These ‘Special’ Deals And Rent Reductions Prove What We Have Always Known: The Pricing Of Housing Is Purely Artificial

1. ‘He says over five thousand new apartments came online in Colorado Springs, while only 2,317 were occupied by the end of the year’

   How do those 5% cap rates look now?

   1. In the big scheme of things, do apartments and rental housig classify as “commercial” real estate? My understanding is that lots of commercial space is vacant. And my steadfast recommendation for eliminating the vacancy problem remains the same as always: lower that rent. Every vacant property will rent out at some price, but you will never discover what that price is if you don’t lower the rent you offer to market value.

      1. I am sure the esteemed Prof Bear knows the answer and was being thought provoking …. but i didnt know and had to look

         Residential includes:
         – Single Family, Detached Homes
         – Duplex, Triplex, Fourplex
         – Townhouse
         – Some housing co-operatives
         – Condominiums

         While Apartment Buildings are designed for residential use, large-scale apartment complexes are considered commercial property because space is leased out to others as part of a rental business.

         Popular types of commercial space include the following:

         – Land Investments
         – Large-Scale Multifamily Housing
         – Office Buildings
         – Retail Stores
         – Retail Warehouses
         – Storage Units
         – Industrial Buildings
         – Manufacturing Facilities
         – Storage Buildings
         – Medical Clinics

         1. more … the more you look, there more that folks are trying to blur lines – see last entry about the commercial classification funding

            After some years, John decided to scale up his investment strategy. He bought a 20-unit apartment building, a commercial property in the heart of the city. Unlike his fourplex, this property was considered commercial real estate due to the number of units and its primary purpose: to generate income.

            The classification of apartments as commercial or residential properties has notable impacts on the real estate market. This categorization affects pricing, taxation, investment opportunities, and rental agreements.

            Commercial real estate usually involves more significant cash flows and potentially higher returns on investment but also comes with increased risk and complexity in management. On the contrary, residential real estate may be easier to manage and finance, but it might not offer the same level of profitability.

            Commercial real estate is also much more difficult and costly to finance than residential property. Because lenders generally see commercial loans as more risky, interest rates are higher and loan term lengths may be as short as 5 years. Commercial real estate borrowers may also be asked by the lender to prove they have successfully owned and operated commercial properties before.

            1. User
               Do apartments and rental housing classify as “commercial” real estate?

               ChatGPT
               Apartments and rental housing are typically considered part of the residential real estate sector rather than the commercial real estate sector. Commercial real estate usually refers to properties used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

               User
               What if large financial corporations are the owners of rental housing for investment gain and rental income? Does that change the classification of this swath of real estate that was traditionally owned locally by individuals and small businesses?

               ChatGPT
               While the ownership structure may change with large financial corporations owning rental housing for investment purposes, the classification of the real estate itself usually remains within the residential sector. However, in some contexts, such as from a financial or investment perspective, these properties might be considered part of the commercial real estate market due to the scale of ownership and the investment objectives involved. Ultimately, the classification can vary depending on the context and perspective from which it is being considered.

               User
               What if lending institutions are heavily concentrated in loans to corporations that engage in buying up large swaths of residential real estate for investment gains and rental income? Would this change the nature of the real estate involved from residential to commercial?

               ChatGPT
               If lending institutions predominantly finance corporations that acquire large amounts of residential real estate for investment purposes, it could lead to a shift in how that real estate is perceived and classified. While the physical properties themselves remain residential, the scale and nature of ownership, along with the primary objective of generating investment gains and rental income, might align more closely with commercial real estate practices. In such cases, there could be arguments for considering this type of real estate as a hybrid or falling within a gray area between residential and commercial classifications. Ultimately, the classification might depend on regulatory definitions, industry standards, and the specific context in which the real estate is being evaluated.

               User
               Is there a risk the whole shit cart of properties purchased on leverage could come crashing down if interest rates increased and property values plummeted?

               ChatGPT
               Yes, there is indeed a risk when properties are purchased on leverage, especially if interest rates increase and property values decline. When properties are highly leveraged, meaning they are purchased with a significant amount of debt, even a small decrease in property values can result in financial difficulties for the owners. If interest rates rise, it can increase the cost of servicing the debt, putting additional pressure on the owners.

               In such scenarios, if property values were to plummet and owners were unable to cover their debt obligations, it could lead to defaults, foreclosures, and potentially a broader impact on the real estate market. This kind of situation could have ripple effects on lending institutions, investors, and the economy as a whole. Therefore, it’s important for investors and lenders to carefully assess and manage the risks associated with leverage and fluctuations in interest rates and property values.

               ChatGPT can make mistakes. Consider checking important information.

      2. Fox Business
         Economy
         Published February 19, 2024 12:16pm EST
         Commercial real estate trouble could trigger systemic credit crash, fund managers say
         Commercial real estate crash seen as most likely catalyst for systemic credit event
         By Megan Henney FOXBusiness
         ‘Kudlow’ panelists Kevin O’Leary, Kevin Hassett and John Carney discuss inflation, bank failures and credit card delinquencies.
         Kevin O’Leary: More failures of regional banks around office space and commercial real estate in the months ahead

         ‘Kudlow’ panelists Kevin O’Leary, Kevin Hassett and John Carney discuss inflation, bank failures and credit card delinquencies.

         Fund managers are growing more worried that trouble in the commercial real estate sector could trigger a credit crisis in the U.S., according to a new Bank of America survey.

         About 16% of participants in the global fund manager survey identified a “systemic credit event” as the top risk to markets in February, compared with just 11% the prior month. It marked the third-largest tail risk for markets, behind sticky inflation and geopolitics.

         The most likely source of a credit event, according to the fund managers, is the commercial real estate market.

         Other possible sources include shadow banking, or non-bank financial institutions that are not subject to regulation, including hedge funds, private equity funds, investment banks and mortgage lenders, as well as U.S. corporate debt.

         About $1.5 trillion in commercial mortgage debt is due by the end of 2025, but steeper borrowing costs, coupled with tighter credit conditions and a decline in property values brought on by remote work, have increased the risk of default.

         Roughly $929 billion worth of commercial real estate loans are set to mature this year, according to the Mortgage Bankers Association. Borrowers may have no choice but to refinance with significantly higher interest rates or sell their properties at a steep loss.

         The Federal Reserve raised interest rates to the highest level since 2001 in response to sky-high inflation. Rates are poised to remain elevated for some time, as policymakers have signaled they are not prepared to start reducing rates until they are more confident that inflation has returned to 2%.

         Complicating the matter is the fact that small and regional banks are the biggest source of credit for the $20 trillion commercial real estate market, holding about 80% of the sector’s outstanding debt. Regional banks were at the epicenter of the upheaval within the financial sector last year following the collapse of Silicon Valley Bank, and there are concerns that the turmoil could make lending standards drastically more restrictive.

         During a credit crunch, banks significantly raise their lending standards, making it difficult for businesses or households to get loans. Borrowers may have to agree to more stringent terms like high interest rates as banks try to reduce the financial risk on their end.

         Those fears were reignited earlier this month when New York Community Bank slashed its dividend and revealed an unexpected quarterly loss on real estate loans tied to both office and apartment buildings. Its shares have lost about half of their value since then.
         …
         https://www.foxbusiness.com/economy/commercial-real-estate-trouble-could-trigger-systemic-credit-crash-fund-managers-say

         1. Financial Times
            New York Community Bank
            Number of weak US banks jumps as NYCB stabilised on $1bn capital raise
            Investors including former Treasury secretary Steven Mnuchin stand to make hundreds of millions on bailout
            Joseph Otting, the former regulator, has taken over as NYCB chief executive
            Joshua Franklin, Stephen Gandel and Brooke Masters in New York
            March 7 2024

            The number of problem banks in the US has jumped 18 per cent, regulators warned, as New York Community Bank was stabilised by a $1bn capital raise led by former US Treasury secretary Steven Mnuchin.

            Twelve months after the failure of Silicon Valley Bank shook the regional banking sector, NYCB’s recent struggles have underscored the continuing fragility at some US lenders.

            The Federal Deposit Insurance Corporation on Thursday said the number of weak US banks had risen by eight to 52 in the final three months of 2023, the biggest jump since the demise of SVB.
            …

            1. Setting up like March 2008…

2. ‘I got eight weeks,’ said Aiden. ‘It was pretty nice. Pretty nice indeed!’

   That’s the spirit Aiden!

3. ‘The listings that would generate between two and three dozen inquiries within days started to decrease to about three or four only around August or September 2023. ‘It stayed that way all through last fall and carried also into this year where we’re not getting the volume of inquiries that we’ve had’

   But there are thousands of people moving to yer sh$thole every hour Joe?

4. You will own nothing.

5. New York Times — Why It’s Hard to Explain Joe Biden’s Unpopularity (3/9/2024):

   “Apart from anxiety about his age, there isn’t a chattering-class consensus or common shorthand for why his presidency is such a political flop. Which is why, perhaps, there was a rush to declare his State of the Union address a rip-roaring success, as though all Biden needs to do to right things is to talk loudly through more than an hour of prepared remarks.”

   Chattering class = soft, soft, city hands.

   “With Biden, it has been different. Attempts to reduce his struggles to the inflation rate are usually met with vehement rebuttals, there’s a strong market for “bad vibes” explanations of his troubles, a lot of blame gets placed on partisan polarization even though Biden won a clear popular majority not so long ago, and even the age issue has taken center stage only in the past few months.”

   81 million ballots, not 81 million votes.

   “Some of this mystification reflects liberal media bias accentuated by contemporary conditions — an unwillingness to look closely at issues like immigration and the border, a hesitation to speak ill of a president who’s the only bulwark against Trumpism.

   But I experience some mystification myself. I think that Biden’s record has big problems and that the economy isn’t as golden as some of his defenders claim. But even I look at his numbers and think, really, that bad?”

   https://archive.is/rxDRV

   Ask yourself, are you any better off now than you were in January 2021?

   1. [From Wikipedia…]

      Chattering classes

      The chattering classes is a politically active, socially concerned and highly educated section of the “metropolitan middle class”,[1] especially those with political, media, and academic connections. It is a generally derogatory term,[1] often used by pundits and political commentators.

      United Kingdom
      It is sometimes used to refer to a liberal elite, but its first use by British journalist Frank Johnson in 1980 appeared to include a wider range of pundits.[1] Indeed, the term is used by people all across the political spectrum to refer to the journalists and political operatives who see themselves as the arbiters of conventional wisdom.[2] As such, the notion of “chattering classes” can be seen as an antonym to the older idea of an unrepresented silent majority, made notable by the U.S. Republican Party President Richard Nixon.

      United States
      In the United States, the term has come to be used by both the left and right and to describe political opponents, with Stephen Perrault of the Merriam-Webster dictionary suggesting that the term has “connotations of idleness, of useless talk, that the noun ‘chatter’ does. … These people don’t amount to much—they like to hear themselves talk.”[3]

      1. “These people don’t amount to much—they like to hear themselves talk”

         Sounds about right.

         And considering the bloodbath of layoffs of Real Journalists and People On TeeVee recently, not many others want to hear them talk either.

         1. People On TeeVee

            Streaming channels, which suddenly need to be profitable, are axing projects, shows and movies left and right.

6. You will eat the bugs.

   The Atlantic — Everything Can Be Meat (3/8/2024):

   “Lab-grown meat, also widely known as cultivated meat, has long been heralded as the future of food. But so far, the goal of perfectly replicating meat as we know it—toothy, sinewy, and sometimes bloody—has proved impractical and expensive. Once-abundant funding has dried up, and this week, Florida moved toward becoming the first state to ban sales of cultivated meat. It seems unlikely that whole cuts of cultivated meat will be showing up on people’s plates anytime soon—but maybe something like beef rice could. The most promising future of lab-grown meat may not look like meat at all, at least as we’ve always known it.”

   Has long been heralded? By who?

   “The promise of cultivated meat is that you can have your steak and eat it too. Unlike the meatless offerings at your grocery store, cultivated meat is meat—just created without killing any animals. But the science just isn’t there yet. Companies have more or less figured out the first step, taking a sample of cells from a live animal or egg and propagating them in a tank filled with a nutrient-rich broth. Though not cheaply: By one estimate, creating a slurry of cultivated cells costs $17 a pound or more to produce.

   The basic science of lab-grown meat can be used for more than just succulent chicken breasts and medium-rare steaks. Cells grown in a tank function essentially like ground meat, imparting a meaty flavor and mouthfeel to whatever they are added to, behaving more like an ingredient or a seasoning than a food product. Hybrid meat products, made by mixing a small amount of cultivated-meat cells with other ingredients, are promising because they would be more cost-effective than entire lab-grown steaks or chicken breasts but meatier than purely plant-based meat.

   Already, the start-up SciFi Foods is producing what has been described as a “fatty meat paste” that is intended to be mixed with plant-based ingredients to make burgers. Only small amounts are needed to make the burgers beefy; each costs less than $10 to make, according to the company—still considerably more than a normal beef patty, but the prices should come down over time. Maybe it sounds weird, but that’s not so different from imitation crab—which doesn’t contain much or any crab at all. A similar premise underlies the plant-based bacon laced with cultivated pork fat that I tried last year. Was it meat? I’m not sure. Did it taste like it? Absolutely.”

   Fatty meat paste?

   “Meat can be so much more than what we’ve always known. “We don’t have to make meat the same way that it’s always come out of an animal,” Bomkamp said. “We can be a little bit more expansive in what our definition of meat is.”

   Eventually, cultivated meat could impart a whiff of meatiness to blander foods, creating new, meat-ish products in the process that are more sustainable than regular meat and more nutritious than plants.

   In this scenario, cultivated meat probably won’t save the planet from climate change and animal suffering. “It wouldn’t serve its original function of being a direct replacement for commercial meat,” Daniel Rosenfeld, who studies perceptions of cultivated meat at UCLA, told me. But at the very least, it could provide another dinner option.

   https://archive.is/Ut8gm

   New, meat-ish products. Klaus approves of this new and improved peasant sustanance menu.

7. ‘I basically told her, you know, are you going to pay anything before you leave?’ Luna recalled. ‘And she literally said, ‘No, I’m not paying you anything.’

   So you want to be a landlord……

8. Does it seem like we are living through an era where there is perpetually a recession six months out?

   1. Mar 7, 2024
      Episode 1113
      The recession that’s always six months away
      Chip Somodevilla/Getty Images
      Plus, deepfakes of Kimberly Adams have come a long way.

      Federal Reserve Chair Jerome Powell took a trip to Capitol Hill this week to testify about the health of the U.S. economy. We’ll get into the TL;DR of Powell’s testimony and why he doesn’t foresee a recession around the corner. And, we’ll talk about how political campaigns are spending on advertising these days. Plus, the latest regional banking woes and what rapidly advancing deepfakes could do to this year’s elections.
      …
      https://www.marketplace.org/shows/make-me-smart/the-recession-thats-always-six-months-away/

      1. We have a number of cities that have skipped right over the recession and gone straight into a depression. The rate of business loss in SF and Ookland is unprecedented in our lifetimes. The homelessness and squalor that continues to expand is also unprecedented.

         There are 3 kinds of lies: lies, damned lies, and statistics.

         1. I see lots of chatter on glassdoor and nextdoor abou how people can’t find work, despite reassurances from the gooberment that there are plenty of unfilled jobs. What I’m reading is that people who have never had trouble finding a new job are 6+ months into unemployment.

   2. 23 hours ago
      Did February jobs report trigger ‘Sahm rule’ recession indicator? No, says rule’s creator, Claudia Sahm.
      By Joseph Adinolfi

      Another uptick in the unemployment rate is driving discussion of whether or not the Sahm Rule, an early recession indicator developed by former Federal Reserve economist Claudia Sahm, has been triggered.

      To help clear things up, Sahm herself took to X, the social-media platform formerly known as Twitter, to declare that it has not.

      As of February, the three-month average of the unemployment rate is still roughly 23 basis points shy of triggering the Sahm Rule, according to data from the St. Louis Fed.

      The rule is relatively straightforward: It triggers when the three-month average unemployment rate climbs 0.5% above the lowest three-month average reading from the past year. According to its creator, the rule has a near-perfect track record of sniffing out a recession within a few months of one starting, dating back to World War II.
      …
      https://www.marketwatch.com/livecoverage/stock-market-today-s-p-500-hovers-near-record-as-investors-await-february-jobs-report/card/did-february-jobs-report-trigger-sahm-rule-recession-indicator-no-says-rule-s-creator-claudia-sahm–Z7uMuAKaPyXEvZj8qddd

   3. Lowest Number of S&P 500 Companies Citing “Recession” on Earnings Calls Since Q4 2021
      Earnings
      By John Butters | March 8, 2024

      Given concerns in the market about a possible economic slowdown or recession, did more S&P 500 companies than normal comment on recession during their earnings conference calls for the fourth quarter?

      The answer is no. FactSet Document Search (which allows users to search for key words or phrases across multiple document types) was used to answer this question. Through Document Search, FactSet searched for the term “recession” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from December 15 through March 7.

      Of these companies, 47 cited the term “recession” during their earnings calls for the fourth quarter. This number is below the 5-year average of 85 and below the 10-year average of 61.

      In fact, this quarter will mark the lowest number of S&P 500 companies citing “recession” on earnings calls for a quarter since Q4 2021 (15). After peaking in Q2 2022, the number of S&P 500 companies citing “recession” on earnings calls has declined (quarter-over-quarter) for six straight quarters.
      …
      https://insight.factset.com/lowest-number-of-sp-500-companies-citing-recession-on-earnings-calls-since-q4-2021

   4. Economy
      A surprise recession could strike after an unexpected jump in the unemployment rate, economist says
      Matthew Fox
      Mar 9, 2024, 5:45 AM PST
      Recession outlook, going out of business, economy
      Robert Alexander / Getty

      – An unexpected rise in the unemployment rate suggests a surprise recession could hit the US economy, according to David Rosenberg.

      – The unemployment rate is now 0.5 percentage points above its cycle low to 3.9%, which Rosenberg says is a worrying sign.

      – “It messes up the soft landing narrative because once it rises this much from the lows, the recession nobody ever sees coming arrives,” he said.
      …
      https://www.businessinsider.com/next-recession-economy-outlook-unemployment-rate-rise-february-jobs-report-2024-3

      1. Surprise recession? Really?

   5. US Markets
      Dow Jones -0.18%
      Nasdaq -1.53%
      S&P 500 -0.65%
      META -0.69%
      TSLA. -0.21%
      AAPL -0.15%

      Markets
      ‘The illusion of prosperity’: 7 underrated reasons why a recession is still on the way, according to long-time bear David Rosenberg
      James Faris
      Mar 9, 2024, 2:01 AM PST
      Financial crisis
      PonyWang/Getty Images

      – The US economy is still destined to slip into a recession soon, David Rosenberg warns.

      – Better-than-expected GDP growth and consumer spending shouldn’t inspire confidence.

      – Here are seven reasons why the economy will contract, according to the long-time bear.
      …
      https://www.businessinsider.com/next-recession-economy-outlook-prediction-consumer-spending-downturn-david-rosenberg-2024-3

   6. Recession Warnings, Overvaluation: The Stock Market Is in ‘Uncharted Territory’
      By Greg Bartalos
      March 08, 2024, 4:00 pm EST

      When Jim Stack, the founder and CEO of Whitefish, Mont.–based Stack Financial Management, founded his $1.8 billion firm three decades ago, little did he know that he would become a pioneer of sorts.
      …
      https://www.barrons.com/articles/top-1200-financial-advisors-ranking-james-stack-ad4414f5

   7. Yahoo Finance
      Business Insider
      S&P 500 might crash 60%, a recession is looming, and speculation is rife, warns elite technical analyst Milton Berg
      Theron Mohamed
      Wed, Mar 6, 2024, 3:33 PM PST 3 min read
      In this article:

      – Market bears calling for a 60% crash in the S&P 500 could soon be proven correct, Milton Berg said.

      – The technical analyst said that stocks may be close to a final peak as speculation runs hot.

      – Berg warned a recession appears likely based on several economic indicators that are flashing red.

      Stocks might crash up to 60%, a recession seems likely, and market speculation has reached dangerous levels, a veteran technical analyst warned.
      …
      https://finance.yahoo.com/news/p-500-might-crash-60-233324840.html

   8. Money & Markets
      Cuts on cuts
      Layoffs reached their highest level since the Great Recession last month
      February job cuts were the highest that month since 2009, with tech and finance leading the pack
      By Laura Bratton
      UpdatedThursday 6:54PM
      …
      https://qz.com/layoffs-great-recession-inflation-big-tech-ai-1851318218

   9. LA Times
      U.S. hiring keeps booming. Why is California lagging behind?
      Don Lee
      Fri, Mar 8, 2024, 3:00 PM PST 5 min read
      …
      https://finance.yahoo.com/news/u-hiring-keeps-booming-why-230059334.html

   10. Bay Area
       San Francisco
       S.F.’s unemployment rate jumps to highest level in over two years amid heavy tech layoffs
       By Roland LiMarch 8, 2024
       Amid layoffs in tech, hospitality and retail, San Francisco has its highest unemployment rate since 2021.
       Justin Sullivan/TNS

       San Francisco’s unemployment rate jumped almost half a percentage point in January from the previous month, to 4% amid heavy tech layoffs, according to state data released Friday.

       It’s the highest level since October 2021, when it was also 4% and the Bay Area was recovering from the worst of the pandemic. San Francisco’s unemployment rate was a revised 3.6% in December 2023 and 2.8% in January 2023. The rates are not seasonally adjusted.

       San Francisco and San Mateo County, which make up a single metro division, saw a loss of 15,700 jobs in January. The hardest-hit sector was professional, scientific and technical services, which lost 4,000 jobs. Hotels and food services lost 1,600 jobs, underscoring continued weakness in the tourism sector. Retail saw a loss of 1,300 jobs as downtown store closures continued.

       Between January 2023 and 2024, the tech-heavy information sector has lost 15,300 jobs across the two counties.

       Numerous tech companies have cut jobs this year. Google, Salesforce, eBay, Cisco and Grammarly have all had layoffs in San Francisco since January, according to state filings.

       San Francisco now has a slightly higher unemployment rate than the nation. U.S. companies added a robust 275,000 non-farm jobs in February, but the national unemployment rose from 3.7% to 3.9%.

       California’s unemployment rate rose slightly from a seasonally adjusted 5.1% to 5.2% in January compared to the prior month.
       …
       https://www.sfchronicle.com/sf/article/s-f-unemployment-rate-tech-layoffs-18759994.php

   11. Local News
       San Diego County unemployment numbers rise to 4.7% in past month
       Last month’s rate compares with an unadjusted unemployment rate of 5.7% for California and 4.1% for the nation during the same period.
       Author: City News Service
       Published: 3:32 PM PST March 8, 2024
       Updated: 3:32 PM PST March 8, 2024

       SAN DIEGO — The unemployment rate in San Diego County increased to 4.7% in February, up from a revised 4.3% in January and above the year-ago estimate of 3.7%, according to figures released Friday by the state Employment Development Department.

       Last month’s rate compares with an unadjusted unemployment rate of 5.7% for California and 4.1% for the nation during the same period.
       …
       https://www.cbs8.com/article/news/local/san-diego-county-unemployment-numbers-rise/509-9fc50993-1f19-40df-ae02-e22a0a16ae3e

       1. CA. unemployment rates: CA. finally woke up the next morning, saw who he had drunkenly slept with as the brown bag fell off, and promptly chewed his arm off to quickly escape.

   12. Yahoo Finance
       Business Insider
       The stock market is set up for panic, and it could spark a steep crash, portfolio manager says
       Jennifer Sor
       Fri, Mar 8, 2024, 3:51 PM PST 2 min read
       – The stock market has the perfect setup for a steep correction, Michael Gayed warned.
       – The portfolio manager pointed to three warning signs flashing in the market.
       – “I still think we’re all in a lot of trouble,” Gayed wrote. “All bubbles end.”

       The market is looking like it’s in the “perfect setup” for investor panic and a coming stock crash, according to one of Wall Street’s most bearish fund managers.

       Michael Gayed, a portfolio manager at Tidal Financial and the author of The Lead-Lag Report, warned that stocks could be at risk of a major correction, thanks to a handful of warning signs that are flashing in the market.

       In an op-ed for InvestorPlace on Thursday, Gayed pointed to the rising price of gold, utility stocks, and long-term Treasury bonds — three assets investors typically flock to for safety when the market starts to sour.

       “It’s uncommon for these three traditionally defensive asset classes to move in such harmony, and historically, this kind of movement has been a precursor to a broader market shift,” Gayed said. “The defensive asset classes’ unison movement is what matters here, and the fact that it’s happening during a bubble of speculative trading screams that something could be about to break. Be warned.”

       Gayed has warned of a massive bubble forming in stocks for months — in line with other bears on Wall Street, who say that the hype for artificial intelligence is overblown and bound to end badly. Stocks now look like they did prior to the dot-com and 2008 market crashes, top economist David Rosenberg warned in a note earlier this year, pointing to the dominance of mega-cap tech in the S&P 500.

       Gayed warned investors to brace for a potential stock market crash, though he didn’t have an official price target for the year.

       “How the hell is this some bull market when it’s literally the entire world cheering the widening of the wealth gap that’s happening between mega-cap technology stocks and nearly every single other public company in existence,” Gayed said in a February op-ed. “I still think we’re all in a lot of trouble, and time will prove my original analysis (largely) right. All bubbles end.”
       …
       https://finance.yahoo.com/news/stock-market-set-panic-could-235133465.html

   13. Stock market surges on hint interest rate cuts may be coming
       Benzinga

       The U.S. stock market surged to record highs this past week, buoyed by Federal Reserve Chair Jerome Powell’s testimony to Congress, where he indicated a readiness to ease monetary policy if continued positive data affirm the ongoing disinflation process.
       …
       https://www.freep.com/story/money/business/2024/03/09/stock-market-surges-on-hint-interest-rate-cuts-may-be-coming/72864208007/

   14. Banque de France Bulletin
       What does an inversion of the yield curve tell us?
       7 March 2024
       Authors : Matthieu Bussière, Stéphane Lhuissier

       Bulletin No. 250, article 3. In June 2023, the yield on 10 year government bonds fell below the yield on 2 year bonds in the euro area. Inversions of the yield curve such as this have sometimes been perceived as a signal of recession, and certain assessments covering past events appear to confirm this. However, other factors may explain the inversion, particularly the asset purchase programme of the European Central Bank (ECB), whose accumulated stocks are driving down long term rates. Therefore, the negative slope of the euro area yield curve tends to overstate the risk of recession. Besides, the ECB’s staff economic projections for December 2023 estimated euro area GDP growth at 0.8% in 2024.
       …
       In June 2023, the inversion of the yield curve (when 2 year government bond yields rise above the 10 year yields) stoked fears of a recession in the euro area. Despite a slight upturn in 2021 and 2022, the spread between long term and short term euro area bond yields, known as the “slope of the yield curve”, has fallen into negative territory, and to its lowest level since the recession of 1992 (see Chart 1). This observation is particularly striking in the case of German bonds, which are more sensitive to key interest rate expectations and less susceptible to default risk. Indeed, the slope reached -37 basis points in November 2023.

       The slope of the yield curve is highly volatile over time, but typically stays in positive territory because investors demand additional compensation for making long term investments (a “term premium”). Therefore, a negative slope is relatively rare, but not unprecedented. It is conventionally perceived as a signal of recession. However, there is no consensus among economists as to the mechanisms behind this correlation, and the correlation itself is undermined by major exceptions, such as the sovereign debt crisis that rocked the euro area between 2010 and 2012 and the public health crisis of 2020: neither were preceded by an inverted yield curve. Furthermore, as the indicator is extremely volatile, assessing the risk of a recession becomes highly dependent on the date taken into consideration.

       For some time now, the academic literature has explored the link between the slope of the yield curve and the risk of recession using “probit” statistical models (Estrella and Hardouvelis, 1991, Estrella and Mishkin, 1998, Rudebusch and Williams, 2009, for the United States; Sabes and Sahuc, 2023, for the euro area). These studies show a high degree of statistical regularity between the yield curve and recession in the United States, but the link is not systematic for the euro area.

       The yield curve inversions observed in the euro area since June 2023 also give us cause to re examine this link. This bulletin therefore aims to review and explain forecasts of recession in the euro area based on the yield curve.
       …
       https://www.banque-france.fr/en/publications-and-statistics/publications/what-does-inversion-yield-curve-tell-us

   15. Inverted Yield Curve: Is it Still a Recession Indicator?

       An inverted yield curve is a good, if imperfect, recession indicator. The economy has been resilient to the latest inversion.
       By Scott Ward
       Reviewed by John Divine
       Feb. 26, 2024
       …
       https://money.usnews.com/investing/articles/inverted-yield-curve-is-it-still-a-recession-indicator

   16. Am I the only market observer to notice an unusually large herd of dumb bovines stampeding towards the edge of that nearby cliff?

   17. Stock Market Today
       Dow Jones Futures: Nvidia Reversal Is Wake-Up Call For AI-Led Market Rally; What To Do Now
       ED CARSON 09:01 AM ET 03/09/2024

       Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.
       …
       https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-nvidia-reversal-is-ai-market-rally/

   18. Business
       San Diego unemployment rate hits highest level since 2021
       Shoppers at Target store in Clairemont
       Retail hiring dropped in January. Pictured: The Target store in Clairemont on Black Friday.
       (Nelvin C. Cepeda/The San Diego Union-Tribune)
       Retail and tourism hiring dropped in January as holiday hiring ended. Other sectors lost jobs too, such as professional and business services
       By Natallie Rocha, Phillip Molnar
       March 8, 2024 2:39 PM PT

       San Diego County’s jobless rate rose to its highest level since 2021 as retail, tourism and other sectors dropped to start the year.

       The county’s unemployment rate was 4.7 percent in January, up from 4.3 percent the previous month, state labor officials said this week. San Diego’s rate was higher than the national average of 4.1 percent but lower than the California average of 5.7 percent for the same time period.

       It was San Diego County’s highest jobless rate since October 2021, with large losses in retail, tourism and professional and business services. It is common for the unemployment rate to rise in January as the holiday season comes to a close.

       “I think it is something to note” that the unemployment rate rose, said Alan Gin, an economist at the University of San Diego. “But it has been higher the last couple of years in January. We need to see some more data before we can draw some type of conclusion that the local economy is slowing down.”

       San Diego’s biggest monthly job losses were in the trade, transportation and utilities sector, which includes retail workers, with a decline of 7,300 jobs. Leisure and hospitality (work in hotels, bars, casinos and restaurants) dropped by 6,300 jobs.

       Another segment that saw job losses, a decline of 3,800, in January was in the legal, scientific, waste management and architectural space. Part of this segment includes higher-earning jobs in the life sciences and tech industry, which declined by 1,700 jobs in January.

       San Diego’s tech and life science industries saw a number of layoffs to end the year as companies refocused budgets amid persistent inflation and a tougher fundraising environment. For instance, local high-tech companies, from Resmed to Viasat, engaged in “rightsizing” their workforce.

       Daniel Enemark, chief economist at the San Diego Regional Policy & Innovation Center, said the county’s unemployment rate was 4.4 percent — down from 4.5 percent in December — when adjusted for seasonal swings. That compares to the seasonally adjusted U.S. average of 3.7 percent and 5.2 percent in California.

       He said the decline in San Diego County’s adjusted rate is “typical for the start of the year, when retail and other seasonal jobs are cut at the end of the holidays.”

       “The decrease in seasonally adjusted unemployment is especially impressive given that the region’s labor force grew by 7,000 — slightly more than is typical for January,” Enemark said.
       …
       https://www.sandiegouniontribune.com/business/story/2024-03-08/san-diego-unemployment-rate-hits-highest-level-since-2021

   19. Asia Times
       Gold, Bitcoin surges show black swan risk rising
       Investors taking out insurance against extreme events – the sort of trouble that might arise from a geopolitical crisis
       by David P Goldman
       March 9, 2024
       Gold and Bitcoin are seen as hedges against dollar weakness to come. Image: Twitter Screengrab

       Gold continued to break price records on Friday, trading at US$2,183 an ounce at mid-afternoon, following a more dramatic rally in Bitcoin. Gold led Bitcoin in 2020 and 2021, during the Covid crisis. This time Bitcoin clearly led gold, suggesting that investors have more confidence in the high-tech alternative to the dollar.

       Key to understanding how gold gauges geopolitical risk is the longstanding relationship between Treasury Inflation Protected Securities (TIPS) and the precious metal. Both are hedges against unexpected inflation or debasement of the dollar.

       From 2007 through 2022, the gold price moved in lockstep with TIPS yields, as investors used them interchangeably. The seizure of more than $300 billion of Russian reserves after Moscow’s February 2022 invasion of Ukraine changed that.

       Foreign central banks hold $3.4 trillion of Treasury debt and all foreigners own more than $8 trillion. Confiscation of reserves persuaded many foreign investors, official as well as private, to shift to gold.

       That’s why the value of gold predicted by TIPS yields remained very close to the actual gold price from 2007 to 2022, and then decoupled. Gold is now nearly $900 “rich” to TIPS yields. The divergence between TIPS yields and gold is at an all-time high.

       This is all the more remarkable given the strong performance of world stock markets during the past several months and the subdued price of risk hedges in options markets. The cost of options on the S&P 500 (the VIX Index) or the cost of options on major currencies is close to its all-time low.
       …
       https://asiatimes.com/2024/03/gold-bitcoin-surges-show-black-swan-risk-rising/

9. Linked from Revolver News, a lengthy discussion of the book Camp Of The Saints (3/5/2024):

   “We often hear hysterical lies about “banned books,” meaning any work that has ever been criticized by anyone on the Right. But all such books are freely available, globally, to anyone, in multiple editions, in all formats and from all major vendors. The only books actually banned are Right books, and there are multitudes of such books. At this moment, Jean Raspail’s The Camp of the Saints, a fifty-year-old parable about the swamping of France by a million invaders from India, is perhaps the most dangerous book of all to the decades-long Left project of replacing the populations of the West with alien migrants. The people have begun to notice, so it is no wonder that the Left has today redoubled its efforts to ban the book. What better time to talk about it?”

   https://theworthyhouse.com/2024/03/05/the-camp-of-the-saints-jean-raspail/

   1. Used copies are available on Amazon starting at $250. No new copies are available.

   2. Internet Archive/books: The Camp of the Saints
      https://archive.org/details/campofsaints00jean

      1. ⬆️ “Camp fo the Saints” Internet Archive
         Have to sign in to get access to all pages.

   3. Available free pdf version…
      https://www.jrbooksonline.com/pdfs/camp_of_the_saints.pdf

      1. 👍🏻 Interesting site.

10. Aug 31, 2016

    Will the risk of overheating in the U.S. commercial real estate market prompt the Federal Reserve to move more quickly on rate hikes despite lackluster economic growth?

    Perhaps, says Boston Fed President Eric Rosengren, it should.

    Eight years of extremely low interest rates have pushed commercial real estate prices up rapidly, and they might also decline rapidly if economic conditions change, Rosengren said in remarks prepared for an event hosted by the Shanghai Advanced Institute of Finance this morning in Beijing.

    Because many banks hold real estate debt, they might sustain losses that force them to decrease consumer lending, sending shock waves through the consumer-driven U.S. economy.

    While Rosengren, a voting member of the U.S. central bank’s monetary policy committee, isn’t predicting such an event, it could “make a recession worse than it would have been had policymakers normalized interest rates more rapidly,” he noted.

    It’s an important consideration for the Federal Reserve as its monetary policy committee weighs what would be only its second hike in short-term interest rates since they were cut to nearly zero to bolster the economy during the 2008 financial crisis.

    While the central bank indicated it might raise rates as many as four times this year after a 25 basis-point boost in December, it later halved the forecast amid market volatility.

    Rates, which now range from 0.25% to 0.5%, haven’t been touched since, though Fed Chair Janet Yellen said this month that a strong labor market strengthens the case for an increase. Still, price inflation, the other half of the Fed’s monetary policy calculus, remains below the central bank’s 2% goal, as Rosengren noted.

    “Given the persistently weak economic growth in the United States during the recovery from the Great Recession, it has been appropriate to be patient about normalizing rates,” he said. That leads to other risks, however, particularly for financial institutions.

    https://www.thestreet.com/markets/the-commercial-real-estate-risk-pushing-the-fed-to-raise-rates-13689788

11. The Real Reason College Dorms Have Gotten So Expensive. 7min

    College dorms have gotten wildly expensive. No, it’s not just tied to the housing market, and no, it’s not directly related to rising tuition. Universities have found a new way to fund, build, and maintain housing that’s great for them but not for students’ pockets.

    https://www.youtube.com/watch?v=zD-0AohZ5xE

12. The Washington Post

    Cool to be far right? Young Europeans are stirring a political youthquake.

    https://www.msn.com/en-us/news/other/cool-to-be-conservative-young-europeans-are-embracing-the-far-right/ar-BB1jyqaF

    1. far right

       To paraphrase Inigo Montoya: that doesn’t mean what they think it means.

13. In response to the post above about fake meat.

    Its entirely fake science that Co2 from humans , animals , plants, and fuels are causing doomsday Climate Change.
    The Great Narratives of this One World Order of emergencies is fraudulent and ridicules.

    Its evident that the response to the Covid 19 pandemic was a departure from Science and the solutions were a fraud.
    This is a pre- planned insurrection by a group, that wants to take over globe, control all resources and consumption, and basically enslave populations of globe , and eliminate Respresentive Governments for their One World Order Dictorship.
    The only good part is they have exposed their intent and their fraud and their genocide and their hate for humans.
    They plan to use AI and other technology for their benefit, not for the benefit of humans.
    That demon Klaus Schwab has said that there will be no need for elections in the World that he and his Cult envision in the near future.
    Nobody is accusing the WEF of insurrection , in spite of this power group calling for a Great Reset One World Order dictorship. Instead governments of World are colluding with this group of psychopaths and fraudsters and their co conspirators.
    As I have mentioned, John Kerry from Davos declared that no Government can stop what he called “market forces”.
    The goal stated at the last Davos meeting was to restore truth, and control what they call disinformation.
    Its absolutely necessary that there be no dispute to the Great Narratives, and free speech must be criminalized, as is happening in Canada, France , Ireland, and other Countries.
    Unbelievable I know.

    1. Orwell’s 1984 was supposed to be a warning, not a how to guide.

14. I got this email:

    Motivated Seller | Fully Remodeled Contemporary Mediterranean in Calabasas

    OFFERED AT $5,400,000
    5623 Manley Court
    CALABASAS, CA 91302

    Motivated seller. Fully remodeled custom contemporary Mediterranean home on a quiet cul-de-sac in guard-gated Mountain View Calabasas. This 6 bed, 7 bath home is elegantly appointed with the finest of finishes and an open floor plan designed for sophistication and functionality. Enter through the grand foyer, anchored by a sculptural staircase and windows which bathe the home in natural light. An exceptionally scaled great room is lined with windows and accordion doors and flows into the oversized kitchen which boasts custom cabinetry, Miele appliances, stone counters, duel islands, large walk-in and butler’s pantries, & an eating area. The primary suite is complete with two oversized custom closets, a massive steam shower, a soaking tub, and a fireplace. Three additional ensuite bedrooms and a media area complete the upper level. The lushly landscaped grounds create privacy and serenity amongst the open seating, outdoor bbq/kitchenette, basketball court, putt putt area, and a resort-style pool and spa. Additional amenities include a bar area, gym, theater, 3 car garage wired with EV, surround sound system, and close to community tennis courts. Also available for lease.

    https://www.zillow.com/homedetails/5623-Manley-Ct-Calabasas-CA-91302/19883387_zpid/

    Date Event Price
    2/29/2024 Listed for rent $35,000-6.7% $5/sqft

    12/13/2023 Listing removed —

    10/26/2023 Price change $5,400,000+126.1% $737/sqft

    6/12/2023 Listed for rent $37,500 $5/sqft

    12/21/2018 Sold $2,388,000-4.4% $326/sqft

    11/8/2018 Pending sale $2,499,000 $341/sqft

    10/25/2018 Price change $2,499,000+4.2% $341/sqft

    10/23/2018 Price change $2,399,000-4% $327/sqft

    10/19/2018 Listed for sale $2,499,000$341/sqft

    10/11/2018 Pending sale $2,499,000 $341/sqft

    9/7/2018 Price change $2,499,000-3.8% $341/sqft

    7/13/2018 Price change $2,599,000-2.8% $355/sqft

    5/14/2018 Listed for sale $2,675,000+24.4% $365/sqft

    3/15/2005 Sold $2,150,000+107.1% $293/sqft
    Source: Public Record
    7/28/1997 Sold $1,038,000$142/sqft

    1. 5 million for a fancy tract style home on a small lot in Calabasas? Even the 2005 price is stupidly high. It’s not like this shack is in Del Mar or La Jolla.

    2. Motivated seller.

       Motivated by a big fat white elephant.

15. A reader sent these in:

    It’s stunning what is happening in Japan.

    https://twitter.com/JeffWeniger/status/1765401180098670708

    Jerome Powell March 6, 2024 per Federal Reserve Testimony

    “The FOMC is strongly committed to returning inflation to its 2 percent objective. Restoring price stability is essential to achieve a sustained period of strong labor market conditions that benefit all.”

    https://twitter.com/GRomePow/status/1765427401457336491

    How vertical rallies eventually end:

    https://twitter.com/NorthmanTrader/status/1765722629900566827

    “Brainard Pushed to Change Biden Budget Forecast to Rosier View”

    Fiddling with the spreadsheets to make things work on paper when in reality it’s all going to be so much worse as all their forecasts have been low balling everything for years on end.

    https://twitter.com/NorthmanTrader/status/1765721126204846099

    Revenue growth for technology companies has been decelerating while valuations have surged

    https://twitter.com/verdadcap/status/1765748385074520553

    Fidelity Investments (not Intl) reportedly conducted a large round of job cuts today – eliminating 800+ roles in tech, risk, and more in offices nationwide.

    https://twitter.com/MacroEdgeRes/status/1765875758562414872

    Rivian is halting construction of its $5 billion manufacturing plant in Georgia as their business model runs aground

    https://twitter.com/MacroEdgeRes/status/1765872770246656005

    Exxon Mobil will eliminate 15% of Denbury’s workforce in Texas

    https://twitter.com/MacroEdgeRes/status/1765860562817163366

    Highmark Health reportedly laid off hundreds of employees today & Anthem reportedly also conducted a round of job cuts

    https://twitter.com/MacroEdgeRes/status/1765847236448301331

    A $22.1 million #CMBS loan collateralized by 2 #Virginia data centers has defaulted, per Trepp

    I thought data centers were invincible because we can order Starbucks with GenAI?

    https://twitter.com/MacroEdgeRes/status/1765801414373028001

    Charge Enterprises Inc., a public company building charging stations for electric vehicles, has filed bankruptcy

    https://twitter.com/MacroEdgeRes/status/1765788303154892965

    Office CMBS delinquency increased to 11% of outstanding loans in February, multifamily increased to 3.4% per CRED iQ

    https://twitter.com/MacroEdgeRes/status/1765760698452492655

    The announced job cuts total for Jan-Feb was the highest total since 2009

    https://twitter.com/MacroEdgeRes/status/1765730293086933068

    The FDIC has added 8 banks to its problem list totaling $66.3 billion in assets

    https://twitter.com/MacroEdgeRes/status/1765761237898727888

    Modesto City Schools to cut staff and teaching positions in the upcoming school year

    https://twitter.com/MacroEdgeRes/status/1765593152964948005

    Thousands of teachers nationwide are set to be laid off this year due to budget shortfalls and rapidly worsening demographics – particularly in K-5 schools

    https://twitter.com/MacroEdgeRes/status/1765896302385041754

    The BLS numbers/revisions are so outside of any statistical possibility that they cannot be taken at face value on initial release.

    Comical birth/death gaming & can kicking to keep payrolls ‘looking’ strong thru the election.

    Unemployment (U-3 and U-6) at new highs for the cycle and tracking well for recession. Labor lag and long and drawn out. Soft landing’s don’t see rising sustained unemployment.

    https://twitter.com/DonMiami3/status/1766112968788361602

    Roughly 60% of the 400 largest metro areas in the United States now have rising unemployment

    https://twitter.com/MacroEdgeRes/status/1766131799204503703

    I thought this was a typo…

    In just February, 1.2 million immigrants (legal and illegal) gained a job. Meanwhile, 500k native-born Americans LOST their job.

    Since Covid, native-born workers have actually LOST 2 million jobs. All of the net job gains are immigrants.

    https://twitter.com/Geiger_Capital/status/1766109789266882959

    Nice proposal. Raises $ 500 b over next 10 years.
    Only problem is that US Federal debt is growing by double that amount ($ 1 Trillion) every 100 days…
    So this wonderful fix will cover 50 days of rising debt…and it will take 10 years…
    At this stage you need confiscation not these politicized headlines.

    https://twitter.com/INArteCarloDoss/status/1766039387362468031

    Question a good investigative journalist (hehehe) should ask Biden is: « deficit is at a level of GDP commensurate with a deep recession and the debt is growing exponentially, you would have had 4 years in office, why didn’t you implement any tax / spending reforms to address the issue during your time in office »?

    Answer is simple: this bullsh$t billionaire tax is yet another political for show shanty measure that does not move the needle in any way but makes him sound like the common man’s candidate.

    https://twitter.com/INArteCarloDoss/status/1766127420178837540

    I agree with Viraj here. Last 3m payroll employment has risen by 265 K per month average. 6m avg is 231 K. Private sector 3m average is 205 K. Any of these numbers is far from the breakeven number of 100 K that would see UR start moving higher.

    BUT, the Household survey was much more bearish. LFPR for prime age jumped to a 22 year high, and employment sank by 184 K. One month does not make a trend, so before drawing any conclusions, important to wait for March.

    https://twitter.com/INArteCarloDoss/status/1766125089722974636

    Private sector hiring for January was revised down to 177,000 jobs versus an initially reported 317,000.

    Private sector hiring rose 226,000 in February (the 3-month average is 205,000).

    The unemployment rate ticked up to 3.9% in February from 3.7% in January.

    https://twitter.com/NickTimiraos/status/1766095359594361274

    Imagine having to trade in real time on data that’s revised every month by 50%

    https://twitter.com/CelestialWraith/status/1766096879962460449

    Economic policy implications of last night

    More stimulus, redistribution, maybe corp taxes, organized labor, and lying about inflation

    We’ll make up the data. We’ll change the definition or even the target. It’ll be good or it’ll be ignored. We are now an EM!

    Viva la rev!

    https://twitter.com/rev_cap/status/1766049995801641371

    hawkish data = bullish
    dovish data = bullish
    negative revisions = also bullish
    hope that helps

    https://twitter.com/concodanomics/status/1766100200790126802

    Here’s what I mean by the NVDA meme
    Since 1/1/2023 17% of the total return of the SPX 500 has been one stock. That is an unusually narrow distribution

    https://twitter.com/dampedspring/status/1766061310632988911

    I’m so old I remember when they used to call markets risk assets.

    https://twitter.com/NorthmanTrader/status/1766088286991237438

    “Over half of Americans older than 65 live on incomes of $30,000 or less annually”
    “Only 42% of Americans aged 75 and older, and 51% of those between 65 to 74, have retirement accounts”

    https://twitter.com/menlobear/status/1765578395294032113

    China is in a full blown deflation
    Car prices are collapsing

    https://twitter.com/WinfieldSmart/status/1765960193148366933

    The Here vacation rental fractional investment platform has shut down

    https://twitter.com/MacroEdgeRes/status/1766212666719187315
    You mean paying $1.2M for an eighth of an aspen ski lodge was a bad investment? Wtf!!!

    https://twitter.com/AntiWoke_techie/status/1766217400301896144

    All the headlines will show that the US economy added 275,000 jobs in February.
    But in reality, the number of people ACTUALLY employed FELL by -184,000, according to Zerohedge.
    The number of workers employed in the US was 160.968 million, the lowest number since May 2023.
    So how did the number of people employed fall while the US economy added jobs?
    The answer to this question is the rapid increase in workers holding MORE THAN ONE job.
    In fact, 278,000 Americans took on more than one job in February.
    All while the January jobs report was revised lower by 129,000 jobs as seen in 10 of the last 12 months.
    Is the labor market really that strong?

    https://twitter.com/KobeissiLetter/status/1766103347226910977

    The labor market is actively coming off the rails but keep buying into these initial headline nonfarms at your own peril. Yields don’t buy it.

    https://twitter.com/DonMiami3/status/1766144123126358467

    Fed’s Goolsbee: Fed Focused On Inflation Rate, Not Price Level
    – Not Realistic To Expect Price Level Back To Pre-Covid
    – Fed’s Inflation Target Is 2% ‘And It Should Be’

    https://twitter.com/LiveSquawk/status/1766179438956327244

    Is your Airbnb feeling a bit quieter lately? You’re not alone. Discover why your bookings might be slowing down and unlock expert strategies to boost your rental’s appeal and profitability. 🏡💰

    https://twitter.com/airdna/status/1766141857040331070

    Median home prices are now contracting at levels NEVER seen since 1964

    https://twitter.com/GameofTrades_/status/1766143088614088813

    Consumers are now out of excess savings
    This is the lowest level in 5 years

    https://twitter.com/GameofTrades_/status/1766124217236365392

    Housing defaults have just hit the highest levels in a decade

    https://twitter.com/GameofTrades_/status/1766086476482093110

    1. BIDEN PREDICTS FED TO LOWER INTEREST RATES

       https://twitter.com/DeItaone/status/1766244523078824060

       ❖ YELLEN: HOUSING REMAINS ‘TREMENDOUS CONCERN’ FOR BIDEN ADMIN

       https://twitter.com/DeItaone/status/1766115700865716369

       ❖ YELLEN: BIDEN WANTS TO MAKE SURE HOUSING IS AFFORDABLE FOR FIRST TIME BUYERS

       https://twitter.com/DeItaone/status/1766113099768107231

       Better buy a few more trillion MBs then eh?

       https://twitter.com/bonker_99/status/1766113293737881937

       Then fire sale the MBS

       https://twitter.com/RandoAnalytics/status/1766113785008287932

       Wow .. Biden speaking in PA just now: “that little outfit that sets interest rates .. it’s going to come down. They’re going to come down”

       Lower interest rates ahead??

       https://twitter.com/SullyCNBC/status/1766238151075299435

       The Loews Hotel in downtown Minneapolis has just sold at shocking ~65% ‘discount’

       The 251 room landmark hotel sold for $23.5M or $93k per room

       What did it sell for in 2014? $65M or $257k per room

       https://twitter.com/TripleNetInvest/status/1766259736419385640

       The wheels are coming off the full-time labor market

       https://twitter.com/DonMiami3/status/1766269692472066371

       Young buyers are getting priced out of buying new cars:

       New car purchases made by 18 to 34-year-olds are at the lowest point ever on record.

       Just 9.3% of total new car sales. (!)

       To make things even more interesting…

       The 65+ crowd just posted its highest share on record of new vehicle purchases – 25.6%.

       Bottom line:

       The cars young people want are too expensive.

       If car manufacturers want to serve the next generation of buyers, they’re going to have to introduce affordable cars that are *actually* desirable.

       After all, no one wants to record a TikTok in the back of a Saturn

       https://twitter.com/GuyDealership/status/1766111261777871326

       Austin rental prices are in freefall

       https://twitter.com/GRomePow/status/1766131938635788680

       Dallas rental market…..timber!!!!!

       https://twitter.com/GRomePow/status/1766134924820816179
       Over the last 3 months the US economy has shed 1.87million full time jobs. That’s the largest decline since the GFC, outside the covid lockdowns.

       https://twitter.com/spomboy/status/1766122397080461615

       Arizona Real Estate Inventory seems to be mooning. Wild to watch live.

       So much for the housing shortage narrative bullsh$t the data proved to NEVER be true.

       https://twitter.com/GRomePow/status/1766107285246660702

       Guys I didn’t realize all it took to afford a $400,000 home was $5,000 more dollars from the government LOL

       https://twitter.com/GRomePow/status/1766105978033123817

       1. Guys I didn’t realize all it took to afford a $400,000 home was $5,000 more dollars from the government LOL

          That’s what I thought when Brandon announced his plan: what difference will this make?

    2. “In just February, 1.2 million immigrants (legal and illegal) gained a job. Meanwhile, 500k native-born Americans LOST their job.

       Since Covid, native-born workers have actually LOST 2 million jobs. All of the net job gains are immigrants.”

       Jonathan Greenblatt wants more of this.

    3. “A reader sent these in:”

       – Thank you Ben for posting all of these X snippets, which in aggregate might indicate that there are problems with “the consumer and the economy is strong” narratives from the current admin. and their lapdog MSM propaganda machine. Read “Potemkin village” and you won’t be far wrong. Everything is awesome!(?)

       – Also glad that Elon acquired X. At least a few places where there’s at least some open discourse on topics of national importance. I’m sure the Left is seething over this.

       – I’m getting that employment ain’t so great. The headline numbers look awesome at face value, but the monthly revisions are huge. Lots of low paying gig jobs, including multiple job holders vs. good permanent jobs w/ benefits. I’m sure this is fine along with the very low inflation. 🙃

       – A net gain in alien jobs, both legal and illegal. A net loss in U.S. born citizen jobs. All is going according to plan.

       – Employment is a lagging indicator, one of the last things to turn down as the economy slows. We must be getting close.

       – BTW, that was quite a angry rant of a SOTU speech by Brandon this week. Too much Adderal in my view. He’ll be recovering for weeks! 😂 Reminiscent of Adolf Hitler with dementia. An actual DJT-Brandon debate would be a joke. 🤡 A battle of wits with an unarmed man.

    4. Rivian is halting construction of its $5 billion manufacturing plant in Georgia as their business model runs aground

       Will probably never be finished and will become a ghost town.

    5. Inflation is a one-way price increase. Once it happens, the value of your dollar HODLings are permanently reduced.

       1. It helps to work hard, work longer, learn stuff, be ever more valuable.

          When you get through decades of that race, it helps to simplify and always need less.

          It helps to have been a serious Boy Scout in the 60s and learn that you absolutely can survive and enjoy with very little, and have a dad and grampa who could help you learn. “They” can inflate the currency to enrich themselves, but they can’t steal this.

          I’m about to burn some serious saved money for pure fun and adventure. I’ll get more out of it now than later I suspect.

          1. Great advice!

             “It helps to work hard, work longer, learn stuff, be ever more valuable.”

             My current and longtime struggle…

             “When you get through decades of that race, it helps to simplify and always need less.”

             Looking forward to that next phase…

             ‘…and have a dad and grampa who could help you learn. “They” can inflate the currency to enrich themselves, but they can’t steal this.’

             I was lucky that way, too. I always remember Grandpa’s lesson in thrift: “You see that watch? I bought it 20 years ago for $1. It still runs perfectly today.”

16. Does it seem as though the entire planet is counting on Powell to deliver near-term rate cuts?

    1. Yahoo News
       Associated Press
       Chinese shares rally after Fed chief Powell says that a rate cut is ‘not far’ off
       ZIMO ZHONG
       Updated Fri, March 8, 2024 at 12:59 AM PST
       3 min read
       16
       FILE – A woman reacts in front of an electronic screen displaying stock prices at a brokerage house in Hangzhou in east China’s Zhejiang province, on Feb. 5, 2024. Chinese shares rallied on Friday, March 8, 2024, following better-than-expected import and export data, signaling increased demand that could support Beijing’s effort to rev up the economy. (Chinatopix via AP, File)

       HONG KONG (AP) — Chinese shares rallied Friday on hopes that a rate cut by the Federal Reserve might relieve pressure on the Chinese yuan and attract more foreign investment in the markets.

       The Hang Seng Index added 0.8% to 16,353.39, led by the tech index, which advanced 1% as senior Chinese officials showcased plans to focus on supporting research and industries to attain breakthroughs in key technologies, including computer chips, during the National People’s Congress.

       Other major China indexes swung between small losses and gains throughout the day. The Shanghai Composite Index gained 0.6% and ended at 3,046.02, and the smaller market in Shenzhen rose 1.1%.

       On Thursday, Federal Reserve Chair Jerome Powell said the central bank is “not far” from delivering the cuts to interest rates that Wall Street craves so much. He added that the Fed was waiting for the appropriate time.

       “We’re waiting to become more confident that inflation is moving sustainably at 2%,” Powell said.
       …
       https://www.yahoo.com/news/chinese-shares-rally-better-expected-043313321.html

    2. Jerome Powell says ‘the housing market is in a very challenging situation right now’ and interest rate cuts alone won’t solve a long-running inventory crisis
       BY Dylan Sloan
       March 8, 2024 at 10:43 AM PST
       Fed chair Jerome Powell testifying before Congress.
       Fed Chair Jerome Powell testified before Congress that interest rate cuts could provide short-term help to the housing market, but they won’t do much to help the long-term housing shortage.
       Al Drago—Bloomberg/Getty Images

       The housing market has a problem—millions of them. The country is short between 3.5 and 5.5 million housing units, according to various estimates. The roots of the shortage go back to the aftermath of the Global Financial Crisis, when cautious developers were hesitant to invest in new construction and set a precedent of undersupply that’s continued to now. Jerome Powell.
       5 hours ago
       BY Alan Wong and Bloomberg
       March 9, 2024
       …
       https://fortune.com/2024/03/08/jerome-powell-housing-market-shortage-interest-rates-inventory-crisis-construction/

    3. Markets
       A $70 Billion Investor Warns Fed May Fail to Cut Rates in 2024

       – Australia’s QIC Ltd. is skeptical Fed can cut rates in 2024

       – Economic resilience, sticky inflation may thwart Fed easing

       By Richard Henderson and Amy Bainbridge
       March 8, 2024 at 3:00 AM PST
       Updated on March 8, 2024 at 7:53 AM PST

       Australia’s QIC Ltd. warns the Federal Reserve may be forced to keep interest rates elevated through the year — or even raise them further — as the US economy powers ahead, a contrarian view that runs counter to the jubilation across global markets.

       After dialing back duration in its debt portfolio to neutral in the midst of a frenetic bond rally late last year, Brett Solomons, a senior portfolio manager at the A$106 billion ($70.2 billion) fund, is opting to keep his powder dry to stay nimble given the various economic scenarios that may unfold. The Fed can’t declare mission accomplished on inflation just yet given the continued strength of the US labor market, he said in an interview earlier this week.
       …
       https://www.bloomberg.com/news/articles/2024-03-08/a-70-billion-investor-prepares-for-fed-rate-hike-risk-in-2024?embedded-checkout=true

17. Too much of an effort to create new ways of stating goals that they’ve never even attempted to reach. They’re laughing at us.

    LEAHmemes @itsreallyleah
    Here’s all three of @JoeBiden
    ’s #SOTU speeches in 5 minutes. If you’ve seen one, you’ve seen them all.
    Same stories, same lies, same proposals. Clearly so much progress with the Biden Administration. 🤡
    https://twitter.com/itsreallyleah/status/1766118227699225063

    1. “Here’s all three of @JoeBiden
       ’s #SOTU speeches in 5 minutes.”

       That was hilarious.

       Looks like all those big spending bills he signed did nothing but fatten his donors and cronies bank accounts because he hasn’t fixed one problem that he’s been spouting off about for years.

       1. That was hilarious.

       2. I am feeling more unnerved than I ever have been. In the past, despite being clued in by members of my family way back that “conspiracy theories” were true. I’d try to see the humorous side of all this and thought it was temporary and people would resist.

          Now, I can’t. I feel awful about how hard younger people have it, and that it’s awful that they haven’t been able to experience life like we did. I worry about the bleak future they might have to face.

          1. “I worry about the bleak future they might have to face.”

             Ditto

18. ‘You had a confluence of several different factors. First, the inflation we felt in ‘21, ’22. Second, Phoenix became an emerging market and grew into its own. It became a popular place to live, and also you had low rates, so that factored into the abundant construction’

    Don’t forget Brent that you guys had a dang good 10 or so year run prior to minor respiratory illness. Building like crazy, flipping them even, cash out refi every two years. Good times!

19. ‘Most cities in D-FW saw prices fall. Weatherford (-5.9%) and Plano (-4.1%) saw the largest monthly rent price drops’

    It still amazes me as someone from near by that Weatherford would be considered part of DFW.

20. ‘gave me a letter from her bank saying, ‘We have your money, but we can’t give it to you because you have fraud. So we have to hold on to this money,’ said Luna, who added that something about the letter didn’t seem right’

    It’s landlord 101 Kenny. You got a letter and no money.

21. ‘it felt like every time I wanted something near campus it would just be so overpriced,’ she said. Chapter’s amenities include a fitness center, a 3D printing lab and a rooftop sundeck. At Oliv and Atmosphere, tenants have an in-ground pool and coffee shop. But Ziemniak said she feels amenities like these are not necessary for student apartments’

    The good old days of tracking the apartment bubble: amenity races. Cuz luxury costs the same as regular airboxes, how do you charge more? Amenities. Why do you need to charge more? We have to build luxury! Why, well we paid so much for the land!!

    And we have our bubble.

22. ‘New York Community Bancorp’s Thursday morning conference call followed a chaotic Wednesday that began with its stock dropping 40% before its trading was halted. It ended with a $1B cash infusion and takeover from a group of investment funds, led by the firm founded by former Treasury Secretary Steven Mnuchin. While Mnuchin’s equity investment stopped NYCB from exploding, its near-collapse coming almost a year to the day after the failures of Silicon Valley Bank and Signature Bank triggered a kind of post-traumatic stress response among property owners in New York City, particularly apartment landlords’

    It was like the end of Animal House.

    1. “Remain calm…All is well!”

       https://m.youtube.com/watch?v=wWBiLeVy45k

23. ‘This is not forever, but at this moment in time (the industry) is really fragile, and the slightest increase in cost may result in the bank saying, ‘No, I’m not going to lend you the money to build this. One of the biggest reasons is that based on the slow growth of incomes over a long period of time, the ability of people to pay rent or to pay a mortgage has not kept up with the increase in costs.’ Developers, in turn, won’t have the money to build’

    One thing Mark: ‘slow growth of incomes over a long period of time’. Yet K-dn igloos are some of the most expensive on the planet. So good luck riding that out, eh?

24. ‘Isn’t it nice to see estate agents panicking for a change, instead of students? These ‘special’ deals and rent reductions prove what we have always known: the pricing of housing in Durham is purely artificial’

    Great work Dan. Bravo.

25. Image file for Jeff — Camping In March Edition:

    https://ibb.co/cws4z69

    1. Awesome!

26. Here is one from the “What’d you say” category.

    Report: Mitch McConnell’s Sister-in-Law, Angela Chao, Made Desperate Call for Help Before Her Death

    AMY FURR
    9 Mar 2024

    Sen. Mitch McConnell’s (R-KY) billionaire sister-in-law reportedly made a panicked phone call to her loved ones moments before her car was submerged in a pond in Texas on February 10.

    Fifty-year-old Angela Chao died after making a three-point turn and “accidentally” backing the vehicle into the water, the New York Post reported Saturday, citing a Wall Street Journal article that detailed the incident.

    She was spending the weekend at the ranch with friends from Harvard Business School, the Post article continued:

    After eating dinner together and celebrating the Chinese New Year on Friday night, Chao left the guesthouse around 11:30 p.m. to head back to the main house, where her son was sleeping. It was cold out, so she decided to take her Tesla Model X SUV for the four-minute drive rather than walk.

    But within minutes, she called one of her friends in a panic. While making a K-turn, she put the car in reverse instead of drive, she told them. While going backwards, the car went over an embankment and into a pond — and was sinking fast.

    https://www.breitbart.com/politics/2024/03/09/report-mitch-mcconnells-sister-in-law-angela-chao-made-desperate-call-help-before-her-death/

27. Are Teslas safe?

    1. New York Post
       US News
       Mitch McConnell’s billionaire sister-in-law Angela Chao made panicked last call before dying in ‘completely submerged’ Tesla on Texas ranch: report
       By Social Links for Patrick Reilly
       Published March 9, 2024
       Updated March 9, 2024, 10:00 a.m. ET

       Angela Chao, Sen. Mitch McConnell’s billionaire sister-in-law, spent her last minutes alive frantically calling her friends for help as her Tesla slowly sank in a pond on a remote Texas ranch, according to a report.

       Chao, the billionaire former CEO of dry bulk shipping giant Foremost Group, tragically died at the age of 50 on Feb. 10 after accidentally backing her car into the pond while making a three-point turn.

       The driving mishap was detailed in a report by The Wall Street Journal that shed light on the chaotic rescue efforts that ultimately came up short, turning what was supposed to be a celebratory weekend with friends into a nightmare.

       Chao invited several of her girlfriends from Harvard Business School to spend the weekend on a gorgeous, sprawling 900-acre private property in Texas’ Hill Country, that included horse stables, a swimming pool and a 10-bedroom guesthouse, the Journal reported.

       After eating dinner together and celebrating the Chinese New Year on Friday night, Chao left the guesthouse around 11:30 p.m. to head back to the main house, where her son was sleeping. It was cold out, so she decided to take her Tesla Model X SUV for the four-minute drive rather than walk.

       But within minutes, she called one of her friends in a panic.

       While making a K-turn, she put the car in reverse instead of drive, she told them.

       While going backwards, the car went over an embankment and into a pond — and was sinking fast.
       …
       https://nypost.com/2024/03/09/us-news/angela-chao-made-panicked-call-before-dying-in-completely-submerged-tesla-on-texas-ranch/

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