Doomstead

Always a lively indicator to watch when the financial system is teetering, which it definitely is now that the Bond market has collapsed.  Mortgage rates remain astronomical and sales are slumping.

The headline loser of this story took a 50% loss on a $20M SF palace purchased only a couple of years earlier.  This person has to be in real financial trouble to sell it off at that price.  Margin call somewhere else in his portfolio perhaps.  If the economy goes into recession, which currently looks likely to me by the 2nd quarter of 2024, mortgage defaults could start rolling in like 2008.  If that happens, Houston, we've got a problem.

https://www.newsweek.com/san-francisco-home-sale-10-million-loss-housing-market-collapse-1849859

San Francisco Home Price Drops $10 Million as Housing Market Collapses

RE

"Correction" implies that once it's finished being corrected, it will be right.  That outcome is highly unlikely.  The only thing that happens during these "corrections"  is a lot of small investors and homeowners lose their shirts and their homes while the hedge fund managers short the market and make a killing and the TBTF Banks get bailed out by da goobermint.  Then everybody goes right back to doing exactly the same thing, because that's how bankers make money.  Getting people to take out the biggest loans possible and run up their debt so that every last penny gets hoovered up in interest payments is the system in need of correction, nobody is making any effort to correct that, and nobody who is the beneficiary of this legalized theft ever will.

However, this latest doomsday prediction does imply the "correction" will be even bigger than the sub-prime fiasco and financial crisis of 2007-8, which if true means we're in for some really lively days ahead in the world of collapse watching.  The 2008 GFC came whisper thin close to completely wiping out the monetary system, and only some truly creative fraud concocted by the Smartest Guys in the Room has kept the system afloat for the last 15 years.  Given that overall global finances are in far worse shape today than they were in 2008 and the political balance between the FSoA, China and Russia is more precarious than ever, a wild roller coaster ride on the currency markets and potential Sovereign Defaults may finally be the Tipping Point we have been expecting in the Collapse Watchers International Association (CWIA) since it failed to arrive on 12-21-2012 as predicted by the Mayan calendar.  ;D

It probably doesn't bode well for my getting out of the Gulag here and into an apartment too soon, but hopefully I'll keep my current roof over my head as the dominos begin to fall.

https://www.foxbusiness.com/real-estate/real-estate-investor-warns-us-entering-greatest-correction-lifetime

Real estate investor warns US is entering the 'greatest' correction of his lifetime

RE

QuoteIn order to jump-start the housing industry, Cardone is urging Powell to "step aside" and let the market correct itself.

Markets do not correct themselves.  The author Cardone is one of the "nobody who is the beneficiary of this legalized theft ever will."

De wisdum of de markeet.

is (https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Ftse1.mm.bing.net%2Fth%3Fid%3DOIP.NPRbjEYonNumX-vhWYGhcQHaD4%26pid%3DApi&f=1&ipt=be725766316ed18f315ddea4275ea2ccc726d169161b1ed7dacf6dd7410e9b6f&ipo=images) !!

We HAD to destroy the village to save it.  Same kind of thinking.


https://callingbullshit.org/ (https://callingbullshit.org/)

Quote from: K-Dog on Dec 16, 2023, 12:15 PM
De wisdum of de markeet.

is (https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Ftse1.mm.bing.net%2Fth%3Fid%3DOIP.NPRbjEYonNumX-vhWYGhcQHaD4%26pid%3DApi&f=1&ipt=be725766316ed18f315ddea4275ea2ccc726d169161b1ed7dacf6dd7410e9b6f&ipo=images) !!

"Wisdom of the Market" is one of the Fundamental Axioms repeated by the True Believers of Capitalism.  No matter how many times it is demonstrably clear that the market has no wisdom at all, the line is repeated as a mantra.  Any problems that crop up are never because the market is stupid, but because of "regulation" and "goobermint interference".  Resistance is Futile.  You will be assimilated.

RE

Hard as it is to believe, it sounds like the affordable housing problem is even worse in Oz than in the FSoA.  I guess the Wisdom of the Market doesn't apply to Real Estate.  ::)

https://www.bbc.com/news/world-australia-67723760

The year the Australian Dream died

RE

The collapse of the commercial RE sector is beginning to hit the banks, which so far claim to have sufficient reserves to cover their losses.  Given the fact that occupancy rates are down to about 50% and a couple of office towers were sold recently at 50% off firesale prices, I find this hard to believe.  Even covering 10% losses out of capital structure is enough to make a bank insolvent.  All they are covering here are losses on notes due this year, not taking the haircut on the full valu of the property, except in the cases where the full building is sold off, which isn't happening that much, relative to the total size of the market.   So while they can absorb the losses this year, without a magical rebound in the market next year,, they'll have to do it all over again.

This may in large part be the reason for the push by many CEOs for the return to the workplace and less work from home.  Work from home made many of those office spaces unnecessary.   Not only the banks take the loss on these properties, so do the lease holders.  If they don't get people back into those offices, they can't unload their leases.

This looks like a slow motion version of what happened to residential RE when the Adjustable Rate Mortgages reset 2006-7.  That took a few months to balloon up, this could take a couple of years.  Same general outcome though, the TBTF banks will need a bailout...again.  Problem is the interest rates are much higher now so printing funny money is much more expensive.

Don't be fooled by the headline, this isn't just a German bank problem.  As goes Deutchebank, so goes Credite Suisse and JP Morgan Chase.

https://www.cnn.com/2024/02/07/business/pbb-bad-loans-real-estate-crisis/index.html

German bank braces for wave of bad loans in 'greatest real estate crisis since the financial crisis'

RE

For sure, your article is about US commercial real estate a German bank has trouble with. This came out two hours ago, Yellen said yesterday:

QuoteThese factors will "put a lot of stress on the owners of these properties," Yellen said, speaking before the House Committee on Financial Services Tuesday.  She cited an increase in interest rates and the higher vacancy rates resulting from a shift to hybrid and remote work—as well as a swath of commercial real estate loans that will soon come due.

A place for foreigners to park money has been US commercial real estate.  I think it is part of back door citizenship.  I could be wrong.  Back door citizenship might only apply to the homes being bought on all sides of me.

Anyhoo, the bubble bursts.  Only while things grew could the banks do well.  Now Yellen is yellin again for more socialism for the rich.

I call for the other kind.

Quote from: K-Dog on Feb 07, 2024, 12:29 PMNow Yellen is yellin again for more socialism for the rich.

As always, privatize the profits, socialize the losses.

RE

Quote from: K-Dog on Feb 07, 2024, 12:29 PMA place for foreigners to park money has been US commercial real estate.  I think it is part of back door citizenship.  I could be wrong.  Back door citizenship might only apply to the homes being bought on all sides of me.

Commercial RE has long been considered a rock solid investment class that would only increase in value, therefore considered low risk.  It's a part of every big bank's capital structure.  Has nothing to do with citizenship at all, these are all international banks that operate all over the world.

The rich Chinese are buying RE around you because their own RE market is in the toilet and they are trying to park their money in safe overseas investments open to them.  Residential RE is in that class.  If it wasn't for the Chinese money, the whole western property market would collapse.  It will anyway of course.  The Chinese have a poor record investing in RE.  They Buy High, Sell Worthless. lol.

RE

Quote from: RE on Feb 07, 2024, 02:09 PMThe rich Chinese are buying RE around you because their own RE market is in the toilet and they are trying to park their money in safe overseas investments open to them.  Residential RE is in that class.  If it wasn't for the Chinese money, the whole western property market would collapse.  It will anyway of course.  The Chinese have a poor record investing in RE.  They Buy High, Sell Worthless. lol.

RE

I helped one of them cut down a tree a couple of years ago unsolicited when I saw he obviously did not know how to use a chain saw.  It was obvious he considered me a madman for helping a stranger.  He still lives across the street.  I have not seen him since.

Well, perhaps not Slo-Mo after all.  The C-Word has already hit the MSM.  CONTAGION.

The reason I put up the story about the German bank was because of a simple rule.  When CEOs and Fed Chairmen make reassuring public statements that there's nothing to worry about and the problems can be contained, you immediately know for sure it's time to start worrying and it definitely can't be contained. lol.

Now it becomes a question of which of the systemically important banks will be the first domino to fall and need a bailout.  Deutchebank seems like a good candidate.  Issue is the German economy is already on the rocks and it's difficult to see how they can pull off the same kind of bazooka with the Euro as Da Fed did with the Dollar in 2008 to bailout DBank.  Without a bailout though, Dbank going down is like Lehman, except an order of magnitude worse.

The stock market should be fun the next couple of days.

https://fortune.com/europe/2024/02/07/commercial-real-estate-german-bank-deutsche-pfandbriefbank/

'Greatest real estate crisis since the financial crisis': German bank alerts the market on exposure to commercial real estate

RE

Deutschebank are a strategically important bank in the EU. They are too big to fail and will be bailed out if it comes to that. The only thing that makes this harder is the Germans are not in direct control of the EU central bank so any bailout will be more convoluted. However, despite its weaknesses the German economy is the heart of the EU. Germany cannot be allowed to fail.

I still maintain that the real acid test will come when oil supply starts going down year-by-year significantly and prices rise because of it. Can the EU and by extension the global economy survive? Now I know the peripheral economies will suffer first but there is only so much supply loss that can occur before the failures begin to manifest in the core economies. How long will it be for that to happen is the big question...

Quote from: monsta666 on Feb 08, 2024, 01:22 PMDeutschebank are a strategically important bank in the EU. They are too big to fail and will be bailed out if it comes to that. The only thing that makes this harder is the Germans are not in direct control of the EU central bank so any bailout will be more convoluted.

Convoluted is a major understatement.  The Dollar has a 1:1 correspondence with USTs.  The Euro on the other hand is backed by the bonds of all the countries that use it, not just Germany.  I can't see France for instance selling bonds to prop up a German bank.  So Germany has to sell all the bonds, but the German economy and Tax base isn't as big as the FSoA.  You need the whole European Union to have that much economic power.

Even if they do manage enough bond sales to cover the losses, the Euro will crater against the dollar by at least 20%, probably more.  Energy and Food, anything priced in dollars will go through the roof.

There is no exit here.  If they can keep this one together, they really are the smartest guys in the room.

RE

Add Germany to the FSoA, UK, China, Canada & Oz as another one sinking into the collapsing RE Black Hole of Debt.

How is it that all these countries with different goobermints can be having exactly the same problems?  Simple, because they all use the same banking system with the same faulty assumptions all trading securities around on the same international markets on Wall St, the City of London, Hong Kong and Tokyo.  All the RE all over the globe has been artificially propped up in value by low interest rates, and it's all overinflated asset valuations that need to drop by 50% or more before it would even be close to correct for a normal correction.  As it is, with so many now in trouble at the same time, everyone will be looking to sell, and WTF is going to buy?  That is a recipe for a complete crash and frozen market.  None of the TBTF banks could handle that kind of capital devaluation, and no Goobermint could bailout all of them together.

This is the accident waiting to happen at the moment, and you can sense the tension in all the articles trying to downplay it and spin that it can be contained.  Can it?  Can the Smartest Guys in the Room pull another rabbit out of their hats?   Tick, Tock...

https://www.ft.com/content/dd396d80-9626-48c6-b276-a1ea4e5f6fad

The German property collapse is happening in residential too

RE

They keep repeating the Mantras "manageable", "can be contained", "no contagion",  "not as bad as 2008".  ::)  Does anyone else here sense the desperation in these reports and pronouncements?  Property values are dropping like a rock,landlords are walking away from buildings, interest rates are up, and there's still a couple of $TRILLION$ in debt coming due by 2025.  Why do I have trouble buying this hopium?

There is a silver lining to this though.  Due to $400B or so in fines the courts have dropped on Trumpovetsky, he's probably going to have to sell at least one of his skyscrapers in NY into this sinking market.  His assets were inflated to even give him a purported net worth of around $2B.  The price he might get on a sale could very well be less than 50% what they are assessed at.  That could cause a reavaluation of all his holdings, which could end with his liabilities exceeding the assets and the banks might call in the loans.  Can you spell BANKRUPTCY?  ;D   Currently his GoFundMe page isn't even covering the accumulating interest on the penalties.

Hope he has a good stash socked away in offshore accounts.  lol.

https://www.dawn.com/news/1815175/echoes-of-the-2008-financial-crisis

Echoes of the 2008 Financial Crisis

RE

The land of unearned riches.  It could not go on forever.  The only property anybody should be able to own is their private residence.  If some useless eaters are in distress it is nothing to be concerned about.

QuoteShunning labor is the conventional evidence of wealth and the mark of social standing.

In Ponzi America having wealth depends on everyone else having wealth.  Most everyone has borrowed wealth and is actually in debt.  Debt is something Americans aspired to.  I will pretend to have wealth if you do.  As long as we all pretend it is 'all good'.  And fuck everybody else who can't pretend to have shit.

But now payments due exceed accounts received.  As it should be.

Shades of 2008, not just the Commercial RE market is having problems, the housing market isn't doing so great either.  Not as bad as the sudden collapse of the sub-prime mortgage market of LIAR and NINJA loans that hit at the end of 2007 and brought down Lehman, but a steady increase in foreclosures as affordability drops and interest rates stay high.  So far,the numbers say we're not in a recession, the question is if that will hold up through the 3rd quarter and the POTUS election?  It still boggles my mind that voters will have to choose between two octogenarian imbeciles so corrupt they make Latin American dictators look honest, and at least some of them will show up at the polls to vote.  Very sad.

https://www.foxbusiness.com/economy/home-foreclosures-are-soaring-nationwide-rising-fastest-these-states

Home foreclosures are soaring nationwide – and rising fastest in these 5 states

RE

QuoteThe typical salary required nationwide for home ownership up to $106,500 — a stunning 61% increase from the $59,000 required just four years ago, according to Zillow.

That from your article.  But people won't scream for the American Dream or make a scene before poverty makes them lean and mean.  By then it will be too late.  If it isn't already!

Everybody in America seems fine with a rentier economy. Most people think they will have a chance to do a little exploiting on there own before the tent comes down on this circus.

$106,500 a year is $51 an hour.  Twice the average American wage.

And you have some idiots making less than 60K a year thinking that raising the minimum wage will hurt their families.

Quote from: K-Dog on Mar 17, 2024, 10:48 AM

QuoteThe typical salary required nationwide for home ownership up to $106,500 — a stunning 61% increase from the $59,000 required just four years ago, according to Zillow.

That from your article.  But people won't scream for the American Dream or make a scene before poverty makes them lean and mean.  By then it will be too late.  If it isn't already!

Everybody in America seems fine with a rentier economy. Most people think they will have a chance to do a little exploiting on there own before the tent comes down on this circus.

$106,500 a year is $51 an hour.  Twice the average American wage.

And you have some idiots making less than 60K a year thinking that raising the minimum wage will hurt their families.

I'm not sure exactly where it is in the FSoA that you can afford to buy a McMansion making $105K/year.  Certainly not in NY, Austin, Los Angeles or Seattle.  Anywhere McMansions come cheap enough to buy on that salary like maybe Springfield, MO or Macon, GA,  95% of the population is making minimum wage of like $15/hour.

I'm no fan of property ownership of course.  I'm fine with people owning a house, just not the land it's parked on.  Land is commons, it belongs to all the creatures who live on it.  You can use it for a while, but as soon as you take it out of the commons you create a class of Haves and another of Have Nots.  If you recall, in the FSoA when it was founded, you had to be a Property Owner to have a vote.  Which meant of course that Natives couldn't vote, because they just had reservations to live on commonly.  Once a person owns land, they can bequeath it to their heirs, creating a class of Royalty, as opposed to "Commoners" who don't own land.  What happens when all the land is bought up, and none left in a given location to buy?  Supply and demand kicks in, and the price keeps spiraling upward, always leaving the class of Have Nots.

Now, it's a different story if you have a domicile of your own you can move around as needed, and additional places to drop it can be added by building upward scaffolding and stacking them up.  That way, people can own their home, and the state provides the scaffolding wherever more people need to live, to be close to their jobs.  The houses would be affordable, and you could buy and sell them on ebay.

(https://www.hollandcomposites.nl/wp-content/uploads/2019/01/Holland-Composites-modulair-woonunit-tinyhouse-tijdelijke-unit-huisvesting-studenten-woning-starter-temporary-house-space-accomodation-Spacebox-LR-004-1024x768.jpg)

(https://s.yimg.com/ny/api/res/1.2/rw3FhOELbrYHEX1mN6xobQ--/YXBwaWQ9aGlnaGxhbmRlcjt3PTY0MDtoPTQwOQ--/http://36.media.tumblr.com/b9a7ef8a9b1697eaf1ec05c50bbf7e99/tumblr_inline_nvwretfy5Q1tchuoh_1280.jpg)

(https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/images/tiny-homes-business-center-1578275581.jfif?crop=1.00xw:0.848xh;0,0.0611xh&resize=1200:*)

(https://www.treehugger.com/thmb/O7buPXnkYEv9TS8k7nvT5Q384GA=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/__opt__aboutcom__coeus__resources__content_migration__treehugger__images__2015__09__closeup-perspective-550c194f6d704c92a5c85786b69d05f3.jpg)

RE

Quote from: RE on Mar 17, 2024, 01:32 AMShades of 2008, not just the Commercial RE market is having problems, the housing market isn't doing so great either. 

https://www.foxbusiness.com/economy/home-foreclosures-are-soaring-nationwide-rising-fastest-these-states

Home foreclosures are soaring nationwide – and rising fastest in these 5 states

RE

One of the biggest financial mistakes I ever made was not buying a house during the lows in 2008. Home values had tanked, and I could have rented it out, and it would have paid off in housing value growth similar to what you have mentioned K-Dog was able to take advantage of. Maybe let one of the kids have it to save themselves rent and whatnot after college. 

I wonder when prices might crash to levels making that game available again.

Quote from: TDoS on Mar 17, 2024, 06:43 PM

Quote from: RE on Mar 17, 2024, 01:32 AMShades of 2008, not just the Commercial RE market is having problems, the housing market isn't doing so great either. 

https://www.foxbusiness.com/economy/home-foreclosures-are-soaring-nationwide-rising-fastest-these-states

Home foreclosures are soaring nationwide – and rising fastest in these 5 states

RE

One of the biggest financial mistakes I ever made was not buying a house during the lows in 2008. Home values had tanked, and I could have rented it out, and it would have paid off in housing value growth similar to what you have mentioned K-Dog was able to take advantage of. Maybe let one of the kids have it to save themselves rent and whatnot after college.

I wonder when prices might crash to levels making that game available again.

I am an oddball.  I was never all right with property values going up.  I think houses should be affordable and steps should have been taken all along the way to keep houses affordable.

When houses become un-affordable and you are lucky enough to own a house it does not mean you are rich.  I you sell the house you have to spend the money to get another place, so it is a wash. 

Home ownership only means you are one of the lucky ones who can live rent free and mortgage free because you have paid your mortgage off.  You pay taxes and have expenses, but you don't pay exorbitant rent or owe a bank until the sun goes red giant.

For years house values went up and all I ever heard was how wonderful it was. 

For years I suffered idiots and fools.  And I still do.

An average home should be worth about five times what the average annual wage is.  A home should be a store of wealth, but that is all.  There never should have been a 'market' as we have known it.

Quote from: TDoS on Mar 17, 2024, 06:43 PMI wonder when prices might crash to levels making that game available again.

Not a new idea.

(https://pbs.twimg.com/media/DtSF4mcWoAETYx7.jpg)

Everyone who dreams of unearned wealth looks to profit off the misery or others.  When farms were being foreclosed on in the Great Depression and homeless Okies were starving on the road to picking the Grapes of Wrath in California Vineyards, there were investors in NY picking up the farms for back taxes and turning the ag industry into conglomerates like Nestle , ConAgra and Monsanto.  In 2008, Blackrock bought thousand of foreclosed McMansions and turned them into rental units.

(https://ih1.redbubble.net/image.1053385993.7657/flat,750x,075,f-pad,750x1000,f8f8f8.jpg)

To paraphrase PT Barnum. "There are scumbags born in every generation".

RE

St. Louis was already a decaying big shitty when I lived in MO back in the 1990s, it's hard to imagine how bad it is now.  Pretty close to Detroit I suspect, just perhaps slightly less poor black gang bangers and a few more white trash rednecks.

In terms of revitalizing and repopulating the city, it would seem like a better place to ship the refugees in the Concentration Camps being run on the Tex-Mex border than NYC, Chicago & LA, which are already stuffed to the gills with homeless. Of course, because St Looie has been in decay for so long there's no job opportunities and insufficient state and local tax revenue to cover the costs involved in keeping these folks fed, but at least there are empty buildings there and infrastructure in place to heat them and get the toilets flushing again.  They might have to share bathrooms in the office buildings and take sponge baths instead of shower  but that still better than porta potties and army tents around communal shower stalls.

So the only way to fund it would be through the federal goobermint, and both the state of MO and municipality of St Louis would

A- Be against it since their politics have changed little since the Civil War
&
B- Be forced to staff it and run it,

but given its history & geographic location at the center of the country on the Mighty Mississippi and Gateway to the West, symbolically and practically it seems like the best place to ship the hungry masses yearning to be free the Statue of Liberty talks about so poetically.

In an election year it's unlikely Uncle Joe would float this idea since it would immediately be attacked by The Donald from the courthouse steps at his latest trial, and the right wing media would pick it up and run with it like OJ Simpson in a car chase on the LA freeway.

So it goes.

https://www.businessinsider.com/st-louis-downtown-doom-loop-is-worse-than-san-francisco-2024-4

The city whose 'doom loop' just might be worse than San Francisco's

RE

The Big Bubble of CRE is starting to pop.

Of course, we are being reassured by Jerry at Da Fed that this is strictly a Regional Bank problem ant there is no threat to the TBTF Banks.  Which of course really means the TBTF banks are in the deep doo doo.  Just ask Deutche Bank over in Germany.

$1T in distressed loans coming due over the next year is not just a regional bank problem, even if most  of those loans are nominally on the books of those banks.  When those banks have to shutter their doors and go into bankruptcy protection, their stock price plummets and who aare the shareholders of those banks?  You guessed it, the TBTF Banks themselves or their shareholders.  Everybody starts to need to borrow money to cover margin calls and nobody's got money to lend.  The whole shit show collapses in contagion gone wild.

OK, granted that is a Kollapsnik Wet Dream, it probably won't get quite that bad.  It's nott gonna be a minor ripple though either.

https://www.foxbusiness.com/economy/commercial-real-estate-foreclosures-jumped-march-trouble-looms

Commercial real estate foreclosures jumped 117% in March as trouble looms

RE

Sounds like the good old days of 2008 are coming back again!  :) This could be good for RE prices, since it will force the liquidation of a lot of bad mortgages and put a lot of properties up for auction.  Mostly commercial, but some residential too.  That's bad for the homeless situation, since it also probably means evictions.  A falling market will also put more mortggages underwater, which might cause owners with non-recourse mortgages to send in the Jingle Mail.

Recession signs popping up all over the place now.

https://watcher.guru/news/billionaire-barry-sternlicht-expects-one-bank-failure-per-week

Billionaire Barry Sternlicht Expects One Bank Failure Per Week

RE

Quote from: RE on May 12, 2024, 06:22 AMThis could be good for RE prices, since it will force the liquidation of a lot of bad mortgages and put a lot of properties up for auction.  Mostly commercial, but some residential too.

Right on cue.  This bank bought it back for less than 10 cents on the dollar.  Next tax filing they have a $100M+ write down on the balance sheet.  Pinnacle Bank is not a TBTF bank.  If they can't unload this property for a bit more than what they just paid for it, they won't be far behind in declaring bankruptcy.

And the beat goes on.

Now tell me, how many refugees do you think you could shelter in 1M square feet?  If you cut it up into 500 sq ft apartments, you could have 2000 apartments there.  Meanwhile, they spend more than that putting up tents at the border.

https://www.foxbusiness.com/real-estate/fort-worths-tallest-building-sells-just-12-3m-auction-stunning-price-drop

(http://fort%20worth's%20tallest%20building%20sells%20for%20just%20$12.3M%20at%20auction%20in%20stunning%20price%20drop)

RE

What could possibly go wrong? lol.

https://www.nationalreview.com/2024/06/freddie-and-fannie-and-the-coming-nightmare-on-main-street/

Freddie (and Fannie) and the Coming Nightmare on Main Street

RE

Quote from: RE on Jun 04, 2024, 10:26 AMWhat could possibly go wrong? lol.

https://www.nationalreview.com/2024/06/freddie-and-fannie-and-the-coming-nightmare-on-main-street/

Freddie (and Fannie) and the Coming Nightmare on Main Street

RE

The conservative bias shows:

The National Review was founded in 1955 by the conservative editor, columnist, author, and commentator William F. Buckley Jr. (1925-2008). According to their about page, the print magazine and website are corporately known as National Review, Inc. It is a wholly-owned subsidiary of the National Review Institute (NRI) based in New York City.  The magazine's website covers articles, blogs, videos, podcasts, opinion pieces, conservative news, and commentary in addition to the content published in its print version.

Unfortunately I can't use the online version as toilet paper.  But a print version of the article would be fluffy and soft.

Quote from: K-Dog on Jun 04, 2024, 12:05 PMThe conservative bias shows:

Right wing bias notwithstanding, Goobermint-guaranteed loans are mainly a risk-free cash machine for the TBTF banks.  Bad loans are all covered by the taxpayer in true "Privatize the Profits, Socialize the Losses" Capitalist fashion.  In addition, pumping still more borrowed money to prop up an anemic, inflation ridden economy is aspectacularly bad idea.

The FHFA also seems likely to approve a Freddie request to purchase second mortgages. The "primary goal" of the proposal, the government says, is to create a cheaper version of "cash-out refinance" — in other words, to allow consumers to pump more borrowed money into the economy at a time of persistent inflation.

Both of the quasi-Goobermint corporations are practically guaranteed to need another, even bigger bailout with the next RE collapse, which does not look too far off on the horizon.

RE

True

The bank said home prices will stay high and go even higher. The housing shortage will persist. And mortgage rates may not fall much — even if the Federal Reserve finally delivers long-delayed interest rate cuts. ...

"This will take many years to work itself out. There isn't a magic fix," Michael Gapen, head of US economics at Bank of America, told CNN in a phone interview. "The message for first-time homebuyers is one of patience and frustration." ...

Bank of America warns the lock-in effect could persist for another six to eight years, keeping a lid on supply during that time.

This is how out of  touch with reality banksters are with society.  To them, this is a problem that can't be fixed.  There's not enough supply and people won't move. So for the better part of the next decade housing costs will stay high, go higher and people will be frustrated.  Do they really think we can keep going with more homeless every year for another 8 years?  They don't see the connection between homelessness and lack of affordable housing? ???

The solution is OBVIOUS.  START BUILDING MORE HOMES!  Affordable homes!  Not 2 bedroom apts that go for $3500/mo.  If the private sector won't build them, da goobermint needs to do it.  Starting yesterday, not 8 years from now.

WTF isn't there some politician who will step up and suggest this ASTOUNDINGLY OBVIOUS solution?  ??? ??? ???

https://www.cnn.com/2024/06/27/economy/housing-market-prices-inflation/index.html

RE

Watching the RE market crumble is like watching grass grow but less exciting. lol.  The payoff though when the worm finally turns is marvelous, so it's worth keeping track of what is going on.  This is the first article I've seen which gives insight into the depth of the problem in the banking and insurance industries.  This won't stay confined to regional banks holding thee mortgages,  insurers, reinsurers and TBTF banks underwriting CMBS securities are going to get hit as well.  2026 looks like the worst, except the probability of recession could accelerate the decline and force liquidation of properties before they need to refi.

Anyhow, unlike 2008 where the banking crisis arrived during a period of economic growth, this one is going to arrive when the economy is already shrinking.  Bailouts are going to be uch harder to manage with currencies that are already questionably backed with irredeemable dent.  Firinig up the Helicopter and loading the Bazooka with Funny Money will not be so EZ.

https://investorplace.com/2024/07/the-commercial-real-estate-meltdown-is-spreading/

RE

A $TRILLLION$ in CRE debt on office space probably not worth more than 50 cents on the dollar. lol.  AIG was Chump Change at a measely $100B.  They're gonna need a Bigger Bazooka.  ;D


This is going to be REALLY entertaining.  8)

https://hbr.org/2024/07/u-s-commercial-real-estate-is-headed-toward-a-crisis

U.S. Commercial Real Estate Is Headed Toward a Crisis

RE

Good explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

Quote from: RE on Jul 25, 2024, 01:23 PMGood explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

That article was illustrative and clear.

QuoteBecause neither the office-building developer nor the warehouse developer can afford to pay $10 million—at that price, their projects will not generate sufficient economic returns to be financially viable—they cannot compete for this land. Thus, the land will be sold to become an apartment building.

The wisdum of de market!

* Caught with its pants down the wisdum of the market reveals itself.  It wants to make more rich people by making more poor people.

** Circumstances of being rich or poor can determine how you feel about the wisdom of de market.  However poor people often identify with their dreams over their realities and go total Stockholm syndrome.  Rich people do not make this mistake at all.  Those who seem to are simply assholes.

*** Working day and night to grow inequity and maintain business as usual, the working man is the ultimate philanthropist.

Quote from: RE on Jul 25, 2024, 01:23 PMGood explanation of why Capitalism and the "Free Market" fails to build affordable housing.

https://ggwash.org/view/96392/why-no-ones-building-middle-income-housing-in-american-cities

Why no one's building middle-income housing in American cities

RE

That article was illustrative and clear.

QuoteBecause neither the office-building developer nor the warehouse developer can afford to pay $10 million—at that price, their projects will not generate sufficient economic returns to be financially viable—they cannot compete for this land. Thus, the land will be sold to become an apartment building.

The wisdum of de market!

* Caught with its pants down the wisdum of the market reveals itself.  It wants to make more rich people by making more poor people.

** Circumstances of being rich or poor can determine how you feel about the wisdom of de market.  However poor people can identify with their dreams over their realities and often go total Stockholm syndrome.  Rich people do not make this mistake.  Why would they?  Those who seem to are generally assholes pretending to be nice because they can.

*** Working day and night to grow inequity and maintain business as usual, a working man's dreams make him the ultimate philanthropist.  Driving by the new apartment building the working man imagines it must be nice to live there.

A few may find out.

In their dreams.  Because that is the only way they ever will.  Unless perhaps they are of the professional class with a huge 4-hoe-1-K. when they retire. 

Not so many like that though.  Rich people come to America from all over the world now.  It is the migration crisis nobody talks about.  Money does not always talk.  Sometimes it shuts the fuck up and makes things expensive.




To be rich and live in a faraway land.

If you are from anywhere else in the world, that faraway land can be America.

And making things too expensive for the locals is an American tradition.  Everyone with money is welcome.  Everybody else can swim a river and drown.

Actual data saying how well Americans are doing is hard to decipher. According to a NY Times podcast inflation is under control and Ameicans are earning more. Enough to offset inflation.

Implication, quit yer bitchin.  You ungrateful cunts.

I totally agree.  As a professional I earned six figures.  Now after the pandemic forced me into retirement I indeed have been getting increases at my part-time McJob.  Enough to offset the cost increases for coffee and donuts on the way to work for sure.

Whoop-de-do.

(https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fwww.ampm.com%2FAssets%2Fimages%2Fproducts%2Fampm_columbian_coffee_coffee_n.png&f=1&nofb=1&ipt=184940616b9b5dafaf80781a728412552c460bb54e9a97c472061a8df8bd8e98&ipo=images)

Yes.

Sadly. even a crash in prices of 50% won't do much to resolve the affordable housing crisis,  Most of the price drops will come in Luxury Housing for the rich.  Even if prices come down a little with the low end housing, there's still not enough of it because it hasn't been profitable to build it, and falling prices will not inspire capitalist builder to break ground on more of it.  In addition, with recession coming, job losses will result in still MOAR people getting evicted or foreclosed on, leading to bigger homeless numbers.

Timing is important alsi here, since if it hits before the election, that mat affect the voting significantly.  Not that it matters much who wins.

https://www.noradarealestate.com/blog/will-the-next-housing-crash-be-be-worse-than-2008/

Will the Next HOUSING CRASH Be WORSE Than 2008?

RE

You found a self serving website.  Of course they want lower interest rates.  They are on the selling side.  They are chock full of short term fixes.  They got their mind on their money and the money on their mind.

The current housing situation is the result of years of inaction.  Total political social bad faith, and sloth.  Failure to regulate 'the market' has now priced most Americans out of the housing market to a point where it can no longer be ignored.  Blind faith in the unregulated manifestation of capitalism has screwed the pooch.

The wisdom of the market however is capable of fixing things.

(https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Ftse3.mm.bing.net%2Fth%3Fid%3DOIP.IVJNJAYI9Te0fK5eyp7IdwHaE7%26pid%3DApi&f=1&ipt=267fb56af2fee492d2dfa4eccb1ddd21a7afbfb9c7003141c7ad38133225c637&ipo=images)

Inflation to the rescue.  Billionaires become trillionaires.  Houses are affordable after the savings of the working class is drained.  That is the key point.  After 'everyone' is broke and everybody in a service job now earns a hundred bucks an hour.  Houses are affordable again.  Decimation has cleaned things out.

It works because not everyone goes broke.  The owning class still owns the same stuff, and more since the middle class is wiped out.  If you have enough money, your money knows how to stay ahead of inflation.  Enough being far more than the average person has.

Shit always rolls downhill under current arrangements.  A holder-over from medieval times.  The system survives and current arrangements are maintained.

NIMBY is real problem also. People like the idea of greater housing stock and lower prices but God forbid you build a real estate around the beautiful countryside that MUST be preserved! If houses get built I might have to associate with the chavs so build it somewhere or else I will vote my local MP out! It is this attitude that leads to a horrendously complex planning code that stifles development.

The other major factor in houses not being built is no one wants to develop cheap accommodation. Everyone wants to build luxury apartments because the profit margins are larger. That is why proper social housing has only been the domain of governments as their primary concern has not been about profit maximization. Issue is most governments don't have the appetite for this and even if they did, they are too broke to build houses at scale. Due to this the problems get worse as housing stock does not match population growth. This is especially the case in the big cities where the jobs are.

Nice 2 hear from U Monsta!  :)  Howz collapse progressing in Jolly Old England?

RE

Quote from: monsta666 on Aug 04, 2024, 01:12 AMThe other major factor in houses not being built is no one wants to develop cheap accommodation.

Homes have been built where I live at a steady rate for twenty years. The newest development is about half a mile away.  I live at the last place around Lake Washington to be developed.  The new development paves over the last hobby farm in the area.  It had a few horses.

No home near us has been built smaller than ours in all that time, and we have 1700 square feet.  Americans can't afford them, but there seems to be a never ending stream of Chinese Ex-pats ready to buy them. 

I did not buy Halloween candy last year.  We had no kids.  Every year there were fewer kids until there were none.  New families can't afford to live here.  But the new schools all could win architectural awards.

Older Chinese women have no fashion sense.  They like to take walks for exercise wearing a mismatched patchwork of colors.  Usually alone.  Indian women always walk with someone else.

Quote from: RE on Aug 04, 2024, 08:04 AMNice 2 hear from U Monsta!  :)  Howz collapse progressing in Jolly Old England?

RE

Yes, good to hear from you Monsta.  Are you hearing anything about things?

I tend to follow British events and a follow few of your presenters.  I get the impression quality of life has taken a hard hit where you are in the last couple of years.

Thanks for the well wishes. Not sure if things are worse in the UK than elsewhere. We got the same issues you see everywhere i.e. the cost of living is increasing at a faster rate than wage growth. Fortunately for me I do get yearly wage increases which is more than what can be said for others.

As for news, the biggest thing doing the rounds are the riots taking place in various cities. It is ostensibly about immigration but really it mostly racist idiots running amok. The catalyst for the whole thing was a stabbing but it turned out the culprit was a native British citizen. His nativity is only called into question simply because of the colour of his skin. In any case with him not being an immigrant or a Muslim their primary argument does not apply.

It is not the first riot nor would I expect it to be the last one. I do think it will die down once people get bored and the new football season starts in two weeks time. I expect the people who are currently rioting will soon rather be watching the footie. I suppose you could say that is similar to the games in Rome. Things change but don't change.

Sad to hear it is racially based.  But since it is, our news has suppressed the identity of the perpetrator and the motivation of the miscreants.  Any reference to the triggering event is children murdered.  No elaboration whatever.

QuoteWhat started as targeted anti-immigration demonstrations quickly descended into directionless disorder. A library in Liverpool, reopened in 2023 as an "education to employment" service for people of all abilities, was set ablaze.

All we get from our mainstream media is lies.