It’s Time To Pay The Piper!
A report from the New York Post. “Spring may only have just begun, but the summer season in the Hamptons is already off to a blistering hot start. In Water Mill, a two-home compound spread across some 21 acres has listed for a cool $99.5 million, according to listings portal Out East. What’s more, the parcel — at 70 and 71 Cobb Lane with frontage on Mecox Bay — is now the priciest residential property for sale in the Hamptons, according to the site. Despite the nearly nine-figure ask, a sale at this sum wouldn’t break a record for the region — and it would also mark a $19 million loss from its last purchase price. In late 2021, Philadelphia real-estate developer Michael Karp purchased the grand property for an even more grand $118.5 million.”
From KFOR. “Neighbors in a Northwest Oklahoma City neighborhood said they’re fed up with people living in abandoned homes next to their own that don’t belong to them. Jennifer Lowry told News 4 Monday that it’s an issue her neighborhood, just south of NW 122nd street and Council Road, has been dealing with for three weeks now. Her problems concern two homes she said have both been abandoned for a little over a year. ‘I just thought they were looking for things to take and maybe sell,’ said Lowry. ‘But then, when suitcases started appearing and more activity, that’s when I really got concerned.'”
“A search of property records found that the property where Monday’s arrests were made belonged to Great Plains Funding LLC, based out of Topeka, Kansas. News 4 reached out and spoke with Stan Oyler, who told us the property had undergone foreclosure and was in the process of being sold to someone who planned to flip the home. Oyler said that, as far as he knew, issues with the property’s security had been resolved. ‘Maybe his idea of secure in mine are two different things, but, you know, the door’s always wide open and that’s obviously how they’re getting in,’ said Lowry. ‘I shouldn’t have to live this way.'”
The Business Observer. “Some South Florida condo owners are in deep trouble. Three years after the deadly collapse of the Champlain Towers South in Surfside, Fla., regulations meant to prevent another building disaster are coming into effect — and look set to cost condo owners, especially those living in aging buildings. This financial hit comes against the backdrop of skyrocketing home insurance prices and a cooling luxury condo market. ‘This is going to be a very rude awakening,’ said Joseph Hernandez, a real estate lawyer at Bilzin Sumberg. ‘Frankly, I, and others in our industry are concerned that a lot of people just can’t afford it.'”
“Take the Palm Bay Yacht Club condo in Miami Shores. Last year, homeowners were quoted $46 million in repairs, which comes to $175,000 per unit on average. With these assessments looming, owners will face a tough choice: pay up or sell. But offloading a condo is no easy task. The South Florida market, after red-hot growth during the pandemic, has cooled. Another wrinkle for condo owners is the so-called ’50 percent rule.’ Florida statutes stipulate that if an owner spends more than 50 percent of a building or a unit’s appraised value to upgrade it, the owner must bring the entire property up to current code standards. In practice, the rule has required owners to completely redevelop their properties and could prime more buildings toward bulk sales. Amid a tight lending market, some developers are waiting on the sidelines, hoping that, as the assessments come in, more owners will become amenable to selling. The coming year will test many buildings. ‘It’s time to pay the piper!’ said Doug Weinstein, senior VP of operations, Southeast at Akam, which helps condo associations with construction projects.”
The Los Angeles Times. “Ken Kahan makes a living building homes. A specialty? Luxury apartment complexes in Los Angeles neighborhoods such as Palms and Silver Lake filled with mostly market rate units, but with a handful of income-restricted affordable ones as well. It can be a good business, but lately less so. ‘We have pulled back,’ said Kahan, the president of California Landmark Group. ‘The metrics don’t work.’ Meanwhile, rents in many places — including Los Angeles — have dropped slightly as vacancies have risen, in part because apartment construction has been relatively robust in recent years.”
“In the city of Los Angeles, developers must contend with another factor — Measure ULA. Though it’s known as the ‘mansion tax,’ except for rare exceptions it applies to all properties sold for more than $5 million, no matter if they are gas stations, strip malls, apartment buildings or actual mansions. Under the measure, a seller is charged 4% of the sales price for properties sold above $5 million and below $10 million. At $10 million and above, the tax is 5.5%. ‘ULA is like the last nail in the coffin,’ said Robert Green, a Los Angeles developer. ‘It couldn’t have come at a worse time.'”
Business Today. “Another Washington DC office building has just been sold at a massive 75 per cent discount, a real estate entrepreneur said on Sunday. The 175k sq ft tower at 1101 Vermont Avenue sold for $16 million, he said, adding that the building was last sold for $60 million in 2006. The building’s assessed value in 2018 was $72 million in 2018. The entrepreneur said that Washington DC, the capital city of the US, has been among the hardest hit office markets in America, with absolutely no rebound in sight. Kotak Mutual Fund’s Managing Director Nilesh Shah said this Washington DC building goes for Rs 7,589 per square foot, 73 per cent lower than the last traded price 18 years back. ‘I did this calculation twice to confirm the number. The commercial real estate in the US is truly in deflation/fire sale. Who bears all these losses?'”
Bloomberg on Colorado. “Cress Capital, a real estate investment manager, said it acquired a $113 million mortgage on a Denver office tower from an Ares Management Corp. affiliate for the equivalent of the land cost. Cress bought the mortgage at ‘a major discount’ for a ‘level approaching or at the pre-Covid land value’ of the property, according to Ryan Parkin, managing partner of the real estate company based in Newport Beach, California. In downtown Denver, more than 37% of office space was available for lease at the end of 2023 compared with 29% for the greater Denver area, according to Savills Plc. ‘When they’re trading at land value, there are multiple options you can pursue,’ Parkin said.”
From Bisnow. “Rising interest rates remain the prevailing headwind stymying transactions in North Texas and beyond. Yet there are some vacant office buildings that aren’t feasible for conversions, which puts them at greater risk of distress. A few of those properties have already entered the foreclosure process. That trend is likely to gain momentum over the next few years, especially as owners grapple with fewer options to recapitalize their loans, Cushman & Wakefield Vice Chair Robbie Baty said. ‘Developers and owners that can convert to some sort of amenitized building and have a competitive price point will do OK and eventually fill up,’ he said. ‘But the ones that can’t do that are going to continue to sit empty, and we’re going to see a massive wave of foreclosures and turnovers.'”
CTV News in Canada. “A fire spread from one home to another in the Calder neighbourhood Thursday morning. The blaze in a duplex at 128 Avenue and 123A Street was reported just before 5 a.m. According to Edmonton Fire Rescue Services, the flames spread to a home on the south side of the duplex. No one was home in either building and no injuries were reported.”
The Helsinki Times. “House prices in Finland fell by more than five per cent year-on-year in February. Statistics Finland reported that the prices of old dwellings in housing companies fell especially in large cities – by 10.4 per cent in Vantaa, 7.1 per cent in Helsinki and 6.8 per cent in Oulu. While the six largest cities in the country recorded a drop of 6.1 per cent and the capital region a drop of 6.7 per cent from the previous year, areas outside the largest cities registered one of 4.4 per cent. Also the volume of sales decreased, with real estate agents brokering 15 per cent fewer sales in February 2024 than in February 2023.”
“Juhana Brotherus, the chief economist at the Federation of Finnish Enterprises, estimated that the market will continue to decline for some time. ‘The house market is being depressed by hard and soft headwinds,’ he wrote. ‘Buyers are losing interest because interest costs and maintenance fees can exceptionally be even higher than rents. Also loan repayments add to the monthly costs. At the same time, households are extremely cautious and sensitive to crises because their general sense of security has been shaken by the coronavirus, energy, war and, most recently, strike crises. The uncertainties are reducing especially large acquisitions, of which home is the most important.'”
ABC News in Australia. “As Steve Yates turns the key into the three-bedroom home he he’s been building for the last five years, his stomach sinks. The Dandenong house in Melbourne’s south-east that Steve’s poured his life savings into is about 80 per cent finished — but it’s not pretty. ‘I absolutely hate coming in here, this is where we are meant to be living, but every time I’m here something new is damaged or stolen,’ he says. There are holes punched in the walls, alcohol bottles and syringes left on the floorboards, smashed glass in the bathrooms and fingerprint dust on the broken doors from where detectives have been.”
“The harder part has been the all-consuming battle he has faced with the state government’s Victorian Managed Insurance Authority (VMIA), waiting for a domestic building insurance quote to get his place fixed up. ‘Initially I was contacting the VMIA once every few months, then it was once a week and in the last month it has been once a day, because I’m over it,’ Steve says. ‘The place has got to be fixed; it has been sitting there basically abandoned for three years, in a housing crisis for god’s sake.’ During that time Steve has been paying a mortgage on the home he can’t live in, and squatters have taken over while he is in limbo waiting for decision from the VMIA.”
“He and his wife are currently sharing a house in a tight squeeze with seven family members that they are paying second a mortgage on. They are so far around $100,000 out of pocket. Steve says his fight with the VMIA has ruined him, as his bank account continues to diminish, with no end in sight. ‘We are paying for bills left right and centre that we don’t have the money to pay for,’ he says.”
Market Watch. “China’s largest property developer, Country Garden, on Monday said it had opted to suspend trading of its shares on the Hong Kong stock exchange after delaying publication of its 2023 results as it continues to grapple with the slump in the Chinese real estate market. The heavily-indebted property developer said it had decided to suspend trading of its shares in order to comply with Hong Kong stock market’s listing rules, which require it to either publish its unaudited financial statements in their current form or halt trading of its shares instead.”
“The company last week said it would be delaying publication of its results in order to ‘collect more information to make appropriate accounting estimates’ and ensure its statements ‘reasonably reflect changes in the industry’ in the face of ‘continuous volatility.’ Country Garden has over the previous year become one of the most high-profile casualties of the slump in China’s property market that has left a raft of the country’s top real estate companies unable to pay their international debts.”
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You will own nothing
You will own nothing, you will not complain, you will eat bugs and like them.
You will be constantly reminded about who is in charge, and it isn’t you.
‘a sale at this sum wouldn’t break a record for the region — and it would also mark a $19 million loss from its last purchase price. In late 2021, Philadelphia real-estate developer Michael Karp purchased the grand property for an even more grand $118.5 million’
Well, it’s still cheaper than renting Mike.
‘I did this calculation twice to confirm the number. The commercial real estate in the US is truly in deflation/fire sale. Who bears all these losses?’
That would be you Jerry.
“Zimbabwe Ben” Bernanke & Yellen the Felon are at least equally culpable.
The losses will be borne by anyone who has more than $250K in a checking account. Maybe they’ll start going after 401Ks for real this time.
Why would the Fed goose up the stock market if 401Ks are going to be confiscated? I don’t know the percentage of gainfully employed people that have 401ks, but if the percentage is 50% of eligible employees, translating to say, 20% of the working adults, it will be small chunk compared to the national debt.
Is the Fed chairman using stealth QE and pointed comments on interest rate cuts to goose the stock market? Fed is really concerned about job losses that will overcome the government jobs down the line.
“Take the Palm Bay Yacht Club condo in Miami Shores. Last year, homeowners were quoted $46 million in repairs, which comes to $175,000 per unit on average. With these assessments looming, owners will face a tough choice: pay up or sell. But offloading a condo is no easy task. The South Florida market, after red-hot growth during the pandemic, has cooled. Another wrinkle for condo owners is the so-called ’50 percent rule.’ Florida statutes stipulate that if an owner spends more than 50 percent of a building or a unit’s appraised value to upgrade it, the owner must bring the entire property up to current code standards.
Florida is finished
were quoted $46 million in repairs, which comes to $175,000 per unit on average.
Anyone who buys a condo in FL over the next year or two is taking on a huge unnecessary risk. Maybe by 2027 it’ll be sorted out???
Here is what I predict will happen in 2025-2030:
1. Deferred maintenance comes due.
2. The elderly and poor have to sell and move out of state, pack in with family, or live on the streets.
3. We plunge into global recession for real.
4. Jay Powell will drop interest rates back to 2%.
5. Anyone with a little cash will take out a loan and buy up all the decrepit buildings for tear-down.
6. Old condos will be replaced by super-luxo Class A+ resort condos which will be bought up by anyone who doesn’t want to have their 401K confiscated by socialists.
7. The once great USA looks like Rio: walled in high rise luxo surrounded by corrugated slums.
Class A+ resort condos which will be bought up by anyone who doesn’t want to have their 401K confiscated by socialists
Who says the commies won’t seize or tax the hades out of second residences?
The once great USA looks like Rio: walled in high rise luxo surrounded by corrugated slums.
You are more pessimistic than I. I don’t see the scenario you mentioned above for at least an other 25-30 years. Of course, most likely I’d be gone by then.
While it looks like T is gaining traction, I think Biden & Co. have just enough cheaters left to win in November and destroy us all for good.
The 175k sq ft tower at 1101 Vermont Avenue sold for $16 million, he said, adding that the building was last sold for $60 million in 2006. The building’s assessed value in 2018 was $72 million in 2018.
The wipeout of fake wealth created by fake money is getting downright Biblical as the long-deferred financial reckoning day slouches closer.
I was told this was the roaring 20’s!
Statistics Finland reported that the prices of old dwellings in housing companies fell especially in large cities – by 10.4 per cent in Vantaa, 7.1 per cent in Helsinki and 6.8 per cent in Oulu.
But…but…muh generational wealth!
Attention crypto bros! If you must wail at your stupendous losses, please wail in time with all the other baggies.
https://www.coinbase.com/explore
America will be left with ‘severe, irreversible scars’ if national debt goes unchecked. Now, a blockbuster report warns the bill is higher than believed, hitting $141T by 2054.
https://finance.yahoo.com/news/america-left-severe-irreversible-scars-113555033.html
National debt is fast becoming the thorn in the side of the American economy that nobody wants to extract—and it will continue to cause damage, sending the U.S. into financial crisis and 10 years of stagnation.
That is increasingly the opinion of a growing number of experts who are sounding the alarm over the pace at which the U.S. government is gathering debt. More important, they fear this debt will mean the country will not be able to afford necessary borrowing in the future, in addition to the funds needed to service existing debt.
Among the ranks of those in the concerned camp are Fed Chairman Jerome Powell, JPMorgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan, BlackRock CEO Larry Fink, and Wharton vice dean Joao Gomes.
Their outlook is evidenced by a March report from the Congressional Budget Office (CBO). The CBO estimates that by 2054 public debt will represent 166% of GDP, reaching $141.1 trillion.
Currently the nation’s $34 trillion debt is approximately 99% of GDP and, according to the CBO, will steadily increase over the next 30 years. In the near term, the CBO expects debt as a percentage of GDP to exceed the record peak of the Second World War by 2029.
This mounting debt, the CBO writes, “would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices.”
The report goes on to add that the likelihood of a financial crisis is increasing as a result of growing debt, something which would cause interest rates to spike and, if paired with higher inflation, “could erode confidence in the U.S. dollar as the dominant international reserve currency.”
The outlook from the U.S. Government Accountability office (GAO) isn’t much better. A report released last month said the government is facing an “unsustainable” fiscal path that poses a “serious” threat to economic, security, and social issues if unaddressed.
The GAO advises Congress to make “difficult budgetary and policy decisions to address the key drivers of federal debt and change the government’s fiscal path,” adding: “The sooner actions are taken to change the long-term fiscal path, the less drastic they will need to be.”
As evidence of a fantastically complex fallout piles up, one might assume it will take an equally complicated approach to prevent it. Economists say that’s not the case—but that’s only if they believe it’s an issue at all. The hardest problem is precisely that: getting enough people to listen.
Wharton’s Gomes has been making his concerns about the level of national debt known for some time now, and last week—following an interview with Fortune—he sat before the U.S. Senate Committee on the Budget and warned them of a train wreck ahead.
The vice dean of research at the University of Pennsylvania’s Wharton School previously argued too few high-profile individuals were taking the matter seriously, but as an up-and-coming economist he felt compelled to step away from the pack to sound the alarm.
“The coming fiscal crisis will be triggered by a sudden loss of confidence by the general public in the federal government’s finances and on those tasked with managing them,” Gomes told chairman Sheldon Whitehouse and ranking member Chuck Grassley. “The projected path for the U.S. federal debt makes this … inevitable in the not too distant future.”
Among the fallouts from the crisis professor Gomes foresees is a sharp decline in the value of the dollar as interest rates spiral higher. He also believes inflation will spike as the government is forced to roll back on social programs to wrestle the deficit under control.
“These measures would have a further devastating effect in the economy, leading to a decade-long stagnation,” Gomes explained. “Given our projected demographic challenges, many older, and marginally attached, workers are likely to leave the labor force never to return again.”
Professor Gomes outlines two well-known options to rebalance the variables: increase growth or cut spending. The former is by far the most preferable, Gomes said, but it wouldn’t accelerate quickly enough to do the job.
Even then, “the required fiscal correction is not drastic,” he added. “We certainly do not need to repay any part of the outstanding debt to prevent a crisis. In fact, government debt can continue to grow steadily over time without posing an immediate threat to the nation’s fiscal solvency—as long as the yearly deficits are not excessive.”
A fiscal adjustment of around 1.4% of GDP—or $400 billion—spread over two or three years would nip the issue in the bud, Gomes estimates.
However without a course correction a fiscal crisis is likely to occur in 2030, said Gomes, or as early as 2025 if the next administration rolls out an “expensive fiscal package that relies on implausibly rosy economic assumptions.”
Regardless, warns Gomes: “Its consequences will be severe and leave lasting—probably irreversible—scars on our economy and society.”
Economists are increasingly revising the bill future generations will have to foot in order to pay for the fiscal outlays of governments way back when. However, that comes with a major caveat: a global pandemic.
For example, in 2019 the CBO projected U.S. public debt by 2049 would be 144% of GDP; by March’s estimate that figure stands at more than 150%.
However the ratio—and corresponding forecasted debt figure—does fluctuate depending on whom you ask. Even the CBO as recently as September 2023 projected the figure to be higher—estimating an 153% debt-to-GDP ratio by 2053.
The GAO puts debt at 200% of GDP by 2050, while the Penn Wharton Budget Model projects 190% of the size of the economy by the same year.
Like Wharton’s Gomes, Russell Price, chief economist at financial services firm Ameriprise Financial, is growing increasingly nervous about national debt while also fielding more questions on the topic from retail investors.
The expert at the Minneapolis-based company—which has $1.4 trillion in assets under management—added the goal is not to balance the books from one year to the next: “Given the high deficits that we’re spending right now, if we did that in a very short period of time it would cause more economic pain than it would displace.”
Price also sought to unpack intergenerational criticism that high levels of spending now will unfairly burden workers of the future. While Social Security as we know it only exists because of higher taxes paid by employees in the 1980s, Price outlined, a great deal of spending will be needed in the future to support an aging population.
As a result, younger workers have a vested interest in making sure whatever spending is agreed upon now is worth their investment in the future. Price explained: “The one thing I point out to retail clients is the debt is never expected to be paid off in full, but the burden of higher interest expense … is where future generations are going to see the value in how much they paid on the promises that were enacted so many years before.”
Other, more optimistic, economists believe a crisis as a result of government debt isn’t in the cards, as fiscal stimulus should lead to higher productivity and hence, to a rise in GDP.
Columbia University professor Brett House is a specialist in macroeconomics and international finance, and falls into the cohort of experts who aren’t losing sleep over national debt.
House reasoned the recent run-up in debt because of the pandemic is an example of how fiscal stimulus can lead to productivity—after all, Q2, Q3, and Q4 2023 all saw productivity increases of more than 3% compared with the prior quarter, according to the Bureau for Labor Statistics.
Indeed, GDP growth in the U.S. since the pandemic has outstripped every other G7 nation—up 7.4% in the latest quarter when compared with Q4 2019. Meanwhile the G7 sits at 4.7% with the EU struggling behind at 3.4%.
“Public debt is justified if it is invested in productivity-enhancing measures that will ensure the economy generates growth that’s required to finance that debt,” House told Fortune.
“Clearly a lot depends on what happens in the wake of the November election,” he added. “On the current trajectory that we’re on right now, I do not see a high probability of financial stress or substantial inflation in the U.S.”
While House acknowledged that a debt-to-GDP ratio above 100% would be dangerous for most countries, he added: “The United States is not most countries. It issues all of its debt in U.S. dollars and consistently, when we see the world in political or financial crisis, money flows into U.S. Treasuries and the bond market as a safe store of value. Because the U.S. issues all of its debt in U.S. dollars it always has the possibility of finding additional buyers for its debt.”
While economists disagree on how much of an issue national debt will be, they do agree on one thing: that the public needs to be involved.
“People who represent labor, people who represent average working people, need to be deeply engaged in these conversations,” House said, “because the cuts will most likely fall on them.”
Forget the debt. We must pay for the illegals.
We should install rolling sidewalks for them at the border, with a new car, a house and an EBT card waiting for them once they cross.
“This sucker could go down” — George W. Bush
“Among the ranks of those in the concerned camp are Fed Chairman Jerome Powell, JPMorgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan, BlackRock CEO Larry Fink, and Wharton vice dean Joao Gomes.”
All these CEOs give a f* about is Powell buying their assets, at par!
When you run out of other people’s money (from the Colorado Sun):
Also:
Yeah, fewer are coming, that must be why they are telling them to please leave Denver because if they stay they will suffer.
Anyway, it’s well known that Dumver has been quietly shipping them to other cities for months. No one wants the invaders in their cities.
No no no. Denver is a sanctuary city. They should take them all. You voted for this. This is what you get
Last year they were puffing their chests out, claiming to fully support the invaders in their quest.
Until they ran out of money. I’m gonna guess that the city employee unions were starting to get worried that the rank and file might get laid off to free up cash for the invaders, and they put the kibosh on that.
Squeegee boys out in force at Alameda and Sheridan today, well over a dozen of them.
The solution is gumball machines with fentanyl.
A reader sent these in:
Issuing more t-bills at an accelerating pace is a precondition to becoming a banana republic. This is the type of thing you see emerging markets do, not the issuer of the world’s reserve currency and neutral reserve asset.
If you believe that the Fed’s primary goal is smooth market functioning for the UST market rather than their dual mandate of maximum employment and price stability, you can begin to understand why Powell is so keen on starting a rate cutting cycle soon despite the fact that the data we are seeing suggests current monetary policy is not restrictive enough to return inflation to 2%.
In a fiscal dominance regime, the central bank is forced to lower rates to help fund the government deficits. Given the dysfunction in DC where both tax increases and spending cuts are off the table as the CBO projects 5-7% deficits for the next couple decades, the only real lever to pull is to lower interest rates on government borrowings as the government continues to shifts borrowings to the front end.
It seems like Gold is already starting to snif out this dynamic as a cutting of interest rates to support government borrowings will lead to currency weakness and higher inflation over time.
https://twitter.com/ces921/status/1774374543882109249
Future of real estate sales
Listing commission $500
Buying commission $500
All done online
https://twitter.com/GRomePow/status/1774612803707625982
Multifamily vacancies are now HIGHER than during the GFC
https://twitter.com/GRomePow/status/1774453771181175195
ISM prices paid showing highest inflation since July 2022 – “we’re winning kids” – Powell
https://twitter.com/DonMiami3/status/1774807323715711086
The National Restaurant Association Customer Traffic Index saw a sharp decline in Q1 as consumers spent less time and less money eating out
https://twitter.com/MacroEdgeRes/status/1774958609295605809
PepsiCo reportedly began mass cuts today in the Plano, TX (Dallas) and Chicago, IL offices and asked employees to work from home for the week. Likely to affect hundreds or more
https://twitter.com/MacroEdgeRes/status/1774930143930175997
US TREASURY 10-YEAR YIELD HITS TWO-WEEK HIGH, LAST UP 13.1 BPS AT 4.325%
https://twitter.com/DeItaone/status/1774817743402918322
This is how people were buying Airbnbs in Palm Springs in 2021 and 2022
I’m sure it’s all above board and fine 😉
https://twitter.com/texasrunnerDFW/status/1774916744714346674
Housing Inflation Is 4X “Official” Metrics
How the government purposely undercounts housing costs in the inflation data.
https://twitter.com/WallStreetSilv/status/1774524466359345649
The federal government spending more money than ever and yet DC home prices are ice cold. Tech stocks zooming and yet San Francisco’s home prices are down. Sheesh, what happens if tech stocks roll over
https://twitter.com/JeffWeniger/status/1773465588041716156
“Crime is down in all categories in Washington, DC,” says @MayorBowser on @SquawkCNBC
Laughable claim- the city is one of the most dangerous places in the nation.
https://twitter.com/joelgriffith/status/1774787194680406129
Happy Transgender Day of Visibility
https://twitter.com/WallStreetSilv/status/1774083115859759522
Citadel’s Ken Griffin in his first letter to investors in years…
“It is irresponsible for the US government to incur a deficit of 6.4% of GDP in a non-recession enviornment… it’s unsustainable.
We must stop borrowing at the expense of our future generations.”
https://twitter.com/Geiger_Capital/status/1774894620045955309
“When you see lenders taking 100% losses on a secured 60 LTV commercial mortgage, that’s a red flag.” – Chris Whalen
https://twitter.com/RudyHavenstein/status/1774928213401059403
Gotta love it when an @Airbnb goes up for sale for less than what they bought it for 2 years prior! Especially when the seller previously paid $85k over the previous asking price 😆
https://twitter.com/k_fayrie/status/1774834290142188020
Real estate bulls picking bottoms daily.
https://twitter.com/ManyBeenRinsed/status/1774205169489641796
Found out 2 of my cousins lost their job this month … laid off … they’ve been there almost 20 yrs … 2 diff industries.
Hundreds laid off in both industries … never hit the news.
Silent depression.
Welcome to Canada.
https://twitter.com/ManyBeenRinsed/status/1772351957975388464
In a fiscal dominance regime, the central bank is forced to lower rates to help fund the government deficits.
Which is eventually followed by hyperinflation.
he federal government spending more money than ever and yet DC home prices are ice cold.
What that means is that almost none of govt’s largesse is winding up in the pockets of people who would normally buy homes.
Laughable claim- the city is one of the most dangerous places in the nation.
We’ve reached the point where everything our “betters” say is a bald faced lie.
“We know that they are lying, they know that they are lying, they even know that we know they are lying, we also know that they know we know they are lying too, they of course know that we certainly know they know we know they are lying too as well, but they are still lying. In our country, the lie has become not just moral category, but the pillar industry of this country.” —Aleksandr Solzhenitsyn
Found out 2 of my cousins lost their job this month … laid off
I’ve noticed that the volume of unsolicited head hunter emails in my inbox is WAY down.
I’ve noticed that the volume of unsolicited head hunter emails in my inbox is WAY down.
Never thought about it, but now that you mention it, the number of emails in my inbox from Linked-in recruiters is way down too.
I was on the road all day yesterday, and I stopped at McDonalds for an early dinner. Next to the front counter is a shelf for “take out app orders.” I fetched my order, which was next to a very large bagged order. While I ate a Toyota 4runner with a magnetic Door Dash placard pulled up, and an adult man got out sprinting through the door and grabbed the large bag and drove off. An adult for crikey sakes!! His car, his insurance, his depreciation. WTF?
i felt this deserved a re-post.
Albuquerque Police Officers Chase Shoplifting Suspect on Horseback
2 days ago
https://youtu.be/Mg1L1zHkAqE?si=CFbDmnZUUV9g_NbQ
Cheer up Dude, it coulda been worse.
https://youtu.be/rZIqg0gBcYM?si=fb767KriIkv8RELg
That’s hilarious on many levels.
The funniest being that APD is notorious for killing dogs. (like ATF levels of dog killing)
and with all the problems of Albuquerque 3 cops and 3 horses to stop a shoplifting suspect? I mean good and all but mighty interesting priorities.
“…despite the fact that the data we are seeing suggests current monetary policy is not restrictive enough to return inflation to 2%….”
Exhibit “A”
I just got back from McDonalds and paid $6.64 for a couple of smallish sausage biscuits. Here is Calif, worker minimum wage is now $20/hr (as of yesterday).
Honest question — why do people bother with fast food? That $6 would go a lot further at any average grocery store.
Option 1: Half-pound of decent quality coldcuts/boiled eggs/cheese/hot dogs and a $1 store-brand soda.
Option 2: Three small donuts and a small SBUX (one of my nearby stores has an SBUX inside).
Option 3: 2 quarts of low-qual ice cream and a Snickers bar.
Option 4: Bag of store-brand rice cakes and a small jar of peanut butter.
Man now I’m getting hungry
Convenience. You are in your car and on the go.
“…Honest question — why do people bother with fast food?…”
Legitimate question.
Normally, I don’t mainly because fast food in general isn’t very healthy.
Today was an exception. I had a boat load of errands to run and didn’t eat breakfast.
Got super hungry, caved in and queued up at the drive thru.
Todays price shock will keep me from going back anytime soon.
We had to run to Dumver for work (only 3 times in 4 years, yeah not seeing why anyone needs to “return to the office). Anyway wife got hungry and says “oh let’s stop” So we stop at Chik-fil-a for a quick breakfast (mostly because there’s no ChikFilA here in middle of nowhereland).
2 chicken biscuit sandwich combo meals (breakfast) so biscuit, little hash brown thing, small soda.
EIGHTEEN DOLLARS!!!!!!!!!!!!!!!!!!
It’s not just CFA either, it’s everyone.
Here in my little burg Mickey D’s has a buy a double cheeseburger at regular price (3 something) get a second one for a dollar. But yeah, if you get a combo meal with a quarter pounder or a big mac you’ll spend $11-12
Got super hungry, caved in and queued up at the drive thru.
I have noticed that the dining rooms at fast food places are usually empty. The only time I see people in them are retirees during the morning and all they do is drink coffee.
I wouldn’t be surprised if 80-90% of fast food biz is the drive thru.
“Man now I’m getting hungry”
Did ‘ya put the BFB in the ground with ‘yer fixings?
Possibly, but I’m sure he was well on his way before that. Is that what happened to him? 😕
“Is that what happened to him?”
I don’t know. Maybe he bought a house, lol?
OTOH, he was likely a prime candidate for COVID death.
I used to chat with him on Twitter quite often. He is really very nice, and I got a kick out of his comments there. He just up and disappeared. I hope he’s all right.
Thx Y’all for reminding me. I have been missing MafiaBlocks for ages. Does anyone know where/how he is?
I sure do miss him.
–Geezer
Time is worth more in some other pursuit besides food preparation and consumption…such as running a country.
“…such as running a country.”
Isn’t “running things” the issue rather than the free market’s invisible hand?
I’m sure the invaders are bewildered by the fact that Dumver ran out of money. I recall an interview I saw with an invader boarding a Denver bound bus in Texas, saying that Denver had endless resources. It must be heartbreaking to arrive only to find out that the Free Sh!t Army is full and there are no more vacancies.
Is inflation contained?
Yahoo Finance Video
As US housing prices rise, is homeownership still achievable?
Brad Smith·Host
Mon, Apr 1, 2024, 8:42 AM PDT
According to a study by Zillow, home prices have risen 42% since 2020 and average homebuyers would need to earn 80% more at that time to afford a home. Currently, prospective homebuyers are having to juggle more cost pressures as they navigate the real estate market.
Yahoo Finance Personal Finance Editor Molly Moorhead joins Wealth! to discuss inflation’s influence on rising home prices as the Federal Reserve considers interest rate cuts, outlining advice for buyers on their homebuying journey.
…
https://finance.yahoo.com/video/us-housing-prices-rise-homeownership-154254226.html
I’ve got some advice. Rent. My new lease arrived for our 3BR 2B townhome. Up $25 to $1475.
Same exact townhome 3 doors down just sold for $270K. With 20% down, taxes, and insurance that’s a monthly nut of $1900. Forget maintenance.
But muh equity!!
Don’t forget the HOA.
The place we rent for an ungodly sum would cost over twice as much per month to buy. Buying only would pencil out if prices kept rising to ever more unaffordable heights, which all the real estate pimps of course predict is going to happen.
Ditto. My LL has it in her head that we’re paying $400 less than market value, so I already know what’s coming.
My LL has it in her head that we’re paying $400 less than market value
Her holding costs have probably gone up, and she wants to squeeze them out of you.
Exactly, but the place estimate’s has doubled since she bought it in 2015 (I know it doesn’t count until it’s in hand), and the property taxes are only $1850/yr. Granted, the insurance has probably gone up.
She wants to replace the windows, but I don’t feel like paying for her windows.
Markets
US stocks in selloff as health care stocks sink, Treasury yields continue climb
Yasin Ebrahim
Author
Published 04/02/2024, 06:55 AM
Updated 04/02/2024, 03:04 PM
Investing.com — U.S. stocks fell sharply Tuesday, weighed by heavy losses health care stocks and an ongoing climb in Treasury yields amid remarks from several Federal Reserve officials reiterated the need to keep rates higher for longer.
By 15:00 ET (20:00 GMT), the Dow Jones Industrial Average was down 429 points, or 1.1%, S&P 500 fell 0.9%, lower and NASDAQ Composite dropped 220 points, or 1.1%.
Treasury yields continue climb as Fed speakers signal higher for longer
Treasury yields continued to add to gains from a day earlier, the recent bout of stronger economic data and Fed speakers cooling expectations for early-rate expectations muddied the path for sooner rate cuts.
San Francisco Fed President Mary Daly echoed said Tuesday that there was no urgency to cut rates as as inflation is still above the central bank’s 2% target. Daly’s echoed Cleveland Fed President Loretta Mester, who said she sees the fed cutting rates this year, but flagged pivoting to cuts too early rather than keeping them higher for longer was the bigger risk.
The CME’s FedWatch tool now factors in around 62% odds of a Fed rate cut in June, down from about 70% probability a week ago.
The remarks arrived on the heels of data showing job openings rose to 8.756M in February, from 8.748M in January, though just shy of expectations for 8.760M.
Jobs data will continue to be in focus, with the payrolls report for March slated to be released on Friday.
The U.S. economy is expected to have added 205,000 jobs in March, slowing from the 275,000 jobs added in February, amid hopes that the economy is set for a “soft landing”, in which inflation moderates but the economy avoids a severe downturn.
Healthcare stocks suffer losses
Health care stocks including Humana Inc (NYSE:HUM), UnitedHealth Group Incorporated (NYSE:UNH) and CVS Health Corp (NYSE:CVS) were down sharply to lead losses in the broader market after the Center for Medicare and Medicaid Services private Medicare Advantage rates will increase an average 3.7% from 2024.
The rate was unchanged from the initial proposals in January, signaling the insurers’ margins will remain under pressure next year. That took Wall Street by surprise as only once in the past 10 years have final rates not increased from the initial proposals, according to research from JPMorgan.
Tesla leads slump in EV stocks after Q1 deliveries disappoint
Tesla (NASDAQ:TSLA) stock fell 5% after the electric vehicle manufacturer reported its first-quarter delivery numbers, falling well short of the expectations.
The EV giant delivered 386,810 vehicles against the estimated 449,080, according to Bloomberg consensus.
This miss was an “unmitigated disaster,” Wedbush said in a note, and marked “a seminal moment in the Tesla story for Musk to either turn this around … otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”
Competitor Rivian Automotive (NASDAQ:RIVN) stock also fell 5% after the EV company trailed analyst consensus for first-quarter production numbers.
…
https://www.investing.com/news/stock-market-news/us-stock-futures-fall-jolts-data-fed-speakers-in-focus-3361317
some darker days could clearly be ahead that could disrupt the long-term
TeslaEV narrativeOther automakers slamming the brakes on EV’s. The novelty factor is over and the masses know that they are toys.
And the physics of poor battery performance (regardless of cell type) in cold weather.
And never mind that a reliable charging infrastructure simply does not exist on any reasonable scale.
Does it seem like irrational exiberance has given way to a one-way ride to Schlongville?
Truth Social: Trump’s DJT stock plummets days after going public
19 hours ago
By Sam Cabral, BBC News, Washington
Shares of Donald Trump’s social media company fell by more than 20% on Monday, less than a week after it began publicly trading under the DJT ticker.
The drop comes after Trump Media & Technology Group reported it had lost nearly $60m (£48m) last year while only bringing in around $4m in revenue.
The price plunge caused the former president’s net worth to shrink by $1bn, according to Bloomberg.
Shares had surged last week, giving the company an $11bn valuation.
But experts warned the stock was bound to tumble, as its main product – Truth Social – loses users and burns cash.
The price spike drew comparisons to the pandemic-era “meme stock” mania, when the share prices of companies like GameStop and AMC soared even though basic parts of their businesses, such as revenue, were weak.
Meme stocks are ones that gain sudden popularity on social media, sparking price rises as online investors rush to buy.
…
https://www.bbc.com/news/world-us-canada-68708648
Yahoo Finance
Stock market today: Stocks slide as oil, yields touch 2024 highs
Karen Friar, Josh Schafer and Alexandra Canal
Tue, Apr 2, 2024, 2:31 PM PDT
In this article:
US stocks closed in a sea of red, but off of their session lows, as investors digested the possibility that an interest rate cut will come later than hoped.
The Dow Jones Industrial Average closed down about 1%, or nearly 400 points, setting the blue-chip index back from a bid to reach the key 40,000 level. The S&P 500 shed about 0.7%, while the tech-heavy Nasdaq Composite also slid nearly 1%.
…
https://finance.yahoo.com/news/stock-market-today-stocks-slide-as-oil-yields-touch-2024-highs-200139171.html
Yahoo Finance
Stocks end day lower, 10-year Treasury yield moves higher
Jared Blikre and Julie Hyman
Tue, Apr 2, 2024, 1:17 PM PDT
In this article:
The major stock market averages ended Tuesday’s session lower, setting the tone for a gloomy start to the second quarter. Yahoo Finance’s Julie Hyman highlights the session’s market action while Jared Blikre reviews the day’s sector leader and laggards.
JULIE HYMAN: Let’s see where the major averages ended up slightly, slightly off the lows of the session in the case of the Dow. That means a 395 point drop, a drop of about 1% here. And what you see going on across the major averages is this a little bit of softening as we see bond yields rise. And as people pay attention to economic data, that shows continued strength in the likes of the labor market as evidenced by the JOLTS report today.
The S&P 500 down 7/10 of 1%. The S&P is only fallen at least 1% on three different occasions this year. Remember, it’s set 22 closing highs.
In other words, the index has been very resilient. And even though it’s down 7/10 of 1%, not a huge decline by historical standards. The NASDAQ off by nearly 1% in today’s session here.
We’ve been talking about what’s been going on with yields. So ending the day, ending the session, which of course, ends in the 2:00 PM hour technically at 4.37% here. So that’s one of the things that we see, put a lot of pressure on things.
We also have been watching oil, which we’re going to dig into a little bit later in the show up 1.7% on the day, just above $85 a barrel. Jared’s got a closer look at today’s sector action, Jared, and more.
JARED BLIKRE: Let’s check out these sectors here. Behind me in a second, you will see energy as the number one sector, up 1.41% upper left. Then followed by utilities.
After that, we run out of green. Then you have communication services and materials. But it gets interesting down here.
We have three sectors that are each down more than 1%. Real estate, consumer discretionary and health care. We’ve been talking about health care might be a one off today.
But you take a look at the leaders here. There’s not a lot of red. In fact, there’s some dark red. We see that in crypto.
GBTC is my Bitcoin. Proxy, that is down 5%. Solar, that is illustrated by tan there that’s down 3%.
What’s in the green today is oil. WTI finishing above $85 a barrel. That has inflationary consequences down the road both for producers and end users. Consumers as well.
…
https://finance.yahoo.com/video/stocks-end-day-lower-10-201716787.html
Financial Times
liveUpdated 2 hours ago
Live news: Korea leads losses as Asia equities follow US lower
Edited by
William Sandlund 45 minutes ago
William Sandlund in Hong Kong
Markets update: South Korea leads losses in Asia as equities follow US lower
South Korean equities led losses in Asia, with the broader region’s stock markets also following the US lower on Wednesday.
The country’s Kospi index shed 1.3 per cent in early trading, while the won was the only major Asian currency to rise against the dollar, edging up 0.1 per cent to Won1,350.15.
The move is likely to be a response to stubborn inflation in the US reducing expectations of forthcoming interest rate cuts. This often hurts sentiment for non-US equities due to the higher “risk-free return” available from US Treasuries.
The benchmark S&P 500 closed 0.7 per cent lower on Tuesday, and the tech-heavy Nasdaq Composite fell 1 per cent.
…
PepsiCo reportedly began mass cuts today in the Plano, TX (Dallas) and Chicago, IL offices and asked employees to work from home for the week. Likely to affect hundreds or more
https://twitter.com/MacroEdgeRes/status/1774930143930175997
Well duh, who the heck can afford soda or chips???????
Soda is now $9.99 (reg price) at the big chain grocery store (safeway) for a 12 pack of 12oz cans. ten bucks!!!!!!!!! in 2019 at sale time they were 5 for $10 That’s almost a buck a can. And I know gas stations/truck stops are way way way worse.
it’s about $8 each at walmart (but never goes on sale).
Chips are $5 to $6 a bag (for the small bag, not the “family size”
I’m amazed they haven’t started layoffs long before now. Coke is sure to follow.
Ditto the 2 liter bottles. $3.50 if not on sale. For what? Water, HFCS and the secret sauce?
New York Times — I’m an Economist. Don’t Worry. Be Happy (4/2/2024):
“The same inflationary forces that pushed these prices higher have also pushed wages to be 22 percent higher than on the eve of the pandemic. Official statistics show that the stuff that a typical American buys now costs 20 percent more over the same period. Some prices rose a little more, some a little less, but they all roughly rose in parallel.
It follows that the typical worker can now afford two percent more stuff. That doesn’t sound like a lot, but it’s a faster rate of improvement than the average rate of real wage growth over the past few decades.
Of course, these are population averages, and they may not reflect your reality. Some folks really are struggling. But in my experience, many folks feel that they’re falling behind, even when a careful analysis of the numbers suggests they’re not.
That’s because real people — and yes, even professional economists — tend to process the parallel rise of prices and wages in quite different ways. In brief, researchers have found that we tend to internalize the gains due to inflation and externalize the losses. These different processes yield different emotional responses.
Let’s start with higher prices. Sticker shock hurts. Even as someone who closely studies the inflation statistics, I’m still often surprised by higher prices. They feel unfair. They undermine my spending power, and my sense of control and order.
But in reality, higher prices are only the first act of the inflationary play. It’s a play that economists have seen before. In episode after episode, surges in prices have led to — or been preceded by — a proportional surge in wages.
Internalizing the gain and externalizing the cost of inflation protects you from this deflating realization. But it also distorts your sense of reality.
The reason so many Americans feel that inflation is stealing their purchasing power is that they give themselves unearned credit for the offsetting wage rises that actually restore it.”
https://archive.is/37mjq
pushed wages to be 22 percent higher than on the eve of the pandemic. Official statistics show that the stuff that a typical American buys now costs 20 percent more over the same period.It follows that the typical worker can now afford two percent more stuff. That doesn’t sound like a lot,
Don’t forget that the incremental increase in wages are taxed at, say 25%. Thus making the take home pay increase 16.5% while the”stuff Americans need to live” increased 20%.
For those “Maff” challenged such as the Economist writing above, an increase of 20% is larger than an increase of 16.5%.
It’s the New York Times.
Read these articles to understand what these out of touch coastal Real Journalists have convinced themselves to believe.
James Carville was right again just in the past week, when he called them a bunch of spanking nannies who want you to behave, shut up, and eat your peas.
The same inflationary forces that pushed these prices higher have also pushed wages to be 22 percent higher than on the eve of the pandemic.
My salary has NOT gone up 22 percent over the last 3 years. Maybe the burger flippers are getting 22% more.
Corelogic says that home prices have increased 5.5% y/y
Whats up with this? I am so confused
https://www.cnbc.com/video/2024/04/02/home-prices-rose-5-point-5-percent-in-february-compared-with-the-same-month-a-year-earlier-corelogic.html
‘Another wrinkle for condo owners is the so-called ’50 percent rule.’ Florida statutes stipulate that if an owner spends more than 50 percent of a building or a unit’s appraised value to upgrade it, the owner must bring the entire property up to current code standards. In practice, the rule has required owners to completely redevelop their properties and could prime more buildings toward bulk sales’
Great, another rule that works to crater the airbox market. This is a CRE publication, so the lawyers, etc are eager to fook the owners.
‘neighborhoods such as Palms and Silver Lake filled with mostly market rate units, but with a handful of income-restricted affordable ones as well. It can be a good business, but lately less so. ‘We have pulled back,’ said Kahan, the president of California Landmark Group. ‘The metrics don’t work’
That means the land is too expensive Ken.
‘this Washington DC building goes for Rs 7,589 per square foot, 73 per cent lower than the last traded price 18 years back’
This thing gets worser by the day.
Washington Post — The GOP is freaking out about an industry that doesn’t even exist yet (4/2/2024):
“The only way you’re allowed to eat a burger is if a live animal first had to burp and die for it. That, apparently, is the battle cry of red-state Republicans, who are working to ban the fledgling “lab-grown meat” industry.
Scientists and entrepreneurs are developing new technologies to create meat from animal tissue cultivated in labs. This is different from Beyond Meat, tofu or any other meat substitute made from vegetarian ingredients. These are cells harvested from actual animals and then grown into edible flesh with the help of nutrients such as amino acids. The idea is to replicate the texture, taste and nutritional content of the delicious meats consumers already know and love.
That’s exactly what makes this nascent industry so exciting. Perhaps humanity doesn’t have to rely on moral suasion to save the planet and protect helpless critters. Financial incentives alone could do it. This novel technology might eventually create meats that appeal to amoral businesses and lazy consumers — potentially at lower cost, no loss of life, reduced climate harm, less use of antibiotics and maybe even greater nutritional value.”
https://archive.is/flQko
Your human mouth has four canine teeth that your ancestors evolved over thousands and thousands of years to give you, from chewing and eating the meat of animals.
Not seeds, not roots, but meat.
These bashtards just won’t give up.
Anyone remember the push against “frankenfoods:” some years ago? Buy a carton of milk at the grocer’s and you will see that it is proudly “rBST free”. Now they want us to eat fake food grown in a lab.
‘reported just before 5 a.m. According to Edmonton Fire Rescue Services, the flames spread to a home on the south side of the duplex. No one was home in either building and no injuries were reported’
Always in the wee hours with nobody around. Eventually somebody is going to die in one of these things.
There was an A&W burger joint on our main drag. It caught fire and the insurance refused to pay. It was bought out, hastily repaired and became a mom n pop burger joint. That one also caught fire and the insurer refused to pay. It sat empty for almost 10 years until it was bulldozed and a Culver’s was built there. Culvers always has a line and their employees don’t look like gang bangers. Their food is very expensive, but good.
‘Buyers are losing interest because interest costs and maintenance fees can exceptionally be even higher than rents’
So yer saying the landlords are taking an a$$ pounding Juhana.
‘He and his wife are currently sharing a house in a tight squeeze with seven family members that they are paying second a mortgage on. They are so far around $100,000 out of pocket. Steve says his fight with the VMIA has ruined him, as his bank account continues to diminish, with no end in sight. ‘We are paying for bills left right and centre that we don’t have the money to pay for’
That’s cuz you and that gang of slobs are stuffing expensive food down yer throats, probably more than once a day Steve. You have to sacrifice to be a winnah!
“Steve is battling a multitude of medical conditions and is unable to work. He and his wife have had to sell their business to service the loan repayments and he doesn’t know how much longer they can keep going.”
No health, no home, no business and a dead bedroom. It’s over, Steve.
Power Of Sales Are Up 55% In 2024! (Toronto Real Estate Market Update)
Team Sessa Real Estate
15 minutes ago
In this episode we take a look at the current Toronto Real Estate Market specifically the detached home prices and market trends for week ending March 27, 2024. We also discuss how power of sales are up 55% from this first quarter to the first quarter of 2023.
https://www.youtube.com/watch?v=yt6OyrQ7ous
21:45.
‘The heavily-indebted property developer said it had decided to suspend trading of its shares in order to comply with Hong Kong stock market’s listing rules, which require it to either publish its unaudited financial statements in their current form or halt trading of its shares instead’
The bankruptcy was filed in the US and IIRC the core assets are in the Caribeano. I’d guess this is legal maneuvering to preserve as many pesos as possible.
“The heavily-indebted property developer…”
Thank gawd it’s other people’s money!
Does it almost seem as though the Fed intends to stay the course on its plans announced many months ago to keep rates higher for longer?