IEHI Feed: The Bank Implode-o-Meter http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65621 Tue, 02 Nov 2021 15:29:38 GMT Zillow Looks to Sell 7,000 Homes for $2.8 Billion After Flipping Fiasco http://bankimplode.com/viewnews/2021-11-02_ZillowLookstoSell7000Homesfor28BillionAfterFlippingFiasco.html Zillow Group Inc. is looking to sell about 7,000 homes as it seeks to recover from a fumble in its high-tech home-flipping business. The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private

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Zillow recently said it would stop making new offers in its home-flipping operation for the remainder of the year, though it continues to close on properties that were already under contract. The decision came after the company tweaked the algorithms that power the business to make higher offers, leaving it with a bevy of winning bids just as home-price appreciation cooled off a bit.

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iehi-feed-65620 Fri, 29 Oct 2021 22:50:28 GMT We're Living Through the Greatest Transfer of Wealth From the Middle Class to the Elites in History | Opinion http://bankimplode.com/viewnews/2021-10-29_WereLivingThroughtheGreatestTransferofWealthFromtheMiddleClassto.html Meanwhile, [[during the pandemic,] the Federal Reserve was pumping trillions of dollars into the markets, helping to inflate stock valuations. Hundreds of thousands of small businesses were murdered in just a few short months--by government edict--while seven tech companies gained $3.4 trillion in market value. If you were able to access capital--which is code for already being big or wealthy, even if you weren't in some cases financially sound--it was plentiful and, for debt capital, available at historically low interest rates. 2020 became a record year for IPOs and for other capital-raising vehicles like special purpose acquisition companies. And some of this capital was likely used to compete with your local small businesses.

The one-two punch of government fiscal and Fed monetary policy continued to destroy the fabric of the economy for the average American. It dislocated the labor markets and the supply chain and it has ultimately led to inflation, which is making the basic cost of living much more expensive for Americans all across the country

In short, while your dollars today purchase fewer goods and services and your lives are more expensive and disrupted, those who are well-connected and asset-rich benefitted from outsized wealth increases driven by government policy.

Of course one party always seems to say "no" to any aid that might help support small businesses, because "that's socialism". With big business and elites having an inherent advantage, even when their considerable props are removed, small businesses still can't compete (e.g., consider the cost of capital between your average big business and small business -- it's not even close, with a healthy small business paying 20%+ for capital, and big business paying 0-8% -- or even less than zero).

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iehi-feed-65619 Thu, 14 Oct 2021 12:52:58 GMT Today's tight housing market is already overbuilt, one analyst says http://bankimplode.com/viewnews/2021-10-14_Todaystighthousingmarketisalreadyoverbuiltoneanalystsays.html McGill cited data from the latest Decennial Census from the U.S. Census showing household formation is about 24% below where it was in the prior four decades.

McGill's partner Ivy Zelman, who is perhaps best known for one of the first warnings about the subprime mortgage crisis over a decade ago, agreed.

"The market is too hot. There is just a massive amount of capital that's coming to the space," Zelman said, referring to the investor interest in the housing market. "We actually believe the industry is already overbuilding in single-family to normalized demand by roughly 20% and about 10% for multi-family, so we couldn't be on more of an opposite side of where the market is and where the industry is, frankly."

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iehi-feed-65618 Tue, 28 Sep 2021 21:35:01 GMT The economy has shafted millennials: now it wants their offspring too http://bankimplode.com/viewnews/2021-09-28_Theeconomyhasshaftedmillennialsnowitwantstheiroffspringtoo.html iehi-feed-65617 Mon, 20 Sep 2021 14:29:00 GMT Evergrande debt: Collapse could have domino effect on China properties http://bankimplode.com/viewnews/2021-09-20_EvergrandedebtCollapsecouldhavedominoeffectonChinaproperties.html While the struggling developers are tiny individually, compared to Evergrande, they make up about 10%-15% of the total market on aggregate, Zeng said. She warned that a collapse could result in a "systemic" spillover to other parts of the economy.

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Some economists have warned that the collapse of Evergrande could become China's "Lehman moment" -- a reference to the bankruptcy of Lehman Brothers as a result of the subprime mortgage crisis, which triggered the 2008 global financial crisis.

However, Capital Economics senior global economist Simon MacAdam described that narrative as "wide of the mark."

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iehi-feed-65613 Mon, 06 Sep 2021 14:48:34 GMT New York Eviction Ban Forces Veteran Landlord To Sleep In Her Car http://bankimplode.com/viewnews/2021-09-06_NewYorkEvictionBanForcesVeteranLandlordToSleepInHerCar.html iehi-feed-65612 Fri, 03 Sep 2021 17:19:17 GMT Eviction Moratoriums Force Landlords To Liquidate Properties http://bankimplode.com/viewnews/2021-09-03_EvictionMoratoriumsForceLandlordsToLiquidateProperties.html iehi-feed-65611 Thu, 02 Sep 2021 18:12:51 GMT Foreclosure Moratorium Alert! Homeowners Scramble To Find Help http://bankimplode.com/viewnews/2021-09-02_ForeclosureMoratoriumAlertHomeownersScrambleToFindHelp.html iehi-feed-65610 Sun, 08 Aug 2021 13:18:42 GMT Was The Great Pandemic Migration To Miami Overhyped? http://bankimplode.com/viewnews/2021-08-08_WasTheGreatPandemicMigrationToMiamiOverhyped.html The Miami metro netted a loss of 42,100 people in 2020, 11% more net move-outs than in 2019, the CBRE analysis found. 

More New Yorkers did move to Florida than normal. The post office data logged 25,843 moves to Miami/Fort Lauderdale from the New York/Jersey City area in 2020. The year prior, when there was no pandemic, there'd been 20,794 similar moves.

Willett said the bump in NY-to-Miami movers represented "a meaningful increase, not just a small increase, but when you look at the grand scheme of migration into and out of South Florida, the flows from places like New York are still a very small portion of the moves to begin with."

... By far, young single urbanites made the most moves, while a demographic "GenXUrban" -- with kids, cars and mortgage payments -- made the fewest.

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iehi-feed-65609 Mon, 02 Aug 2021 21:06:27 GMT An unemployment cliff is coming. More than 7.5 million may fall off http://bankimplode.com/viewnews/2021-08-02_AnunemploymentcliffiscomingMorethan75millionmayfalloff.html "This is so many more people than have ever been cut off from something like this," Stettner said of the looming cliff relative to past cutoffs.

Of course, the economy has recovered more quickly than in past recessions. It's now larger than it was before the pandemic, according to Commerce Department data released Thursday.

Hiring is also up over the past few months. The economy added 850,000 new jobs in June, after 583,000 in May and 269,000 in April. However, the U.S. has yet to recover almost 7 million lost jobs versus pre-pandemic levels.

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Twenty-six states ended their participation in federal unemployment programs over June and July, to try to encourage recipients to return to work -- effectively moving up the benefits cliff for residents by about two to three months.

With the $300 supplement, almost half of jobless workers (48%) make as much or more money on unemployment benefits than their lost paychecks, according to a recent paper published by the JPMorgan Chase & Co. Institute.

The extra funds had a small impact on job-finding among workers, but didn't significantly hold back the job market, according to economists Fiona Greig, Daniel Sullivan, Peter Ganong, Pascal Noel and Joseph Vavra, who authored the analysis.

And though it's still early, evidence so far doesn't suggest the state policies immediately pushed people back into the workforce.

If you believe the economy is larger now than before the COVID recession, I have a bridge to sell you (and when I do, we'll count that transaction towards economic growth as well!)

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iehi-feed-65608 Sun, 01 Aug 2021 15:59:08 GMT Soaring Post-COVID Home Prices and the Fed http://bankimplode.com/viewnews/2021-08-01_SoaringPostCOVIDHomePricesandtheFed.html So what can the Fed do about any of this? Officials, including Mr. Bullard, have suggested that it might make sense for the Fed to slow its monthly purchases of Treasury debt and mortgage-backed securities soon, and quickly, to avoid giving housing an unneeded boost by keeping mortgages so cheap.

Discussions about how and when the Fed will taper off its buying are ongoing, but most economists expect bond-buying to slow late this year or early next. That should nudge mortgage rates higher and slow the booming market a little.

But borrowing costs are likely to remain low by historical standards for years to come. Longer-term interest rates have fallen even as the Fed considers dialing back bond purchases, because investors have grown more glum about the global growth outlook. And the Fed is unlikely to lift its policy interest rate -- its more powerful tool -- away from rock bottom anytime soon.

Ideally, officials would like to see the economy return to full employment before lifting rates, and most don't expect that moment to arrive until 2023. They're unlikely to speed up the plan just to cool off housing. Fed officials have for decades maintained that bubbles are difficult to spot in real time and that monetary policy is the wrong tool to pop them.

For now, your local housing market boom is probably going to be left to its own devices -- meaning that while first time home buyers may end up paying more, they will also have an easier time financing it.

And they'll have an easier time ending up underwater whenever this boom reverses...

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iehi-feed-65607 Fri, 30 Jul 2021 14:54:40 GMT Pandemic Housing Boom Is Over! http://bankimplode.com/viewnews/2021-07-30_PandemicHousingBoomIsOver.html iehi-feed-65606 Sat, 17 Jul 2021 16:11:21 GMT Going back to the office or permanent remote: the future of WFH http://bankimplode.com/viewnews/2021-07-17_GoingbacktotheofficeorpermanentremotethefutureofWFH.html iehi-feed-65604 Sat, 03 Jul 2021 19:12:30 GMT Even Where Pandemic Jobless Benefits Were Cut, Jobs Are Still Hard to Fill http://bankimplode.com/viewnews/2021-07-03_EvenWherePandemicJoblessBenefitsWereCutJobsAreStillHardtoFill.html In recent decades, a declining share of the country's income and its productivity gains has gone to workers. And for adults without a four-year college degree, the options are especially bleak. From 1974 to 2018, for example, real wages for men with only a high school diploma declined by 7 percent. For those without that diploma, wages fell by 18 percent.

For most of the last 40 years, less than full employment has tended to give employers the advantage. As it becomes harder to find qualified candidates, though, employers are often slow to adjust expectations.

Among job seekers interviewed at job fairs and employment agencies in the St. Louis area the week after the benefit cutoff, higher pay and better conditions were cited as their primary motivations. Of 40 people interviewed, only one -- a longtime manager who had recently been laid off -- had been receiving unemployment benefits. (The maximum weekly benefit in Missouri is $320.)

In St. Louis, the Element Hotel held a job fair to hire servers, bartenders and front-desk receptionists. Housekeepers were especially in demand. Janessa Corpuz, the general manager, had come in on a Sunday with her teenage daughter to do laundry because of the shortage.

The hotel, which is on a major bus line, raised its starting wage to $13.50 an hour, the second increase in two months. It also offers benefits and a $50-a-month transportation allowance. The number of applicants shot up -- to 40 from a handful the previous month -- after the second wage increase.

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Justin Johnson, too, already had a job when he showed up at an Express Employment Professionals office. He was working at a pet feed company, earning $14 an hour to shovel piles of mud or oats. But that week temperatures topped 90 degrees every day and were heading past 100.

"The supervisor pushed people too hard," Mr. Johnson said. He had to bring his own water, and if it was a slow day, he got sent home early, without pay for the lost hours.

He accepted an offer to begin work the next day at a bottle packaging plant, earning $16.50.

Amy Barber Terschluse, the owner of three Express franchises in St. Louis, handles mostly manufacturing, distribution and administrative jobs. Wages, hours and a short commute are what matter most to job seekers, she said, and few would work for less than $14 an hour.

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In St. Louis, a single person needs to earn $14 an hour to cover basic expenses at a minimum standard, according to M.I.T.'s living-wage calculator. Add a child, and the needed wage rises just above $30. Two adults working with two children would each have to earn roughly $21 an hour.

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iehi-feed-65603 Fri, 02 Jul 2021 23:13:41 GMT Manhattan Residential Real Estate Finally Bounces Back - But Not Quite "Normal" http://bankimplode.com/viewnews/2021-07-02_ManhattanResidentialRealEstateFinallyBouncesBackButNotQuiteNorma.html Buyers over the last few months gravitated toward co-ops, a housing type that had seemed to lose some favor in recent years. Co-ops accounted for 49 percent of all deals, versus 37 percent for existing condos, according to Corcoran. And in the frenzy of the post-pandemic market, downtown seems to have benefited at the expense of uptown, according to Compass, which reported that neighborhoods like Chelsea, SoHo and the East Village accounted for 31 percent of all deals.

For Elizabeth Stribling-Kivlan, a senior managing director at Compass, one of the spring's most heartening developments was improvement in the financial district, a neighborhood that became a veritable ghost town during the pandemic with the emptying out of office buildings. Median prices there soared 33 percent in a year, the largest increase of any neighborhood, she said.

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Prices [generally], though, may have a ways to go. The price per square foot for resale apartments, which is a useful indicator because it controls for the apartment size, Mr. Miller said, actually declined this spring over a year ago, to $1,408 from $1,461, or 3.6 percent.

"Prices are still not at parity with a year ago," he said. The overall discount that buyers are paying on list prices is at 6.4 percent, which is better than 2020 but still higher than the decade average of 4.9 percent. "There still is a Covid discount out there," Mr. Miller said, "but it's easing."

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iehi-feed-65602 Fri, 02 Jul 2021 13:41:37 GMT Office Vacancies Soar in New York, a Dire Sign for the City's Recovery http://bankimplode.com/viewnews/2021-07-02_OfficeVacanciesSoarinNewYorkaDireSignfortheCitysRecovery.html Across Manhattan, home to the two largest business districts in the country, 18.7 percent of all office space is available for lease, a jump from more than 15 percent at the end of 2020 and more than double the rate from before the pandemic, according to Newmark, a real estate services company... Some neighborhoods are faring worse, such as Downtown Manhattan, where 21 percent of offices have no tenants, Newmark said.

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There are signs that the situation in New York could get worse. A third of leases at large Manhattan buildings will expire over the next three years, according to CBRE, a commercial real estate services company, and companies have made clear they will need significantly less space.

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About 14 million square feet of office space is under construction in New York City, which is equal to about double the size of Orlando, Fla.

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iehi-feed-65597 Tue, 11 May 2021 23:15:13 GMT ‘No one wants to work anymore': the truth behind this unemployment benefits myth http://bankimplode.com/viewnews/2021-05-11_Noonewantstoworkanymorethetruthbehindthisunemploymentbenefitsmyt.html The University of Pennsylvania economist Ioana Marinescu said: "In the absence of the benefits there would probably be a little bit more applications and hiring would be a little bit easier, but the main drive of the recent change in sentiment is that hiring is accelerating."

Job openings rose to a two-year high in February, according to the US Labor Department's job openings and labor turnover survey published last month. And in March, employers added nearly 1 million new jobs, with many economists expecting similar or better gains in the April jobs report on Friday.

If job openings accelerate faster than people apply for work, there will be pain for business owners. The pandemic has added some quirks to this economic reality.

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The University of Massachusetts Amherst economist Arindrajit Dube said the fiscal stimulus, including unemployment benefits, could lead to a once in a generation or two generations increase in wages and reduced unemployment rates.

The last time this type of wage growth happened was in the late 1990s when the labor market tightened, with many employers chasing fewer workers.

"You had a tight enough labor market which led to broad-based wage growth of the sort we hadn't really seen since maybe the 70s," Dube said. "And that was unusual and yes, employers had a hard time filling vacancies and they had to raise wages a lot and that's OK."

God forbid wages ever go up, and the low end of the job market doesn't resemble legal slavery...

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iehi-feed-65595 Wed, 28 Apr 2021 22:15:30 GMT Ground Lease On Times Square Hotel Once Valued at $126M Sells For $4M http://bankimplode.com/viewnews/2021-04-28_GroundLeaseOnTimesSquareHotelOnceValuedat126MSellsFor4M.html After years of sliding valuations and multiple auctions, the Gallivant Times Square Hotel has sold for a fraction of its previous value.

Special servicer LNR Partners sold the ground lease of the 334-room hotel at 234 West 48th St. to an LLC controlled by Mehran Kohansieh for $4M, according to records filed with the city last week.

Kohansieh also goes by Mike Kohan and owns Kohan Retail Investment Group. He told Bisnow that the company, which owns aging malls around the country, plans to keep the property as a hotel and "revitalize" it. LNR Partners acquired the ground lease for $9.5M after foreclosing on its previous owner, Investcorp.

The sale, announced with limited details by brokerage JLL last month, concludes years of mounting debt and several rebrands. CMBS tracking firm Trepp's remittance data suggests the liquidation proceeds for LNR were $2.5M. That sum "was completely eaten away by expenses," Trepp wrote in a report Tuesday, which noted the hotel was appraised at $126M at securitization in 2006.

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iehi-feed-65594 Mon, 26 Apr 2021 13:45:42 GMT Stow Your Outrage About a Capital Gains Tax Hike http://bankimplode.com/viewnews/2021-04-26_StowYourOutrageAboutaCapitalGainsTaxHike.html ... there have been three recent, real-world opportunities to observe the impact of a capital gains tax hike -- in 1987, 1988 and 2013. In each case, equities (with the exception of momentum stocks) stumbled before the hikes were enacted but outperformed afterward.

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the fruits of the market's boom have been narrowly enjoyed. The wealthiest 1% of Americans reported about 75% of all long-term capital gains in 2019, according to the Tax Policy Center, with the wealthiest 0.1% -- the cohort with annual incomes above $3.8 million -- hauling in more than half of all capital gains.

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iehi-feed-65593 Thu, 22 Apr 2021 22:34:14 GMT Biden prepares to announce string of tax rises for richest Americans http://bankimplode.com/viewnews/2021-04-22_BidenpreparestoannouncestringoftaxrisesforrichestAmericans.html The tax increases would [end the preferential treatment of capital gains income for those making over $1 million per year, and] reverse some of the tax cuts passed in 2017 by former president Donald Trump and are expected to track Biden's campaign proposals, which targeted individuals earning more than $400,000 per year.

Among them are an increase in the top income tax rate from 37 per cent to 39.6 per cent and the application of ordinary income tax rates to capital gains and dividend payments for Americans earning more than $1m a year.

Coupled with a surtax on investment income for the wealthy introduced at the time of Barack Obama's health reform, this would bring the total capital gains tax rate for the richest Americans to 43.4 per cent.

The rates proposed by Biden would hit private equity and hedge fund managers by effectively eliminating the preferential tax treatment of their profits -- or "carried interest". At the moment, carried interest is taxed at the lower capital gains rate rather than ordinary income, but Biden would equalise their tax treatment. 

The president has also been considering taxing unrealised capital gains passed on to heirs at death, and increasing payroll taxes on the wealthiest Americans.

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As he pushes ahead with the new tax-and-spend proposal for childcare and education, Biden is struggling to gain momentum on Capitol Hill for his infrastructure plan.

Senate Republicans proposed their own $568bn plan on Thursday -- far below the levels of spending sought by the White House. The Republican offer is heavily weighted towards traditional infrastructure projects, with $299bn devoted to roads and bridges, $65bn to broadband, $61bn to public transit systems and $44bn to airports.

By contrast, the White House plan seeks broader investments in research and development, manufacturing subsidies and retooling buildings, while devoting much more federal funding towards tackling climate change -- a priority for many Democrats.

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