Comrades

      How and with what? They don’t have any weapons or even a ballot box. If they even say anything amiss their money gets shut off. At most, they can Lie Flat and not have any children.

        1. Financial Times
          Opinion Lex
          Predictions: China’s record-low births will leave a global mark
          A longer-term economic impact comes from a shrinking labour force
          A group of Chinese parents help their babies exercise
          Since China’s ‘one child’ policy was scrapped in 2016 births have declined 50%
          December 28 2023

          Just three years ago, economists had predicted China would overtake the US economy by the end of the decade. Now, that looks unlikely. But it will not be the current real estate crisis that stands in the way. A record-low birth rate is the country’s biggest obstacle.

          China’s fertility rate is estimated to have touched a record low of 1.09 last year. Births were below 10mn for the first time. This year, expect a third straight year of decline with births a tenth lower to well below 9mn.

          It is a vicious cycle. An economic slowdown should mean young couples delay having children. The resulting decline in fertility rates eventually pushes the economy’s productivity rates lower.

          On current estimates the population rank in the world will fall precipitously. In 1990, China had over a fifth of the world’s people according to UN data. But sometime in 2050s that proportion will have fallen to just over half that proportion, less than that of high income nations. By the end of the century 40 per cent of the populace will be over the age of 65.

          The reversal of Beijing’s decades-old “one child” policy has had little effect. In fact, since that was scrapped in 2016 births have declined 50 per cent. Other official incentives and policies, including cash bonuses for births and discouraging divorces by implementing a 30-day “cooling-off period”, have not helped.

          The immediate impact will be felt by companies in related sectors such as baby formula and dairy products. Manufacturers in Japan and South Korea, where birth rates have already dipped below one child per woman, have battled slim profit margins. Companies such as Maeil Dairies and Megmilk Snow Brand rely on exports to China for growth, as do Australian makers.

          A longer-term economic impact comes from a shrinking labour force. China already has worker shortages in manufacturing. Younger workers, aged 16 to 24, shun factory jobs. Beijing expects a shortage of nearly 30mn manufacturing workers by 2025. The resulting rise in labour costs will weigh on both local and international companies with factories in China. Labour cost rises there have already outpaced those in Thailand and Vietnam.

          Demographic pressures have long been an issue in Asia. But China’s share of global manufacturing means its low birth rate will affect international companies as well.

          1. “Since China’s ‘one child’ policy was scrapped in 2016 births have declined 50%”

            I guess a state-sponsored real estate collapse isn’t working out very well for China’s birth rate.

          2. The US is not reproducing very fast, either. I guess that is where illegal immigration comes to the rescue?

          3. “illegal immigration comes to the rescue”

            How much do the squeegee boys at the corner of Santa Fe and Alameda contribute to GDP?

            Oh, right. They don’t.

        2. Oct 4, 2023 –
          The birth rate ticked up in 2022. Can the reversal last?
          Alex Fitzpatrick, Kavya Beheraj
          Data: CDC; Map: Axios Visuals

          The nationwide birth rate fell significantly between 2007 and 2022, dropping from 14.3 births per 1,000 people to 11.1, or nearly 23%, per new CDC data.

          Driving the news: It declined particularly dramatically in parts of the West and Southwest, with the greatest drop-offs in Utah (-36.2%), Arizona (-36.1%) and Nevada (-34.0%).

  13. Markets
    Updated Fri, Dec 29 2023 4:42 PM EST
    S&P 500 falls slightly Friday, but rides 9-week win streak to end 2023 with 24% gain: Live updates
    Samantha Subin
    Jesse Pound
    A recession isn’t expected next year, says Carson’s Ryan Detrick

    Stocks fell slightly on Friday, but the S&P 500 closed out 2023 with a surprising gain of 24% as inflation slowed, the economy remained strong and the Federal Reserve signaled an end to its rate-hiking campaign.

    The S&P 500 rose for nine straight weeks to end the year, its best win streak since 2004. Big Tech stocks lifted the Nasdaq Composite to its best year since 2020 on AI enthusiasm.

    The broad index fell 0.28% to settle at 4,769.83, with a 24.2% gain for the year. The S&P 500 ends 2023 just short of a new all-time high. At one point on Friday, it climbed within 9 points, or less than 0.2%, from its record close of 4,796.56 attained in January 2022.

    The Dow Jones Industrial Average
    lost 20.56 points, or 0.05%, to close at 37,689.54 on Friday. It finished the year with a 13.7% gain and notched a new record during 2023. The Nasdaq Composite edged down 0.56% to 15,011.35 for the session, but rose 43.4% for its best year since 2020.

    “Momentum continues to remain favorable heading into year end,” said Mona Mahajan, senior investment strategist at Edward Jones. “It’s been quite a phenomenal run.”

  14. “What are your predictions for the housing bubble in 2024?”

    – Happy New Year ya filthy animals! – paraphrased, with credits to: “Home Alone 2” (1992) and “Angels With Dirty Faces” (1938); cast including: James Cagney, Humphrey Bogart and Pat O’Brien

    “It’s tough to make predictions, especially about the future.” – Yogi Berra

    – Here are my “predictions,” largely based on human nature (behavior/psychology), which is fairly constant throughout history.

    “History doesn’t repeat itself, but it does rhyme.” – Mark Twain

    “What’s past is prologue.” – William Shakespeare, The Tempest

    “What has been will be again,
    what has been done will be done again;” – Ecclesiastes 1: 9

    – If we accept that human nature is a relative constant throughout history, then we can expect similar outcomes to the current Everything Bubble – which includes Housing Bubble 2.0 – vis-à-vis the most recent two asset bubbles: The Dot Com Bubble in 2000 and Housing Bubble 1.0/The GFC in 2008-2009, only worser.

    – Since the current Everything Bubble has elements of these two previous asset bubbles, but is even larger and includes most other asset classes, we can expect that the outcome of this Everything Bubble will be like a combination of the two previous bubbles + some added bad stuff due to the other affected asset classes. Also, don’t forget that current public and private debt levels are much higher than during the GFC. “The bigger the boom, the bigger the bust.”

    – I think the Guberment and their agent, the Fed, are going to try to extend the bubble through the Nov., ’24 Presidential elections, to try to help Bandon get reeleted (may God help us!), but that seems like a bridge too far to me. I’m expecting the next leg down in the current stonk bear market to begin anytime now, but in Q1, ’24. I think the recession that everyone’s now expecting to be recorded as starting in either Q1 or Q2, (1H) ’24 as well.

    – Since falling stonks and recessions are notoriously bad for housing markets, this will carry over into house price declines, which are already rolling over in most MSAs. The Case-Shiller index is lagging by 2-3 months, so look at pending home sales (PHS) as a leading indicator for existing home sales, which is the majority of the market vs. new home sales.

    – Summary: QE + ZIRP = expanding asset bubbles and economic activity; QT + HIRP (H=higher) = contracting asset bubbles and economic activity. Guberment and Fed can-kicking since the GFC are now running out of runway.

    – Inflation is now a thing and, in my view, will hamstring Guberment and Fed responses vs. continued easy financial conditions. We’ll see how things play out in 2024, but “extend and pretend” eventually runs into economic reality. Bummer.

    “Trees don’t grow to the sky.” – German Proverb

    Stein’s Law: “If something cannot go on forever, it will stop.” – Herbert Stein (1916-1999), Economist

    “The greatest shortcoming of the human race is our inability to understand the exponential function.” – Albert A. Bartlett (1923-2013), Professor Emeritus in Nuclear Physics at University of Colorado at Boulder

    “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding, economist

    1. “…look at pending home sales (PHS) as a leading indicator for existing home sales, which is the majority of the market vs. new home sales.”

      What could it mean if home sales draw down to record low volumes on rising prices, as they have in San Diego recently?

      Usually a dessication of sales against a parabolic price blowout is a sign of an impending bubble collapse.

      However, this time is different…

  15. HOA’s Are Ruining Florida Family Homes!
    Palm Beaches Paul

    Dec 24, 2023 BOYNTON BEACH
    HOA’s have been a part of the the South Florida real estate market forever and for the most part people have just accepted them as part of the home buying process. But recently multiple HOA’s have been coming under criminal investigation for everything from intimedation, harrasment, money laundering, voter fraud, and more and now most Americans would prefer to live in a community without one all together. In this video I address this trend of hating HOA’s.–SEc


  16. ‘With inflation well above the Fed’s target level of 2%, it will continue raising interest rates into 2023 and beyond, while ignoring the crescendo swell of wailing and gnashing of teeth by Wall Street’s risk asset HODLers’

    Inflation is still high, but Jerry had a bad dream. I wonder what really happened.

    1. ‘if banks lose 5% of their capital, there are going to be a lot of banks in trouble’

      Was this Jerry’s bad dream? It would be a shame if he miscalculated and inflation took his face off.

    2. I have (another) friend from Texas who believes that when the Fed stops raising rates, it often reflects an insider perception that the economy is about to CR8R and stocks are soon to crash. I guess we’ll know in a few months if his insight applies to the present episode.

      I will say that he did very well buying the dip from September 2008 through March 2009 in the ensuing 50% percent off fire sale, when the bulls were all busy crying in their beers.

  17. ‘And dare I mention that amid the homebuying’s steep descent of 2005-07, California prices also rose 5%? That bubble-bursting era’s price implosion of 50% came in 2008-09’

    This is from Jon Lansner at the OCR. What he’s saying is that the YOY number wasn’t falling until 2008-09, and that’s debatable IMO. The crater was already underway. Point is prices can seem stable when they are not.

    1. “What he’s saying is that the YOY number wasn’t falling until 2008-09,…”

      The Case-Shiller numbers are perpetually out of date on release, by constuction. For instance, September 2023 numbers were just released, and they represent the average trajectory of prices for periods preceding September. The reports based on these numbers are more of a history lesson than news, as they are not reflective of current market conditions.

    2. ‘And dare I mention that amid the homebuying’s steep descent of 2005-07, California prices also rose 5%? That bubble-bursting era’s price implosion of 50% came in 2008-09’

      This time around, Germany and China are out ahead of the US in bubble collapse timing.

    3. “Little by little, and then all at once.”

      That’s how the housing bubble popped in 2008. Ben, we were watching the little by little part.

  18. ‘He said they will likely have low revenue (in the form of rents) relative to their loan amount, among other factors that lenders find undesirable’

    They made the loans Kevin. Sound lending blowing up on 3 to 5 year debt.

    1. Bloomberg
      Summers Says Investors Probably Underestimating Inflation Risk
      Former Treasury chief says premature to declare ‘soft landing’
      US will have to boost defense spending amid wars, Summers says
      Inflation outcome was closer to “team transitory’s prediction,” says Summers
      By Matthew Boesler
      December 29, 2023 at 8:17 AM PST
      Former Treasury Secretary Lawrence Summers said investors are probably underestimating inflation risk as markets move swiftly toward expectations for Federal Reserve easing.

      “I think there’s still a risk that the market is probably underestimating: that we’re not going to quite make as much progress on inflation as people hope, and that there’s not going to be quite as much room for Fed easing as people hope,” Summers said on Bloomberg Television’s Wall Street Week with David Westin.

      1. The 1970s was about OPEC pinching our middle-east energy supplies. Now, Germany’s energy supply from Russia has been pinched by the US. There’s just no modern economy without fossil fuels.

      2. “The amount of debt makes the 70’s look prudent and stable.”

        Agreed. We pushed the house wife into the workplace, but we never paid down our debts.

  19. Why do Democrats like to create incentives for illegal immigration? Is it a strategy for recruiting future Democratic voters?

      1. Are they trying to chase out California taxpayers and replace them with non-taxpaying illegals who get free healthcare on top of not paying taxes?
        Sounds like something a state with a $68 billion budget gap should try.

        What next: Reparations for descendents of slaves who never even visited California during their lifetimes, much less lived here, paid for by taxpayers whose ancestors didn’t even own slaves?

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