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?     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.









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.



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.



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

RE