A Bout Of Realism Rather Than The Usual Optimism
A report from Global News in Canada. “It was tough at the top for people who sold their luxury homes in Vancouver last yea, according to Sotheby’s International Realty Canada’s 2017 Year-End Top-Tier Real Estate Report. When you break those sales down into three price segments, the most expensive of them saw the biggest drop in any major Canadian city that the report covered. Out of all three, sales of Vancouver homes that cost $4 million or more fell by 33 per cent, steeper than either of the other two price segments in Vancouver, and more sharply than homes worth $4 million or more in Calgary, Toronto and Montreal. The total number of sales in this category — including condos and townhouses — fell from 573 in 2016 to 382 in 2017, marking their lowest level in three years.”
“Brad Henderson, president of Sotheby’s International Realty Canada, said there’s a ’stalemate’ going on, ‘particularly in the higher end of the market.’ ‘I think there’s a fear of heights, and that the Vancouver prices have gotten to a point where many in the market are concerned that there isn’t necessarily the bandwidth for it to be able to continue going higher,’ Henderson said.”
From City AM on the UK. “The price of London homes coming to market fell sharply over the last year, as properties in Zones 2 and 3 slumped. Homes brought to market in the capital are now an average of £21,000 cheaper, a 3.5 per cent fall over the last year, according to Rightmove. The £8,800 fall in the asking prices of sellers new to the market in the last month comes as a ’bout of realism rather than the usual New Year optimism,’ according to Miles Shipside, Rightmove director and housing market analyst.”
From Bloomberg. “Sweden is in the worst housing-market downturn since the global financial crisis. But with bigger bank buffers and an economy that’s growing much faster than the rest of Europe, analysts, regulators and politicians all say everything will be just fine. First, there’s the reason behind the price correction. It’s not caused by economic or financial distress, but by a surge in construction (initially to meet excess demand). Sweden is now a buyers’ market, with construction at its highest since the 1990s.”
“Data showed that home prices continued to slide in December, dropping 2 percent in the month, according to the Nasdaq OMX Valueguard-KTH Housing Index, HOX Sweden. The three-month drop was 7.8 percent, the steepest decline since late 2008. Prices were down 2.5 percent from a year earlier, the biggest drop since March 2012.”
From Arab News on Dubai. “Higher interest rates and falling property prices could hit Dubai developers’ transaction volumes linked to the purchase of properties off-plan, warn experts. Jesse Downs, managing director of Phidar Advisory, a real estate consultancy in the UAE, said developers have been offering generous off-plan purchase deals. These often involved offers to pay between 40 percent and 60 percent of the sale price two years or more after completion, she said.”
“Such deals have grown more popular since the introduction of a mortgage cap that has depressed the secondary sales market — with buyers spotting an easier way to get on the property ladder, said Downs. But if the market falls too sharply and sentiment turns, there may be danger ahead. ‘Potentially, there would be a bigger impact when less of a percentage has been paid down on the product,’ said Downs. That’s because with less to lose, some buyers may be tempted to cut their losses and run, if they think prices won’t recover.”
“Downs said: ‘These … deals are artificially driving supply up … encouraging overbuilding which drives up market risks.’”
From Quartz on India. “Even plummeting prices haven’t been able to entice India’s home-buyers. Home purchases in the country fell to a seven-year low in 2017 despite sliding prices, according to real estate consultancy firm Knight Frank. A new tax regime and a regulation introduced last year have pummelled a sector already reeling under the aftermath of demonetisation in late 2016.”
“While other parts of India suffered, even Mumbai, India’s most expensive housing market, bled as property prices fell in 2017—the first time in nearly a decade. Yet, the price-to-buyer’s income ratio (the average number of annual incomes required to own a house) in Mumbai remains at a prohibitive 7.8—much higher than in other major Indian cities—even though it is off its peak of 11 in 2010.”
To counter the slump, developers have been offering discounts, and waiving stamp duty, and floor-rise and other charges. ‘At the end of 2017, India’s residential sector appears to have shrunk to a fraction of the size it was less than a decade ago,’ said Shishir Baijal, chairman of Knight Frank.”
From the Singapore Business Review. “Singapore’s construction sector could still be in the red for at least one to two years, because of excess stocks in the residential and non-residential market, BMI Research said. The vacancy rate for private residential units in Singapore stood at 8.4% at the end of September 2017, compared to the 5.5% average between 2010 and 2013, prior to the recent boom in housing construction. The group also suggested that because sales remained relatively weak, there is an ongoing oversupply despite the pick-up in demand.”
The Sydney Morning Herald in Australia. “Is it a bird? Is it a plane? No, the crane invasion of Sydney’s skyline has been visible for several years – a 65 per cent increase in just the last two years. But experts warn Sydney’s pattern of development is failing to deliver the relief first home buyers need. Amid a record apartment building boom, a suburb by suburb breakdown of the Rider Levett Bucknall Crane Index reveals Sydney’s emerging crane hotspots, spreading wings across the northern, western and southern corridors of the city.”
“‘Residential cranes soared to 298 around Sydney, which amount to 43 per cent of total cranes erected within Australia and 54 per cent of all cranes supporting the residential sector in Australia,’ said director of research at Rider Levett Bucknall, Stephen Ballesty. Building work began on a record number of new apartments in NSW last year, figures from the Australian Bureau of Statistics show.”
“Work began on 74,000 new homes last year, including 29,000 free standing homes and a record 44,000 apartments. But experts warn that the state’s record apartment boom is not delivering the price relief that first time buyers need. The head of Urban and Regional Planning and Policy at the University of Sydney, Peter Phibbs, said high land prices meant developers were building apartments in the million dollar mark range, out of reach of typical first time buyers.”
“Overall, Professor Phibbs said the Sydney experience showed the error of simply focusing on supply to improve housing affordability. ‘We have run an international experiment about the inability of supply really to moderate housing price increases in a context of declining interest rates and a very tax friendly environment for investors. We will probably never see that supply response in Sydney again.’”
From Smart Property in Australia. “House values saw declines in Australia’s major property markets as well as Perth and Darwin, according to CoreLogic’s latest Hedonic Home Value Index. CoreLogic head of research, Tim Lawless, said the transition towards weaker housing market conditions has been gradual, but clear. He also said these conditions are likely to continue throughout 2018.”
“He said the biggest drags are in Sydney and Darwin. ‘From a macro perspective, late 2016 marked a peak in the pace of capital gains across Australia. In 2017 we saw growth rates and transactional activity gradually lose steam, with national month-on-month capital gains slowing in October and November before turning negative in December,’ Mr Lawless said.”
‘He said the biggest drags are in Sydney and Darwin’
How the mighty have fallen, Sydney lumped in with remote mining towns.
‘From a macro perspective, late 2016 marked a peak in the pace of capital gains across Australia’
Now you tells us. Boy I hope no one paid too much in the year and a half it took you to figure this out Tim.
This was posted in the previous comments:
“Rental Watch
I know there is little credit given to the likes of John Burns around these parts. That said, I thought the following post on their website was interesting…it talks about particular markets, and where they feel we are in the housing cycle:’
https://www.realestateconsulting.com/where-are-we-in-the-housing-cycle/
So I looked around a bit:
Rising Arizona
By John Burns | November 29, 2005
Featured Major Market: Phoenix
“Phoenix has now surpassed Atlanta as the largest single-family housing market in the country, with 58,865 single-family permits issued in the 12 months ending in March. Eighteen of the largest 20 Giants have operations in Phoenix, with D.R. Horton and Pulte each reportedly selling more than 5,000 homes per year in the metropolitan area.”
“Phoenix’s economy is very strong. More than 66,000 jobs have been created in the last 12 months, and unemployment stands at 4.2 percent. People are flocking to Phoenix from all over the country. One of our favorite Web sites for tracking migration is UHaul.com, where the migration flow is readily apparent in its truck pricing. The cost to rent a U-Haul truck from Los Angeles to Phoenix is more than 7 times the cost of a return trip, and the cost to rent a truck from Chicago to Phoenix is more than 3 times the cost of a return trip (see sidebar).”
“Despite the significant growth in primary and active adult new home communities, builders have not been able to keep up with demand. The median resale home price in Phoenix has risen more than $53,000 in the last 3 years, to a new record high of $208,000.”
Featured Up-and-Coming Market: Tucson
“Tucson, which is located two hours south of Phoenix, has been growing just as fast. Single-family permits now exceed 10,000 per year in Tucson, and prices have risen $55,000 over the last three years, to a median resale price of $195,277. Job growth is also strong, with 13,300 jobs created in the 12 months ending in March. Tucson builders are expanding south, east and north into areas that have seen very little housing in the past.”
“While we were completing an analysis in Tucson recently, the locals seemed very concerned that a housing bubble was emerging. In addition to the incredible price appreciation that had occurred, their “warning signal” was that California developers were now moving into the area. Are they paranoid, or are their gut instincts correct? Only time will tell.”
https://www.probuilder.com/rising-arizona
There’s a table of the top 20 metros at the bottom. Not a single negative growth projection. Even Fort Myers!
“Phoenix’s economy is very strong…Despite the significant growth in primary and active adult new home communities, builders have not been able to keep up with demand.”
This guy should stick to standup.
Here’s another:
Potential Overbuilding Reversed by Katrina
Featured Major Market: Houston Houston has steadily risen from a relatively small housing market in 1987 to the third largest housing market in the country. Houston has always been known for its pro-growth, pro-developer attitudes, which has lead to periods of overbuilding in the past. We were concerned about potential overbuilding in Houston until Hurricane Katrina hit New Orleans.
By John Burns | September 30, 2005
Featured Major Market: Houston
Houston has steadily risen from a relatively small housing market in 1987 to the third largest housing market in the country. Houston has always been known for its pro-growth, pro-developer attitudes, which has lead to periods of overbuilding in the past.
We were concerned about potential overbuilding in Houston until Hurricane Katrina hit New Orleans. Then, hundreds of thousands of New Orleans evacuees immigrated to Houston in search of jobs and housing. Subsequently, Houston was evacuated due to Hurricane Rita. As we go to press, preliminary reports are that Houston was spared serious damage.
In the short-term, we know that construction in Houston will be delayed by two weeks or more. In the long-term, nobody knows for certain whether Houston will continue to grow, or if the scare of the hurricanes will drive more people and employers elsewhere.
Featured Major Market: San Antonio
The steady rise in construction has also occurred in San Antonio, a city with an economy that is also benefiting from the hurricane. San Antonio’s government officials are extremely pro-growth, and have been successfully attracting major businesses to south San Antonio. Like Houston, San Antonio is now benefiting from an influx of hurricane refugees.
Most notable about San Antonio, however, has been the recent acquisition activity that has changed the landscape from one of major local builders to one of major national builders. Recent acquisitions by Standard Pacific and The Corky McMillin Companies are just the latest evidence of this transition that began with KB Home’s acquisition of Rayco in 1996.
https://www.probuilder.com/potential-overbuilding-reversed-katrina
A wise man once said, “go burn John before John burns you.”
The only question here is how many years behind the curve is Mr. Burns.
JB and The Johnny-Come-Latelys
<em?ucson, which is located two hours south of Phoenix, has been growing just as fast. Single-family permits now exceed 10,000 per year in Tucson, and prices have risen $55,000 over the last three years, to a median resale price of $195,277.
I remember when you could buy a nice house in Tucson for well under 100K. Not a starter house, a nice house. And it wasn’t that long ago.
Of course, there was a reason it was so cheap: it was freaking blast furnace Tucson.
Its still a blast furnace there in the summer, but now its an expensive blast furnace.
Like the old adage goes….. You can ask $50k for your run down 10 year old Honda Civic but where is the buyer at that price?
So it is with all depreciating assets like houses.
Very recently, Tucson had double digit vacancy rates, one of the worst in the nation. Also, Tucson is not the “blast furnace.” That’s Phoenix, which is always a few degrees warmer.
OK, a slightly cooler blast furnace.
(And yes, I knew Tucson was typically a very few degrees cooler than Phoenix)
A kinder, gentler, blast furnace.
Also, Tucson is not the “blast furnace.”
Problem with Tucson are low wages.
Problem with Tucson are low wages.
This seems to be a problem just about anywhere in flyover.
rms: Problem with Tucson are low wages.
I remember after the financial crisis, people were wondering how ratings companies that rated subprime mortgages as AAA got away with it. The response was that house prices had never suffered a (sustained) decline. That’s just not true. The Case Shiller index shows a sustained decline in the index from 1953 to 1976. Then over the course of a couple of years it goes back up to its 1953 level (115 to 104, then back up). I was looking at the source data on Shiller’s Yale website, since the Fed links only show the rising portions (shocking I know), from 1975 or more recent.
I wouldn’t lean on CaseShiller too heavily. Garbarge data.
‘He said the biggest drags are in Sydney and Darwin’
Darwin
population 106,000 (Year2011)
Sydney vs Darwin is a night and day comparison!
Columbia, CT Housing Prices Crater 7% YOY
https://www.movoto.com/columbia-ct/market-trends/
Realtors are liars.
If you were to judge a realtor by the “content of their character” you would be correct in judging them as a liar.
Depends on the flavor of Identity Politics at any given moment.
I can’t remember reading anything where MLK spoke in support of cultural relativism.
Why does the left celebrate MLK Jr’s Birthday when they don’t believe in anything he said?
King was for integration
King was for a society where merit is judged not on skin color
King was for nonviolence
+10000000000000
I just went to Google news and looked down the list of headlines regarding MLK day. Its amazing to see how various people and outlets are putting their spin on it.
Oh, and I found this:
“Martin Luther King Jr.’s niece defended President Trump against accusations of racism by pointing to the economic opportunities for black Americans.
“I do not believe President Donald John Trump is a racist. The economy’s up. Jobs are up in the black community. There is great promise to get a lot of people who have been unfairly incarcerated out,” Alveda King told “Fox and Friends” on Monday, the federal holiday honoring her uncle.”
http://www.washingtonexaminer.com/alveda-king-defends-trump-against-racism-accusations-black-americans-are-benefiting-from-his-presidency/article/2645940
Why does the left celebrate MLK Jr’s Birthday when they don’t believe in anything he said?
He’s been retconned into a different, more Narrative conforming persona.
Different world.
How many Baptist, Christian or Jewish leaders have ever used the word Buddhism in their spoken word? MLK was a product of his times.
Martin Luther King was a brilliant man. I rather believe that he transcended his time.
How many Baptist, Christian or Jewish leaders have ever used the word Buddhism in their spoken word?
I recently attended a funeral at a Presbyterian Church where the minister quoted Buddha. He also never said a peep about the promised resurrection.
His legal name was Michael not Martin Luther and perhaps the people whose writings and speeches that he plagiarized during his lifetime were the ones who were actually “brilliant”.
http://www.nytimes.com/1991/10/11/us/boston-u-panel-finds-plagiarism-by-dr-king.html
http://www.martinlutherking.org/chronology.html
If you’re ever in a strange city and need a hooker or drugs, go to MLK Jr. blvd.*
*I don’t do hookers or drugs, this is just an interesting factoid I learned.
http://www.cnn.com/2016/01/18/us/martin-luther-king-jr-streets/index.html
“If you sit back and look, on a daily basis,” White said, “you see prostitution, you see drugs being sold, abandoned buildings, vacant lots, trash just being dumped all over the streets.”
His legal name was Michael not Martin Luther and perhaps the people whose writings and speeches that he plagiarized during his lifetime were the ones who were actually “brilliant”.
His name is irrelevant and the text of his speeches and sermons are just part of brilliance. He played an important role in moving the country forward.
Apparently you also shared with us a web site dedicated to attacking King. A quick perusal shows that it also includes an attack on Rosa Parks, something written by David Duke and something else about how Jews played a prominent role in the Civil Rights movement. Apparently, there are of energetic losers out there.
speeches that he plagiarized…
I rather doubt that you have heard or read much of it.
I doubt that he was trying to make money off of any work of others that he drew upon. I could be wrong, but I don’t think so.
“If you’re ever in a strange city and need a hooker or drugs, go to MLK Jr. blvd.”
LOL… probably true.
African-American comedian Chris Rock built an entire skit riffing off the violence going down on Martin Luther King Boulevards, all across the country.
Rock also has a few things to say about African-Americans with good- and not-so-good merit. (Rock uses different language.)
“Apparently you also shared with us a web site dedicated to attacking King. A quick perusal shows that it also includes an attack on Rosa Parks, something written by David Duke and something else about how Jews played a prominent role in the Civil Rights movement. Apparently, there are of energetic losers out there”.
You’re right, that’s the last time I’ll reference an article from the NY Times on this site.
That’s always interesting phenomenon - people who pretend to be dumber than they are.
“‘He would be ashamed’ to walk MLK Blvd
St. Louis”
Enuf said. I lived my early decades there, growing up four miles east of what became ground zero for the Ferguson BLM riots. Race relations are not good, and the African-American communities are rife with poverty, high crime rates, and bad public schools. Two generations earlier, the same area of North St. Louis that anyone of means, black or white, now avoids was populated by an economically stable upper-middle class German community which included some of my ancestors as well as some of George W. Bush’s. I will always remember the day that my grandma spotted a photograph in the local paper of her childhood home that had burned to the ground after becoming subsumed by the ghetto.
I’ve heard some of the hot ones really “work” to get a deal done.
‘Work began on 74,000 new homes last year, including 29,000 free standing homes and a record 44,000 apartments. But experts warn that the state’s record apartment boom is not delivering the price relief that first time buyers need…Phibbs, said high land prices meant developers were building apartments in the million dollar mark range, out of reach of typical first time buyers.’
‘Overall, Professor Phibbs said the Sydney experience showed the error of simply focusing on supply to improve housing affordability. ‘We have run an international experiment about the inability of supply really to moderate housing price increases in a context of declining interest rates and a very tax friendly environment for investors’
This is why the supply and demanders are all wet. Pull all the goodies and government guarantees - crater. Build until prices fall - crater. A bubble is going to pop, it seems more logical to not build too much overpriced stuff and have even more lenders and consumers get hammered.
Bubbles just make you poor, then they pop.
“‘Work began on 74,000 new homes last year…”
So Sydney is building for 50% of Darwin’s population.
Riddle me this Batman.
When you are leveraged 40:1 with negative cash flow real estate investments and these assets lose just a little bit of their value (yoy)…
Also - Take a look at that graph of Commercial Property Price Index.
Again - something magical happens in 2009 to make asset prices go berserk.
What is so special about 2009 that it shows up on every bubble graph?
+++++
Commercial Real Estate Suffers First Down-Year since 2009
Wolf Richter • Jan 15, 2018
In the era of the never-ending “Everything Bubble,” where asset prices can do only one thing, namely surge, it might come as an unwelcome surprise: Commercial real estate prices had their first down-year since the Financial Crisis, according to the Green Street Property Price index, which ended December 2017 at 125.96, a notch below its level a year ago (126.66).
The index is flat with its level 18 months ago, in June 2016. This is when the index began to plateau, after a huge surge that pushed the index up 106% from May 2009 and leaves it 26% above the peak of the prior crazy bubble that imploded with spectacular results.
Commercial real estate is highly leveraged, backed by $4.3 trillion in bank loans, as of November 2017. Much of this debt is held by smaller banks with less than $50 billion in assets, concentrated in CRE in their local markets. And these banks are less able to withstand shocks to collateral values. Boston Fed President Eric Rosengren has been fretting about them for a while. The “significant decline in collateral values” of CRE was one of the root causes of the Financial Crisis, as he said in a presentation on the topic.
CRE is now facing rising interest rates, in addition to unique challenges for each segment, including a flood of new supply of high-end apartments in some markets, such as in Seattle, oversupply in the self-storage segment, a surge of home-sharing in the lodging segment, or the inexorable structural shift of retail from malls to online – and often enough by the same retailers.
“Again - something magical happens in 2009 to make asset prices go berserk.
“What is so special about 2009 that it shows up on every bubble graph?”
2008 was the year of the rat (my kind of year 😁) and this year set up the next year, which was 2009.
Malls are making a comeback
One thing I noticed in Folsom is that there are no traditional malls here. It is now 100% outdoor upscale (stucco and earth tones and lights around the roof) shopping. You have to drive around the lake to Roseville or toward Sacramento to go to a traditional mall.
How long until everything flips over again and the latest thing is indoor malls and wall to wall carpeting in homes? This hardwood thing is starting to feel played out to me. Time to cover it with carpet again soon I’m thinking. The hardwood will probably last just as long as pergraniteel, but I wouldn’t be shocked to see it all die on the next cycle. Somebody just needs to invent something even MORE expensive so that they can look down on all the current stuff.
Solid hardwood flooring never goes out of style. It’s one of the best, most durable floors there is. Pergo, laminate, etc. need not apply.
I thought everyone wanted to live there…
+++++
London Property Crash Looms As Prices Drop To 2 1/2 Year Low
Mark O’Byrne · January 15, 2018 ·
– London homeowners cut property prices by another 1.4% in January
– Average price for a London house dropped by £22,000 to £600,926 in 2017
– Takes 78 days to sell a home on average, the highest level since 2012
– London’s downtrend continues after 2017 performance as worst UK housing market
– UK regional house prices begin to falter as house prices climb slows down
The London property bubble slow motion bursting continues with the latest data from property website Rightmove showing house prices in London were down by another 1.4% in January.
In the past year London homes are now an average of £22,000 cheaper and have fallen to just over £600,000, a 3.5 per cent fall over the last year. However this does not reflect the damage being felt by London’s own ‘zones’ outside of zone 1. Sellers of homes in Zone 3 saw the biggest fall in prices, of 7.7%, while Zone 2 saw prices drop by 6.4%.
It appears that the international collapse of Housing Bubble 2.0 is already well underway, before central bankers have done much beyond merely discussing the future prospect of someday normalizing interest rates. Which makes me wonder how bad the carnage will get when and if central bankers ever actually follow through on normalization plans that have been repeatedly announced, then postponed, in recent years.
It will be a real sh*thole…
…And we’ll ALL be living in that sh*thole!!!
A repeatedly announced plan is no plan at all.
They’ll just keep postponing it, and blathering on and on…
You’d thing they’d all have sprained necks after so many head fakes.
Old news here, but still pertinent and quite shocking in terms of the implied destruction by activist central bankers of the role of financial markets to efficiently channel economic activity.
fastFT
Markets
JPMorgan: Central bank normalisation may spark next financial crisis
Adam Samson
October 4, 2017
As central banks begin shrinking their balance sheets, they risk triggering another financial crisis, something that may be sharpened by the shift away from active investing, JPMorgan’s top quant strategist has warned.
Central banks are expected to begin next year the process of unwinding the $15tn or so in financial assets they purchased over the past decade, said Marko Kolanovic, global head of macro quantitative and derivatives research at JPMorgan.
“Such outflows (or lack of new inflows) could lead to asset declines and liquidity disruptions, and potentially cause a financial crisis,” said Mr Kolanovic (who, it is worth noting, has issued such warnings before). “The timing will largely be determined by the pace of central bank normalisation, business cycle dynamics and various idiosyncratic events, and hence cannot be known accurately.”
Mr Kolanovic pointed out that “this is similar to the 2008 [Great Financial Crisis], when those that accurately predicted the nature of the GFC started doing so around 2006.”
The warning from the closely-followed strategist comes on the heels of similar remarks over the summer, where he warned markets to prepare for a bout of “market turmoil” (something that has not yet materialised).
A monetary policy-induced shock could be worsened by the dramatic shift from active investing, such as through mutual funds, into passive products, like exchange-traded products, Mr Kolanovic said. In fact, in a sign of how rapid the rise of passive management has been, analysts at research service Morningstar reckon passive investors could control over half of the US stock and bond market by 2021.
“The shift from active to passive assets, and specifically the decline of active value investors, reduces the ability of the market to prevent and recover from large drawdowns,” Mr Kolanovic said.
He added that the move towards passive and momentum strategies, where traders chase market cues as opposed to company fundamentals, has “eliminated a large pool of assets that would be standing ready to buy cheap public securities and backstop a market disruption.”
…
‘“Such outflows (or lack of new inflows) could lead to asset declines and liquidity disruptions, and potentially cause a financial crisis,” said Mr Kolanovic…’
The flaw in his logic seems obvious: Why would central banks ever follow through with announced normalization plans if they believed that doing so would risk rekindling the financial crisis? The option of repeatedly announcing normalization plans, only to punt again and again, seems far more appealing. And this also seems to be the game plan.
“The boy who cried wolf” has more credibility than the Fed.
Lucy trying to convince Charlie Brown to try kicking the football one more time has more credibility.
DEC 21, 2017
By Gareth Jenkinson
It’s Too Late To Buy Bitcoin, Says 2008 Housing Bubble Predictor
American businessman and investor Peter Schiff believes investors buying Bitcoin at current prices could lose everything.
It’s been an interesting, and for some frightening, past few days for Bitcoin. Last week, the price of the cryptocurrency reacted favorably to the launch of Bitcoin futures on the CBOE. Exactly one week later, CME launched trading of Bitcoin futures contracts on their platform, which was met with a drop in Bitcoin’s price.
Then on Wednesday, America’s biggest Bitcoin exchange, Coinbase, announced the surprise launch of Bitcoin Cash (BCH) support on its platform and exchange, GDAX. BCH price soared, while Bitcoin shuddered somewhat.
Speaking to RT this week, renowned analyst Peter Schiff, credited for predicting the 2008 housing market collapse, issued a foreboding warning to investors buying Bitcoin at current prices.
Even with a shaky week, Bitcoin is hovering around the $16,000 mark, after a two-month bull run that saw the price rise by more than 200 percent.
Schiff says those trying to ride the bubble are too late:
“People who got it years ago, even people who got it at the beginning of the year have the opportunity to cash out and make a lot of money. But people who are buying it at these prices or higher prices are going to lose practically everything.”
…
“Schiff says those trying to ride the bubble are too late”
No mention on his part about the politics of the coin. That’s what has changed and who’s expecting people to follow the story ?
It’s moved from page 17 to page 1 in Don Coxe terms. (So much for wheat and corn trading.)
Do you think current WS bonus money didn’t take a dive in?
When bank interest accounts went to zero years ago,where do you think SOME Millennials put their money ? Before then it was Magic cards and Unlimited Dual Lands.
When bank interest accounts went to zero years ago,where do you think SOME Millennials put their money ? Before then it was Magic cards and Unlimited Dual Lands.
Well if Millennials took their money out of Magic cards (???) and put it into Bitcoin, that’s good enough for me. I’m going all in. They’re so smart, after all. So knowledgable.
“They’re so smart, after all. So knowledgable.”
I am glad you agree since you know the history of Magic the Gathering(MTG). The prices below are their SOLD prices. The money from one collectible(MTG) migrated into another(BTC).
https://www.ebay.com/sch/i.html?_from=R40&_sacat=0&_sop=16&_nkw=Black%20Lotus&LH_Complete=1&LH_Sold=1&rt=nc&_trksid=p2045573.m1684
At those prices I would expect high quality counterfeits to flood the market.
What exactly are those, and why are people paying (or trying to get) so much money for them?
Ah, Magic. Those were the days. Now where is my shoe box of cards. I think I still have a few double lands sitting around somewhere…
They’re the new Beanie Babies. If you get them cheap and can make some money off them, fine, go for it. It’s not an “investment” and people who flip them are not “smart investors”.
By the way, the link you posted was for a very specific sub-set of Magic cards, and you had them sorted by high price.
Here’s a link to that same subset, sorted by End Date: recent first: https://www.ebay.com/sch/i.html?_from=R40&_sacat=0&LH_Complete=1&LH_Sold=1&_nkw=Black+Lotus&_sop=13
Gives a slightly different picture.
Karen
Beanie Babies from 1991? When were “pet rocks’?
So you posted a list without knowing it’s the most widely played game in the world.
There are numbers in the right-hand corner that convey information to you. They signify “condition.”
Did you keep your Mickey Mantle cards? Sandy Koufax? Silver Surfer comics? Lionel trains?
Colorado
Counterfeits started up a while back. Not very good ones. However…
Story:
Years ago a famous philatelist made the following observation at a convention hall podium: “A perfect forgery is not a forgery.”
The hall went silent when people realized what he was saying.
Are their other degenerate gamblers in your family?
Years ago a famous philatelist made the following observation at a convention hall podium: “A perfect forgery is not a forgery.”
I have heard similar remark made about counterfeit currency.
So you posted a list without knowing it’s the most widely played game in the world.
It was your list. The only thing I changed was the sorting. You had it sorted by high price, I changed it to the most recent auctions.
What price did you buy at, alphonso? You’re really shilling lately. Are you one of those who got duped into the market at $19,000? It’s a mania, buddy, see it for what it is. There was a story recently that highlighted Wall St. hedge funds who were playing around in it. That doesn’t really square with your narrative that it’s the future. It’s another Wall St. swindle on high.
BSD,
I’m curious to know what people in their fifties and sixties know or don’t know about bcoins. There’s a book here. (What did Korea do today ?) The existing sites have young folk only pitching it.
France started a hedge fund a while back. The BOYZ of WallStreet couldn’t figure out a way to do it without fking people. Listen to Dimon. Envy and fear.
Blankfein, however, wants to sell the shovels. Interesting perspective.
It’s in Asia to stay.
If you haven’t traded futures and you haven’t been into T.A. for decades pass on it.
How many people argue the facts? (There is only one Ben Jones.)
“How many people argue the facts? (There is only one Ben Jones.)”
You forgot about me. I’ve been explaining to anyone who would listen about why Bitcoin is dead in the long run since before Bill in the OC was banished. I will admit that the bubble in Bitcoin went far beyond my expectations, and I hope Bill made a bundle off his early Bitcoin enthusiasm.
However, I can’t recall you getting excited about the concept before the onset of full-blown mania.
“In the long run,” we’re all dead.
It’s the same as in tulips, stocks in 1929, or beanie babies, or 1999 dot-com. Everybody knew it was dead, but not quite yet. They were all trying to time the market to sell within a nanosecond of peak. Because once you’re on the other side of peak, it’s a very long, and *very* fast, fall on the other side.
Does anyone else remember the stories from late 1999-mid 2000, of junior investors pleading to their bosses to invest in something other than dot-com? The junior investors argued that dot-com was going to pop and they should invest at least a little of the OPM in more stable stocks. The boss would say “You’re right, I know, but *you’re fired* anyway, because dot-com is making money NOW.”
So bear, it doesn’t really matter if you predicted that buttcoin was going to fall. Everybody is predicting it.
“So bear, it doesn’t really matter if you predicted that buttcoin was going to fall. Everybody is predicting it.”
I explained why Buttcoin was not a sustainable investment long before it was a mania, quite a while before everyone else figured it out.
Before long, you’ll be ‘predicting’ DC housing prices and rents will fall. When prediction doesn’t matter is the point when everyone is pretending to predict what everyone generally agrees is already occurring.
“Because once you’re on the other side of peak, it’s a very long, and *very* fast, fall on the other side.”
I can site at least two historic examples where there were twin bubble peaks, with the false trough between them serving to suck in greater fools who bought the dip, only to later lose their shirts:
1. The South Sea Bubble, which sucked in Sir Isaac Newton To buy the dip before losing a fortune in the ultimate bubble collapse.
2. The Great Housing Bubble of 1997-????, which convinced many to buy the dip in the wake of the Fed’s bailouts and subsequent Quantitative Easing episodes.
“However, I can’t recall you getting excited about the concept before the onset of full-blown mania.”
Exactly. He emerged as a shill AFTER prices peaked. That’s why I asked if he was a buyer at $19k. A lot of these guys shilling for Bitcoin believe that nonsense that it’s going to a million bucks, predicted by that that murderous antivirus software guy McAfee who has a massive stake in it.
Why pay $14,000 for a virtual Bitcoin when you can get physical coins for $1.70 a piece?
10 Pack Golden Bitcoin Coin Bronze Physical Bitcoins Coin Collectible BTC Coin
$16.99
Sold & shipped by WHATWEARS LLC
https://www.walmart.com/ip/10-Pack-Golden-Bitcoin-Coin-Bronze-Physical-Bitcoins-Coin-Collectible-BTC-Coin/
2banana’s Rule:
Long term democrat rule + public unions + free sh*t army = a real sh*thole
Get out now - the golden obama shower bubble is going to crush California when it pops
++++++
Democrats have turned the once Golden State into a sh*thole
Canada Free Press | 01/15/18 | Katy Grimes
The new word of the week accurately describes California
Despite so-called “progressives” promising their policies will create a Soviet-style worker’s paradise, California’s leftist Democrats have turned the once Golden State into a sh*thole through decades of leftist policies penalizing and demonizing employers, businesses, property owners, innovators, entrepreneurs—and really, anyone who wants to work hard and get ahead. These hard working people are responding by fleeing liberal California for conservative red states.
According to the 10th Edition of Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index for 2017, California ranks 47th in economic outlook. Why?
Top Marginal Personal Income Tax Rate rank = 50
Top Marginal Corporate Income Tax Rate = 40
Personal Income Tax Progressivity = 50
Sales Tax Burden = 33
State Liability System Survey = 47
State Minimum Wage = 48
Absolute Domestic Migration = 49
Average Workers’ Compensation Costs = 50
Right-to-Work State? (No) = 50
Data from the U.S. Energy Information Administration showed California households paying 17.97 cents per kilowatt hour for electricity, or 40.9 percent more than the national average of 12.75 cents, CNBC reported.
Green Germany 42¢
How can you be a .gov contractor and still be insolvent?
http://money.cnn.com/2018/01/15/investing/carillion-uk-liquidation/index.html
I see the bailout coming already…
++++++
Green said that the U.K. government would provide funds to keep the company’s public services operational, including school lunches and prison management.
“All [Carillion] employees should keep coming to work, you will continue to get paid,” he said.
The UK is running out of money. I was shocked at how blatant and pervasive the “gibs me dat” were in London and how people complained about the long waiting lists for welfare. The only people who seemed to do any work in London were Eastern Europeans.
“Net debt to equity at Carillion doubled between 2012 and 2016″
When you are rolling down the hill you coast for a longgggg time.
When you underbid like crazy in order to win - management needs their jobs - and then after the win they get little or no change orders so the contract is a net loser. The old adage “be careful what you wish for” applies. Management like that will fail at everything though, just clueless all around which drives away good employees. I know, I fired them by moving to another division.
they get little or no change orders so the contract is a net loser
I just learned about this recently. Contractors often depend on change orders to “get well.”
No, they don’t. Their profit is built into the bid. Change orders are just an added bonus.
You would think that, but thats not how the game is played on a lot of contracts. The political landscape/environment changes too, so assumptions about change orders dropping like rain may be made only to find out a few years later that budgets are tight and a lot of deferred issues need to have their fires put out first. Most of my work has been on change orders where the profit is good - so much so that when I went to the prime contractors Christmas party one year they rolled out the red carpet for me. Especially funny was the difference in how people treated me before they found out who I was and after.
Unions bleed the taxpayers with change orders which just incentivizes mistakes - seen this too. You have minimum wage monkeys making more than top engineers due to triple time (holiday night work). And these are people who get paid to keep a seat warm.
When I was in high school I knew a kid whose father worked for a local defense contractor. He said that the engineers there rarely did any work. They mostly sat around drinking coffee.
Well, I would have never thought companies selling electricity in California could go bankrupt or nearly bankrupt. But that happened. So the lesson is, with adequate mismanagement (in PG&E and SCE’s cases, it was poorly handled gov’t deregulation), anything is possible.
looks like bad management
The Lessons of Carillion’s Demise
By Lionel Laurent
Jan 15, 2018 5:34 AM EST
Government contractor Carillion Plc’s collapse into liquidation is an embarrassment for all concerned.After the inevitable finger-pointing, blame-shifting and political backlash, the U.K. will hopefully knuckle down and strengthen a construction and procurement market that’s too fragmented and weak to support its Brexit dreams without help.
Clean-Up Time
History suggests Carillion expanded too aggressively and tried to fix its balance sheet too late
Carillion’s demise may have been triggered by a perfect storm of several projects going wrong at the same time, but the long-term causes lie in its racy expansion and over-reliance on debt. Net debt to equity doubled between 2012 and 2016, from 15 to 30, according to Bloomberg data.
https://www.bloomberg.com/gadfly/articles/2018-01-15/carillion-collapse-is-a-lesson-for-britain-and-brexit
“Net debt to equity doubled between 2012 and 2016, from 15 to 30, according to Bloomberg data.”
That’s a lot of leverage.
Mountain View, CA Housing Prices Crater 13% YOY As Bay Area Housing Correction Accelerates
https://www.movoto.com/mountain-view-ca/market-trends/
And then there is Dubai. That’s an unfathomable mystery to me. I’ve tried to understand the business model and it defeats me each time. I’m usually stopped out when they talk about building on man-made reefs.
(In one’s comparisons “liquidity” should be mentioned.)
A previous dirt poor muslim country that hit the oil and gas lottery. Nearly all oil and gas production is done by foriegn nationals while the locals sit at home and live off the generous welfare state or work in a well paid no work government job. They decided to “diversify” their robust economy by building lots of office towers, luxury condos and ultra rich housing.
It is going to end badly.
i agree, but it might take a long time.
I’m still tryin’ to sit at home and have someone pay my bills. No takers as yet !
Allow your home equity to pay your bills for you.
Still anxious to see what Aramco’s IPO does. Ford just announced 40 new electrified vehicles at CES this morning, 16 of which are pure EVs. These carbon-based oil states could be in for a rude awakening once we enter the secular oil decline. It looks like peak oil may finally be getting here, but from a totally different cause.
pull your equity and buy a new car!
We’re going to need to dig some more electricity mines.
Ha, Ha. Yes. I can just see it now - 400 mw plant being dual fueled by natural gas and oil delivering electricity for cranes to dig coal in situ, powering crushers to pulverize the coal into dust, so that water can be mixed with it to pump it thru a filter system to eliminate impurities, then clean coal pumped to nearby the surface so that they can generate electricity in a coal fired generating plant (of course called in situ). Yup 400 mw worth.
Or maybe a 78 cent kw solar array because a run of river 9 cent would interfere with the scenery.
BTW, that electricity mine is a mile away from an oil elephant field.
Ford just announced 40 new electrified vehicles at CES this morning, 16 of which are pure EVs.
A few weeks ago I went on a 4-day road trip. I had to fill up the tank twice. I didn’t bother to look up gas stations along the way — I knew they would be there when I needed one.
Can’t say the same for EV. So who is going to do the very unsexy work of building the EV recharge structure out in the countryside and not just in the hipster cities? Certainly not the high-fallutin car companies.
It will need some massive government subsidies.
Rt95 near richmond has 1 and it’s FREE!
W/o subsidies no one buys electric cars
Blue, you’re right. In fact I suspect that car companies are purposely holding off on the refueling supply chain for the sole purpose of begging for government cheese later.
Oh sorry, we were too busy making the cars, we forgot about refueling, we need $$$ “for the children.”
A few years ago Elon Musk made a big deal of demonstrating a swappable battery as a quicker alternative to plug-in. Since then, I’ve heard nada. Probably Musk is holding out for government cheese too. It worked with solar.
IMO the government should just take charge of the refueling themselves and then charge the car companies lease payments in order to use the government charge stations. That’ll learn ‘em those execs at Ford.
This really isn’t an issue now and EVs are less than 1% of the US fleet. My father routinely does 2-3 day road trips across most of the US and has no issues. There are plenty of places to get power even outside of the plentiful Tesla supercharging stations (RV parks, hotels, public chargers, etc.). Basically, anywhere you can find an electrical outlet.
https://www.plugshare.com/
https://chargehub.com/
It would make sense for hotels to start building charging stations for guests. Nobody wants to hang out at the local Pilot truck stop for several hours, waiting for their Tesla to charge while the wandering toothless crack hos - lot lizards I think they call them - service the truckers.
“Mommy, what’s she doing on her knees over there, is she hurt?”
“Lock the doors, kids, and cover your eyes.”
You are right, this is already happening:
https://electrek.co/2017/11/21/tesla-destination-charging-stations-hilton-hotels/
Bradenton, FL Housing Prices Crater 26% YOY As Housing Inventory Mushrooms
https://www.movoto.com/bradenton-fl/market-trends/
your house is your bank!
Sweden - “The three-month drop was 7.8 percent”
That’s kind of a lot. In a short period of time. After years of non-stop increases.
Are they still paying people to borrow with negative interest rates? If so, it’s not enough to cover a 2.6% loss per month.
stocks and homes is all u need to buy.
I am as much of a bear on housing as anyone here, but what we’ve got is essentially housing stagnation and I’m not seeing anything remotely resembling a “collapse” in Florida. Not now, and not in the near future. At least, not because of the “financial system”, whatever that is. (A joke it what it is, IMO). This has been gamed out of all recognition.
Will a “collapse” ever come? Yes, but when it does, it is my opinion it will come because of some unrelated “black swan”. Some EMP, natural disaster, pestilence or whatever. Because the same financial structure, if it continues, will do whatever it can to continue the farce. They changed the rules, and they probably don’t even play by those.
BTW, keep an eye on what’s going with Pakistan and India. It’s my opinion that they are going to let off a nuclear weapon and probably in the not too distant future.
I’m not seeing anything remotely resembling…
What you can see is the fat old possum way out on a fragile Persimmon branch. You don’t have to see it snap to know what is inevitable. Just stay clear.
you made some sense until I put the whiskey bottle away.
Why would you do that?
Mmmmm, persimmons. I cant blame the possum. Fuyu or some other kind?
A collapse in demand is a collapse.
Remember…. Organic housing demand is at 1997 levels.
There may be a collapse in demand for million dollar Miami condoze, but you know there’s something wrong when people are paying two and three times the normal price for modest concrete block shacks built in the 1960s and 1970s.
The panic buying at the lower end had gotten even worse since the summer. Of course, during the winter is when people in Florida put their homes on the market at top dollar, kind of like how people in New England put their homes on the market during the summer, especially in areas near the shore.
Suggestion to Ben for a topic: retirement housing, 55+ communities in the US, if there is any reporting on it out there. It’s fascinating, I’ve learned a lot more about it since I moved north in Florida. I knew about the Villages, but had no idea how the areas north of the Villages had also become a retirement mecca. It’s where they go when they don’t want to be in the Villages, but still want a retirement community. It’s unbelievable.
And it looks as if there has been some major malinvestment into retirement housing: a lot of fancy stuff with all sort of “amenities” getting built and price points to match, as if everyone retiring was upper income. The liar realtors hose these people into stuff they can’t afford, and the communities pile all sorts of fees on top of the price of the house. Monthly fees in the $400 and up range. People are trying to sell just to get out of having to pay the fees. That is, if they don’t get foreclosed on first.
You’d be surprised how many of these retirees are in trouble. People you wouldn’t think had any financial problems, to look at them. One lady was telling me how she and her husband had to take a mortgage out on their modest house “because it’s not easy living on a fixed income”.
If you signed up for a mortgage the last 20 years, you’re in trouble. Retiree or not.
I signed up for a mortgage in 2000. Sold at the top in 2005 and got rid of it. No problemo!
You’re fortunate. The rest aren’t.
‘…but what we’ve got is essentially housing stagnation and I’m not seeing anything remotely resembling a “collapse” in Florida.’
Are you suggesting that Florida housing has achieved a permanently high plateau?
No such thing as a permanent plateau, high or otherwise.
I was rechanneling Yale econ faculty member Robert Shiller’s predecessor, Irving Fisher, there:
“Stock prices have reached what looks like a permanently high plateau.”
I’m not seeing anything remotely resembling a “collapse” in Florida. Not now, and not in the near future.
Will a “collapse” ever come? Yes, but when it does, it is my opinion it will come because of some unrelated “black swan”.—Palmetto
You have described both Florida coasts. A 14foot Hurricane tidal surge might change valuations, but, only temporarily.
They just keep on coming. It’s like the state is some sort of life raft.
Because what Denver needs is more Denver.
Suburbs north of Denver have “come of age” with explosive growth along I-25 corridor:
“The population numbers help to tell the story up north, according to state demographer Elizabeth Garner.
The top two metro-area counties, aside from Denver, in terms of projected raw population growth from 2015 to 2025 are north of the city — with Adams County expected to pick up 110,000 people, an increase of 22.5 percent, and Weld County expected to gain the same number of people as Adams during that period, a 39 percent increase.
“There is some pressure from the north, for sure,” Garner said.
Meanwhile, her office projects that Broomfield will grow by 23,143 people from 2015 to 2025.
Not that the south metro area is standing still. Garner’s office projects that Arapahoe County will grow by nearly 100,000 people in that same 10-year period while Douglas County could see 60,000 more residents move in.
Neil Marciniak, economic development manager for Centennial, doesn’t see the situation as north vs. south. He said metro Denver is just going through a boom phase.
“What you’re actually seeing is the metro area as a whole having a strong pull for projects like these,” he said.
https://www.denverpost.com/2018/01/14/north-denver-suburbs-population-growth/
Meanwhile net migration to metro Denver has been in a steady decline for the past few years. It’s going to be interesting to see how this “explosive growth” pans out.
Ooooh! The Butterfly Pavilion is moving! That has to be a sign that that the economy is moving and shaking (The Butterfly Pavilion is a very mini zoo that specializes in butterflies and other bugs)
“Other bugs” primarily being what’s-her-name the spider :-).
Yeah, tarantulas and some other creepy crawlies.
Nouriel Roubini is unhappy with the commissions we pay on bcoin and gold.
Okay. Following that logic, what about real estate? Is that acceptable? And…..drum roll….why should I pay for his investment newsletter and services. Shouldn’t that be free, as well?
Are coins taking away and diverting fees from Jamie Dimon who is a paragon of financial virtue… and… who is also a predatory f$$k, but, NY is NY and if you want a scoop of ice cream in the Summer in Manhattan you pay $9… or …you can watch others eat it.
You now have a class of financial advisors that are angry that others are gaming people for fees that rightly should be theirs to game. PERIOD.
“This isn’t an investment, Mr. Clark Kent. It’s a scam. Let me show you one of my pitches that’s better and sounder than the spell you are being put under now, and…. it includes a newsletter as well !!!”
Great post.
Makes me feel like I’m from another world.
This feeling forces us to re-examine our underlying assumptions, hopefully dispassionately. Things change all the time. But the reason history repeats is because people don’t remember the mistakes of the past.
If our underlying assumptions are still sound, it could just be this is one of those phenomenons from the distant and not so distant past that’s playing out again.
Speaking of another world, I didn’t realize this happened at Lake Superior back in October. Does it ever get that bad up by you?
https://www.youtube.com/watch?v=LEKxQAmP5S0
I always seek a safe harbor when stuff like that is coming in. So far not been caught out in heavy weather, not that heavy. I have been in harbor with those waves crashing over the breakwall plenty of times though.
Warrenton, WA Housing Prices Crater 23% YOY
https://www.movoto.com/warrenton-or/market-trends/
Wes Montgomery - Bumpin’ On Sunset
https://www.youtube.com/watch?v=dqn3PF_DcSg
Wes Montgomery - Work Song
https://www.youtube.com/watch?v=qK-Spn2IrVo
Nat Adderley: cornet, Wes Montgomery: guitar, Bobby Timmons: piano, Sam Jones: cello/bass, Percy Heath: bass, Louis Hayes: drums
Cannonball Adderley Quintet - “Mercy, Mercy, Mercy” (1966)
https://www.youtube.com/watch?v=s4rXEKtC8iY
Cannonball Adderley Quintet: Cannonball Adderley (alto saxophone); Nat Adderley (cornet); Joe Zawinul (acoustic & electric pianos); Victor Gaskin (bass); Roy McCurdy (drums).
“Cannonball Adderley Quintet - “Mercy, Mercy, Mercy” (1966)”
Really good.
MASSIVE cryptocurrency crash taking place right now. Bitcoin Cash down over 25%, Ethereum down over 20%, Litecoin 20%, Bitcoin 16%. Stunning drops straight down.
BUY THE DIP!
😁
Do it with home equity! Do it today!
Bitcoin: an excellent way to lose your a$$.
All 100 of the top Bitcoin copycats plunged.
All 100!
Mania in a Petri Dish.
I hear Magic cards are a good investment. You should check those out.
am i back to mining today. without equity i am FUBARED ! If I set up a go fund me account would I get any support?
Maybe you could rent the place out and sleep in the garage. Use the proceeds to buy more houses. Huge tax write offs.