An Imminent Glut Amid A Wave Of New Construction
A report from Mingtiandi on California. “China’s Greenland Group is reportedly shopping the hotel within its flagship mixed-use project on the US west coast only 10 months after it opened, in the latest sign of overseas strains for the state-owned property firm. Oversupply fears could be a factor in Greenland’s change of plans. Downtown Los Angeles faces an imminent glut of luxury condos, amid a wave of up to 30,000 new residential units projected to hit the city’s market over the next three years. The reported hotel offering suggests that Greenland could be facing financial pressure in the US, after investing in a total of $8 billion worth of real estate projects on the east and west coasts. Like many Chinese property groups, Greenland is highly leveraged.”
“Last October, a Greenland-led Chinese consortium was reported to be selling the Landing at Oyster Point, a 42-acre waterfront biotech and office project in South San Francisco which hasn’t yet broken ground. Greenland also walked away from talks for a 1.9 million square foot mixed-use redevelopment project in North Hollywood, Los Angeles last November before paying the required deposit.”
From Queens News in New York. “Queens rental prices finished down at the end of the year, StreetEasy reports. StreetEasy attributed the decrease to a ‘glut of high-end homes in the area’ combined with the usual market slowdown in the winter. Price cuts also reached an all time high. ‘While a flood of new construction has been the main driver of the rental market slowdown we’ve witnessed over the last year, the fourth quarter’s rent cuts are more far-reaching than in years past,’ said StreetEasy Senior Economist Grant Long. ‘The cooling in the market is no longer limited to new, high-end buildings in select pockets of the city — there’s a broader trend of rents topping out across all price points. The slowdown is forcing landlords across the city to cut deals, and renters now have the most negotiating leverage in years.’”
From CBS Denver in Colorado. “A new report out this week shows several neighborhoods in Denver where rent decreased over a one-year period including in LoDo. Zumper data is made up of new listings on their site available at that time as well as information they get from third parties. The drop of 7.49 percent in LoDo was from December 2016 to December 2017.”
“Beyond LoDo, several other neighborhoods saw a drop in rent for the same period between nine and 20 percent. The five spots with the largest drop were Berkeley, Whittier, Dayton Triangle, Elyria Swansea, and the Central Business District. Ron Throupe, a professor at the University of Denver focuses on real estate. He says his research supports the trend Zumper is seeing in major cities. ‘We probably won’t see the trend until June,’ he said. ‘Whether we’re going to continue with price movement and a lot of demand for new units or are we going to start to slump back.’”
From WFAA in Texas. “Affordable real estate, buildings within walking distance of each other, great mass transportation and a city that’s got a plan for affordable housing. Those are some of Amazon’s top priorities as it gears up to pick a city for its $5 billion second headquarters. In all, North Texas has about 57,000 apartments — or roughly 33,000 vacant apartments in existing properties and another 24,000 apartments that are under construction — available for a major employer, like Amazon, to help fill. Atlanta also has a ready-to-go supply of about 43,000 apartments — with about 30,000 vacant apartments in existing communities and another 13,000 apartments under construction.”
“When it comes to finding big, open spaces at affordable prices to build a new corporate campus, North Texas seemingly has no shortage.”
From the Columbia Missourian. “When plans for the Hagan Scholarship Academy were announced in 2012, the news was greeted with plenty of enthusiasm. Columbia developer Dan Hagan hoped to nurture high-achieving students in rural areas through his new venture. But today, more than five years later, the college preparatory school commissioned by Hagan is still on the drawing board. The stalled academy is yet another testament to what many local experts describe as rising market uncertainty surrounding downtown real estate in Columbia. A pause in growth dampens Columbia’s reputation as a ‘boomtown’ in the region, an uptick spurred largely by enrollment spikes at MU celebrated from St. Louis Today to The New York Times.”
“John John, a real estate agent in Columbia, attributes the slowdown to bad luck for forward-thinking developers, who planned ahead for more students in the area and then got caught in a downturn. ‘Everyone was building in anticipation of the two- or three-year increased growth, so when it stopped and went backward; you gotta regain the momentum, not only what we lost, but get above that number,’ John said.”
From CU-Citizen Access in Illinois. “The development of student apartments in Champaign-Urbana has not slowed down over the past five years, despite two separate federal housing analyses describing the rental market as oversaturated. ‘During December 2016, the estimated student-targeted apartment vacancy rate was 12.9 percent, up from 7.4 percent a year earlier’ a federal 2017 Comprehensive Housing Market Analysis reported in January. But Ben LeRoy, an associate planner for the Champaign planning and development department, said that the city’s policy on student apartments is influenced more by the developers on campus.”
“In 2012, HUD reported that the housing market was soft and that the current overall vacancy rate was estimated to be at ‘9.1 percent, with around 300 rental units under construction at the time.’ The 2012 HUD analysis also presented a three-year forecast that ‘no additional units should be constructed to allow for the absorption of the current excess supply.’”
“But despite this federal report calling for a slow-down in development of rental units, building permits for major apartment complexes such as Latitude and HERE were both approved. These complexes would add 604 and 528 beds, respectively. LeRoy said the City of Champaign views the developers, ‘as having the best knowledge about whether there’s an over supply, an over supply of one type of student housing, an under supply and what prices should be.’”
“The developers may have been influenced the City of Champaign to report that there was a demand for student housing in a 2014-2015 Planning and Development Annual Report. This report stated changes in ‘a new ‘University Neighborhood’ where ‘developers can continue to meet the housing demand generated by continued increases in the University of Illinois’ enrollment.”
“But the 2017 CHMA reported that ‘UIUC enrollment has only increased by approximately 2,000 students since 2012.’ And despite this fact, ‘an estimated 4,600 beds have been added to the market’ since 2012 as well. Overall, 60 percent of apartments constructed since 2010 have been aimed at students, the analysis reported The report found that the average rent per bedroom in a student-targeted apartment was $579 in December 2016.”
“‘The current average rent in a two-bedroom student targeted apartment is approximately 45 percent higher than a two-bedroom non-student-targeted apartment,’ the report said.”
I’ve been wanting to highlight this report, as it typifies how this whole thing works. From the Worchester Telegram in Massachusetts.
‘Well, the downtown housing market is changing. The U.S. Census Bureau projected 1,516 housing units in the Central Business District in 2015. But within a few years, more than 1,000 units of new or renovated housing have been or will be added to that area.’
‘The most visible sign of that development is arguably the new apartments at 145 Front at City Square. The $92 million Front Street development by Roseland Residential Trust of New Jersey offers 365 luxury studio to two-bedroom apartments with common amenities such as a private garage, concierge, swimming pool, game room and fitness center. The building is scheduled to begin leasing apartments next month, and rents range from approximately $1,350 to $2,200.’
‘But renovations have been happening downtown for a few years. Edge at Union Station opened in June 2016 with a combination of one-, two- and four-bedroom suites in 81 units. Described as “purpose-built student housing,” the fully furnished units include high-end kitchens, private bathrooms and in-unit laundry. The housing is leased by the bedroom at prices ranging from $985 to $1,480 per room.’
‘MG2 Group of Quincy has invested $42 million to renovate approximately 535 apartments across seven properties along Worcester Common collectively referred to as The Grid District. The company just completed renovations at the Park Plaza, situated at Main and Franklin streets, and is finishing renovations at 50 Franklin St., known as Bancroft on the Grid. Rents range from a studio at $875 to $2,250 for a three-bedroom unit.
The Krock family is renovating 332 Main St., the Central Building, into 55 units, 50 of which will have some affordability restrictions. Meanwhile, Trinity Financial of Boston is investing approximately $55 million to develop the former Worcester County Courthouse into 114 units ranging from studio to three-bedroom apartments.’
‘Developers, city officials, architects and planners interviewed said these housing units capitalize on a trend toward a more urban lifestyle; as access to shops, entertainment, restaurants and bars, and transit increasingly usurp the desire for the single-family home on an acre of land along a cul-de-sac. “People are moving into neighborhoods that are going to be walkable and have access to transit, whether buses or trains,” said Stephen S. Rolle, the city’s assistant chief development officer.’
‘But there are only a few areas in Worcester where that urban lifestyle is achievable. And they are not where most of the city’s housing is located.’
‘So what will these new and renovated apartments downtown - if they are successful - mean for Worcester’s neighborhoods of three-deckers? Will it, as some suggest, prompt developers to renovate in order to compete for tenants, improving the overall housing stock?’
‘Or will those people be correct in saying the downtown is so devoid of housing, and the city’s population is growing so much that adding 1,000 units will be negligible to the overall r’ental market? Perhaps it will be a combination of both?
“I’m not claiming to have a crystal ball,” said Russell Haims, president of Hampton Properties, a real-estate development firm in the city.’
‘In fact, several of those interviewed noted that crystal balls were in short supply. The development of downtown is also, in many ways, unprecedented. The city has constructed large public-housing projects before, but has not seen the development of a mix of market and affordable units spread among several different projects in a single urban neighborhood.’
‘But while opinions on the impact of the housing were nuanced and varied, one thing was universal: hope for success. To discuss the potential impact of 1,000 units of new or renovated housing on the rental market, it helps to understand the rental market.’
″(It’s) on fire,” Mr. DiRoberto said. “Prices have increased dramatically. A lot of owners are doing renovations to their property and taking advantage of that and getting top dollar.”
‘Worcester had 42,479 units of renter-occupied housing in 2016, according to the latest figures from the U.S. Census Bureau American Community Survey. That is up from 41,520 units in 2015 and 38,263 units in 2014. Of that, 1,783 rental units were vacant last year. Over the past five years, that number has fluctuated between a low of 1,256 vacant rental units in 2016 to a high of 2,635 vacant rental units in 2013, according to the Census Bureau.’
‘The gross median rent in Worcester in 2016 was $975, according to the Census Bureau, up from $945 in 2015 and $935 in 2014. “Prices have gone up dramatically,” said Worcester real estate agent David Stead. “There’s been such a shortage of rentals, prices are getting pushed up.”
‘The three-deckers are also attracting investors from outside the city, according to Mr. Stead. “I have a lot of investors that come westward from Boston,” Mr. Stead said. “If you have a three-family in Boston that is $1.5 million, you can buy the same thing in Worcester for $330,000.”
‘The question is what will happen when these new units begin leasing. Those interviewed generally see two theories: the rising tide theory and the drop-in-the-bucket theory.’
‘When Mr. Haims began renovating homes in Main South near Clark University about 15 years ago, he installed granite countertops, stainless-steel appliances and laundry in the units.
Soon students had a realization. “Students realized they didn’t have to live in substandard housing,” Mr. Haims said. Other landlords had a realization, too: They had to keep up. “If you don’t keep up, you die or you fail,” Mr. Haims said.’
‘Several of those interviewed said that they expected a similar pattern would occur in the city. “As they say, a rising tide lifts all boats,” said Mr. Benoit, one of several who used the phrase.’
“To the extent that consumers and renters are going to have more options, you know, is going to cause existing businesses and owners and renters - whether it be three-deckers or multiuse housing - they’re going to have to raise their game,” Mr. Murray said. “They’re going to have to reinvest in their properties and bring them up to compete for tenants. So I think that’s a good thing.”
‘In fact, there is some evidence this is already happening. The Grid District is renovating its buildings and offering two months of free rent with a 13-month lease.’
‘On the other hand, there were some interviewed - and some when pressed about potential displacement and gentrification issues - who said that 1,000 units would minimally change the rental market. “One thousand units is a drop in the bucket,” said Frank Zitomersky, an architect and developer in the city. He has a housing project at 771 Main St., the former Standish Hotel, where he converted 28 apartments.’
“What it appears right now, at least in the short term, is an increase in prices,” said Mr. Traynor. “But that’s reflective of the cost of building new units and what the rent has to be to support those build-out costs.”
‘The question is what will happen when these new units begin leasing. Those interviewed generally see two theories: the rising tide theory and the drop-in-the-bucket theory’
There’s also mine which is the “you’re all gonna lose your ass” theory.
‘in the short term, is an increase in prices,’ said Mr. Traynor. ‘But that’s reflective of the cost of building new units and what the rent has to be to support those build-out costs’
Here’s the thing Mike: there is nothing that says rents have to support anything. And more, renters can’t get an interest only loan to pay guys like you. This is all outside of economic conditions and John Johns forward seeing bad luck.
I read some report the other day where a guy was saying the whole narrative that young folks were going to move into more concentrated urban areas for the foreseeable future was actually false. What they’re really seeing (and I’ve seen multiple sources say this) is that young people are moving to the suburbs for the 3/2 their parents had when they start a family.
If they are moving to the suburbs all this urban stuff is sunk. Yes, there will be a steady flow of new young people straight out of college but they won’t have anywhere near the income to support the current prices which are rich even for early career folks who are 5-10 years in to their careers.
I also suspect that a good portion of the suburbs will tank in price when the young folks start losing their shirts on the urban condos they bought and are no longer able to cash out their equity to buy that sweet house in the burbs.
The amount of malinvestment this decade has been stunning. I predict that this period will be referred to in the future as the “great malinvestment”.
The sequel to “The Great Malinvestment” will be “The Great Unwind.”
“Students realized they didn’t have to live in substandard housing,”
As if students earn enough money to afford living high.
Soon students had a realization. “Students realized they didn’t have to live in substandard housing,” Mr. Haims said. Other landlords had a realization, too: They had to keep up. “If you don’t keep up, you die or you fail,” Mr. Haims said.
Both landlords and students realized that substantial student loans are easily obtained despite “padded room” majors such as victim studies. If they’re lucky Pocahontas will author legislation allowing the government to discharge their student loan debt if they vote correctly.
woostah
foogedaboudit
‘John John, a real estate agent in Columbia, attributes the slowdown to bad luck’
Calls like that are why you make the big bucks John John.
‘In 2012, HUD reported that the housing market was soft and that the current overall vacancy rate was estimated to be at ‘9.1 percent, with around 300 rental units under construction at the time.’ The 2012 HUD analysis also presented a three-year forecast that ‘no additional units should be constructed to allow for the absorption of the current excess supply.’
‘But despite this federal report calling for a slow-down in development of rental units, building permits for major apartment complexes such as Latitude and HERE were both approved.’
Hmmm, it’s like there was something else going on that distracted these builders.
San Diego, CA 92129 Housing Prices Crater 13% YOY As Housing Enters Major Correction Phase
https://www.zillow.com/san-diego-ca-92129/home-values/
*Select price from dropdown menu on first chart
Isn’t it interesting to see all of these risk assets, including stocks, long-term Treasurys, Bitcoin and housing, go into a temporally-correlated nose dive immediaely following one of the most protracted bubbles in risk assets ever witnessed?
‘“As they say, a rising tide lifts all boats,” said Mr. Benoit, one of several who used the phrase.’
My theory is that a rising tsunami tide lifts all boats. And a receding tsunami tide fully reveals all the wrecked boats left high and dry, miles from the shore.
Like this one.
Sh!tcoin is breaking down again. It just hit $7,950 at 12:09 PST.
$7,965.00 Bitcoin price
−$289.15 Past hour (USD)
−3.5% Past hour (%)
Major ouchie!
I think Tether is Bitcoin’s “support” when it dips below $8k. This whole scam can’t keep going much longer.
I know these transactions cost a lot of electricity. Are there any transaction fees too? Is Tether going to play the transaction game?
Just how many “edgers” are out in cyberspace? Is there one for every Buttcoin hodler?
So on to my greedy bashtards in a bubble theory:
‘Chaos erupts after a measure that would have strengthened rent control failed to pass the State Assembly Housing Committee three weeks ago — a major setback for tenants in the midst of the housing crisis. Dozens of those protesters live in buildings owned by the largest landlord in San Francisco, Veritas Investments. I-Team Reporter Dan Noyes has been investigating complaints about the company.’
‘Veritas now owns about 240 buildings across San Francisco — more than 5,000 apartments — and just bought its first building in Oakland.’
“A lot of the stories are heart-wrenching stories,” San Francisco Supervisor Aaron Peskin told Dan Noyes. He’s been hearing complaints about the company. “They’re buying these buildings at extremely high prices,” said Peskin. “And under San Francisco rent control laws are passing on the debt on those buildings to their tenants.”
Ahem…
“They’re buying these buildings at extremely high prices”
“They’re buying these buildings at extremely high prices”
And these extremely high prices translate to INCREASED EQUITY for the comps, and this increased equity for the comps translates to INCREASED WEALTH for the debt slaves - many who just cannot stand prosperity thus they are driven to pay a visit to their local banker so as to CASH OUT this increased wealth and spend the cashed out equity ASAP because … because they just cannot help themselves!
(Which is a wonderful thing to experience if you are a banker 😁)
Q. Mr. Banker, what happens to your customers after they suck out all their house equity and are left with nothing but crushing debt?
A. Go here …
https://www.marketwatch.com/story/many-older-americans-are-living-a-desperate-nomadic-life-2017-11-06
“Seniors harvesting beets?”
Hehe… likely an embellished read. Farms don’t bother hiring white sloth when “tough as nails” Mexicans are willing to do the strenuous work.
I love when progressives/liberals who vote for the most far left wing politicians get slapped in the face with their choice.
Massive amounts of cheap and easy obama money. ZIRP, bailout after bailout, QE1, QE2, QE3, QE4, Operation twist, TARP, HARP, etc.
Which went to those closest to the money - Banks and Wall Street.
Who then needed to invest this cheap and easy money into things like real estate.
Wash and repeat.
Now eat your peas.
+++++
Veritas bought her building and in December, with pass-throughs, her rent climbed from $383 a month to $818 — a 114 percent increase.
“Which went to those closest to the money - Banks and Wall Street.”
Clearly more progress needs to be made in this area. 😁
“I love when progressives/liberals who vote for the most far left wing politicians get slapped in the face with their choice.”
They’re getting b!tch-slapped in Seattle/King County right now. The property tax increases, car tabs increases, levys, etc. have even the hardcore libs squirming now. Once the actual assessments go out this year, you’re going to see an absolute revolt. Things have gone over the edge.
The property tax increases, car tabs increases, levys, etc. have even the hardcore libs squirming now.
Is anyone really squirming? I try to avoid talk of politics with most folks since I hold a minority opinion and am sick of getting denigrated for it, but I just see more of the same “we need to raise taxes on the rich (read: everyone with more than me)”.
What’s on the current ballot for Bellevue? 3 separate property tax increases… “for the kids” of course.
With housing prices increasing as they have (and thus tax receipts), how the heck could the schools need even *more* funding?!?!?
Oh, they most certainly are. There are people who are posting signs in opposition of the new school levys, etc., and that’s over on the eastside where you live/lived. That’s not something you’d see, historically.
And, yes, one has to question how in the f**k the politicians would need even more money now, when they’re sitting on the largest tax haul in history. The answer is simple: They spend (and waste!!) every dollar they take in, and then some. They do this on purpose, and they load the government with more workers, pensions and higher salaries when the times are good, like now, then cry poor later.
They spend (and waste!!) every dollar they take in, and then some.
it’s worse than that. they actually use some of our tax money against us.
“With housing prices increasing as they have (and thus tax receipts), how the heck could the schools need even *more* funding?!?!?”
Some school districts buy homes and rent them to the teachers at a discount since their wages won’t cover the cost of local housing.
‘Home to the most expensive market in the country, San Francisco is expected to cool off due its a glut of supply. About 5 million square feet of new office space is expected to hit the market this year — a figure that’s equivalent to the past three years’ worth of office construction — along with 3.3 million square feet of sublease space, according to Bloomberg.’
More and more gluts. RW, how can you have any pudding if you won’t eat your crow?
is rent going up anywhere in the US?
Yes, Florida. Everyone thinks their rundown, maintenance-deferred POS craps rivers of gold.
Any Florida LLs here on the blog? If so, what is it you have against fixing broken, sagging or deteriorated soffit? Don’t you realize that leads to water intrusion?
What ’bout the fascia? And what are you going to nail the replacement soffit to? Is that termite damage or rotting truss ends?
“Gimme paint and I’ll make it look like new.”
Lol, do you know my former LL? How about my current one?
I think there’s going to be some major future hurt from damage caused by Irma. Such as minor damage being ignored and morphing into larger problems.
Palmy - Are you somewhere around Ocala now?
Yep. Looking to settle northwest of there. Possibly High Springs area.
What happened to the single family house prices in that area?
Around here the prices have run back up to damn near 2005 and in some cases all the way back.
“What ’bout the fascia? And what are you going to nail the replacement soffit to? Is that termite damage or rotting truss ends?
“Gimme paint and I’ll make it look like new.””
Wood Bondo, of course, then paint. Lipstick on a pig is an art.
jeff, when we moved here, housing prices were reasonable. Within a month, they were on a steep rise. Hard to say why, although my guess is they were pumping up for the “season”, when anyone who wants to sell a house puts their best and most expensive foot forward.
Again, at the lower end, things are selling. And they’re building like crazy in places like the Ocala Waterway area, Silver Springs Shores and Marion Oaks. And breaking ground in new areas of the sprawling retirement communities, and doing a brisk re-sale business in the less expensive, built out communities. I knew about the Villages, but had NO idea how big the retirement RE business was north of The Villages.
If you can find a reasonably priced 1200-1500 sqft house, then that area seems like it would be ideal for retirement. Nice weather, no state income tax, but not really within commuting distance to job centers which (theoretically) keeps a lid on housing prices.
“…not really within commuting distance to job centers…”
Good strategy for finding housing for your retirement years in whatever part of the country you prefer at a relatively affordable price compared to housing closer to job centers.
I have only been back to Florida a few times since starting out there as an infant, but I have two prevailing memories from a childhood visit: large, aggressive mosquitoes, and visible mold on the side of houses, thanks to the perpetually warm, moist tropical climate.
As an adult, I wonder whether mold is much of a factor in Florida housing depreciation and maintenance costs?
Careless (and strapped) homeowners tend to ignore the problem.
“Florida…prevailing memories…aggressive mosquitoes…”
I saw a young infant last year carried off by a Florida mosquito while the parents were ten feet away texting to each other.
I once visited my snowbird parents in West Palm/Ft Laud. All I remember is tanned fatties at the Country Buffet, crossing a 6-lane highway to get to the beach, endless shopping strips, and oil spots and manowars on the beach. And the landfill.
Didja step in one of those petro-turds? (they call it beach tar, sounds more, uh, I dunno, beachy or something like that.) Try getting it off. Ugh! Beats the heck outta stepping on a man o war, though.
Ha-ha on the fatties. Ever see one of those men with dunlop’s disease at the beach in a pair of Speedo nut-huggers? Now there’s a real feast for the eyes. Not.
Speedos and Eurotrash tourists. I lived in Delray for 6 years, then Austin and now Tampa.
I like Tampa. I’d like to be a LL again but am a little gun-shy from reading this blog for the better part of 6 years
Sold my house and duplex in the Austin area right after the move to Tampa.
I had to look up Dunlop’s disease. Eww. I don’t remember seeing it; I was too busy looking for the man o wars. In my most recent trip to the beach, the middle-aged men all seems to have upper-belly fat - the kind that signals heart disease. Not floppy fat.
I don’t remember big oil splotches, just some little spots that got on the clothes and would never wash out.
“…men with dunlop’s disease at the beach in a pair of Speedo nut-huggers?”
I guess it beats exposing one’s eyes to the full Monte.
Ran across this (oh, goody, it contains a chart) …
https://www.apartmentlist.com/rentonomics/national-rent-data/
Turning point noted in August 2017.
Why do democrats think the wealthy should pay their “fair share” and then do everything to rescue the MID which goes mostly to the wealthy?
+++++
California’s Proposed Fraudulent Gift to the Ultra-Wealthy
Townhall.com | February 4, 2018 | Hank Adler
If you were worried that the wealthiest California taxpayers were paying too much in Federal taxes, the Democratic dominated California State Senate apparently has been equally concerned and has proposed a “tax” law change that would allow California taxpayers to deduct 85% of their California state taxes as “contributions” in their federal income tax returns.
In short form, the proposal is for California taxpayers to pay an amount equal to their California taxes to a non-profit “charity” that will in turn donate the money to the state. Of course, the California Senate has found a couple of tax professors to bless the plan and apparently the California Senate believes that neither Congress nor the Internal Revenue Service will so much as acknowledge any disagreement with this plan.
The problems with the proposal are legion: (1) The Internal Revenue Service will undoubtedly contest and propose a corrected tax plus penalties on every tax return that includes a deduction for a donation to the California Excellence Fund (2) The Internal Revenue Service will undoubtedly propose penalties on any tax return preparer that signs such a tax return, (3) It is highly likely that the Administration will refuse to work with California on virtually any issue where federal help is needed, (4) There is not one dollar of benefit to the State of California, (5) the legislation does not address the reality that if passed, California 2017 estimated tax payments will disappear as the donations to the California Excellence Fund are all made on December 31th, thereby forcing California to borrow funds to keep California’s government open, (6) anyone who has spent a few minutes reviewing historical California tax data knows that virtually the only beneficiaries of this plan will be taxpayers showing federal adjusted gross income exceeding $150,000 and (7) the state would have to administer the plan, which would not be inexpensive. (it is important to note here that many taxpayers with taxable income approaching $150,000 were already losing their tax deductions as the result of the alternative minimum tax.)
But the ultra-wealthy win big.
In 2015, 8051 California taxpayers filed tax returns with individual adjusted gross income of over $5 million. These folks combined to have taxable income of $132 billion. and paid just short of $17 billion of state and local taxes. The California Senate wants to award these folks a deduction of over $14 billion against their federal income taxes.
The Tipping Point (TPT) is here.
+++++
Corporate Bond Market in Worst Denial since 2007
Wolf Richter • Feb 4, 2018
Treasury securities have been selling off and Treasury yields have been rising, with the two-year yield at 2.15% on Friday, the highest since September 2008, and the 10-year yield at 2.84%, the highest since April 2014. Rising yields mean that bond prices are falling, and this selloff has been an uncomfortable experience for holders of Treasury securities.
But corporate bonds have been in their own la-la-land, and even Tesla, despite its cash-burn rate that should scare the bejesus out of investors, was able to sell $546 million in bonds last week – bonds collateralized by lease payments it receives from customers that have leased its cars.
This is the narrowest spread since July 2007, just before credit froze as the Financial Crisis began to unfold, and numerous of these junk-rated companies, cut off from further funding and losing money as they went, ended up in bankruptcy court, an experience during which stiffed bondholders and other creditors re-learned to appreciate the notion of risk.
Here’s how this is going to work out:
The Fed will continue to raise its target range for the federal funds rate.
The 10-year yield will follow.
As the Treasury yield curve, which is still relatively flat, steepens back to some sort of normal-ish slope, the 10-year yield will make up for lost time over the past year and will rise faster than the Fed’s target range for the federal funds rate.
Corporate bonds will follow, but they have even more catching up to do, and so they will rise even faster than the 10-year yield, as yield spreads between the 10-year Treasury and corporate bonds widen back to some sort of normal-ish range.
This is not a secret. It’s just how it works. The initial moves are what the Fed wants to accomplish. It wants to tighten the current extraordinarily loose financial conditions. Yield spreads and corporate bond yields are a big part of those financial conditions. This will happen, it always does. It’s just a question of how fast and how disruptive the adjustment will be, how many junk-rated companies find themselves unable to raise funds to service their debts and keep going, and whether it will be just a painful sell-off or junk-bond mayhem.
The onset of the recent steady rise in long-term Treasury yields actually dates back to September 2017, not last week:
Date 10 Yr 30 Yr
9/07/17 2.05 2.66
2/02/18 2.78 3.01
Change (bps) +73 +35
So why the sudden freak out about bond yields?
The Financial Times
Global Market Overview Asia
US stocks tumble as bond yields hit multiyear highs
Robust US wage growth fuels talk of more aggressive Fed
Investors expect the Federal Reserve to tighten policy in March
Dave Shellock
February 2, 2018
Friday 21.00 GMT
What you need to know
- S&P 500 and Dow have worst week since January 2016
- 10-year Treasury yield tops 2.8 per cent for the first time in four years
- Pace of US annual wage growth hits highest since 2009
- Dollar index pulls away from three-year trough
- Oil and gold suffer steep losses
Things turned ugly on Wall Street on Friday as stocks tumbled amid an acceleration of this week’s bond sell-off after strong wage growth data heightened speculation that the Federal Reserve would raise interest rates more aggressively than had been expected.
The S&P 500 suffered its biggest daily fall since September 2016 and its worst weekly showing for more than two years.
The dollar finally found some support from the rise in yields, with the euro back below $1.25 and dollar/yen topping the ¥110 level for the first time in more than a week.
But commodities priced in the US currency suffered hefty losses, with Brent oil down sharply and gold heading for its lowest close since January 22.
…
Last week I moved my fixed income allocation from a Bond Index fund to a stable value fund that uses the 3 yr Treasury as its benchmark. Last time I looked the 3 year Treasury was yielding about 2.24%. The duration on the Bond Index fund was somewhere around 6 years.
This might be a good time to trim the REIT allocation as well. So many of the REITs’ debt instruments are variable rate loans.
We live in interesting times.
+1
Malls going dark
Bears have never been so wrong or reviled for so long as in the Quantitative Easing era.
The Financial Times
Opinion
Anatomy of the escalating bond bear market
With term premia now back to ‘normal’ bonds look better underpinned
The last remaining bears almost a decade into a recovery will be hoping that with the arrival of 2018 they will finally be proven right
Gavyn Davies 9 hours ago
The global economy remains in the strong, synchronised upswing that has now been in place for almost two years. The latest Fulcrum nowcasts show no sign of any major slowdown in the global growth rate, which remains around 4.5 per cent, almost a full percentage point above its long term trend. Among the major blocs, the advanced economies are continuing to record growth rates that are, remarkably, 1.7 percentage points above trend, while the emerging markets are hovering around trend.
The recent surge in global growth is mainly a cyclical demand phenomenon, which has so far had only a moderate impact on long term sustainable growth. Although this implies that excess capacity in the world economy is now being absorbed fairly rapidly, there has been very little, if any, increase in underlying core inflation, which remains stubbornly low in the major advanced economies. Headline inflation has risen slightly, because of rising oil prices, but this will not be of any great concern to the central banks. Nor, in itself, should it be of any great concern to the markets.
Based on incoming economic data, the world economy (and asset markets) are therefore still in a regime that we have named “global expansion”, rather than “global reflation” because core inflation remains so subdued. The mix between real output and inflation in nominal economic activity is still extremely healthy:
Despite the low rates of recorded inflation, the global bond market has responded to the acceleration in output growth with a sharp sell-off, especially at the front end of the curve. For example, in the latest phase of bear flattening starting in early September 2017, the US 2-year yield has risen by about 90 basis points, while the 10 year yield is up by 70 basis points. Why has this happened?
…
“As the Treasury yield curve, which is still relatively flat, steepens back to some sort of normal-ish slope, the 10-year yield will make up for lost time over the past year and will rise faster than the Fed’s target range for the federal funds rate.”
That’s the optimistic scenario. The pessimistic scenario is also out there. However, the developments of last week pretty much undercut the worries about low yield volatility.
From just a few long weeks ago:
The bond market is doing something it hasn’t done in 52 years
Bill Baruch
Published 6:31 AM ET Tue, 9 Jan 2018 Updated 9:12 AM ET Tue, 9 Jan 2018
CNBC.com
The Treasury market is doing something it hasn’t done in 52 years — here’s what it means
5:52 PM ET Mon, 8 Jan 2018 | 01:48
Volatility in the Treasury market has sunk to a multidecade low, and that could have sweeping implications for the bond market this year.
Treasury volatility as measured by realized volatility in the U.S. 10-year Treasury note has fallen to a 52-year low, according to a new report from Bank of America Merrill Lynch. I believe this is going to open the door to an inverted yield curve, wherein the longer-dated Treasuries carry a lower yield than those that are shorter-dated; this development is classically taken as a troubling signal for the broader market.
…
We’ve got “troubling signals” all over the place.
I am so glad that I’m insulated to the extent that I don’t have to worry about any of it.
2banana’s Rule:
Conservatives are more than happy to live under the same laws and taxes they want for everyone else.
Liberals/Progressives expect to exempted from the same laws and taxes they want for everyone else.
+++++++
Rich Kennedy Family Lived Behind Walls And Armed Protection For Decades
Daily Caller | Jan. 31, 2018 | Julian Gillespie
In a statement meant to dare the Trump administration, Kennedy declared, “Build a wall and my generation will tear it down.”
The quote, he said, was witnessed on posters at recent political rallies that promote more porous borders.
Yet the young congressman failed to mention that generations of Kennedys preceding him have enjoyed the protections and sanctity provided by walls and extra security at compounds stretching from Cape Cod to Palm Beach.
When the Kennedy family sold the estate in Palm Beach, Florida in 1995, the walls and gate were the only part of the two-acre oceanfront compound to be legally protected, according to The New York Times. The family had fought for years to keep the estate from historical designation to help resale value and make remodeling less complicated for a new owner.
It’s unclear if these walls and border protections were immoral in the eyes of the 37-year-old Kennedy. He added last evening, “We choose the thousands of American communities whose roads aren’t paved with power and privilege, but with honest effort, good faith, and the resolve to build something better for their kids.”
Building “something better” apparently doesn’t include walls we all can use.
The end of the line to those who play Mr. Banker’s game of debt.
+++++++++
Many older Americans are living a desperate, nomadic life
MarketWatch | 4Feb18 | Richard Eisenberg
In her powerful new book, “Nomadland,” award-winning journalist Jessica Bruder reveals the dark, depressing and sometimes physically painful life of a tribe of men and women in their 50s and 60s who are — as the subtitle says — “surviving America in the twenty-first century.” Not quite homeless, they are “houseless,” living in secondhand RVs, trailers and vans and driving from one location to another to pick up seasonal low-wage jobs, if they can get them, with little or no benefits.
The “workamper” jobs range from helping harvest sugar beets to flipping burgers at baseball spring training games to Amazon’s AMZN, +2.87% “CamperForce,” seasonal employees who can walk the equivalent of 15 miles a day during Christmas season pulling items off warehouse shelves and then returning to frigid campgrounds at night. Living on less than $1,000 a month, in certain cases, some have no hot showers. As Bruder writes, these are “people who never imagined being nomads.” Many saw their savings wiped out during the Great Recession or were foreclosure victims and, writes Bruder, “felt they’d spent too long losing a rigged game.” Some were laid off from high-paying professional jobs. Few have chosen this life. Few think they can find a way out of it. They’re downwardly mobile older Americans in mobile homes.
It began in 2008, within months after the housing collapse. Amazon contracts with an RV park and pays the CamperForce to do warehouse work loading and packing and order fulfillment. From the outside looking in, you’d say: ‘Why would you want older people doing this? The jobs seem suited to younger bodies.’ But so many times, the recruiters in the published materials talk about the older people’s work ethic and the maturity of the workforce and their ‘life experience,’ which is a code word for ‘Hey, you’re old.’
“But so many times, the recruiters in the published materials talk about the older people’s work ethic and the maturity of the workforce and their ‘life experience,’ which is a code word for ‘Hey, you’re old.’”
Personally I like to hire sweet young interns and pay them nuthin’.
This “life experience” is a load of crap: Life experience generally means they have been around the block a few times and thus are onto my game.
Better to get ‘em young and dumb.
Boot straps. What these older nomad Americans need are bootstraps.
And $500,000 starter homes.
There is a reason why the counties around Washington DC became the wealthiest in the country under obama.
God Bless DJT.
+++++
Trump’s shot heard round the civil-service world
wnd.com | 2/3/2018 | Greg Corombos
He fired a major shot in the effort to enact civil service reform during his State of the Union address, creating what one leading workforce expert hopes will be an effort to root out the “intransigence and incompetence” from the federal workforce.
In his speech, Trump hailed the passage of legislation in 2017 that gave more authority for Veterans Affairs Secretary Dr. David Shulkin to fire people failing to perform at levels needed to provide veterans the service they deserve. He then said that flexibility should be available to all cabinet secretaries.
Stepman says getting rid of most incompetent and uncooperative federal workers is exceedingly difficult.
“I think the average American has very little idea how difficult it actually is to fire a federal worker. The process is usually over 300 days long. It includes two appeals that are conducted at the same standard of proof as a civil trial.
“Ninety-five percent of the donations over $200 that were made by federal employees went to Hillary Clinton in 2016. It was 99 percent at the State Department. That’s not an apolitical civil service. That’s a civil service that has its own interests in growing government. We’re talking about millions of people who make decisions for the American people, where the voters have absolutely no say over whether they stay or go,” said Stepman.
Stepman expects labor unions and other interests to fight back if this idea gains legislative traction, but she says the push is now on after Trump’s speech.
Has Trump made a dent yet in the fedgov’s workforce? I seem to recall predictions made on this blog about imminent mass firings.
Just asking because I know a guy who quit his private sector IT job for a job with Bureau of Reclamation. And the guy was a die hard, conservative, “shrink the government” type. I suspect that his tune is about to change.
It’s not Trump. Congress has more influence than the President does. Each year, an agency asks for a certain amount of funds and if Congress doesn’t grant the requested amount, the agency has to cut. Usually they cut contractors and R&D, freeze hiring, or offer early retirement and buyouts. I know of agencies who have been culling for 4-5 years, regardless of who is President.
Isn’t this because of the failure to actually pass a budget by both parties for quite some time? The entire federal government is being run by continuing resolutions, which makes long-term planning extremely difficult. In this scenario, there is an incentive to spend as much money as possible in short-sighted fashion or else you’re agency will get fewer funds in the future.
Not really. A CR means that agencies get the same amount that they asked for last time. So unless an agency asks for an increase for more staff, a CR won’t hurt the agencies much. (To be honest, I don’t know how that affects automatic step increases or cost of living increases. The money might automatically be approved under the CR.)
Agencies are pressed to spend all their money in any situation, not just a CR. I’ve heard stories of DoD managers keeping wish-lists of shovel-ready projects (so to speak) just in case a pile of money appears and they need to spend it fast.
Makes sense. I’ve always worked in the private sector. I am basing my limited knowledge off of the inner-workings of federal government bureaucracy off some Planet Money commentary:
VANEK SMITH: When government agencies only have a few months to deal with a whole year’s budget, it makes it much harder to spend that money well, whether their budget is getting bigger or smaller.
COLLENDER: Whatever decision is ultimately made, they’re going to have to do it in a very short period of time. And that means the decisions they make are going to be not good government. If you have to save a lot of money quickly because of the budget cutbacks, chances are you’re going to have to lay off people and lay them off very quickly. And therefore you may be getting rid of the wrong people, not considering what the functions are but considering how much you could save. On the other hand, if you’ve got a big budget increase that you’ve got to implement in a short period of time, the department or agency may end up buying things not because they’re good or because what they needed but because they can get the money spent quickly.
GARCIA: So they’re just trying to get the money out the door because they have less time in which to spend it.
https://www.npr.org/templates/transcript/transcript.php?storyId=579783785
Trump at SOTU: “All Americans deserve accountability and respect — and that is what we are giving them. So tonight, I call on the Congress to empower every Cabinet Secretary with the authority to reward good workers — and to remove Federal employees who undermine the public trust or fail the American people.”
Very difficult to fire federal employees. Trump is calling on Congress to make it easier.
I think it’s almost impossible for any government employee, no matter if it’s federal, state or local, to be fired. It’s a real problem, and is partly responsible for the absolutely nasty attitudes a lot of them have.
Apply that chop level for EPA across from he board
“…the company [is] 46.37% owned by the Shanghai Government.” It’s only a minority share.
Chinese…selling 42-acre project …San Francisco …hasn’t broken ground….walked away from [another]…1.9 million square foot ….
https://en.wikipedia.org/wiki/Greenland_Holdings
It is interesting that this Chinese scheme calls itself by the name of a different country.
Public unions are the largest political campaign donors of all times.
Public unions give 99.9% to democrats.
Wonder why your property taxes are crushing you?
Wonder why all major cities, counties and towns where public unions and democrats rule are near bankrupt?
+++++++
Aging cops and firefighters miss years of work and collect twice the pay
Los Angeles Times | Feb 03, 2018 | Jack Dolan, Gus Garcia-Roberts and Ryan Menezes
When Capt. Tia Morris turned 50, after about three decades in the Los Angeles Police Department, she became eligible to retire with nearly 90% of her salary.
But like many cops and firefighters in her position, the decision to keep working was a financial no-brainer, thanks to a program that allowed her to nearly double her pay by keeping her salary while also collecting her pension.
A month after Morris entered the program, her husband, a detective, joined too. Their combined income for four years in the Deferred Retirement Option Plan was just shy of $2 million, city payroll records show.
But the city didn’t benefit much from the Morrises’ experience: They both filed claims for carpal tunnel syndrome and other cumulative ailments about halfway through the program. She spent nearly two years on disability and sick leave; he missed more than two years, according to a Times analysis of city payroll data.
The Morrises are far from alone. In fact, they’re among hundreds of Los Angeles police and firefighters who have turned the DROP program — which has doled out more than $1.6 billion in extra pension payments since its inception in 2002 — into an extended leave at nearly twice the pay, a Times investigation has found.
Former firefighter Thomas Futterer, an avid runner who lives in Long Beach, hurt a knee “misstepping off the fire truck,” three weeks after entering DROP, according to city records. The injury kept him off the job for almost a full year.
Less than two months after the knee injury, a Tom Futterer from Long Beach crossed the finish line of a half-marathon in Portland, Ore., in a brisk 2:05:23, according to race results posted online. Only one Tom Futterer lives in Long Beach, according to public records.
In 2016, officers exiting the program had been paid an average of $434,000 in extra pension payments, according to a Times analysis of Los Angeles Police and Fire Pension fund data.
Senior Los Angeles Fire Department officials — many of whom are in DROP and stand to collect high six-figure payments from the program — declined to comment for this story.
Assistant Police Chief Jorge Villegas, who joined DROP in 2015 and could walk away with nearly $900,000 in extra pension pay at the end, said any change to the rules would require careful deliberation.
Of the 2,583 cops and firefighters who entered the program between July 1, 2008, and July 1, 2017, 860 have collected more than $1 million in combined salary and pension payments during their tenure in DROP, The Times found. Thirty-one have collected more than $2 million.
One incentive for cops and firefighters to file a workers’ comp claim, rather than use their health insurance, is that their salaries are exempt from federal and state income tax while they’re out on disability leave for a job-related injury.
Percy Morris’ retirement announcement in The Thin Blue Line, an LAPD union magazine, highlights his affection for the Mexican resort town where he and his wife bought a timeshare and spent time recovering from the injuries that kept them from work while in DROP. Los Angeles Police Protective League
Instead of simply retiring with her pension and city-paid health insurance, however, Morris remained in DROP and started taking long disability leaves for injuries she said she had accumulated during decades on the force — collecting her salary and pension all the while.
With the exception of a few workdays in June 2012, she remained on injury leave until September 2013, when she retired, city records show. The city paid her nearly $470,000 for the time off in DROP, The Times’ analysis found.
Her husband, Percy Morris, filed claims for carpal tunnel, MRSA and a back injury while in DROP. He was paid about $476,000 for the more than two years he took off during the program, The Times found.
Since the program’s inception, not a single DROP participant has been charged with workers’ compensation fraud, court records show.
Heard on the radio that workers’ compensation much harder to get in the private sector, NPR I think it was awhile ago.
CA State workers live under a different set of rules than private sector.
When most Los Angeles taxpayers reach the standard retirement age, 65, they face a stark choice: keep working and collecting their paychecks or quit and start collecting Social Security, which replaces only a small fraction of annual wages for most people.
When city firefighters or police officers reach their retirement age, 50, the choices are far better. They can keep working for a paycheck, they can retire with up to 90% of their salary in pension and city-subsidized health insurance for life, or they can enter DROP. For many, the choice is easy.”
i guess finally everyone is figuring this out
“Blue State public sector workers are dreamers too”
Nice of these “experts” to weigh in on the D.C. market. Did you know all millenials want to buy a house?
https://www.bisnow.com/washington-dc/news/commercial-real-estate/the-revenge-of-homeownership-and-5-other-dc-real-estate-trends-to-watch-84519
I find it interesting that the amenity war has expanded from Class A apartments to Class A office space:
“high-end fitness centers with class offerings, rooftop decks staffed with baristas and full kitchens, and conference centers with pool tables and golf simulators.”
Time to BTFD and HODL!
Risk asset futures:
DJIA F 25,443 -729 -2.79%
S&P F 2,757.25 -65.25 -2.31%
NASDAQ F 6,753.25 -145.25 -2.11%
Gold 1,335.20 -12.70 -0.94%
Silver 16.555 -0.60 -3.50%
Crude Oil 65.06 -0.74 -1.12%
Crypto:
Bitcoin USD 8,235.08 -921.80 -10.07%
Bitcoin EUR 6,607.87 -739.65 -10.07%
Bitcoin GBP 5,832.91 -650.76 -10.04%
Bitcoin JPY 906,723 -101,495 -10.07%
GBTC 12.00 -1.11 -8.47%
Bitcoin F (CBOE) 8,520.00 -560.00 -6.17%
Panic Monday?
The party is over …
https://finviz.com/futures_charts.ashx?p=d1&t=YM
Don’t you just sweat bullets when the futures chart assumes that ugly hangman’s noose technical pattern?
Now the DOW futures are down by a mere 666.
Wait a minute… isn’t that the sign of the beas
t?
Realtors are liars.
‘The drop of 7.49 percent in LoDo was from December 2016 to December 2017. Beyond LoDo, several other neighborhoods saw a drop in rent for the same period between nine and 20 percent. The five spots with the largest drop were Berkeley, Whittier, Dayton Triangle, Elyria Swansea, and the Central Business District. Ron Throupe, a professor at the University of Denver says his research supports the trend Zumper is seeing in major cities. ‘We probably won’t see the trend until June,’ he said. ‘Whether we’re going to continue with price movement and a lot of demand for new units or are we going to start to slump back.’
February 1, 2018
From the Denver Channel in Colorado. “Schools in Denver are feeling the effects of the affordable housing crisis. Enrollment numbers are dropping as families move out of neighborhoods that were once considered accessible. Brian Eschbacher, the executive director of planning and enrollment for Denver Public Schools, says the decline is recent phenomena.”
“‘Over the last 10 years, we’ve been the fastest growing urban district in the country. We’ve added over 20,000 students and sometimes adding 3,000 students in a year. In the last year, suddenly that growth has stopped, and we are projected to lose students this year for the first time since 2004,’ said Eschbacher.”
http://thehousingbubbleblog.com/?p=10331
LoDo? I guess you can walk to Coors Field and Union Station if you live in LoDo. Anyway, I don’t think that too many families with schoolaged children live in Lodo, just millennial hipsters.
As for families moving out of Denver into the burbs, why exactly is this surprising?
‘and the Central Business District’
Denver looks all the same to me. All the way to Colorado Springs.
I wouldn’t go that far. Highlands Ranch looks very different from say Five Points, Montebello, Washington Park or LoDo. Some parts of metro Denver are very nice.
When I visited Denver I was thinking it was going to be like a mountain town. I was surprised when it was like Kansas.
It’s not in the mountains. It’s on the Front Range.
I know that now, having visited. However, I was not aware prior how far away from the mountains it really was.
It’s not that far, you can see the Rockies from downtown. That’s closer than say Kansas City. And the western burbs are in the foothills. If you were expecting it to be a ski resort, well …
“It’s not that far, you can see the Rockies from downtown…”
Sure, and I can see Mt. Rainier from my house, but it’s a long freakin’ ways away, around 60 miles. It just so happens that it’s 60 miles to the nearest ski resort from Denver. I guess it’s a matter of opinion, so I’ll agree to disagree.
‘UIUC enrollment has only increased by approximately 2,000 students since 2012.’ And despite this fact, ‘an estimated 4,600 beds have been added to the market’ since 2012 as well. Overall, 60 percent of apartments constructed since 2010 have been aimed at students, the analysis reported The report found that the average rent per bedroom in a student-targeted apartment was $579 in December 2016.’
‘The current average rent in a two-bedroom student targeted apartment is approximately 45 percent higher than a two-bedroom non-student-targeted apartment,’ the report said.’
If I was a student there I would stay in a non-student airbox. 45% would pay for a lot of beer and pizza.
‘North Texas has about 57,000 apartments — or roughly 33,000 vacant apartments in existing properties and another 24,000 apartments that are under construction — available for a major employer, like Amazon, to help fill. Atlanta also has a ready-to-go supply of about 43,000 apartments — with about 30,000 vacant apartments in existing communities and another 13,000 apartments under construction.’
I flew out of DFW yesterday and the amount of construction is phenomenal. Yet from the air you can see there is plenty of land in every direction.
‘When it comes to finding big, open spaces at affordable prices to build a new corporate campus, North Texas seemingly has no shortage’
‘When it comes to finding big, open spaces at affordable prices to build a new corporate campus, North Texas seemingly has no shortage’
I think the real problem, especially with ’spawly’ places like DFW or Hotlanta is the nightmarish road congestion.
‘I think the real problem, especially with ’spawly’ places like DFW or Hotlanta is the nightmarish road congestion.’
They build a new road here in DFW practically every day, and are widening the old ones. The problem is the tolls you will pay.
‘When it comes to finding big, open spaces at affordable prices to build a new corporate campus, North Texas seemingly has no shortage’
Where are the posters who claim the land is all spoken for/built up around here?
The problem is the tolls you will pay
If it’s pay-as-you-go to pay for build-out and maintenance, I’m all for it. Problem is the guvvie gets addicted to the income and tolls never go away, and keep going up…
Blindspot concussion…oof!
You know that had to hurt… and he didn’t lose the football.
I shut it off. Mr. Perfect is getting boring. Very boring.
He lost, all’s good.
Denver, CO Housing Prices Crater 10% YOY On Expanding Mortgage Defaults
https://www.zillow.com/denver-co-80211/home-values/
*Select price from dropdown menu on first chart
On this Super Bowl night, I was just wondering if maybe, with all the knee-taking and social justice mewlings and concussions and other stuff, some people might be a little relieved that the NFL is losing popularity. After a while, you just think to yourself, what’s the point? It’s not even fun, really. Souper Bowl is like one of those boring obligatory events, like your uncle’s birthday party, only with better chicken wings.
im am not watching the cr@p.
I don’t even know who’s playing. Haven’t for a decade, maybe two, I don’t recall.
Johnny Unitas. On another planet.
Been there. Done it.
In other football news
Colts player Edwin Jackson, Avon man killed by suspected drunken driver on I-70
Justin L. Mack and Emma Kate Fittes, IndyStar Published 10:05 a.m. ET Feb. 4, 2018 | Updated 7:33 p.m. ET Feb. 4, 2018
Police said Jackson and 54-year-old Jeffrey Monroe of Avon were standing near a stopped vehicle when a black Ford F-150 pickup truck drove onto the emergency shoulder and struck them both.
The driver of the pickup truck, identified as 37-year-old Alex Cabrera Gonsales of Indianapolis, tried to flee the scene on foot.
He was apprehended shortly after on the ramp to Holt Road by Mays, police said.
“It is believed Gonsales was intoxicated and was driving without a license,” Perrine said in a statement. “He was transported to the Marion County Jail, the result of the test for intoxication is pending.”
https://www.indystar.com/story/news/crime/2018/02/04/suspected-drunken-driver-kills-2-70/304726002/
I thought that Timberlake put on a fantastic show at halftime, but I’m not sure it was enough to redeem him from accidentally revealing his true opinion about football by saying his son “will never play football.”
It sure doesn’t bode well for the NFL’s brand when your headliner has qualms about your product. Youth participation in football is way, way down. Parents have smartened up and they are directing their children to less deleterious sports. And it’s not just concussions that contribute to CTE, it’s repetitive, sub-concussive hits that create the lasting trauma that wreaks havoc on players’ long-term health. In other words, the very act hitting each other in the head is at the root of the health problem, which is kind of the essence of contact football. In order for football to stay relevant, it’s going to have to transform to a non-contact sport that is more about speed, agility, and coordination, and less about brutal hits.
Packers #51 (1960s) was a cousin of mine. He said that on the bus after a game he had to sit and listen to the chatter to know if they won the game or not. His last years were an agony of the legacy of concussion. A room full of trophies isn’t worth that.
Reality always wins.
John Urschel, the NFL hyperachiever who played on the Baltimore Ravens, and who just retired to pursue his PhD in Mathematics at MIT, retired “just two days after a new study revealed increasing evidence connecting the degenerative brain disease chronic traumatic encephalopathy to the highest levels of the game.” — Washington Post
Also Brett Favre and Bo Jackson have said hey wouldn’t let their sons play football.
Side note: Urschel is a fiscally conservative guy. He drove a used Nissan Versa. The pic of his car in the team parking lot is amusing.
“It’s not a headache. It’s not “getting your bell rung.” You don’t have a bell. It’s a traumatic brain injury. Every single concussion is a new traumatic brain injury.” — “The Film The NFL Doesn’t Want You To See: “Concussion Protocol”" - The Intercept.
Wow, that’s cool about Urschel, I have a lot of respect for someone that can play at the level of professional sports and somehow manages to keep alive the zest for knowledge.
I thought that Timberlake put on a fantastic show at halftime
I must be getting old, but I found the show to be dull and boring.
It was on at the laundromat I was at - got some chico fruit from the filipino women working at the time - and looked up to see what I thought might be Timberlake. His look + attire made me think of a cross between a bum and not-a-cigrarette - I guess he’s pioneering the hobosexual look.
Really? I haven’t watched one football game all year. Just wanted to see the halftime show because I was curious to see if Timerlake had mellowed out since last time he performed at Superbowl. My 3 year-old was dancing and clapping and in a good mood, so maybe that’s why I liked it. I thought the Prince tribute was classy.
I found it awful as well. I have a hard time even calling that “music.”
FISA warrant allowed spying on entire Trump campaign
“The FISA warrant wasn’t a 702. They claimed Carter Page was a spy, much as they did with Fox News reporter James Rosen. That allowed them to spy on the entire Trump team. The warrant unmasked, not only Carter Page, it unmasked everyone in the “circle”.
https://www.youtube.com/watch?v=L1eNnoT5Fxk
Where’s Just Some Dude with that BS from a couple weeks ago?
If Mueller doesn’t find collusion with the Russians, and it turns out this surveillance was initiated or co-opted by politically motivated insiders, using the national security apparatus to covertly surveil one’s political opponents, this could be very big indeed.
Watergate was all about covertly surveilling one’s political opponents. That was done illegally and hamfistedly by Republican operatives.
Talk about incumbent advantage, if this use of the national security apparatus turns out to be legal
Incumbents have de facto legalized bribery, why not covert surveillance?
I wonder about this Carter Page character. Some guy Trump didn’t even know, all of a sudden pops up as a “volunteer” foreign policy adviser. Now, if he was for real, he should be screaming bloody murder about defamation and constitutional rights. At the very least, his lawyer should be making the rounds and foaming at the mouth on the TeeVee.
Instead, I’m hearing crickets. It’s very possible he was a spy. For the US intelligence services. A plant, to enable the FISA warrant.
And forget about Russia, Russia, Russia. Think Britain, Britain, Britain. Mr. 007 Christopher Steele who hated Trump. Britain who has ALWAYS loathed the US, but pretends to be an ally, always dragging us into their crap.
Remember Yalta? US, Soviet Union and, wait for it, BRITAIN! Right there in the middle, all tickety-boo, giving the business to both the US and Soviet Union. Whispering in the ears of both, setting them against each other. And they’re still at it! Except this time it’s Russia.
Trump knows. That’s why Theresa May was hanging her head and giving Trump the cold fish handshake in that last photo op.
What about the FISA judges, where are they? Surely one of those black robed worthies could pipe up and say they were bamboozled.
Crickets.
‘What about the FISA judges’
I was wondering about that myself. Put them under oath and a few questions should make things much more clear.
This makes things pretty clear:
http://truthfeednews.com/just-in-judge-who-granted-fisa-warrant-tied-to-obama/
“Obama appointed Contreras to the FISA court in May 2016, just before he would become the unscrupulous (at best) judge that would issue the warrant to spy on Carter Page
Judge Rudolph Contreras was also appointed to rule on General Fynn’s case. What a coincidence? He just happened to recuse himself from that case a couple of weeks ago, when news of the Nunes Memo first hit the wire.”
I remember that recusal. Can you say “stinks to high heaven”?
The FBI could have gone in there with the lyrics to Yankee Doodle Dandy and the judge would have granted the warrant.
The whole thing is an elaborate inside job.
I’m all for rocks being turned over to see what lives there. It may take quite a bit of effort to introduce some integrity.
Are you gonna BTFD tomorrow?
Bitcoin is the new locker room talk for some NFL players—here’s what they’re saying
Ali Montag
12 Hours Ago
Injured cornerback Richard Sherman of the Seattle Seahawks smiles from the sidelines before the game against the Philadelphia Eagles at CenturyLink Field on December 3, 2017 in Seattle, Washington.
Otto Greule Jr | Getty Images
In late 2017, bitcoin made headlines. The cryptocurrency surged from below $1,000 at the beginning of the year to a peak of $19,000 in early December, and drew the attention of everyone from Warren Buffett to Jamie Foxx.
In recent days, cryptocurrencies turned heads for a different reason. More than $100 billion in value was lost in the global cryptocurrency market Friday, as the total market capitalization of all cryptocurrencies in circulation plummeted by $112.6 billion to $405 billion Friday morning, according to CoinMarketCap.com.
The volatile asset has also recently caught the attention of some of the nation’s most prominent athletes, according to NFL star Richard Sherman, a cornerback for the Seattle Seahawks.
“Especially the way bitcoin boomed from nothing to … $19,000 at one point, that really caught the eye of a lot of people,” Sherman tells CNBC Make It. “Ever since then it has been common conversation for a lot of us.”
Sherman, who began accepting bitcoin for merchandise on his website as early as 2014, is currently recovering from an injury to his Achilles tendon, and is using his time off to study cryptocurrency. He’s also a spokesperson for the exchange platform Cobinhood, and an investor in the company’s coin, COB.
https://www.cnbc.com/2018/02/02/richard-sherman-nfl-players-are-curious-about-bitcoin.html
Articles like this one make me think that desperate HODLers of Bitcoin may not yet have run out of greater fools who might be willing to buy.
Finance #LifeHacks
Feb 4, 2018 @ 10:00 AM
Should You Jump On The Bitcoin Bandwagon?
Financial Finesse
We provide workplace financial education.
Erik Carter, Contributor
https://www.forbes.com/sites/financialfinesse/2018/02/04/should-you-jump-on-the-bitcoin-bandwagon/#3a674a5b9db6
If you’re like me, you may know at least one person who made thousands of dollars in just a few weeks by investing in Bitcoin. You may even have thought of putting some money into it yourself. You’re worried it’s a bubble that Warren Buffett says won’t end well, but you also have FOMO. This got me thinking about what successful investors do in general when deciding what to invest in and how to make a rational decision as opposed to being caught up in a herd mentality. Here are questions to ask before investing your hard-earned dollars in the latest investment trend (or fad):
Telegraph Technology
Lloyds Bank in Bitcoin crackdown: credit card owners banned from buying cryptocurrency
Brass bitcoin medals
Chain block: Lloyds Bank is stopping its credit card customers from purchasing cryptocurrency Credit: Tomohiro Ohsumi/Getty Images
James Titcomb, Technology Editor
Katie Morley, Consumer Affairs Editor
4 February 2018 • 9:30pm
Britain’s biggest bank has become the first to announce a ban on customers using credit cards to buy Bitcoin amid fears they could run up huge losses.
Lloyds Banking Group will on Monday tell its 9 million credit card customers that it will block any attempts to buy Bitcoin after the digital currency lost more than half its value in just two months.
The price of Bitcoin has fallen by 57 per cent from £14,000 in December to less than £6,000 and the bank fears it could end up footing the bill for unpaid debt should the price fall any lower.
It is believed that hundreds of thousands of British people invested in the cryptocurrency last year amid its extraordinary 13-fold increase.
But from Monday credit card customers of Lloyds, which includes Halifax, Bank of Scotland and MBNA, will be blocked from buying the cryptocurrency online via a blacklist which will flag up sellers.
http://www.telegraph.co.uk/technology/2018/02/04/lloyds-bank-bitcoin-crackdown-credit-card-owners-banned-buying/
What next: Margin calls for people who borrowed on their credit cards to buy cryptocurrencies?
Bitcoin
Major Banks Ban Buying Bitcoin With Your Credit Card
By David Z. Morris February 4, 2018
Most major U.S. credit card issuers have now banned the use of their cards to buy Bitcoin or other digital currencies, in a move intended to decrease both financial and legal risk.
Bank of America began blocking cryptocurrency purchases on Friday, according to Bloomberg. JPMorgan did the same on Saturday.
Citigroup also says it is halting cryptocurrency purchases on credit, and Capital One and Discover had already enacted their own bans. That means all of the top five credit card issuers have announced or implemented bans.
The moves are above all in the banks’ self-interest. As Fortune previously reported, the mania surrounding cryptocurrency late last year appears to have motivated many retail investors to use credit cards as leveraging tools, buying more cryptocurrency than they could afford. With Bitcoin down roughly 50% from December highs, many of those investors are likely underwater right now, and may not be able to pay off their initial Bitcoin purchases soon, if ever.
http://fortune.com/2018/02/04/banks-ban-buying-bitcoin-credit-card/
Imagine borrowing at 29%, then losing 50% of the crypto value on top of it.
Attention Bitcoin investors:This book has been written especially for you …
https://www.amazon.com/Bitcoin-Dummies-Prypto/dp/1119076137/ref=sr_1_1?ie=UTF8&qid=1517803884&sr=8-1&keywords=bitcoin+for+dummies
The Wall Street flu is highly contagious and uncontained!
Will there be no end to this terrible carnage?
Asian markets tumble as global equity sell-off deepens
Indices drop in Hong Kong and Japan after worst US trading session in 2 years
Asian markets tumbled on Monday after US stocks were pummelled at the end of last week, with traders fretting that a surging US economy will lead to sharp interest rate hikes by the Federal Reserve.
Photograph: Anthony WALLACE/AFP/Getty Images
Emma Dunkley and Hudson Lockett in Hong Kong
20 minutes ago
Asian stock markets tumbled on Monday as the global equity market sell-off deepened following Wall Street’s worst trading day in two years on Friday.
Hong Kong’s Hang Seng index fell by as much as 2.7 per cent, while the Hang Seng China Enterprises index of large-cap Chinese companies listed in Hong Kong dropped by as much as 3.1 per cent to its lowest level since December.
In Japan, the Topix index slid 2.2 per cent while South Korea’s Kospi Composite dropped 1.3 per cent and Australia’s benchmark S&P/ASX 200 index fell 1.6 per cent.
The losses came on the heels of Wall Street’s worst trading session in nearly two years on Friday, and as the 10-year US Treasury yield, which moves inversely to price, rose nearly 4 basis points to a high of 2.8831 per cent in Asia.
The yields on 10-year Australian government bonds also surged, rising by close to 11 basis points to 2.933 per cent.
European stock indices were expected to fall in opening trade, adding to heavy losses made on Friday. According to early opening calls from spread betting agency. London Capital, the FTSE 100 will lose a further 1.1 per cent, with Frankfurt’s Xetra Dax 30 expected to fall 1.2 per cent. That would follow declines of 0.6 per cent and 1.3 per cent for the indices, respectively, made over Friday.
…
CITY & BUSINESS
Warnings global financial CRASH may be IMMINENT as US stock market hits two year low
WORLD “is due” an economic crash that would cause chaos after major US stock indexes saw their worst weekly performance in two years on Friday, experts have warned.
By Dan Falvey
02:23, Mon, Feb 5, 2018 | UPDATED: 02:35, Mon, Feb 5, 2018
The US stock exchange hits a two year low on Friday
On Friday US stock indexes ended the week with their worst performance since June 2016 after the Dow Jones industrial average futures declined more than 200 points, S&P 500 dropped by nine points and Nasdaq 100 futures saw 37.75 points fall.
There are concerns the stock market’s performance could indicate the US is set for its first recession since 2008 and a knock-on effect could cause an economic downturn across the globe.
…
r we gonna round up the usual suspects after a crash?
It’s almost like being in a real life version of one of those movies where a giant asteroid is approaching Earth, soon to destroy all life on the planet.
But then I console myself with the words from a placard that used to hang on the wall of my grandma’s kitchen:
“A watched pot never boils over.”
Don’t fight the Fed!
How Spiking Bond Yields Could Topple a Stock Market Rally
By Elena Popina
February 4, 2018, 7:00 AM PST
Updated on February 4, 2018, 3:24 PM PST
- Fear of missing out quickly turning to Fed fear: WF’s Harvey
- Gap between S&P earnings, Treasury yield narrowest in 8 years
- Dow Takes Biggest Plunge Since June 2016 as Rate Angst Sinks Bonds
You may have heard: bond yields are surging. It’s sowing extreme angst in U.S. equities, which last week fell the most in two years.
And though the tumble in the S&P 500 may be nothing but a breather, concern is mounting that the Treasury market’s travails are becoming an inescapable portent for stocks. Selling resumed Sunday night as index futures opened lower, a week after yields on 10-year Treasuries climbed to a four-year high of 2.84 percent. Here are some thoughts on why that can be bad for equities.
…
with the FED selling bonds and trump running trillion dollar deficits who is gonna be the buyer of treasuries?
Another global central bank printing like crazy?
Markets
As Stock-Market Rout Spreads, Investors Fear Markets Falling in Lockstep
Some investors worry that markets moving in tandem raise the chances of a more severe selloff than what still-positive fundamentals would warrant
By Amrith Ramkumar and Ira Iosebashvili
Updated Feb. 5, 2018 3:05 a.m. ET
U.S. stocks last week suffered their largest weekly drop in two years. But some investors worry that falling prices for things like oil futures, gold and bitcoin are offering a more ominous signal that could presage deeper declines.
The broad selloff that featured Friday’s 666-point tumble in the Dow Industrials marked a sharp reversal from the broad-based advance of the past year. Many stock-market indexes have hit fresh records or recent highs.
…
Off topic …
Climate Barbie
Watch “Environment minister tells Rebel Media reporter to stop calling her ‘Climate Barbie’” on YouTube
https://youtu.be/qKMO2H-ffkA
Thin skinned politicians. Love it.
Does cryptocurrency shrinkage have any effects on the real economy? For instance, what if a substantial amount of the recent purchases used leverage which cannot be repaid, thanks to the half a trillion dollars in losses?
I guess we will find out about how this plays out over the next few months.
Forget cryptos, check out the market! I pray this sell-off goes on and on. Cheap houses for everyone!
And possibly fewer jobs. If the market crashes hard Corporate America will fire up the layoff machine like last time. Remember people collecting unemployment for up to two years, then going on SSDI disability?
“And possibly fewer jobs.”
Ooops! How could I forget those hundreds of thousands, maybe millions of good paying jobs Corporate America put in place over the years as the stock market soared to the heavens?
Wasn’t this the “red state” jobs being off-shored?
“Central bank tightening” seems like a huge omission from this guy’s list. Until someone creates interest-bearing assets denominated in Bitcoin, higher rates on dollar-denominated accounts will tend to reduce the Bitcoin exchange rate.
5 reasons virtual currencies have shed a half-trillion dollars in less than a month
By Mark DeCambre
Published: Feb 2, 2018 9:56 a.m. ET
After reaching dizzying heights, the broader cryptocurrency market is suffering a gut-wrenching plunge that has erased nearly $500 billion dollars in value.
The No. 1 cryptocurrency in the market, bitcoin, accounts for about $200 billion of that lost market value, according to crypto date site CoinMarketCap.com. This isn’t the way it was meant to play out for digital assets in 2018, following a scorching-hot run-up in 2017 that took bitcoin to a peak at around $20,000 in mid December, marking a more than 1,900% increase from its level on Dec. 31 2016, according to news and data site CoinDesk.com.
Now, the value of a single bitcoin (BTCUSD, -7.90%) is going in the opposite direction, briefly dipping below $8,000 for the first time since November on Friday, marking a roughly 60% plunge.
…
Wow, Trump is already hard at it, doing some serious weasel-whacking this morning.
#LittleAdamSchiff
“A watched pot never boils over.”
Today’s selloff was over almost before it began. It is safe to buy stocks again, as the panic has been nipped in the bud. Resume normal stock market speculative activity.
It is safe to buy stocks again, as the panic has been nipped in the bud
Can’t help but notice long-term treasuries reversed course today and kicked into gear when the selloff went into full effect.
Perhaps LTTs aren’t dead yet…?
It was an interesting reversal from last week, when Treasurys and stocks were selling off in lockstep.