patrick.net

8% reached!

Yep, a lot of the "Smart" money was shorting longer term Treasuries over the last couple of weeks. I wonder how leveraged they got. Looks like there are a bunch of Hedge Funds blowing up as we speak. The 10 year down 15 basis points, stock futures flying, this ain't a normal trading environment. The "Smart" money is selling what they can and reversing their short positions to meet their margin calls. They are praying for a hot CPI print to come out, but that won't happen till Thursday. I don't think they will be able to hold on that long.

To put it in perspective the price of 10 year bonds went up about 3%. That's for the whole bond market not stock market but Bond market. You are supposed to be able to go 10 times leverage on treasuries so that's a loss of 30% overnight, and I bet some of those crazies are even more leveraged.

10/10/23

AmericanKulak says

8% reached!

Still way too low.

AmericanKulak says

8% reached!

Good, but that may be a temporary reaction to the Israeli-Hamas conflict.

This was posted by someone her recently. Saw it again today because someone I know shared it with me. I've always heard people on this site justify their housing debt by saying they won't their homes in an economic collapse. I've pointed out the absurdity of thinking wages will keep up with inflation, but I've always worried about asset seizure as another avenue, and apparently I'm not wrong. Don't owe anyone anything, best policy.

https://mpalmer.heresy.is/webnotes/TheGreatTaking/Prologue.html

AmericanKulak says

8% reached!

A bald-faced lie!

The Housing Experts of PatNet insisted this would never happen and derided those who said otherwise.

Normalcy Bias kills. Just ask the Israelis.

EBGuy says

ad says

$700 a month "bed pods" in San Fran are ruled not safe

Interestingly, the building inspectors didn't take issue with the pods themselves.

Within five days, the firm must replace the lock with a type that doesn’t require a key to leave, in case of emergency, and must obtain permits within 30 days for the shower installation, the notice says. Brownstone also has 30 days to file a “change of use” permit to legalize the conversion to a residential space and the installation of the sleeping pods or, the notice says, the firm could revert the property to its “last known legal condition.”

Are you saying that the whole thing was sensationalized by unscrupulous journos or some twattering attention whores? That has never happened before!!!

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From what I've seen the 30 year mortgage rate is about 1.5% greater than the 10 Year Treasury.

However the rate has been a lot more than the yield for the 10 Year Treasury over the last 12 to 18 months.

Number of home sales is going to drop to just above Zero. The Fed is trying to cause home prices to return to late 2020 price levels.

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NuttBoxer says

This was posted by someone her recently. Saw it again today because someone I know shared it with me. I've always heard people on this site justify their housing debt by saying they won't their homes in an economic collapse. I've pointed out the absurdity of thinking wages will keep up with inflation, but I've always worried about asset seizure as another avenue, and apparently I'm not wrong. Don't owe anyone anything, best policy.

https://mpalmer.heresy.is/webnotes/TheGreatTaking/Prologue.html

Anybody else has a problem with this "proof that deflation is rampant everywhere"?

In 1905, my great, great grandfather’s coal yard was valued in a bank appraisal at $126,000. A modern industrial building with heavy overhead hoists was built on the property in the 1920s by my grandfather; that became the site of Webb Equipment, the crane and hoist business. After my father’s death in 1981, this property, with equipment and materials, was sold for less than $80,000. This was after three quarters of a century.

He's talking about Cleveland, if I'm not mistaken.

PedoIwog says

AmericanKulak says

8% reached!

A bald-faced lie!

The Housing Experts of PatNet insisted this would never happen and derided those who said otherwise.

Normalcy Bias kills. Just ask the Israelis.

In a way, aren't they trying to do this with federal housing regulations having to do with building multi unit buildings in the suburbs?

Damn, I've been thinking for years that I should short US Treasuries.

This is from 8 years ago:

https://patrick.net/post/1283745/2015-08-11-time-to-short-treasuries

Timing is hard.

Patrick says

Damn, I've been thinking for years that I should short US Treasuries.

This is from 8 years ago:

https://patrick.net/post/1283745/2015-08-11-time-to-short-treasuries

Timing is hard.

Now put yourself not on the beginning but the end of the cycle and buy Vanguard Total Bond Fund ETF in anticipation of a Fed Funds rate cut from 5.5% to eventually 2.5% over about 6 to 9 months... a 3% cut will mean the price for a 5 year bond will go up about 15% ...

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GNL says

In a way, aren't they trying to do this with federal housing regulations having to do with building multi unit buildings in the suburbs?

That's to bring the Hood to your Hood and help "Decolonize". That Euphemism which means the same as "Liquidation" to an NKVD or SS Official.

https://www.cnbc.com/2023/10/11/adjustable-rate-mortgage-demand-spiked-last-week-heres-why.html

Adjustable-rate mortgage demand spiked last week

<<< YEP!

Homebuyers will return when Homeloaners adjust prices way down to account for the doubling of interest rates.

Stats, Schmats. It's the monthly payment, end of story. There are no endless trains of Foreign Buyers and DINKs looking for 3-4 beds in the suburbs that are an hour drive from the city where they want to sent their kid to the college as a foreign student or go to the downtown to watch homeless people shit from the window of the Yuppie Wine & Mani-Pedi Bar.

Houses that were a third to almost half off today's asking price just 5 years ago when rates were 3.5%

"But my all cash investors."

Those investors borrowed the cash at low rates from banks. In the rare instance they have unborrowed cash, they're waiting and seeing for interest rates to take their inevitable toll, along with the unavoidable (Death & Infirmity) aging out of the richest large age cohort.

"I'm 72 and I'm going to wait out the market and then finally move to my beach house full time!" LOL

Booger says

yep, it went up real fast from late 2020 to mid 2022...then crashed in a shorter time period (late 2022 to mid 2023) ...

that is how it usually is with assets like stocks going up over a longer period and crashing over a very short period... housing obviously is different as far as ease of creating a sale ...

when i say crash for housing I mean volume and liquidity... there was a mad rush to buy when the 30 yr mortgage rate dropped to 3% ... it was like a stampede effect as far as buyers rushing in a store to clear the shelves out ...

from what I've seen of charts and data, I think peak housing price was set around 4% locked-in rate for the 30 year mortgage

if rates go down to 5.5% for 30 year mortgage next year, you may see incentives like home builders offering 4 discount points payment and then an increase in real estate transactions ... and they may require 10% down for this ... that would equate to a 4.5% rate for the 30 year mortgage...

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A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

GNL says

This is in the DMV.

By DMV he means the greater Washington DC area.

HeadSet says

By DMV he means the greater Washington DC area.

The V is also known as the People's Republic of Northern Virginia

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(D)istrict of Columbia, (M)aryland and (V)irginia...where they all converge and the surrounding areas. Otherwise known as Mordor(?). The Imperial City?

GNL says

A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

1337irr says

GNL says

A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

Maybe she was just frustrated. I don't know.

1337irr says

Last recession, DC housing didn't feel a thing.

Not true. I know several people who lost jobs and houses during that time in this area. Prices did go down and there are several areas that took 10 years for prices to get back to where a seller could sell without losing $$. NO, it did not suffer like most of the rest of the country but, YES it did suffer some.

GNL says

1337irr says

Last recession, DC housing didn't feel a thing.

Not true. I know several people who lost jobs and houses during that time in this area. Prices did go down and there are several areas that took 10 years for prices to get back to where a seller could sell without losing $$. NO, it did not suffer like most of the rest of the country but, YES it did suffer some.

You are right...https://fred.stlouisfed.org/series/ATNHPIUS47894Q
Flame war averted...my apology GNL.

1337irr says

Flame war averted...my apology GNL.

I must have a bad reputation. I'll work to rectify that.

GNL says

1337irr says

Flame war averted...my apology GNL.

I must have a bad reputation. I'll work to rectify that.

Nah, it was all me. I apologize. Takes two to start a flame war. You are good GNL.

1337irr says

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

you are correct, the direct wages (civil servant or contractor) are mostly from federal government spending within 50 miles radius of downtown Washington DC

there are a few pockets of major employers within that radius such as Capitol One and Microstrategy , and at one time AOL that were the exception

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Bobby Kennedy announced a plan for 3% mortgages for all Americans.

Shitty economics, pretty good politics.

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

HeadSet says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

It encourages debt and discourages saving.

GNL says

It encourages debt and discourages saving.

looks like more people are putting down more money and generating more equity

https://finance.yahoo.com/news/homebuyers-are-putting-more-money-down-than-ever-before-despite-difficult-housing-conditions-114905401.html

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Mortgage rates spike to new 23 yr high at 7.92% today

https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

HeadSet says

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

Equity is the paid off portion of the home, or asset price (or market value) minus liability (balance on mortgage + closing costs + etc.)

But yes, you could still have negative equity after putting a downpayment when not only accounting for costs like sellers transaction or closing costs but also a drop in the home's value due to a depressed market.

...

GNL says

HeadSet says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

It encourages debt and discourages saving.

Yes, it pulls forward spending that would have otherwise had to be saved for. As a consequence of taking purchase loans, the interest paid destroys capital that could have been spent on other desired objects/services. This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

ForcedTQ says

This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

yep, need to account for many factors like time value of money and opportunity cost

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https://www.kxan.com/news/austin-round-rock-metro-area-housing-has-most-inventory-on-hand-in-more-than-8-years-abor-says/

Austin housing inventory reaches 8-year high, ABoR says

Very tight inventory here in the DMV.

We hit 8%!!!