Those Who Thought That Home Prices Would Rise Forever, And Got Stuck
A report from Suburbs 101. “Nationally, home prices are going up, but the Texas housing market is getting hit hard by dropping prices. Some places are seeing double-digit losses. The net loss is quite significant in some metro areas. Where homeowners are losing over $230 per day in equity if they had purchased a home in the first quarter of 2023. The biggest losers in the Texas housing market are Snyder, Pearsall, Raymondville, and Fredericksburg, all of which have experienced a double digit percentage drop in home prices. Snyder suffered the largest price drop of 26.67%. Pearsall homeowners also experienced a significant drop of 23.08% in home prices over the course of a year. Of all the Texas metro areas on this list, Fredericksburg homeowners saw the biggest net loss in absolute dollars. The median home price in the Fredericksburg, TX metro area declined from $634,312 to $549,480, resulting in a percentage drop of 15.44%. It’s startling to think someone who purchased a home in Fredericksburg in the first quarter of 2023 has now lost $232 per day in equity.”
Florida Politics. “Closed housing sale contracts across Florida fell in some of the state’s largest counties in April. Elliman analysts say the Sunshine state home market is obviously getting chilly. ‘Most housing markets saw rising prices reaching new highs and sales falling short of prior year levels. Mortgage rates have remained elevated as economic conditions remain vibrant. Bidding wars remain a factor in the market but rising inventory has reduced its dominance,’ the report concluded. Duval County, for the second straight month, had the most significant decrease in housing sales in the state, with 431 total closings. That’s way down from April 2023, when Duval saw 778 homes sold. The home of Jacksonville saw a 44.6% annual drop in contracted home sales in April.”
“Duval’s First Coast neighbor St. Johns County, also saw a notable dive in closed and contracted home sales. The home to tourist meccas St. Augustine and Ponte Vedra Beach saw home sales plunge by 34.5% in April compared to a year ago. The only other county with a decrease in home sales exceeding 20% was Broward County, where signed closings dropped by 23.3%.”
The Real Deal. “Developer Dan Kodsi isn’t rushing to build multifamily projects in South Florida. Two years ago, he jumped into the market with proposals for an apartment tower in Aventura and another in Miami. Now, he’s reevaluating the developments and tweaking both. ‘It’s too expensive to build [high-rise] apartments today,’ Kodsi said. ‘The margins are very razor tight, and let’s just say capital right now is not leaning to multifamily.’ Although much concern nationwide has been over tighter bank lending and elevated interest rates, South Florida is also home to skyrocketing insurance premiums, including for builder’s risk, and construction costs are still higher than pre-pandemic. South Florida also has a record number of units on tap, saturating the tri-county region, while leasing has slowed and rent growth calmed, according to experts.”
“‘The macroeconomics has created a lot of headwinds. A lot of projects are in a holding pattern,’ said Sonny Maken, COO of Associated Builders and Contractors’ Florida East Coast Chapter. ‘People are worried about units being overbuilt. They are trying to get clarity on the demand.'”
Click Orlando. “Central Florida’s inventory, now at a four-month supply, is the highest it’s been since pre-pandemic, caused in large part by higher interest rates. Rose Kemp, president of the Orlando Regional Realtor Assocation says that’s actually been healthy despite how some people feel about the current state of the housing market. ‘Those pessimistic remarks, I laugh at them,’ Kemp said . ‘People are continuing to relocate here – a thousand people per week – so as far as housing goes, we don’t see a market that’s going backwards in value.'”
The Associated Press on California. “Wearing a bright safety vest with the words ‘Safe Passage’ on the back, Tatiana Alabsi strides through San Francisco’s Tenderloin neighborhood to its only public elementary school, navigating broken bottles and stained sleeping bags along tired streets that occasionally reek of urine. Along the way in one of America’s most notorious neighborhoods, she calls out to politely alert people huddled on sidewalks, some holding strips of tin foil topped with illicit drugs. Her voice is cheerful, a soothing contrast to the misery on display in the 50-block neighborhood that’s well-known for its crime, squalor and reckless abandon. ‘School time. Kids will be coming soon.'”
“Further along, Alabsi passes a man dancing in the middle of the street with his arms in the air as a squealing firetruck races by. She stops to gently touch the shoulder of a man curled up in the fetal position on the sidewalk, his head inches from the tires of a parked car. ‘Are you OK?’ she asks, before suggesting he move to a spot out of the sun. ‘Kids will be coming soon.’ Long known for its brazen open-air drug markets, chronic addiction, mental illness and homelessness, the Tenderloin neighborhood is also home to the highest concentration of kids in San Francisco, an estimated 3,000 children largely from immigrant families. On a recent afternoon, two girls with ponytails sashayed across an intersection, talking about becoming TikTok stars one day, seemingly oblivious to a couple hunched over at a bus stop across the street, struggling to light up. As they walked, Alabsi blocked their view of smeared feces.”
The Pioneer Press in Minnesota. “The largest private property owner in downtown St. Paul has put 10 of its commercial properties up for sale, including six office buildings, raising deep questions about the future of some of the city’s most storied commercial buildings. Madison Equities listed the commercial properties — comprising more than 1.6 million square feet in commercial space — this past week through brokerage CBRE, including the iconic First National Bank building, the Park Square Court building, the 1890s-era Empire Building, the Alliance Center and two parking ramps. With U.S. Bank poised to leave the 26-story U.S. Bank Center by October except for a skyway branch, occupancy rates in those commercial buildings average 50% or less and dropping. In some cases, estimated market values calculated by the Ramsey County assessor’s office list building values at or even below where they were a decade ago, when the office market was still re-emerging from the Great Recession.”
“Not helping matters is the amount of deferred maintenance visibly evident in some of the properties. ‘If it was to be sold in a bulk sale, a portfolio sale, you have to think how big that buyer would have to be. You’d have to be a massive player,’ said John Rent, a commercial real estate lender based in downtown Minneapolis. ‘And institutional buyers are mostly on the sidelines now. To the extent they’re active, they’re engaged in industrial properties and multi-family properties. If I were in their shoes, and there’s an offer on any of these, I’d take it.'”
The Financial Post in Canada. “According to the latest report from the Toronto Regional Real Estate Board (TRREB), new listings were up 47.2 per cent year-over-year, with 7,114 homes changing hands last month, a five per cent drop from April 2023. The ostensible buyers’ market may be largely attributable to a glut in condominium stock. ,’For detached homes, we’re still seeing multiple offers and bidding wars because there is not that much inventory,’ Royal LePage sales representative, Thomas Delespierre said. ‘But for condos, there are a lot of new buildings coming to completion and a lot more inventory to choose from.'”
The Globe and Mail. “Spring is in the air, and you can feel the thaw in Canada’s real estate sector. Given widespread expectations that the Bank of Canada will soon begin cutting interest rates, thereby allowing some mortgage rates to fall, industry groups are forecasting the return of happy times, with the Canada Mortgage and Housing Corporation expecting new record highs in house prices before long. But here’s a possibility that’s getting too little attention: What if interest rates don’t come down?”
“The narrative changed sharply on April 25 with the release of the latest U.S. GDP report. What it found was that while the economy was growing more slowly than expected, inflation was heating back up. The following day’s Personal Consumption Expenditure report seconded that finding. The prospect that the dreaded ‘stagflation,’ which made life so miserable in the late 1970s and early 80s, might be returning to the United States sent a chill through stock and bond markets. In short, there is a growing possibility that interest rates, if they do come down, will come down less than investors hope. Those hoping to be rescued by cheap money are likely to be disappointed.”
“A colleague of mine, a former adviser to Barack Obama who’s now at Stanford University, recently surveyed experiences of monetary tightening around the world to reach a jarring conclusion: There is no painless way to restore price stability. Investors have to accept that returning to low inflation can’t be done without asset prices taking a hit. To date, Canada’s property sector has weathered the central bank’s tightening in fairly good shape. But this fight may not be over. Investors should brace for the possibility that before the good times return, they may first have to weather more pain.”
This Is Money in the UK. “It is not an easy time to be selling your home. Little more than a year ago, sellers had the upper hand as the housing market was red hot and there were plenty of buyers competing for each available property – and bumping up the price in the process. But higher mortgage rates, falling house prices and economic uncertainty mean that the power balance has shifted. It seems gazundering is on the rise. Others find their property remains on the market for a long time, and are faced with either cutting the price, or holding their nerve and risking their listing hanging around even longer. James Forrester, managing director of agent Barrows and Forrester, says: ‘There simply isn’t the same buyer feeding frenzy as there was a year ago. ‘It’s commonplace for sellers to enter the market with an unrealistic price expectation to begin with, and this can see their property sit on the market with little to no interest for weeks on end.'”
“Tim Dansie, director of Jackson-Stops estate agents in Ipswich, adds that even if a buyer agrees to your ambitious price, it can all fall apart later on when they apply for a mortgage – potentially unravelling the whole chain. ‘We’re clear with buyers when conducting valuations that over enthusiastic asking prices could lead to disappointment down the line. Long chains are often reliant upon a number of mortgages being accepted and completions going through, which is where any overvalued pricing quickly becomes unravelled by lenders who use the true market values, risking the whole chain collapsing. Accepting price adjustments of around 5-10 per cent from the outset can secure a buyer, expedite the sales process, and avoid last-minute negotiations.'”
The Wall Street Journal. “When postal manager José Belloso put his Paris apartment up for sale this year he was required to have an inspector grade the home for energy efficiency under strict rules designed to fight climate change. Belloso’s building was built in the early 1900s from millstone, a porous sedimentary rock that was popular among architects of France’s Belle Époque. His apartment flunked the inspection—and under a regulation that came into force this year, the property was barred from the rental market until costly renovations are made. Belloso was ultimately forced to knock 50,000 euros, equivalent to $54,000, off his asking price to find a buyer. Consumers are starting to pay for the energy transition, and they aren’t happy about it.”
“Governments that were among the earliest in the world to adopt climate legislation tried to take the sting out of the transition by motivating consumers with subsidies. Now, however, the same capitals are cash-strapped and many are passing the bill to the consumer. Subsidies are being scaled back, taxes tied to carbon emissions are being phased in, and rules requiring expensive renovations are starting to bite. If the government thought the new rules would spur homeowners to invest, the plan has backfired, Belloso said, adding: ‘They raised the bar too high, all at once. And voilà! You plunge everyone into forced sales.'”
Syria Direct. “For eight months, Bozan Sheikho, 44, has been trying to sell his property in Kobani to fund migration to Europe. His asking price is low, but he has not found a buyer in the Syrian Democratic Forces (SDF)-controlled northern Syrian city, also known as Ain al-Arab. Sheikho worries that, in the end, he will be forced to sell for ‘dirt cheap.’ Sheikho owns two shops in Kobani. For one, located on a main street, he is asking for $10,000—less than half of its $20,000 value in 2019, just before United States (US) forces nearby pulled out at the order of former President Donald Trump and the city came under near-constant Turkish threats. Sheikho’s other shop is larger, but on a side street. He is charging the same price for it, though it is worth around $15,000, he told Syria Direct.”
“Alongside the shops, Sheikho owns a hectare (10 dunums) of land in the Kobani countryside that he is looking to sell for $5,000. This, too, is below its estimated $9,000 value before 2019. Many residents like Sheikho have put their properties up for sale, Berkel Mustafa, who owns a real estate office in Kobani, said. But while many properties are on the market, there is ‘a decline in real estate sales. I haven’t bought or sold any property in two months,’ he added. Kobani real estate has lost around 50 percent of its value since 2019, while buildings affected by the February 2023 earthquake in northern Syria and southern Turkey have lost between 65 and 70 percent of their value, he estimated. Before 2019, the price per square meter of residential real estate on some streets reached $200, while it currently goes for $75 or less—a difference that is not related to the decline of the Syrian pound.”
“Outside the city limits, the going price for land once ranged from $25 to $60 per square meter, but currently varies from $5 to $20. ‘Even so, there is little demand,’ Mustafa said. In Kobani, real estate is ‘dead.'”
From Haaretz. “After decades of upswings in almost every category of the Israeli real estate market, 2023 was a turning point that took a lot of air out of the industry. It actually started in 2022, when the high-tech bubble burst and interest rates went up. Then the Gaza war broke out in October 2023. It’s still difficult to predict when market sentiment will again turn positive, and real estate developers, who had become used to rising prices and endless demand, suddenly had to go on the defensive and make a strategic change.”
“Guy Preminger, CPA, a partner in the accounting firm PwC Israel explains: ‘When a developer faces a cash flow problem, it often confuses him, and many developers now have this problem: Interest rates have jumped from 5 percent to 8 percent, slowing sales and increasing construction expenses, and the result is that even for a profitable project, this creates a cash flow problem. Suddenly, it’s hard to pay fixed expenses and finish projects that developers thought would be wonderful and profitable, because there aren’t enough home sales and the cash flow has shrunk.'”
“Real estate developers go to PwC to consult on tax issues, to examine the financial feasibility of projects, including urban renewal projects, and to prepare the financial statements for public companies. ‘We see everything,’ says Preminger, ‘both the good and the bad.’ Who are the developers at the highest risk of insolvency? ‘Anyone who bought expensive land and realized they’re in a hole after the interest rate hikes, or those who thought that home prices would rise forever, and got stuck.'”
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‘The biggest losers in the Texas housing market are Snyder, Pearsall, Raymondville, and Fredericksburg, all of which have experienced a double digit percentage drop in home prices. Snyder suffered the largest price drop of 26.67%. Pearsall homeowners also experienced a significant drop of 23.08% in home prices over the course of a year. Of all the Texas metro areas on this list, Fredericksburg homeowners saw the biggest net loss in absolute dollars. The median home price in the Fredericksburg, TX metro area declined from $634,312 to $549,480, resulting in a percentage drop of 15.44%’
It’s a good thing everybody put 30% down! I never thought I’d post an article on Snyder. But it points to yer biggest problem Jerry. All these tiny sh$tholes across the country that saw yuuge shack price increases that had no business going up at all
“All these tiny sh$tholes across the country that saw yuuge shack price increases that had no business going up at all.”
Once Wall Street started snapping up houses like meme stocks in every corner of East Podunk in order to capitalize on the tsunami tide of Quantitative Easing money flowing into housing, the market was FOOBAR as far as Mom and Pop were concerned.
They were never buying shacks in places like Snyder. I’ve seen similar price increases in many small and mid-sized sh$tholes in Texas. Fredericksburg doesn’t have enough population to attract wall street. And now prices are like California’s and sinking like a turd in a well.
That area of Texas all surviving homes have metal roofs which tells you something .
‘On a recent afternoon, two girls with ponytails sashayed across an intersection, talking about becoming TikTok stars one day, seemingly oblivious to a couple hunched over at a bus stop across the street, struggling to light up. As they walked, Alabsi blocked their view of smeared feces’
The AP is globalist scum media and here they are trying to normalize third world living. Oh isn’t it nice this lady is keeping kids from seeing the smeared poop. It takes a village!
Vote like California, become California?
The state where frontline workers earn up to $800K a year in overtime. Overtime for California government workers has surged since 2019, according to Transparent California figures. On a per-worker basis, overtime pay is up 34% from 2019 to 2022 – almost doubling the inflation rate of 18.2% over the same period.Apr 22, 2024
Public unions control CA and when frontline state workers retire they usually bail , wonder why ?
‘If the government thought the new rules would spur homeowners to invest, the plan has backfired, Belloso said, adding: ‘They raised the bar too high, all at once. And voilà! You plunge everyone into forced sales’
There’s a German guy who got fooked with a heat pump too.
“There’s a German guy who got fooked with a heat pump too.”
I got a cold call recently from the owner of the company that installed our Trane variable speed heat pump system wondering why we’re not ordering a Spring cleaning. I told him that we only operate the heat pump to cool the house, not heat it, instead preferring to use electric oil radiators for each room, as needed, as it was more efficient than operating a mechanical system. When I told him I was an engineer he agreed with me.
This strategy can save a lot of money and in some cases is actually an overall improvement. For instance, at night an oil heater is very quiet and you are only using one room. Aside from that one of the best things a person can do is get serious about weatherization. If you get that part right and slow the rate of loss way down you can get by with a lot less heat generation.
“…get serious about weatherization.”
We used our covid cash toward replacing all of our windows with top of the line Milgard, which required a router to deepen the wooden recess since the new window casement were much thicker. The end result is a stable temperature without any drafts, and the outside noise reduction is fantastic.
The net loss is quite significant in some metro areas. Where homeowners are losing over $230 per day in equity if they had purchased a home in the first quarter of 2023.
Welp, at least they’re not throwing money away on rent.
Snyder suffered the largest price drop of 26.67%. Pearsall homeowners also experienced a significant drop of 23.08% in home prices over the course of a year.
Fake wealth created by fake money was never sustainable in the long run.
“Fake wealth created by fake money…”
…was a dangerous policy move.
The median home price in the Fredericksburg, TX metro area declined from $634,312 to $549,480, resulting in a percentage drop of 15.44%.
Gosh, any Fredericksburg FBs who levered up on debt to get up on that housing ladder to effortless riches are now boarding the express train to Schlongville.
It’s startling to think someone who purchased a home in Fredericksburg in the first quarter of 2023 has now lost $232 per day in equity.”
Trillions in fictitious Yellen Bux “value” will be winging off to whatever afterlife awaits debauched fiat currencies as true price discovery lays waste to the Fed’s asset bubbles & Ponzi markets.
The home of Jacksonville saw a 44.6% annual drop in contracted home sales in April.”
Is that a lot?
‘The median home price in the Fredericksburg, TX metro area declined from $634,312 to $549,480, resulting in a percentage drop of 15.44%. It’s startling to think someone who purchased a home in Fredericksburg in the first quarter of 2023 has now lost $232 per day in equity’
https://www.lendersa.com/lenders/fha/tx/fredericksburg
‘In 2024, FHA loan limit in Fredericksburg county of Gillespie, Texas is $472,030 for a single-family home, $604,400 for 2-units, $730,525 for 3-units, and $907,900 for 4-units. The maximum loan amount of conventional loans on a single-family residence is $726,200, $929,850 for 2-units, $1,123,900 for 3-units, and $1,396,800 for 4-units.’
Shacks used to cost 40k pesos here cuz it’s a remote sh$thole. Thanks guberments and central banks!
Sad to see grand old vacant mansions deteriorating.
https://www.dailymail.co.uk/news/article-13385633/Los-Angeles-mansion-Los-Feliz-Glendower-Place.html
Aussie FBs are starting to crack under the “cost of living” crisis. Coming soon to a housing market near you as the Fed’s currency debasement shows no signs of abating.
https://www.news.com.au/finance/business/banking/westpac-reports-profit-slide-to-334bn-in-fy24-h1-earnings/news-story/7b7aa71e48e4b47bc47e9522c9c18aa8
‘And in a cautious tone, Mr King delivered a fresh warning to homeowners, warning interest rates would likely stay “higher for longer” as the Reserve Bank navigated sticky inflation and rising geopolitical uncertainty.’
EZ Credit is right up there with Free and All You Can Eat.
The risk that comes with owning an electric vehicle is that fancy technology tends not to age very well.
So when I plunked down money on an EV in early 2022, I figured I was making a long-term commitment to a vehicle that might not appeal to second-hand buyers.
My approach then: I planned to drive the car for at least 10 years. I wouldn’t mind if it wasn’t worth much at the end of this period, because a decade of car ownership is full value for me. If it is still a fine vehicle in 2032, that would be an unexpected bonus.
More than two years later, I’m sticking with this approach. Although I have a wandering eye for different colours, my 2022 Hyundai Ioniq 5 still looks great. It runs like a charm, and I can’t think of a single thing that is looking dated.
Well, except that the price of some EVs is now dropping. This trend marks a stark contrast to my start with EV ownership, when high demand for vehicles and low supply fed long waiting lists for some models throughout 2022 and into 2023. The idea of price cuts seemed absurd then.
Cheaper EVs are a good development, of course. Lower prices should stimulate demand for cleaner vehicles, which seems like an essential step toward wider adoption. That should create the need for more public charging options and stimulate yet more demand. Looks like a virtuous circle to me.
However, falling prices can leave some consumers regretting their purchases when they realize that they could have saved money by buying later. Widespread regret isn’t a good image. This is why a deflationary economic environment is so feared. A deflationary spiral could explain why EV sales growth has been slowing over the past year, pushing manufacturers to recalibrate their sales forecasts.
Yeah, I might be driving the electric equivalent of a beater in several years, where inquisitive people ask me: You paid how much? For that? But that’s okay by me.
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-worried-about-the-resale-value-of-your-ev-my-approach-is-simple-dont/
The time to buy an EV without consideration of the resale prices was in 2016-2018 when they were appropriately priced for what they are: an iphone on wheels that will be out of date every 2-4 years.
Even with the price drops EV’s are still stupidly expensive
Virtue is costly.
I drive a 2010. ti’s 14 years old, I expect I’ll get at least another 5 years out of it without major engine/transmission work. Probably closer to 10. I think this is pretty normal, I see a lot of late 90’s vehicles on the roads every day.
How is it better for the environment to throw away your car every 10 years? OH right right, cuz it’s about CONTROL.
It is taken for granted by politicians and the media that we need to control immigration.
Even many of those against the brutality and hypocrisy of anti-immigrant measures feel it’s impossible not to call for some kind of control on immigration.
But immigration controls only exist to police working class people and spread racist division. They are a tool of our enemies—the bosses and the state.
Immigration controls also legitimise a very wrong and dangerous idea—that workers have to compete with each other for a limited set of resources. The Tories and Labour are happy for ordinary people to put their anger over the lack of housing, the rundown of health and welfare, job insecurity and pay down to immigrants.
It’s a line even parroted by those who claim to be on the left. But immigrants are not to blame. The system of raids, detention centres and deportation that hangs over migrants is an attack on all workers, wherever they are from.
So is Britain at risk of being “full”? No. For socialists, the only possible policy is opposition to all laws restricting immigration and asylum.
https://socialistworker.co.uk/what-we-stand-for/why-we-hit-back-at-all-immigration-controls/
So, opposing the wholesale invasion of your country by unproductive and unassimilable foreigners is “brutal and hypocritical”. That’s some mighty fine gaslighting.
you don’t hate journalists enough you think you do, but you don’t.
https://www.youtube.com/watch?v=JiXzMntCEfk
Putin, Islamism and the Case for Monoculturalism | Konstantin Kisin
I thought this was interesting
You will own nothing.
“I Don’t Think Housing Prices Will Ever Come Down”: Americans Are Sharing Why They’ve Decided To Call It Quits On Homeownership In 2024
“I make $90K a year and can’t afford to buy a house. That used to be considered good money.”
by Ross Yoder
BuzzFeed Staff
…
https://www.buzzfeed.com/rossyoder/deciding-against-homeownership-2024
“I make $90K a year and can’t afford to buy a house. That used to be considered good money.”
I wonder how much of this is due to a 35T dollar debt and how it affects real workers versus anyone who can tap into printed money without working ?
The U.S. housing market is harboring the potential for unprecedented economic stimulus that wouldn’t require any federal spending, according to Meredith Whitney, the one-time “Oracle of Wall Street” who predicted the Great Financial Crisis.
In a column for the Financial Times on Friday, she noted that mortgage finance giant Freddie Mac asked its regulator last month to enter the secondary mortgage market, or home equity loans, which allow homeowners to borrow against the equity in their houses.
https://finance.yahoo.com/news/3-trillion-could-injected-u-192408915.html
First come the cash out ATM loans, next the undewaterness and clamoring for bailouts.
“First come the cash out ATM loans…”
Only if you’re smart.
“It’s startling to think someone who purchased a home in Fredericksburg in the first quarter of 2023 has now lost $232 per day in equity.”
What? No?! But Dave Ramsey said…..
Maybe we will get back to the crazy idea that you buy a house for decades not just a few years. The street i grew up on small 3 bedroom ranches. ours was the only 2 family house on the street, kids i went to grade school with were there at our HS graduation very few had moved.
And that’s one of the things jokers like Ramsey fail to take in consideration. Last time I checked I believe average was about 6 years. But then some joker will chime in and say just rent it out if you move. Sorry, nothing bought in the last several years comes close to penciling out. Buying right now is a total lose situation. And the only good reason to buy is if you’re okay with that and can afford the @$$ pounding. To each his own.
California Cities See Exodus of College-Educated Americans
Published May 06, 2024 at 3:00 AM EDT
Updated May 06, 2024 at 4:35 AM EDT
By Joe Edwards
…
https://www.newsweek.com/california-college-degree-americans-leaving-exodus-1897121
California Cities See Exodus of College-Educated Americans”
What but I thought they went to university and became WOKE now they are bailing from CA ?
[From Down Under …]
Surprise! The World’s biggest bankers are suddenly energy pragmatists.
https://joannenova.com.au/2024/05/jp-morgan-blackrock-drop-out-of-climate-banker-cabal-and-admit-the-net-zero-transition-is-delayed/
JP Morgan, BlackRock drop out of climate banker cabal, and admit the Net Zero transition is “delayed”
In February three of the four largest financial houses in the world, left the giant financial cabal called “Climate 100+” (the fourth one left a year ago). BlackRock, JP Morgan and State Street all parted ways with the billionaire-club of philanthropists trying to bully the world into buying their own renewables. In the two months since then, two of their CEO’s have put out “letters to shareholders” predicting how the transition is going to be slower and harder and how we still need fossil fuels.
Suddenly everyone sounds like an energy skeptic.
There are lots of reasons for this shift:
1: US Republican States are pointing the “AntiTrust” gun at the billionaire banker club because it looks exactly like a monopolistic cabal doing its best to collude to reduce competition. The States are also firing up the fiduciary duty canon. Hence the bankers not only want to back away from the cabal, they want to sound like bankers that care about investing their clients funds.
2. The renewables bubble is deflating fast, and the CEO’s can see what’s coming. Think of their renewable energy passion a few years ago as a pump-n-dump scheme and it all makes more sense. Right now smart bankers are smoothing the exit ramp out of the bubble they created and hoping no one notices how wrong all their previous statements were.
3. Maybe there’s a point where smart banker billionaires realize they don’t want their own homeland to hit the skids. They’ve all made a fortune in the last four years, but who wants that fifth private jet if there is no homeland to come home too? Jamie Dimon astonished people when came out in January saying Trump’s policies were “kinda right”. Billionaires might want to visit China, but they don’t want to live there. And as I said at the time, maybe the wake up call was when the paratroopers-of-death dropped into a democracy and the Ivy league started cheering them on.
4. And besides, Trump might even win.
How times have changed
A year ago the CEO of the JP Morgan was calling for forced property seizure in a climate emergency:
Wall Street titan Jamie Dimon says seize private land for wind and solar builds
6 April 2023 10:29 GMT, Recharge
By Andrew Lee
One of the world’s highest-profile bankers – JP Morgan Chase CEO Jamie Dimon – said the US government should consider seizing private property to boost the number of green energy projects coming through the pipeline. Dimon told the bank’s shareholders that availability of wind and solar projects needs to be accelerated urgently as “the window for action to avert the costliest impacts of global climate change is closing”.
This year we need a reality check:
JP Morgan Warns of Delay to Global Energy Transition
By Irina Slav, OilPrice, April 19th, 2024
Inflation, interest rates, and wars may well delay the energy transition by quite a long time, JP Morgan has warned in a call for “a reality check” on its shift from hydrocarbons to alternatives.
…the bank’s head of global energy strategy, Christyan Malek, … forecasts that governments will dial down the push to transition from oil and gas to wind and solar as their financial resources dwindle.
Jamie Dimon’s Letter to Shareholders in 2024, is a 30,000 word 70 page letter. Despite being a small book it mentions “climate” just 13 times. He’s now more concerned about China (18 mentions) and uses the word military 24 times. He criticizes the Inflation Reduction Act because it angered all the allies of the US and he argues the US should dig up gas and sell it for political gain as well as the money:
Trade is realpolitik, and the recent cancellation of future liquified natural gas (LNG) projects is a good example of this fact. The projects were delayed mainly for political reasons — to pacify those who believe that gas is bad and that oil and gas projects should simply be stopped. This is not only wrong but also enormously naïve. One of the best ways to reduce CO2 for the next few decades is to use gas to replace coal. When oil and gas prices skyrocketed last winter, nations around the world — wealthy and very climate-conscious nations like France, Germany and the Netherlands, as well as lower-income nations like Indonesia, the Philippines and Vietnam that could not afford the higher cost — started to turn back to their coal plants. This highlights the importance of safe, secure and affordable energy. Second, the export of LNG is a great economic boon for the United States. But most important is the realpolitik goal: Our allied nations that need secure and affordable energy resources, including critical nations like Japan, Korea and most of our European allies, would like to be able to depend on the United States for energy. This now puts them in a difficult position — they may have to look elsewhere for such supplies, turning to Iran, Qatar, the United Arab Emirates or maybe even Russia. We need to minimize anything that can tear at our economic bonds with our allies.
The strength of our domestic production of energy gives us a “power advantage” — cheaper and more reliable energy, which creates economic and geopolitical advantages.
Meanwhile Larry Fink, CEO of BlackRock, the largest asset fund in the world, has undergone a very similar transformation. In 2021, he was raving how the existential crisis and how this was the beginning of a long and rapidly accelerating transition:
Larry Fink’s letter to CEO’s 2021:
I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response.
…I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. We know that climate risk is investment risk.
But now, after the bubble came and went, now he’s telling us energy security is just as important as the climate crisis:
Oil, gas needed for years: BlackRock’s Larry Fink says in annual [2024] letter
By Eric Johnston, March 27, 2024, The Australian Business Review
One of the world’s most influential investors has said the switch is on to “energy pragmatism” that recognises energy security is just as important in the move to net zero. Larry Fink of the $US10 trillion ($15.3 trillion) BlackRock has acknowledged the world will need to rely on oil and gas “for years to come” through the uneven energy transition.
… his letter … which runs to almost 30 pages, only mentions climate change in passing and the discussion is limited to strategies under way in the energy transition.
Larry Fink’s letter to investors in 2024 didn’t even mention ESG.
These are the levers of power you see shifting. BlackRock manages $10 trillion dollars in assets, and according to Jamie Dimon’s letter, JP Morgan was managing assets of $7.6 trillion. When these men write long letters, Wall Street studies them.
A lot of people have suddenly started to say in April that “we always knew the transition would be expensive” — the phase change is following the bankers.
A reader sent these in:
Makes my blood boil when politicians or CNBC guests talk about how inflation isn’t that bad…It feels fine for the already rich, for those with assets, as everything rises in nominal terms. But for average Americans, families running a budget… it’s brutal. They don’t get it.
https://twitter.com/Geiger_Capital/status/1787259799731585506
Fed is crushing it
Consumers love it
https://twitter.com/rev_cap/status/1787280955264131230
Wasn’t my editorial language
But it is definitely the biggest bubble in the history of the US
Home prices objectively never been more expensive vs any benchmark. But also has never been less supply
Japan crazier in 90s. But another 2 years of Jerome Powell and we’ll be there
https://twitter.com/rev_cap/status/1787284740732543171
Menu prices at the F1 event in Miami this weekend. $180 for some nachos. $190 for a fruit platter. $280 for lobster rolls. We need at least four or five more rate hikes @federalreserve
https://twitter.com/JesseCohenInv/status/1787218696420704487
This is basically a stimulus for rich ppl who own T-bills
https://twitter.com/awealthofcs/status/1787150923208216706
“Why aren’t more investors blowing a gasket out about bonds?” 🤯
https://twitter.com/TheCompoundNews/status/1787131835522175103
“We’ve essentially pulled forward a decade’s worth of growth into a few short years in the 2020s.” 🏘️
https://twitter.com/TheCompoundNews/status/1786786922783777016
N: Berkshire Hathaway’s cash pile reached a new all-time high of $189 BILLION in Q1 2024.
This is a $19 billion increase from their cash balance seen in Q4 2023, and a 70% increase in cash since 2022.
To put this in perspective, Berkshire Hathaway’s cash balance is larger than the market cap of Starbucks and Target combined.
When asked about this, Warren Buffet said “I don’t mind at all, given current conditions, building our cash position.”
Why is Buffett holding so much cash?
https://twitter.com/KobeissiLetter/status/1787174866736775530
American Exceptionalism…
https://twitter.com/hkuppy/status/1787117968544997692
Internal sources confirm another round of layoffs just hit emails at Tesla.
https://twitter.com/spotted_model/status/1787289584256114799
Makes sense. My local Tesla center. All available.
https://twitter.com/AlderWindz/status/1787313592376668493
“When monetary policy is easier, mortgage rates tend to fall, while house prices tend to rise due to higher demand. These opposing channels imply that the net effect on affordability is ambiguous and potentially the opposite of what…”
https://twitter.com/JohnWake/status/1787225006348574974
Apartment complex in Tampa Florida sells at a massive $32M loss in just 2 yrs of ownership
The previous owner paid $115M or $444k per unit in 2022
They just sold for $83M or $320k per unit
There’s been an increasing amount of distress emerging in US apartments as borrowing costs surge
https://twitter.com/TripleNetInvest/status/1787089463329579430
‘The previous owner paid $115M or $444k per unit in 2022…They just sold for $83M or $320k per unit’
Knife catcher.
No jobs for the olds.
HuffPaint — People Are Sharing What It’s Like To Job-Hunt Over 50 — And It’s Harrowing (5/6/2024):
“If you’re over 50, you are more likely to lose ― or be pushed out of ― your job. Once this happens, it takes much longer for older job seekers than their younger counterparts to land a job again, let alone a job that pays them what they are used to earning.
In fact, half of people in their 50s are laid off at least once and only 1 in 10 of these workers will ever again earn as much as they did before this setback, according to a 2018 data analysis by ProPublica and the Urban Institute of the Health and Retirement Study.
If you were born between 1943 and 1954 in America, you will not get full retirement benefits until you turn 66. And many older workers do not have enough saved up to retire comfortably. About 43% of people between 55 and 64 do not even have a retirement savings account, according to a 2022 survey of consumer finances from the Federal Reserve.”
https://www.huffpost.com/entry/job-hunting-over-50_l_66269df8e4b04378c08b05b8
43% is that a lot?
If you were born between 1943 and 1954 in America, you will not get full retirement benefits until you turn 66.
Ironically, this prediction is for people already in their 70s.
Washington Post — Social Security and Medicare finances look grim as overall debt piles up (5/6/2024):
“New estimates are expected Monday to paint a dire picture of the budget outlook for Social Security and Medicare, the massive federal programs for seniors, threatening future benefits and putting fresh pressure on Congress to address the nation’s deteriorating financial health.
Especially since the pandemic, the federal debt has skyrocketed, even as an aging population is placing increasing demands on retirement services. Meanwhile, Congress is contemplating how to find trillions of dollars to avoid widespread tax hikes when the 2017 Trump tax cuts expire next year.
Faced with the prospect of plunging the country into unprecedented levels of debt, fiscal experts say, Congress may be running out of room to keep putting off action.”
https://archive.ph/ONBE5
You’ll be eating cat food and cutting your pills in half, while Zelensky got another $60+ billion to keep his fat beak stuffed full of cocaine.
New estimates are expected Monday to paint a dire picture of the budget outlook for Social Security and Medicare, the massive federal programs for seniors, threatening future benefits
Impossible, I distinctly remember you guys telling me a few months ago that everything was fine with SS/Medicare, and that Gen X/Y/Z would all get their full benefits when they were ready to retire.
San Francisco’s brand-new Central Subway is a $2 billion watery mess. 🚰 Here’s what we know about the issue—and what’s being done about it.
2 min
https://www.youtube.com/watch?v=nFFU6U-tWJk
The can’t do nation.
but but but
diversity is our strength
L O L
You will own nothing.
CNBC — Renters’ hopes of being able to buy a home have fallen to a record low, New York Fed survey shows (5/6/2024):
“The dream of home ownership has gotten even further away for renters, with higher housing costs and elevated interest rates standing in the way of the American housing dream, according to a New York Federal Reserve survey released Monday.
The share of renters as of February who possess hopes of “residential mobility,” or the belief from renters that they one day will be able to afford a home, fell to a record low 13.4% in the central bank’s annual housing survey for 2024.”
https://www.cnbc.com/2024/05/06/renters-hopes-of-being-able-to-buy-a-home-have-fallen-to-a-record-low-new-york-fed-survey-shows.html
Google search is crap… does anyone know that link that accurately tracked all the 2020 election court cases?
You mean hereistheevidence dot com?
Yes, much much appreciated. Impossible to get an accurate search result from big tech, huge thanks.
MarketWatch — Same job, $16 less per hour: Frustrated job hunters can’t find roles that pay as well as their old ones (5/4/2024):
“U.S. employers have announced more than 322,043 job cuts since the start of 2024, according to the latest figures from the outplacement firm Challenger, Gray & Christmas.
Along with those layoffs, workers looking for new jobs not only saw lower pay, they also saw roles that required them to do more.
Companies have also had to recalibrate remaining employees’ responsibilities after layoffs, Yodh said, noting that unless a company decides to eliminate a project, the work still needs to get done.
Increasingly, beaten-down job seekers are saying yes to lower-paying jobs after months of unemployment.”
https://www.marketwatch.com/story/same-job-16-less-per-hour-frustrated-job-hunters-cant-find-roles-that-pay-as-well-as-their-old-ones-8da958e9?mod=home-page
This reminds me of the guys/gals who drive for UPS/FedEx. Better not FU that job! Where else can you get 6 figures for such a low skilled job.
” She thought that was unacceptable. “You can’t pay people less when the cost of living is what it is right now,” Jansen told MarketWatch. “You can’t pay people less to do the same job that they were doing previously.’ ”
Um, I have some news for you.
Ok, so how does the projection that AI will take over 40% of the jobs within the next 10 years figure in the future.
Are all these displaced workers going to get Universal income from a government that wouldn’t be able to afford it, in the final analysis?
The biggest threat to humanity are Monopoly Corporations and the bulk of Governments of the globe. It isn’t Climate Change or the virus Panademics.
a little levity today:
Mama Cass ‘didn’t choke to death on a ham sandwich’, daughter says
https://www.yahoo.com/entertainment/mama-cass-didnt-choke-death-014242875.html
https://www.yahoo.com/entertainment/mamas-papas-singer-cass-elliot-164920611.html
Shanghai Turned into a Commercial Ghost Town? 60% Office Vacancy, Foreign Half-Price Sales Fail
China Observer
3 hours ago
A shocking 60% vacancy rate in Shanghai’s Qiantan office buildings? This is not a joke. As a professional in Shanghai office space rentals, let me share a method to gauge the market. In Qiantan, each office building’s lobby has plaques with the names of companies located there. By visiting each building, you can observe and gauge the overall occupancy and vacancy rates yourself.
https://www.youtube.com/watch?v=wv3WKXl9ktQ
17 minutes.
GTA Real Estate DISASTER. Slowest April in 20 Years
Honest real estate talk 🇨🇦
59 minutes ago
The Spring real estate market has been flat this year. Cities in the Toronto area are seeing lot of homes go up for sale but not too many sell. This April was the slowest april we’ve seen in over 20 years. Months of inventory is around 2.5 months for most cities around Toronto. Toronto sitting at 2.9 months of inventory.
No need to go crazy during bidding because chances are a new home listings will hit the MLS pretty soon. New listings for homes are up 47% compared to last year and active home listing on the Toronto MLS are up 74%. Chances of the spring real estate market picking up in the next 3 weeks are slim.
https://www.youtube.com/watch?v=6xFPM1V24rQ
7 minutes.
Funny how Colorado Springs gets ever so close to that 3,000-inventory threshold but never seems to cross it. By design perhaps?
‘Closed housing sale contracts across Florida fell in some of the state’s largest counties in April. Elliman analysts say the Sunshine state home market is obviously getting chilly’
And April would be March-ish actual sales. Isn’t that the spring time when things are supposed to be red hotcakes in Florida?
‘Those pessimistic remarks, I laugh at them,’ Kemp said . ‘People are continuing to relocate here – a thousand people per week’
According to popular REIC myth Rose, that’s been the case since 2005. Seems like lots of would-be movers are looking to get out – again.
‘If it was to be sold in a bulk sale, a portfolio sale, you have to think how big that buyer would have to be. You’d have to be a massive player…And institutional buyers are mostly on the sidelines now. To the extent they’re active, they’re engaged in industrial properties and multi-family properties. If I were in their shoes, and there’s an offer on any of these, I’d take it’
Yer not going to get hired John, cuz you want to give it away.
‘But for condos, there are a lot of new buildings coming to completion and a lot more inventory to choose from’
You know Tom, amid all the crater, I had forgot that tens of thousands of airboxes are finishing up all the time in yer sh$thole.
‘There simply isn’t the same buyer feeding frenzy as there was a year ago. ‘It’s commonplace for sellers to enter the market with an unrealistic price expectation to begin with, and this can see their property sit on the market with little to no interest for weeks on end’
That’s the spirit Jim, drive those expectations down!
‘Long chains are often reliant upon a number of mortgages being accepted and completions going through, which is where any overvalued pricing quickly becomes unravelled by lenders who use the true market values, risking the whole chain collapsing. Accepting price adjustments of around 5-10 per cent from the outset can secure a buyer, expedite the sales process, and avoid last-minute negotiations’
Jim, you could learn a thing or two from Tim. He’s a shark. I’d bet would-be movers wet themselves in his office.
‘Governments that were among the earliest in the world to adopt climate legislation tried to take the sting out of the transition by motivating consumers with subsidies. Now, however, the same capitals are cash-strapped and many are passing the bill to the consumer. Subsidies are being scaled back, taxes tied to carbon emissions are being phased in, and rules requiring expensive renovations are starting to bite. If the government thought the new rules would spur homeowners to invest, the plan has backfired, Belloso said, adding: ‘They raised the bar too high, all at once. And voilà! You plunge everyone into forced sales’
We’re all gonna die if you don’t take yer a$$ pounding Bellago.
‘When a developer faces a cash flow problem, it often confuses him, and many developers now have this problem: Interest rates have jumped from 5 percent to 8 percent, slowing sales and increasing construction expenses, and the result is that even for a profitable project, this creates a cash flow problem. Suddenly, it’s hard to pay fixed expenses and finish projects that developers thought would be wonderful and profitable, because there aren’t enough home sales and the cash flow has shrunk’
‘Anyone who bought expensive land and realized they’re in a hole after the interest rate hikes, or those who thought that home prices would rise forever, and got stuck’
Like yesterday Guy, every time I read about you guys getting fooked on yer own greed, it cracks me up.