There Was A Lot Of Exuberance That This Price Escalation Would Continue, Not Now
A report from the Daily Mail. “New York City real estate developer Nir Meir and other industry executives were indicted for stealing $86 million from investors through a failed luxury apartment development. Meir, 49, and several other executives from HFZ Capital Group were charged with varying counts of larceny, conspiracy, falsifying business records, tax fraud, money laundering and more on Wednesday. Prosecutors said Meir and the others stole over $86 million from investors, subcontractors and New York City through a series of frauds and schemes that began in 2015.The district attorney’s case focuses largely on failed development called The XI along the High Line in Chelsea, which they said Meir used to steal $37 million.”
The Des Moines Register in Iowa. “Johnston developer Daniel Pettit sent flowers to Dana and Jerry Ogden after the 2021 loss of their 27-year-old son to fentanyl poisoning ― a gesture that Dana Ogden said moved the grieving California couple deeply. Two-and-a-half years later, the Ogdens are among numerous investors and lenders from across the country wondering if they will ever recoup a large sum of money they gave Pettit in an investment deal gone bad. Ogden said Johnston police appear to be investigating her allegations that Pettit never repaid her and her husband the $60,000 he persuaded them to invest in a West Des Moines apartment development deal.”
“Ogden said she told Pettit that she and her husband needed out of the Sugar Creek deal. ‘I said, ‘We are tapped out emotionally, physically and mentally. Please, let us walk,’ she said. He said, ‘No problem’… . It took two months, but everybody signed the legal paperwork on the dotted line. Then the money never came.'”
From NPR. “Seventeen facilities owned by a Peoria-based nursing home and assisted living company are now in foreclosure proceedings after lenders allege a combined $51 million in debts went unpaid. Petersen Health Care entered foreclosure proceedings with X-Caliber Funding and Capital Funding in two separate federal court cases last month. The story was first reported by the Peoria Journal Star. A complaint filed Jan. 23 in the Illinois Northern District Court by X-Caliber Funding said Petersen Health Care defaulted on loans on Dec. 29, 2023. They’re demanding a little more than $31.2 million. ‘Upon Plaintiff’s review of Defendants’ books and records since that time, it became apparent that Defendants were actually diverting cash from their facilities to float operations at other facilities under common ownership and claiming an inability to pay the current expenses of the facilities,’ the attorneys wrote.”
The Asbury Park Press in New Jersey. “David Wellington owns two properties on Myrtle Avenue in Keansburg. One is an unoccupied bungalow that he had raised and renovated. The other is a vacant after he tore its bungalow down with a goal of building a bigger house. He needs variances to proceed, but since the summer, both projects are on hold over questions from the borough’s planning board about whether the properties have merged. ‘It’s become more of a personal issue now where I stepped out of line because I challenged them,’ Wellington said, ‘so they’re going to try to make it difficult for me until I run out of money and I’m going to sit there with two pieces of property, two pieces of land that I can’t use.'”
Local 10 in Florida. “Residents on North Bay Village’s Harbor Island captured a scary situation on video when high winds blew heavy construction debris from a stalled high-rise project onto a park, adjacent to a playground. During a Sunday storm, metal scaffolding from the 21-story 7918 West Drive project, located at the aforementioned address, blew onto nearby Dr. Paul Vogel Community Park, landing right next to a playground. City officials said the project became dormant, with ‘no explanation,’ in December. Jose Gonzalez took photos of the ‘very big’ pile of debris afterward. ‘If you are going to stop building, at least keep everything safe,’ Gonzalez said.”
The Wall Street Journal. “Houses in Austin that rented for $5,000 or $8,000 a month now lease for as much as 20% off. In Chicago, some amenity-packed apartment towers with a new building smell offer months of free rent. The surplus of new housing is driving down prices at the top of the market. In Austin, rents are falling fastest in areas near downtown that have filled up with pricey new apartments and townhomes. At the 44-story building called Hanover Republic Square, a three-bedroom penthouse going for more than $15,000 a month now comes with up to eight weeks free and a $500 move-in bonus.”
“Two months ago, Austin real-estate agent Carly Guimaraes listed a two-bedroom duplex unit in an upscale neighborhood north of downtown at $5,000 a month. That wasn’t an unusual price for a new construction home, but it sat on the market for more than 30 days. After the owner cut the rent by $500, however, the unit was leased in just a few days. ‘Everyone came here to build,’ Guimaraes said. ‘Now that supply is coming to fruition, and it’s created a surplus in the luxury market.'”
Bisnow Boston in Massachusetts. “Life sciences giant Alexandria Real Estate Equities has sold another property at a loss as it sells underperforming assets and focuses on its bigger campuses. Alexandria sold a three-story office building at 138 River Road in Andover for $3.9M to Lawrence-based Energy North Group, according to public records. The sale price represents just more than a quarter of the $14.3M the life sciences REIT bought it for two years ago, the Boston Business Journal first reported. Alexandria has suffered similar losses in the last year as it has begun to unload assets from its Greater Boston portfolio. In June, the company sold a three-building, 510K SF office campus in Newton for $117.5M, half of what the REIT bought the property for in 2020. In December, Alexandria sold two industrial buildings in South Boston for half of the $168.5M it bought them for in 2020.”
The Globe and Mail in Canada. “How did rents fall and vacancy rates go up in the most expensive parts of downtown Toronto? ‘Trust me when I tell you I’ve never experienced vacant units,’ said Sundeep Bahl, a Toronto realtor with Re/Max Plus City Team, who specializes in buying and selling investor-owned condominiums and also provides his own property management services. ‘We get a 60 days notice [from a tenant vacating] and we’ve expired the 60 days. The unit’s now become vacant and we can’t find a tenant for the landlord.’ Sales of unbuilt condos have reached rarely seen lows, the resale market is facing falling prices, and at the same time there are more newly completed units being added to the market every quarter.”
“‘They’re cannibalizing each other,’ said Pauline Lierman, vice-president of market research with Zonda Urban. ‘It’s not the first time we’ve had cannibalization in certain neighbourhood pockets. But at that scale, it really makes a difference.’ With a sudden glut of condos, plus more than 5,500 recently opened purpose-built rental apartments, there is more competition for the top tenants. ‘Condo projects are recalibrating, pricing is coming down,’ said Ms. Lierman. ‘I have a [project] where they’re probably coming down $100 per square foot, just to keep things moving.”
“The other signal Ms. Lierman is watching closely is preconstruction buyers walking away from deposits. She said Zonda hasn’t seen anything statistically significant, but did note that she’s been told of an uptick buyers defaulting if they came in late in the sales cycle with a deposit of 5 per cent in 2022 for condos that are now finished. Such buyers were likely hoping to flip units on the assignment market and were unable to find takers for units that cost upwards of $1,900 a square foot. ‘There was a lot of exuberance, in the sense that this – price escalation – would just continue,’ said Ms. Lierman. ‘Not now, not now.'”
From Reuters. “TAG Immobilen co-CEO Martin Thiel painted a bleak picture for Europe’s biggest residential property market, which has already seen prices tumble by around 10% in Germany’s worst property crash in a generation. ‘We expect further losses in value,’ Thiel said, adding that while he expected the fall in valuations to bottom out at 20%, TAG was taking precautions for worse. ‘You have to be prepared in case it is not the 20% but 25% or 30%. The balance sheet must be able to withstand that. You simply need that cushion,’ Thiel said in an interview. ‘The market for transactions is incredibly difficult. You hardly see any big transactions.'”
“For years, property in Europe and particularly Germany boomed as interest rates fell, turbocharging demand. But a sudden jump in rates and building costs tipped some developers into insolvency as bank financing dried up and deals froze. TAG’s CEO said he had misjudged the scale of the slump that forced it to withhold dividends, sell property and raise capital. ‘If you had asked at the beginning of 2022 whether prices for apartments … would fall by 20%, I probably would have said: impossible. The business is too stable for that.'”
The Star Weekly in Australia. “Affected families by the collapse of the Victorian builder Montego Homes are reeling from losing their deposits and their dream houses in the Casey South region. Key initial findings have shown that 63 homeowners are affected by the company not having appropriate insurance in place for deposit holders. Uninsured creditor Nicole Clarke, who bought a block of land in Cranbourne East, has still been processing the news with a heavy heart. She lost $13,825, which took her over a year to save. ‘It’s not huge, but it’s decent enough to be upset about this because you can’t get it back,’ she said.”
“Paul Elsharouny, another uninsured creditor, lost over $15,000 from a deposit for his single-story house in Clyde North. He signed the contract in March 2023 and immediately paid the deposit. Ten months later, he was in shock when he discovered the collapse of Montego Homes through an email. ‘After what happened with Porter Davis last year, the government should have been warned and put more strict laws in place to observe these builders, but this didn’t happen,’ he said. ‘We lost our life savings, and we still need to continue with our life.'”
Business Insider. “China’s property crisis represents a historic collapse. The world’s second-largest economy is grappling with a medley of bearish headwinds including deflation, a flight of foreign investment, youth unemployment, huge debt, and an aging population. Most pressing, however, is its real estate trouble, which the International Monetary Fund characterized as a historic bust matching levels only seen in the worst collapses of the last three decades. In a report published February 2, IMF researchers Henry Hoyle and Sonali Jain-Chandra said the property market will no longer be the powerhouse driver of growth for China’s economy that it was in the past.”
“‘Home prices became significantly stretched relative to household incomes in the decade before the pandemic, in part because consumers preferred to invest their considerable savings in real estate given the scarcity of attractive alternative savings options,’ the IMF researchers said. But expectations for ongoing price increases for land and homes led to overextended developers that borrowed too much and overpromised, which has ultimately fueled a collapse in real estate activity. Housing starts have plunged by more than 60% compared to pre-pandemic levels, the IMF said, and weak confidence among homebuyers has led to a sharp drop-off in sales. The collapse has transpired at ‘a historically rapid pace only seen in the largest housing busts in cross-country experience in the last three decades,’ researchers said.”
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‘City officials said the project became dormant, with ‘no explanation,’ in December. Jose Gonzalez took photos of the ‘very big’ pile of debris afterward. ‘If you are going to stop building, at least keep everything safe’
I’d never heard of this sh$thole before. These were going to be airboxes for sale.
https://nypost.com/2024/02/06/news/squatters-take-over-1200-homes-in-atlanta-terrorize-neighbors/?utm_source=twitter&utm_medium=social&utm_campaign=nypost_sitebuttons’
Hopefully, not a repost. ‘Dormant” homes being taken over by squatters by the hundreds in Atlanta.
You will own nothing.
‘We lost our life savings, and we still need to continue with our life’
Acceptance <- Paul you are here.
‘Prosecutors said Meir and the others stole over $86 million from investors, subcontractors and New York City through a series of frauds and schemes that began in 2015.The district attorney’s case focuses largely on failed development called The XI along the High Line in Chelsea’
This was a major flame out. Everybody suing everybody. Here’s two more links on it:
https://www.bisnow.com/national/news/construction-development/new-york-developer-arrested-in-miami-as-part-of-sprawling-fraud-case-122765
https://therealdeal.com/new-york/2024/02/07/nir-meir-construction-executives-charged-with-grand-larceny/
So, if your “Life Savings ”, consists of 13K? , Admit it, you aren’t able to invest in Real Estate , just spend what you have for groceries , or maybe a few trips to McD’s…..
The sale price represents just more than a quarter of the $14.3M the life sciences REIT bought it for two years ago, the Boston Business Journal first reported. Alexandria has suffered similar losses in the last year
So prices (and appraisals) are down from 50% to 75%. My guess is the owners of said buildings are going to expect taxes to go down a fair amount. I would love to see the tax projections on the 2025 budget on some of the major cities like Chicago, NYC and San Fran.
Add the illegals cost to the falling tax revenues and be damn glad I don’t own property in any of these places. Again, gotta believe a lot of these building have negative value.
Texas Public Radio promotes the Great Replacement.
TPR — Eagle Pass residents on edge as Texas Gov. vows to expand border operations (2/7/2024):
“A supporter of far right militias, he traveled to Eagle Pass from Colorado to join the so-called “Take Our Border Back” convoy, a mix of Trump supporters, migration hawks, election deniers and conspiracy theorists.
This all has locals on edge and feeling like they are caught in the middle. They are alarmed at seeing their once quiet city militarized and becoming a magnet for the extremists.
Residents of Eagle Pass say they’re more worried about danger stirred up by Abbott than the immigrants attempting to cross the Rio Grande, which has dropped considerably since the start of the new year.
Eagle Pass residents say the real invasion is from far-right activists, who are being inspired by Abbott.”
https://www.tpr.org/border-immigration/2024-02-07/right-wing-border-convoy-leaves-eagle-pass-residents-on-edge
“danger stirred up by Abbott than the immigrants attempting to cross the Rio Grande, which has dropped considerably since the start of the new year.”
And why, do you think, that crossings of the Rio Grand have dropped considerably? I guess the illegals just decided to stop coming, by themselves?
Some lies were told.
This starts smelling a bit of Thomas Müntzer. I’ll let you figure it out.
Almost 4,000 sq/ft for 39K. Bring a paintbrush and a little caulk.
https://www.zillow.com/homedetails/550-Orange-St-NE-Dawson-GA-39842/81695000_zpid/
Re: There Was A Lot Of Exuberance That This Price Escalation Would Continue, Not Now.
All these stories of widespread fraud remind us of Warren Buffett’s prophetic warning “It’s only when the tide goes out that you learn who has been swimming naked” and we are finding that out.
Still, the tide may have gone out for the time being but not to worry. This price fluctuation is nothing but the entirely predictable outcome of the continuous debasement of the inherently worthless fiat (fake) currency with which prices are measured and which, in the long run, can go in only one direction – down – like a house built on quicksand and, thanks to the clueless morons that run the economy, the tide will return again in the form of a tsunami . . .
ChatGPT 3.5
User
Are falling prices in China a problem for the US economy?
ChatGPT
Falling prices in China can have various effects on the US economy. While it may benefit US consumers by providing access to cheaper goods, it can also put pressure on US businesses that compete with Chinese imports. Additionally, if China’s economy slows down due to falling prices, it can reduce demand for US exports, impacting sectors reliant on international trade. Overall, the impact depends on various factors, including the extent of price declines and how US policymakers respond to them.
User
What about Chinese investor demand for US residential and commercial real estate?
ChatGPT
Chinese investor demand for US residential and commercial real estate has been significant in recent years, contributing to price appreciation in certain markets. However, fluctuations in this demand can impact the US real estate sector. A decrease in Chinese investment could potentially lead to lower demand for properties, affecting property values and market dynamics in specific regions, especially those that have been heavily reliant on foreign investment. Additionally, shifts in Chinese investment patterns could influence financing availability and development projects in the US real estate market.
User
“A decrease in Chinese investment could potentially lead to lower demand for properties, affecting property values and market dynamics in specific regions, especially those that have been heavily reliant on foreign investment.”
Could you be more specific about which regions were heavily reliant on foreign investment demand from China?
ChatGPT
Certainly. In recent years, certain regions in the United States have experienced significant investment demand from Chinese investors, particularly in the real estate sector. Some of the major cities that have been heavily reliant on foreign investment from China include:
New York City: Chinese investors have shown significant interest in luxury residential and commercial properties in Manhattan, driving up prices in prime locations.
Los Angeles: Areas like Beverly Hills, Westwood, and Downtown Los Angeles have attracted substantial investment from Chinese buyers, particularly in high-end residential properties and commercial real estate projects.
San Francisco Bay Area: Silicon Valley and San Francisco have seen considerable investment from Chinese investors, especially in tech hubs and upscale neighborhoods.
Seattle: The city’s booming tech industry and proximity to Asia have made it attractive to Chinese investors seeking real estate opportunities, particularly in residential and commercial properties.
Miami: Chinese buyers have shown interest in luxury waterfront properties and high-end condominiums in Miami and its surrounding areas, contributing to the region’s real estate market growth.
These are just a few examples, but there are certainly other regions in the US that have also been impacted by significant Chinese investment in real estate.
ChatGPT can make mistakes. Consider checking important information.
ChatGPT
Financial Times
Chinese economy
China’s prices fall at fastest rate in 15 years as economy battles deflation
Analysts warn prolonged price declines will undermine business and consumer confidence
A man puts oranges in a plastic bag at a grocery store in Beijing
China’s economy slipped into deflation in July, and prices have been flat or fallen in almost every month since then
Joe Leahy in Beijing yesterday
China’s consumer prices fell at the fastest annual rate in 15 years in January, missing analysts’ forecasts and underlining the challenges for policymakers trying to revive investor confidence in the world’s second-largest economy.
The country’s consumer price index fell 0.8 per cent year on year in January, according to official statistics released on Thursday, the fourth straight month of declines and the biggest contraction since 2009.
The fall, which was steeper than a 0.5 per cent drop forecast by a Reuters poll of analysts and a 0.3 per cent decline in December, comes as China’s economy contends with an extended property sector slump, a stock market meltdown and weaker export revenue.
…
Financial Times
Global inflation
China to export deflation to the world as economy stumbles
Prices of products shipped overseas have been falling at the fastest rate since 2008 crisis
Joseph Cotterill in London, Claire Jones in Washington and Martin Arnold in Frankfurt 10 hours ago
Global investors expect falling prices in China to push down inflation rates worldwide this year, as excess capacity in its slowing economy prompts Chinese exporters to cut prices on goods they sell abroad.
Prices of Chinese exports have been falling at their fastest rate since the 2008 financial crisis, indicating the world’s largest exporter is starting to send deflation outward to countries that have been battling high inflation.
“China will be exporting deflation to the rest of the world, and you will find various countries dealing with the fact that China has built up overcapacity,” said Chetan Sehgal, lead portfolio manager at Templeton Emerging Markets Investment Trust, a UK-listed fund.
China’s consumer prices fell at the fastest annual rate in 15 years in January, losing 0.8 per cent, while the country’s producer price index dropped 2.5 per cent year on year. Few economists expect developed economies to record similar outright falls in prices, but many think Chinese deflation could have a significant impact in emerging markets, particularly those with major trading relationships with Beijing.
Line chart of Annual % change showing Chinese export prices are falling at a rate not seen since the last financial crisis
Citigroup analysts said this week that falling prices in China could help to hasten moves by central banks in emerging markets to cut interest rates this year, particularly in countries that consume relatively large shares of Chinese goods.
“We as investors are only just starting to connect the dots” on how falling prices imported from China might play out across markets, said Luis Costa, global head of emerging markets sovereign debt strategy at Citigroup. “The question is the magnitude.”
…
Washington State legislators contemplate tripling property taxes
‘However, the current bill, championed by Sen. Jamie Pedersen, D-Seattle, along with 18 members of the Senate Democratic Caucus, seeks to bypass this voter mandate without requiring public approval, potentially increasing property taxes by as much as $6 billion over the next 12 years.’
https://www.yoursourceone.com/columbia_basin/wa-legislators-contemplate-tripling-property-taxes-igniting-voter-concerns/article_c24222bc-c642-11ee-a1f0-f74ba52c26a8.html
“…Washington State legislators contemplate tripling property taxes…”
Washington State even outdoing California… That’s special.
Real Estate holding costs on a continuous upswing.
Of course, the MSM will tell you no one could of possibly have seen it coming.
The HBB and its readers have been warning about such scenarios for over a decade….
The bill received a nod from the Senate Ways and Means Committee on February 5, passing with votes strictly from Democratic members.
[Here is another interesting but non-housing related post accompanied by a few snips.]
Just pause for a moment to appreciate how fast the EV transition is coming undone
https://joannenova.com.au/
Last year the acceleration in EV sales stopped accelerating. The industry was still growing they said, just not quite as fast. Now, so soon, the sales are actually falling. In the UK, EV sales dropped off a cliff, falling 25% last month. Perhaps it was just a bad month? But in California, home of global green dreams, sales have also declined, and for the last two quarters. Ominously, this is happening despite government decrees insisting every new car sold in 2035 will be an EV. Sales are supposed to be launching into orbit. Something is very wrong.
Meanwhile Hertz has taken yet another step away from their EV quest — after announcing they were selling off a third of their EV fleet at bargain basement prices, now they are cancelling plans to buy 65,000 Polestars. This was a $3 billion deal, and to let them out of it, Polestar has, by golly, demanded Hertz give them the right to buy back the old Polestars that Hertz wants to sell — that way Polestar can keep the older models off the secondhard market and stop the value from falling the same dire way the secondhand Teslas have.
Polestar is a Volvo spin off company, and now we understand why last week Volvo announced it would stop funding Polestar and reduce its shareholding. They knew what was coming.
Not to put too fine a point on the state of the EV market, but Ford is losing $38,000 per EV. This means the more EVs they sell, the poorer the company gets. They made $10 billion dollars in profits last year, yet the balance sheet shows they lost about $5 billion just on EVs. This puts them in the bizarre position that they could theoretically give away the entire EV production line and boost company profits by 50%. It’s that bad…
Indeed it’s so truly awful, that the UK Lords are calling for the government to counter the misinformation campaign filled with “mistruths”. The industry must be at deaths door.
[Link on the article to read the rest.]
EV has definitely peaked. Looks like all the pre-orders have been filled… and by golly if those pre-orders weren’t rich white virtue signaling couples whose second car happens to be and ICE. They wouldn’t DARE have an EV as the only car. And few new orders are forthcoming.
EV’s are a luxury item and will be for a very long time…maybe ok for mail trucks, local deliveries you can plug in overnight might be cost effective,
https://redstate.com/benkew/2024/02/07/ford-announces-billions-in-losses-on-electric-vehicle-range-worse-than-even-expected-n2169794
EV’s are a luxury item
Just be sure you park it either outside or in a detached garage, unless you want you house to burn to the ground.
Indeed, have to wonder if home owner’s insurance policies acknowledge EVs parked in the garage?
Worse yet, charged in the garage.
The calls began coming in at around 2:30 Tuesday afternoon. People were overdosing in downtown Belleville, Ont., after consuming drugs.
“I saw five go down like boom, boom, boom, boom,” says a man named Steve. He was arriving to the Bridge Street United Church, which offers drop-in services for the city’s homeless, when he say people started collapsing on the ground. Between when they inhaled and when they went down, I put a high-end of five minutes,” he recalls.
Over the course of one hour, emergency services responded to 13 overdoses, all within a few blocks. This prompted police to put out an alert warning the public to “exercise caution and avoid unnecessary travel” to the downtown core.
By Wednesday morning, the total number of suspected overdoses had climbed to 16. None of them was fatal.
Belleville Mayor Neil Ellis says the city will declare a state of emergency Thursday, hoping to unlock more support and funding from the provincial government.
“We can’t afford to fix it ourselves,” he told CTV News. “It’s a crisis. It’s a medical crisis and a health crisis. And resources from the province and the feds have got to go toward trying to solve this.”
This is not the first time Belleville has struggled with a spike in overdoses. In November, there were 90 suspected overdoses in one week, with one of them fatal.
Ellis says an increase in housing for those experiencing homeless will help, but acknowledges there’s no easy solution.
“The best case is housing first and wraparound services,” he says. “It’s not going to cure everybody but that’s the gold standard.”
What’s happening in Belleville is taking place in cities and towns across the country.
In British Columbia, there were 2,511 suspected overdose deaths in 2023, a five per cent increase from the year before and the most ever recorded in the province. In Toronto, paramedics responded to 25 fatal calls for suspected opioid overdoses in December 2023. Ottawa Public Health says there were 22 suspected overdose deaths last month alone.
Contributing to opioid overdose deaths is a drug supply becoming increasingly more toxic, with drugs often laced with fentanyl, carfentanil and animal tranquilizers.
“Right now, we are seeing tranquilizers which are used for elephants called Xylazine in the drugs,” says Derrick St. John, who works at Ottawa’s Sand Hill Community Health Centre.
“Xylazine decreases the blood flow to limbs, so we are seeing people with really bad wounds,” he says. In some cases, those wounds can be so bad that limbs need to be amputated.
Clients at Sandy Hill are able to bring their drug supply in for testing and St. John says Xylazine is showing up in one of every two or three samples taken. “The drugs are getting worse,” he says.
Todd Buchanan works with people struggling with addiction in Belleville and calls Tuesday’s events “devastating.”
“It could have been a lot worse,” he says, grateful that no one died. “When an event like this happens in a community, my hope would be people take notice and not judge what happened but find ways so it doesn’t happen again.”
Buchanan wants to see new approaches taken by all levels of government to address this crisis, saying the current approach is clearly not working.
“(A solution) comes from the government’s willingness to look outside the box and try and find solutions that may seem on the surface perhaps controversial,” he says.
But those solutions may take years, which is too long for people like Steve. He is experiencing homelessness and watches as more and more friends fall victim to the opioid crisis. He says everything feels reactionary and not enough is being done to prevent what’s happening.
“Not enough, not even touching it,” he says. “They need to get ahead of it, because I’m telling ya, these people didn’t come here that way.”
https://www.ctvnews.ca/canada/belleville-ont-set-to-declare-state-of-emergency-due-to-spike-in-drug-overdoses-1.6760791
It is breathtaking to watch Western Civilization collapse in real time. I can only wonder how future historians will cover this self annihilation. Will someone write a book titled “The Rise and Fall of the Great American Empire”? Will future generations shake their heads in disbelief and ask “did they really believe that men could be women and all that other nonsense?”
All mail-in Democrat voters I’m sure.
A reader sent these in:
🇨🇦’s intel warned the gov that a transnational car theft group controls the ports and is washing the proceeds in housing, thus inflating home prices.
… today the Liberals & NDP voted down scanners at the port.
🇨🇦 needs an anti-corruption agency now.
https://twitter.com/StephenPunwasi/status/1755377465701126234
CAUTION: Median home prices are now contracting at levels NEVER seen since 1964
https://twitter.com/GameofTrades_/status/1755301651206865407
The only way to fix the housing affordability problem is with a housing price crash.
Anyone that thinks otherwise is fooling themselves and everyone else.
https://twitter.com/JonFlynnREstats/status/1755257589984550970
Canadian business insolvencies spike ‘tip of the iceberg’
https://twitter.com/REWoman/status/1755221143403774014
Flagstar Bank parent New York Community Bancorp (NYCB) is under a lot of pressure. Stock down nearly 50% in the past week. Flagstar is a top-15 mortgage lender nationally and top-5 wholesale mortgage lender. What happens if NYCB fails?
https://twitter.com/mortgagetruth/status/1755272351493820448
To afford the median-priced home of $433,100, Americans need an annual income of roughly $166,600. However, the median household earns just $74,580, per FORTUNE.
https://twitter.com/unusual_whales/status/1754837845301424446
When was I radicalized? When the Fed printed 5T into zero interest rates, doubling the S&P for asset owners, spiking cost of living by 25% for non asset owners. And when the cost increases subsided – but previous gains held – they lied to us that inflation was going down.
https://twitter.com/philbak1/status/1755277959462543583
Reminder: it was HSBC that got caught with special teller windows at its branches for cartels to drop off enormous piles of cash to be laundered.
https://twitter.com/RobertPLewis/status/1755277091522920577
Am I the only one who finds it creepy AF that all these firms that are walking away from Non-Recourse CRE loans, sticking small banks & pensions with the losses, are simultaneously stockpiling cash to buy back the same buildings for pennies on the dollar?🧐
https://twitter.com/JG_Nuke/status/1755260163928281509
“Ginnie Mae Mortgage-Backed Securities Portfolio Reaches $2.53 Trillion in January” | The new subprime….
https://twitter.com/rcwhalen/status/1755243424452636790
Below, you’ll find a heat map of the United States, which shows what percentage of median household income is spent on annual mortgage payments.
In California, the figure stands at 59%, as of December 2023. This is nearly double the recommended maximum amount that a household should spend on housing.
These figures are calculated by using median sales price data provided by Redfin, median household income by state, which is provided by the St. Louis Federal Reserve, and the prevailing 30-year mortgage rate.
What we see is that certain states, like California, Hawaii, and New York, are far more expensive than states in the Midwest.
https://twitter.com/ReefInsights/status/1755229526827610539
On the left: Salt River Pima-Maricopa Native American Reservation
On the right: Scottsdale
https://twitter.com/tawillionaire/status/1754956338474729790
The guy from Toyota $TM caught hell for questioning big EV “investments”
https://twitter.com/cvpayne/status/1755237868459450569
“Monetary Policy Hits Wall”
Bank of Canada Governor Declares Interest Rates Can’t Fix Housing Affordability Disaster 👇🏽
https://twitter.com/ShaziGoalie/status/1755017308748034454
Office building foreclosure in Downtown Denver.
Trinity Place. 1980s vintage.
Purchased in 2019 for $40mm by Novel Coworking.
Loan balance of $35mm.
Lender is LoanCore.
https://twitter.com/aryal1994/status/1755227728578564404
❖ KANSAS BANKER CHARGED WITH EMBEZZLING $47 MILLION TO BUY CRYPTO
https://twitter.com/DeItaone/status/1755291428563956062
Paris is becoming a giant 💩 hole
https://twitter.com/ClownWorld_/status/1755190569683628251
🇨🇦’s intel warned the gov that a transnational car theft group controls the ports
It is amazing how a car stolen in Quebec or Ontario can wind up in Africa. And of course, the Canadian government doesn’t give a rat’s patootie.
Watching the collapse as it happens. And I know many hope we will be able to vote our way out of this mess, but even if the “good guys” win the next elections, I am reminded of a G.K. Chesterton quote:
“The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected.”
– Illustrated London News, April 19, 1924
What a great quote. The more things change the more they stay the same.
“The Strauss–Howe generational theory, devised by William Strauss and Neil Howe, describes a theorized recurring generation cycle in American history and Western history. According to the theory, historical events are associated with recurring generational personas (archetypes).”
So it took about 100-yrs (4th turning) to re-experience this economic and social stupidity.
And a devastating world war to rub it out last time.
What a great quote.
Chesterton was a brilliant fellow.
Horse
Jordon Peterson had a recent podcast on the mold problem in houses and commercial building.
One stat said 45 million housing and buildings in US have this mold problem.
It can cause all kinds of illness like allergies, headaches, respiratory problems, fatigue, psychology disorders ,and progress to more extreme disease depending on exposure.
So, something to consider if your having symptoms, and maybe you need a mold report if you buy a house because the problem is so widespread.
What a day! It looks like SCOTUS’ ruling on the Colorado 14th amendment case could be 9-0 and special counsel found that Biden “willfully retained and disclosed classified materials after his vice presidency when he was a private citizen” but is too cognitively impaired to be charged with a crime. Next up, Tucker Carlson’s Putin interview in 70 minutes.
Hur’s report included several shocking lines about Biden’s memory, which the report said “was significantly limited” during his 2023 interviews with the special counsel. Biden’s age and presentation would make it more difficult to convince a jury beyond a reasonable doubt that the now-81-year-old was guilty of willfully committing a crime.
“We have also considered that, at trial, Mr. Biden would likely present himself to a jury, as he did during our interview of him, as a sympathetic, well-meaning, elderly man with a poor memory,” it said. “Based on our direct interactions with and observations of him, he is someone for whom many jurors will want to identify reasonable doubt. It would be difficult to convince a jury that they should convict him — by then a former president well into his eighties — of a serious felony that requires a mental state of willfulness.”
Later in the report, the special counsel said that the president’s memory was “worse” during an interview with him than it was in recorded conversations from 2017.
“He did not remember when he was vice president, forgetting on the first day of the interview when his term ended (‘if it was 2013 — when did I stop being Vice President?’), and forgetting on the second day of the interview when his term began (‘in 2009, am I still Vice President?’),” the report said.
Biden also had difficulty remembering the timing of his son Beau’s death, as well as a debate about Afghanistan.
“He did not remember, even within several years, when his son Beau died,” the report said.
https://www.msn.com/en-us/news/politics/biden-willfully-retained-and-disclosed-classified-docs-but-wont-be-charged-special-counsel-says/ar-BB1hZFkM
It would be difficult to convince a jury that they should convict him
HRC treatment.
our interview of him
October 8 & 9, 2023. Israel was attacked on October 7.
“He did not remember, even within several years, when his son Beau died,” the report said.
Maybe he recalls when Hunter started boning Beau’s widow?
“Biden’s age and presentation would make it more difficult to convince a jury beyond a reasonable doubt that the now-81-year-old was guilty of willfully committing a crime.”
Little Feat Old Folks Boogie on Vinyl with Lyrics in Description
https://youtu.be/WyK9T37EvDU?si=0c8q6UzFwNOjEo0O
too cognitively impaired
25th Amendment on deck.
Are they really going to renominate him? I seriously doubt he’ll live to the end of a second term. And if they don’t nominate him, then who? The Hildebeast? Big Mike? Gruesome?
“Are they really going to renominate him?”
The deep state’s ideal sock puppet. Unaccountable!
Biden’s supposed DOJ is giving the off-ramp.
Tucker/Putin interview got 14 million views in an hour. In about 15 minutes Tucker’s going to surpass the eyeballs on the Grammys.
HEADS EXPLODE Over Tucker Interviewing Putin!
The Jimmy Dore Show
6 hours ago
Tucker Carlson recently traveled to Russia to interview Russian President Vladimir Putin, and heads in the establishment commentariat predictably exploded. The European Union is threatening to sanction Carlson as a result, while the Ukrainian government has placed Carlson’s name on the country’s “kill list.”
Jimmy is joined by Due Dissidence’s Russell Dobular and Americans’ Comedian Kurt Metzger to discuss the rank McCarthyism on display in this episode from the American liberal class.
https://www.youtube.com/watch?v=R-Frr2SsBCw
20 minutes. This is a good one.
“This is a good one.”
+1
‘Johnston developer Daniel Pettit sent flowers to Dana and Jerry Ogden after the 2021 loss of their 27-year-old son to fentanyl poisoning ― a gesture that Dana Ogden said moved the grieving California couple deeply. Two-and-a-half years later, the Ogdens are among numerous investors and lenders from across the country wondering if they will ever recoup a large sum of money they gave Pettit in an investment deal gone bad’
Flowers. That was a big spend looking for a mark. If you want to hear about bottom feeding real estate scammers, read this one.
Pettit
Chubby face; a few more Pop Tarts, and his chin will disappear.
“As Christians, she said, she and her husband also were moved by Pettit’s professed faith and the good deeds he talked about carrying out with churches and organizations. They eventually invested $60,000 in the West Des Moines Sugar Creek development after he promised a $1 million return over time, she said.”
Chumming the faithful is like shooting fish in a barrel. And god knows only Hillary makes returns like that.
‘she told Pettit that she and her husband needed out of the Sugar Creek deal. ‘I said, ‘We are tapped out emotionally, physically and mentally. Please, let us walk,’ she said. He said, ‘No problem’… . It took two months, but everybody signed the legal paperwork on the dotted line. Then the money never came’
They usually just cut off the phones Dana, but this guy was used to milking the rag.
‘With a sudden glut of condos, plus more than 5,500 recently opened purpose-built rental apartments, there is more competition for the top tenants. ‘Condo projects are recalibrating, pricing is coming down,’ said Ms. Lierman. ‘I have a [project] where they’re probably coming down $100 per square foot, just to keep things moving’
This situation is similar to short term rentals in that this is the tenth at least Toronto pre-construction condo crash since I’ve had this blog. Like STR’s, it just keeps cratering.
‘You have to be prepared in case it is not the 20% but 25% or 30%. The balance sheet must be able to withstand that. You simply need that cushion…The market for transactions is incredibly difficult. You hardly see any big transactions’…he had misjudged the scale of the slump that forced it to withhold dividends, sell property and raise capital. ‘If you had asked at the beginning of 2022 whether prices for apartments … would fall by 20%, I probably would have said: impossible. The business is too stable for that’
Yer saying you didn’t see this a$$pounding coming Martin.
‘‘Home prices became significantly stretched relative to household incomes in the decade before the pandemic, in part because consumers preferred to invest their considerable savings in real estate given the scarcity of attractive alternative savings options,’ the IMF researchers said. But expectations for ongoing price increases for land and homes led to overextended developers that borrowed too much and overpromised, which has ultimately fueled a collapse in real estate activity’
This is what I mean by the housing bubble is constantly in a state of frenzy or collapse in many places at the same time. It’s been going on for decades now. I could have posted this paragraph at any point dozens of times in 20 years.
In the Jailhouse Now by Jimmie Rodgers (1928)
Jimmie Rodgers
May 17, 2012
This video is presented as an historical reference by Empty Set Group, producers of “Waiting For A Train”, the new Jimmie Rodgers musical.
https://www.youtube.com/watch?v=p3L2qf3q-ok
3:20.
BREAKING VIDEO: Supreme Court Justice Jackson Caught Lying About Trump In Open Court
Infowars.com
February 8th 2024, 3:54 pm
‘The events were shameful criminal violence, all of those things, but did not qualify as insurrection as that term is used in Section Three,’ Trump lawyer educates SCOTUS justice.
A Trump attorney shot down DEI SCOTUS Justice Kentanji Brown Jackson’s support of false claims made in Colorado’s petition to remove Trump from the state’s ballot, rejecting a characterization that the Jan. 6 riot constituted an “insurrection.”
1:26
CSPAN
@cspan
Justice Jackson: “So, your point is that a chaotic effort to overthrow the government is not an insurrection?”
Jonathan Mitchell: “We didn’t conceded that it’s an effort to overthrow the government either…this was a a riot. It was not an insurrection.”
11:13 AM · Feb 8, 2024
https://x.com/cspan/status/1755625827750883802?s=20
Was your hedge fund trimmed due to investing in Chinese real estate bonds before they gave foreign investors a crew cut?
Fortune
FINANCE HEDGE FUNDS
Western hedge funds that saw a killing in billions of Evergrande bonds stunned when government handed out 99% haircut instead, sources say
Evergrande’s liquidation and 1-cent-on-the-dollar bond price was a first-hand education for many global money managers.
BY ALICE HUANG , DOROTHY MA , PEARL LIU , AND BLOOMBERG
February 08, 2024 11:00 PM EST
Evergrande
A resident cycles through the Evergrande city during the last day of the National Day and Golden Week holidays on October 7, 2021 in Wuhan, Hubei province, China. Getty Images
From afar, China Evergrande Group had all the makings of a killer distressed-debt trade: $19 billion in defaulted offshore bonds; $242 billion in assets; and a government that appeared determined to prop up the country’s faltering property market. So US and European hedge funds piled into the debt, envisioning big payouts to juice their returns.
What they got instead over the course of the next two years is a harsh lesson in the dangers of trying to bargain with the Communist Party. The talks are now dead — a Hong Kong court has ordered Evergrande’s liquidation, and the bonds are nearly worthless, trading in secondary markets at just 1 cent on the dollar.
In the aftermath of the Jan. 29 wind-up order, the biggest in China’s history, key players on both sides of the negotiations paint a Kafkaesque picture of endless micro-managing by unidentified government handlers that was communicated to investors through a mind-numbing maze of channels, only to then be interrupted by months-long gaps in dialogue. The last of those gaps came — to the shock of creditors — after the court’s December ruling giving the two sides one final chance to cut a deal.
Bloomberg spoke with more than a dozen people with direct knowledge of the talks for this story. All of them requested anonymity because they weren’t authorized to comment publicly about private conversations.
While global money managers have long known that the Chinese government exerts influence over corporate affairs in ways that are uncommon across the developed world, Evergrande was nonetheless a first-hand education for many of them in just how much authorities will intervene for the sake of political and economic expediency.
The 1-cent-on-the-dollar price on the bonds, they say, sends a warning to investors as other Chinese companies, including Country Garden Holdings Co., follow Evergrande into default amid an economic slump that officials have struggled to fix. And the country’s disregard for foreign creditors almost certainly means more of them will get sold for parts.
“Investors probably did not fully appreciate the risk of state intervention,” said David Knutson, chair of The Credit Roundtable, an organization of investors that works to respond to corporate actions averse to bondholders. “Apportioning losses between domestic creditors and foreign creditors will be political.”
Of course, it’s more than just Beijing’s involvement that caused Evergrande’s bonds to crater.
The nation’s deepening property-market slump, a $7 trillion stock rout and a tepid policy response are all weighing on broader sentiment. The fact that the bulk of the company’s assets are either already seized or located not in Hong Kong but mainland China — potentially out of reach of bondholders including Davidson Kempner Capital Management, King Street Capital Management and Contrarian Capital Management, has also contributed to rock-bottom recovery expectations.
Representatives for Davidson Kempner and King Street declined to comment, while Contrarian Capital didn’t respond to requests seeking comment.
Among the litany of grievances raised by those close to the negotiations, almost all pointed to a lack of clarity over who was calling the shots for Evergrande.
Soon after the company’s 2021 default, a risk-management committee dominated by officials from Evergrande’s home province of Guangdong — in part made up of company executives and state-affiliated debt managers — was formed to guide the overhaul. Provincial authorities also said that year that they would send a working group to strengthen internal controls and management of Evergrande.
Over the course of the negotiations, Evergrande representatives would sometimes refer to “Guangzhou” (the capital of Guangdong province) as responsible for vetting virtually all key decisions, yet it remained unclear to creditors which combination of entities or individuals they were alluding to.
Investors and advisers lamented not being fully aware of whose interests were being prioritized in negotiations, nor which layers of government they were dealing with.
The secretive yet omnipresent group never directly interacted with those involved in offshore debt talks, said the people familiar. Their views were relayed to the company’s financial advisers, China International Capital Corp. and Bank of China International Holdings, which would then pass information on to bondholders via a convoluted web of communications that consisted of lawyers and advisers both in Hong Kong and the mainland, the people said.
The group could, and did, veto creditor proposals with minimal explanation, the people added.
In one example, it balked at an early offer that would’ve given offshore creditors access to the future income streams generated from Evergrande’s onshore projects. That cash instead was to be preserved for ensuring the delivery of other company projects, the people said. That reasoning wasn’t communicated to investors, who were only told the terms were not acceptable, they added.
Representatives for Evergrande, CICC, BOCI and the Guangdong government didn’t respond to requests seeking comment.
Still, early last year, Evergrande and its creditors were seemingly near an agreement to overhaul the company’s offshore debt load. Its $4.7 billion of dollar bonds due 2025 spiked as high as 11 cents.
But a series of setbacks, including weaker than expected property sales, push back from regulators and the detention of Evergrande billionaire chairman Hui Ka Yan, ultimately torpedoed a deal, fueling further frustration and leading to a significant breakdown in talks, the people said.
In early December, when a Hong Kong court gave Evergrande one last chance to strike a deal, the company’s representatives largely fell silent. Over a month went by before they finally contacted the offshore creditor group again — via email.
When they did, their proposal shocked bondholders. Not only did it do little to strengthen their offer, it crossed a number of red lines the creditor group thought were clearly laid out, people with knowledge of the situation said.
One key sticking point was the claims of a group of creditors identified as class C, which consists of some state-run banks, according to the people.
While Evergrande eventually agreed to give creditors controlling stakes in two offshore listed units’ equity — a compromise it previously refused to make, the plan would have put the foreign bondholder claims and the debt held by the banks on equal footing, shrinking the pie for the international investors, multiple people familiar said. Offshore bondholders deemed the plan particularly objectionable because class C creditors also have access to onshore assets that they have little recourse to.
A counteroffer was quickly made, and the company sent over another proposal on Jan. 29, just hours before the latest scheduled wind-up hearing.
Still, progress was scant. While heading into the hearing the creditor group was amenable to giving the company more time to work out an agreement, it neither asked for another adjournment or requested a wind-up order, the people said.
In the end, the judge overseeing the case, frustrated by the lack of progress on a deal, ordered the company’s liquidation.
‘Serious Setback’
One Evergrande adviser said that while they’re relieved the negotiations are over, how they ended has left them feeling like they wasted two years of their life. It’s a sentiment shared by many.
The company’s court-ordered liquidators from Alvarez & Marsal now begin the process of seizing and carving up the developer’s 1.74 trillion yuan ($242 billion) of assets, more than 90% of which are located in mainland China. Yet given Hong Kong’s insolvency proceedings have limited recognition in China, creditors face an uphill battle recouping losses.
“Authorities are not likely to allow offshore claimants to secure valuable onshore assets while effectively insolvent developers struggle to meet politically tense onshore obligations,” said Brock Silvers, managing director at private equity firm Kaiyuan Capital. “This is a serious setback for China’s still-developing credit markets and can only exacerbate declining market sentiment as foreign capital increasingly seeks lower risk outlets.”
…
https://fortune.com/2024/02/08/evergrande-liquidation-99-percent-haircut-hedge-funds
“And the country’s disregard for foreign creditors almost certainly means more of them will get sold for parts.”
Foreigners should have gotten the message when China quietly sealed-off Wuhan from the rest of the country during the COVID crisis while allowing international flights to continue unabated.
ChatGPT 3.5
User
Will China’s economic malaise be contained to China, just as COVID-19 was?
ChatGPT
China’s economic malaise could have global implications, but whether it will be contained to China alone is uncertain. Like COVID-19, economic issues in one country can have ripple effects throughout the global economy, particularly given China’s significant role in global trade and supply chains. Factors such as the extent of government intervention, international cooperation, and the resilience of other economies will all play a role in determining the extent of the impact beyond China’s borders.
User
What about all the Chinese investors who paid top dollar for US real estate?
ChatGPT
The economic challenges in China could potentially affect Chinese investors who have heavily invested in US real estate. If there is a significant downturn in the Chinese economy, it could impact the financial stability of these investors and their ability to continue investing or maintaining their properties abroad. This could have repercussions in the US real estate market, particularly in areas where Chinese investors have been major players. However, the extent of the impact would depend on various factors such as the scale of Chinese investment, the specific regions and types of properties involved, and the resilience of the US real estate market itself.
User
In what specific US regions were Chinese investors major players?
ChatGPT
Chinese investors have been significant players in various US regions, particularly in major metropolitan areas and cities known for their real estate investment opportunities and desirable properties. Some specific regions that have seen significant Chinese investment include:
West Coast Cities: Cities such as Los Angeles, San Francisco, and Seattle have attracted Chinese investors due to their robust real estate markets, cultural attractions, and proximity to Asia.
New York City: Manhattan, in particular, has been a hotspot for Chinese real estate investment, with wealthy individuals and companies purchasing high-end properties for investment or personal use.
Miami: Miami’s luxury real estate market has also been popular among Chinese investors, drawn by the city’s warm climate, waterfront properties, and status as an international hub.
Silicon Valley: Chinese investors have shown interest in the tech hubs of Silicon Valley, investing in commercial properties and residential real estate in areas surrounding major tech companies.
Chicago: Chinese investment in Chicago has been notable, particularly in downtown luxury condominiums and commercial real estate projects.
These are just a few examples, but Chinese investment in US real estate has been diverse and spread across various regions, driven by factors such as economic growth, diversification of investment portfolios, immigration trends, and educational opportunities for Chinese students.
User
Now that Chinese investment demand has cratered, what is happening to real estate prices in the US areas where they previously paid top dollar?
ChatGPT
The impact of decreased Chinese investment demand on real estate prices in US areas where they previously paid top dollar can vary depending on a range of factors including local market conditions, overall demand, and the resilience of the real estate sector in those areas.
In some regions heavily reliant on Chinese investment, such as luxury markets in cities like New York, Los Angeles, and San Francisco, a decline in Chinese demand could lead to downward pressure on prices, particularly in segments of the market where Chinese buyers were prominent. Sellers may need to adjust their expectations or offer incentives to attract buyers from other demographics.
However, it’s essential to note that real estate markets are influenced by a complex interplay of factors beyond just one demographic’s investment activity. Other factors such as domestic demand, economic conditions, interest rates, and housing supply dynamics also play significant roles in shaping real estate prices.
Overall, while decreased Chinese investment demand may have some impact on specific segments of the US real estate market, the extent and duration of any price adjustments will depend on how these factors interact and evolve over time.
User
You are not an economist, are you?
ChatGPT
I’m not an economist, but I’m trained on a wide range of topics, including economics and real estate. While I can provide general insights and information based on available knowledge, my responses should be considered as informational rather than expert financial advice. If you have specific questions or need in-depth analysis, consulting with a qualified economist or financial advisor would be advisable.
ChatGPT can make mistakes. Consider checking important information.
ChatGPT
ChatGPT 3.5
User
Is generative AI the greatest invention since sliced bread?
ChatGPT
As impressive as generative AI is, comparing it to sliced bread might be a bit of a stretch. While generative AI has incredible potential for creativity and innovation, it’s just one of many groundbreaking inventions that have transformed society. Sliced bread revolutionized convenience and food preparation, but generative AI impacts a wide range of industries and fields, from art and entertainment to healthcare and finance. So, it’s more accurate to say that generative AI is a significant advancement in technology with far-reaching implications rather than labeling it as the greatest invention since sliced bread.
User
Is it safe to assume that stocks of companies involved in AI can only go up from now on?
ChatGPT
It’s not safe to assume that stocks of companies involved in AI will only go up from now on. While AI is a rapidly growing field with vast potential, stock prices are influenced by many factors, including market conditions, company performance, competition, regulatory changes, and economic trends. Investing in AI companies can be lucrative, but it also carries risks like any other investment. Conduct thorough research, consider diversification, and consult with a financial advisor to make informed investment decisions.
2 WA
ChatGPT can make mistakes. Consider checking important information.
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