From CNBC:
Foreign buyers are bailing on the U.S. housing market. Here’s why
International buyers are pulling back from the U.S. housing market, as high mortgage rates, soaring home prices, a meager supply of homes for sale and a strong dollar all make the purchases much less financially attractive.
From April of last year to this March, international buyers bought roughly 84,600 homes; that’s the lowest number since the National Association of Realtors began tracking such purchases in 2009 and a 14% drop from the year before.
And while overseas buyers bought fewer homes, they paid more for them. The median price of homes they purchased was $396,400, the highest the Realtors ever recorded.
China, Mexico, Canada, India and Colombia were the top five countries of origin for international buyers of existing homes by number of houses, not dollar volume. The survey does not count new construction, where international buyers are also active.
Chinese buyers had the highest average purchase price, at $1.23 million, likely because a third of them bought in California, where home prices are highest. In total, 15% of foreign buyers bought homes worth more than $1 million.
“Home purchases from Chinese buyers increased after China relaxed the world’s strictest pandemic lockdown policy, while buyers from India were helped by the country’s strong GDP growth,” said Lawrence Yun, NAR’s chief economist, in a press release. “A stronger Mexican peso against the U.S. dollar likely contributed to the rise in sales from Mexican buyers.”
…
Foreign buyers continue to flock to the same places as they have in the past, namely Florida (23%), California (12%), Texas (12%), North Carolina (4%), Arizona (4%) and Illinois (4%). Chinese buyers in particular like California, as they often buy so that their children can attend local schools and universities.
…
About 42% of foreign buyers used cash. As for why they are buying, half purchased the properties for use as a vacation home, rental property or both, up from 44% the previous year.
First
Raises the question of overall impact from a contingency chain perspective.
These 84,600 fewer transactions probably had downstream implications for 2-3x that number of transactions, 170-250k transactions in total, due to the domino effect of enabling downstream contingent (sell/buy) transactions to take place.
Looking at California transactions and prices, this is most certainly a driver, we’re on the cusp of seeing 5 quarters of home price declines. Florida for sure going to tip soon, 3 quarters of very flat pricing, harbinger or a drop as buyer urgency will surely moderate.
NJ’s latest print feels very much like we’re in the “blow-off top” stage, where the highest peaks in prices are set by a small handful of idiotic transaction prices. I wouldn’t at all be celebrating that news.
If we tip into recession, watch out.
most of the unemployed will be republicans and they will vote against Universal Basic Income
grim says:
August 2, 2023 at 9:36 pm
The AI arms race continues.
The level of unemployment in the short term will be staggering.
Not sure if I should teach my kids AI or HVAC.
Certainly not radiology…
https://healthimaging.com/topics/medical-imaging/womens-imaging/ai-reduces-radiologists-mammography-screen-reading-workload-44
https://www.washingtonpost.com/health/2023/08/02/artificial-intelligence-breast-cancer-screening/
Lol – “Reduces workload by 44%”
Let me translate that for you:
Eliminates the need for 44% of radiologists, while maintaining the same, or higher, revenue (after all, better results, higher price).
Mean hourly wage for radiologists in the US is $150 an hour.
Lambda released it’s 8x H100 cluster pricing, at $21 an hour.
Suspect maybe you can get 10x uplift in workload from a resource that’s 7x less expensive on a per hour basis, and it’ll work 24 hours a day, 7 days a week, holidays too.
Just wait until United Healthcare sinks its teeth into that one – “You want a HUMAN radiologist? Prior auth denied”
AI overlords are in a race to be best not first.. as much of the tech has been around for a long time.
Case in point.
Google Assistant aka the voice-activated speaker Google Home, it’s been around in various forms for about 8 years and well has not taken over the world yet.
Well Google is shuffling the deck again layoffs now for anyone in the way of using their use their own large language model Palm 2 for the AI component of their APIs from Google Cloud Functions they sell to customers etc and build into all their products including phones and TVs etc.
On the bright side, LK99 looks like it might be the real deal, we may have just found the solution to global warming, the EV/Grid problem, and even more powerful AI, at a fraction of the cost.
Ten 413.8
The technology behind google assistant and Siri are archaic in comparison.
These things are barely AI, while they use ASR and NLU for language understanding, 99% of what they do is programmatically scripted. The only “AI” is to take audio and turn it into accurate text, and then to scan the text to find some idea of what you are actually asking. Everything after that is old fashioned programming. That’s why they struggle with contextual understanding, that’s why they struggle to understand mixed intents, that’s why they struggle with multi-turn conversation, that’s why they struggle with disambiguation. Literally every possible conversational flow needs to be programmed to be effective, and that’s nearly impossible. So you get 10%, 20% coverage, and an incredibly shitty experience.
Siri is notoriously archaic, even internally at Apple, they know they are a laughing stock. “Set a timer” is the pinnacle of engineering there.
Google will flip assistant to LLM first, Apple will do it best. In either case, we’re looking at further acceleration and adoption.
On the bright side, these things might finally be useful.
Inflection.ai is one to watch. A 40 person company that’s already raised 1.5 billion. They spent 0.8 billion of that on building what is the world’s largest AI supercomputer right now.
re: “You want a HUMAN radiologist, denied”
Yes and no…. they will need to capture the government to change the laws as to what classes will not be protected. Lawyers protected first then of course their biggest customers the Doctors, as well the lawyers (legislators) are not going to put their customers or themselves out of business.
Technologists have been at this since before IBM’s Deep Blue’s victory over Garry Kasparov in chess in 1997.
The Weather also comes to mind. We have been using AI to predict the weather for a long time. It still does not get it right.
BTW the AI startups have allot of fake it till you make it. Not to say some won’t be successfully but there will be billion in failed investments before AI comes to take away any job that involves stroking a keyboard.
LK – 99 looks promising but is is brittle? How stable does it degrade from sunlight? Allot of questions… also it is made of lead..
Apple will do it best.
We shall see. I want a robot that folds laundry before anything else.
Ten 415.1
Well, until I can get AI to paint the exterior of my house, I need some recommendations for painters in the west Essex area. Thanks!
I need AI to keep Gator happy!
Ten 417.1
Chi: what exactly is the ten screaming about?
That the bond saleswoman Yellen should be fired.
grim says:
August 3, 2023 at 7:25 am
Not sure if I should teach my kids AI or HVAC.
The unemployed can’t afford air conditioning. But the AI computers will probably need it.
Be nice to grandma or you won’t receive your part of the inheritance.
Juice Box says:
August 3, 2023 at 9:22 am
That the bond saleswoman Yellen should be fired.
Mattel will make one. Ken the robot houseperson.
It will come with– Haha, no, I’m not going to finish what I was going to say.
Juice Box says:
August 3, 2023 at 8:11 am
Apple will do it best.
We shall see. I want a robot that folds laundry before anything else.
One of my former lab mates was an above average chemist. But, she did go to grad school for Chem at MIT. Being female and a 3.5 will get you there. Afterwards she’s kinda just bounced around from post doc position to post doc position in fields she has no background in. A year here, a year there. But she’s always played up the “women in science” card to get hired. Recently, she’s stuck the AI tag into her Linked In profile. She has no background in programming at all.
I wonder how what is written on a police report affects the financial payout in something like this, you know, from like an insurance perspective. Does life insurance pay out if someone offs themselves? Does the amount change? No implication that this is what happened in this story, it just raises a question.
Suppose you have terminal cancer, you travel to a state to take care of business- are they going to cut a check or leave your family broke azz?
https://dailyvoice.com/new-jersey/morris/beloved-retired-police-officer-from-bergen-dies-in-freak-accident-in-sussex-county/
The HVAC guy I used is in his early 30s. He’s been doing two installations a day for the past few years. He’s doing very well for himself.
Director NYC says:
August 3, 2023 at 9:14 am
Chi: what exactly is the ten screaming about?
The next massive government bailout will start in approximately two years.
Phoenix – The promise of LK- 99 is the holy grail itself a room temperature superconductor.
No waste energy like heat generated and really massive electrical throughput for everything from computing to electric motors and heck and perhaps an MRI that can see all the way down into your atoms and fits in your hand like a star trek tricorder. Perhaps even unlimited energy generation via mastering the fusion of atoms.
Joke today from the AI crowd was this…… “love these emails from recruiters asking for 2+ years of experience with lk-99.”
re: “The next massive government bailout ”
The next crisis since Covid has not arrived yet. The clock starting ticking in April of 2020. We have yet to see what will happen other than well more predictable inflation.
It became much harder to move money out of China over the last several years. The government isn’t granting travel visas. They have closed a lot of loopholes in their capital controls. I know someone who has several millions of cash in the bank in China and is only gradually able to bring a little bit over per year. She made these millions not quite according to the law in China – nothing immoral, just against official regulations, so taxes in China got paid under another person’s name in China. Which would also unfortunately mean that the US has no evidence that taxes were already paid on gains in China, so they’d probably like to tax it if she brought back to the US. Five years ago she would have been able to bring the whole sum over at once and would have probably bought rental properties with it. Now she basically has to find 20 Chinese hookers for every million she wants to bring back into the US (who earn cash in the US and want to give renminbi to their families in China). Everyone in China has a limit of $50k they can send out of China per year. So for this person to get the money out of China, she transfers money from her bank account in China to the hookers’ family, and then they give her a bag of $50 bills in the US. But of course she can’t put the bills in the bank, or she get’s caught with her money laundering. So instead she carries around stacks of fifties, and is constantly buying presents and paying for restaurant bills for herself and her friends with her fifties. My wife finds it very annoying to be around her throwing around her hooker fifties everywhere.
Interesting article in Marketwatch this morning, basically saying we are in a recession with rolling recessions , but we just do t know it yet, until we are in the recession. Something like that.
No One – You really believe that hooker story? That is cover story, there is no way they are slinging that much dick around.
The number one underwriter of international criminal organizations operating in the US and Europe etc are the Chinese money launderer gangs.
Here is how it really works. The Mexican drug cartels deliver bulk US dollars they get from US drug dealer networks through mules to a Chinese money broker. The Chinese money broker then pays the Mexican cartel in pesos in Mexico.
Then those dollars to given to a member of their Chinese gang in the United States who then advertises and sells those dollars to Chinese nationals in the United States. Once the drug dealer cash is sold Chinese national to fund their lifestyle here in the US there is China-to-China bank transfer from the Chinese national account to another Chinese account controlled by the Chinese gang aka money laundering organization.
My advise to you is cut ties with these people. They will get caught, the FBI, DEA, IRS etc is onto them. It is only a matter of time.
Re: radiology
“….while maintaining the same, or higher, revenue (after all, better results, higher price).”
Interesting thought, but it’s healthcare. No provider gets paid on outcomes. Agree on radiologists going away (which has been occurring for a while, you may very well have staffed many since more than a few scans are already read half a world away).
Chi, 4.25 is the line, right?
Dumped some low cost VIX longs put on as hedges, multiples of profit, but they are stupidly illiquid these last two days, vol may very well come out of market tomorrow with AAPL, AMZN, and jobs, and I still have some low cost SPY/SPX shorts that are actually liquid…portfolio higher than last week, which is good….
Lib, good luck on ADUS…can’t do home healthcare, every one of those companies in the history of man has blown up at some point in time due to billing issues, intentional or not…INGR looks interesting, TY on that, only wish she weren’t double topping a five year high….probably throw that on a watchlist to pick up on a downdraft if/when happens.
Got nothing for you…kind of in a holding pattern still around this 4400/4500 level…I’ll wait out these earnings and let the market tell me what to do….
“My wife finds it very annoying to be around her throwing around her hooker fifties everywhere.”
She single? I’ll take the dinners, fifty slinging, and the hookers. Dream date.
Supposedly it’s the Madams she’s dealing with rather than the hookers themselves. I told my wife to stay far away and not help her out, and she hasn’t.
But yes, that’s because eventually somebody’s going to see all that cash that’s flowing and it will attract attention, and I don’t want us to be associated with that at all.
Left,
I don’t think you could handle eating only Chinese food, fulfilling the constant need for compliments, and constantly being told what to do. Plus she seems ok with her current boyfriend. Four years ago might have worked.
“I don’t think you could handle eating only Chinese food, fulfilling the constant need for compliments, and constantly being told what to do.”
After 20 years of shit marriage and seeing crazy, desperate 40-somethings my tolerance for indigestion, fake fawning, and the regular ‘ok dear’ is astronomical if it comes in a tight package spewing 50s with hooker friends. LOL.
Or I keep chasing the late 20-somethings who just don’t give a fuck. Doesn’t suck either.
Kramer ore is in. Dressing like Kramer is all the rage with Gen Z crowd.
No One – Eventually this Chinese National gets scared and then she then stop providing the cash flow of Renminbi back home. There are only so many people with Chinese bank accounts living here in the USA. She will then be blackmailed or worse by those “Madams” or even their bosses as I mentioned it’s all still a criminal gang, they mix drug dealing with prostitution and other crimes there is no distinction or line drawn it’s get rich or die trying.
Any of you New Yawkers remember the Ghost Shadows or the United Bamboo or the Born to Kill from back in the day?
Friend of mine who I grew up with had a family member in BTK as his sister was married to one. Very nice large Vietnamese family who mostly escaped during the fall of Saigon.
It always amazes me how newer generations of immigrants tend for form gangs just like the Italians or Irish did in earlier generations of immigrant racketeers.
Juice: Some good friends of mine retired NYPD, who were on task forces with the FBI drugs/ weapons activities by gangs, dealt with multiple immigrant ethnic groups involved in these activities. They said the Russian/ Ukrainian gangs were the worst, absolutely ruthless, and no “code” women / children, did not matter.
LW
https://media.giphy.com/media/XbuQg2ySoCDTzjLb1i/giphy.gif
That a boy!! Get it!!
And nothing worse than a controlling wife. It’s not fun, ask me how i know. Successful women are a pain in the ass, esp if they are good looking. Everything has a cost.
leftwing says:
August 3, 2023 at 11:01 am
“I don’t think you could handle eating only Chinese food, fulfilling the constant need for compliments, and constantly being told what to do.”
After 20 years of shit marriage and seeing crazy, desperate 40-somethings my tolerance for indigestion, fake fawning, and the regular ‘ok dear’ is astronomical if it comes in a tight package spewing 50s with hooker friends. LOL.
Or I keep chasing the late 20-somethings who just don’t give a fuck. Doesn’t suck either
Anyway, getting back to grim’s original post, it’s become harder for Chinese to buy US houses.
Left,
Now that the said package has hit her late 50s, it’s not so tight any more. She blew her chance on a good re-marriage in her 40s, getting strung along for a decade by a guy who I think was probably an academic spy for China who turned out to have Chinese girlfriends in multiple cities.
She’s sort of a celebrity in the Atlanta Chinese community. No, not Connie Chung, but was friends with her.
Phoenix,
For you.
https://twitter.com/stealthqe4/status/1687100562180026370?s=46&t=0eaRjeKWHSIY8WCyPT4KMg
The entire thing is about supply management. Let’s rewind to Q2’22.
• US Gov’t deficit drops from 14% to 5% – gigantic headwind.
• Oil & Gas go to the moon on the back of underinvestment & war. System can’t handle energy spend above 13% of gdp or it breaks.
• Fed 6m RoC on rates is 325bps and rising at 75bps clips (something I wasn’t sure I would ever see again)
These 🤡 are now in the middle of a gigantic shit show.
Biden starts accelerating the SPR release to ease the diesel and gasoline pinch. Especially after getting the Heisman in Ryadh when he came with his hands out looking for help. (Which is funny bc then he predictably moved to doing biz with the dirt bag Maduro again shortly after getting shutdown by MBS)
Energy leaks in June with most commodities and then we rally as term premium goes negative.
All along remember the BoJ is the only source of global liquidity providing carry traders and ED$ players money to the tune of almost $1 trillion.
Then UK Truss clown show ensues simultaneously with Yen falling apart. Peak DXY. It’s clear this whole thing scared the CB’s and western govts.
Then the still Dem controlled Congress passes a budget that will re-accelerate spending funded by its checking account & not requiring new funding as the debt ceiling was set to be triggered in October.
This is really when the slight of hand occurred. October to June no net new debt from treasury. Funding focused on front end for ReFi from then to July. TGA run down is big boost to economy and markets. Taking deficit from 5% to 9% is a lot ( at least in old non clown world). Then after tax selling is done it’s game on as China is pumping and Japan is pumping and the Govt sent out a $500bn check to boomers for their cola adjustment.
Again no new equity or debt, I’m fact opposite due to buybacks of equity and debt. Capital markets are DEAD!
So we enter this bizarre period where supply is flat to down, everyone is conservatively positioned, and DC/Beijing/BoJ are pumping.
The only issue was that banks were, in the words of Jason Statham in Snatch, “Proper Fucked”. They sold $500bn of treasuries in beginning of the year. But then perversely get saved by the banking crises opening the BTFP lines. Miraculously since then no more bank selling of treasuries.
The Q2’23 leg is one for the Ages & I am happy I sat on my hands for months. Now it’s peak everything DC and CB’s and govts engineered. No supply, too much money sitting conservatively on side, options to be unwound, complete lack of supply in duration assets, Yen carry trade is running like it’s 1997 or 2007!
So what happens?
Stocks go vertical as ERP approaches zero (lowest level since 2000) following the massively negative term premia.
As Wall Street does the narratives follow price action.
1) NTM P/E up 30%
2) AI – “game changer”
3) magnificent 7
4) breadth expands
Blah blah blah
What happened when BoJ and Treasury changed their policy and l effectively let rates rise on the long end via repratriaon / protection & new supply?
Ultra long duration equities get torched.
Entire thing was manipulated.
GOP going to reverse FY24 spending to FY22, CPI going to reaccelerate on 40% higher gasoline in 2 weeks, and the long end is repricing.
Let’s see how the AI / growth / tech / ARKK folks are feeling when the 10y has a 5 handle.
Good take boss. Couldn’t agree more.
Whatcha like Lib?
https://finviz.com/map.ashx?t=sec&st=fpe
Twix.
The add popped up as I followed your link.
I think the market is nowhere close to done rallying. September comes and the traders are back and we head to the moon until Xmas.
My best speculative play is still ADUS/INGR
My best gut play is SOFI
My best long-term set it and forget it is still Amazon, then Apple and finally Alphabet. I think Meta is done as is Netflix.
We need to ban TikTok. Not only for security reasons, but they are stealing all of the ad dollars from everyone and sending them to China.
Gotta get through this earnings season for me to be a believer.
I’ll be long GOOG soon enough for a LT set it and forget it.
Not a fan of AMZN yet. Maybe sometime. I’ll look for TSLA for a set and forget.
Basically, anything that is a category killer I’ll jump on next pullback. Or miss.
Guess I’m kind of like where you are, market is ready but I want a slight discount from present to buy….
LOL day. I have 21 open option positions, a handful of equities, and each of the half dozen or so times I’ve looked at my screen I’m literally +/- two whole dollars on the day. Ha. What are those chances, may buy a lotto for shits and giggles.
Got lucky (which fyi is much better than smart) on dumping my VIX at/over 17….she’s down on the day now…
Our youth
https://www.msn.com/en-us/money/careersandeducation/how-do-i-do-that-the-new-hires-of-2023-are-unprepared-for-work/ar-AA1eG45p?ocid=finance-verthp-feeds
TikTok isn’t stealing, they made a better product.
America needs to step up it’s game.
Doesn’t seem like it wants to. Great job Boomer, look at the future you created for the children of America.
And like that, Amazon is up 7% in after hours.
The mistake everyone is making with valuing GOOG, MSFT and AWS, is that no one is going to own the cloudspace. I think there will always be many options because no one offers anything terribly unique. And this competition will keep profits in that space down. Don’t forget, most larger companies didn’t go full cloud until Covid. If WFH fades, Cloud becomes less important.
Amazon halved due to inflation and inflation alone. Profits are back because inflation has been curbed. If there is deflation, Amazon should be printing money. Lot’s of potential here, not to mention they are leaders in automation and run the absolute tightest ship among the FAANGS. Brick & mortar will continue to fade. Shipping costs and fulfillment speed will continue to shorten. Plus, Amazon is still incubating in Europe and in the rest of the world, it’s not even know when it comes to commerce.
Will definitely be the Walmart of online commerce.
Happy for you on AMZN, as always. Not the risk adjusted trade for me night of earnings.
Did play ABNB earnings again writing a bunch of near term puts down 10%+ that will be mostly worthless tomorrow providing a nice overnight lower risk earnings return…more my speed these days, not even singles and doubles just fouling off throws looking for my pitch….
Lib,
Deflation…everything gets a bat to the head till the Fed comes to the rescue.
I just don’t know who is buying apple and others at these levels. Has to be passive (401k) supported.
Pumps
I thought a few weeks ago you were posting to buy as much Apple and Amazon as you can?
“The 10-year yield is now above the levels that triggered most of the issues across the banking industry earlier this year.
It’s intriguing to see investors drawing comparisons between today’s environment and 2011, even though the differences couldn’t be more pronounced.
Back then, the Fed wasn’t shrinking its balance sheet assets to this extent, foreign central banks were substantial buyers of US debt, and government tax revenues weren’t experiencing the sharp decline seen today.
More importantly, the overall economy currently bears a substantially higher level of leverage compared to that time while the cost of debt was virtually zero.
Investors are clearly underestimating the potential issues that may arise from a structurally higher cost of capital environment, especially when over 90% of the Treasury yield curve has already been inverted.
The fact that a recession hasn’t happened yet doesn’t mean that the probability of one is now lower.
VIX is at a 15 handle, credit spreads are historically suppressed, and equity markets remain absurdly overvalued.
Something has to give.”
Honestly, thinking about the passive aspect again. That has def helped the stock market this past year. All these people with significantly higher raises now contributing more to their 401k inflating the market to an extent. Def contributing in some way to this rally.
Hold,
Wasn’t me. I have been waiving the white flag. Even shorting DNA down. Needed a breather at the least…market ran up too high, too fast. Not saying it won’t keep running up, but we are in the danger zone baby!! (Top Gun style). Game of musical chairs is on. Someone going to get left holding the bag.
I have no problem holding apple…it will be fine long-term. I just know that you will be able to get it cheaper at some point. Apple lives off people DCA into it. They don’t care what the price is. They will always buy at the same time every month. But at some point, people like buffett are going to take some profits.
Hold,
I said to buy as much apple and amazon as you could last decade when people were calling for the end of apple. It was dropping hard. Think it’s the last time it dropped hard since i made that call.
Yea, if you pull up the lifetime chart. It was around 2015/16
I sold all my Amazon above 180 and bought back in a few months ago around 100. Was not a trade.
grim: was this your listing….. is it Montclair, but Clifton zip code?
https://nypost.com/2023/08/03/aaron-rodgers-has-bought-a-9-5m-home-in-new-jersey/
Cedar Grove zip – It’s off Bradford by Mills Reservation.
Stanton listing I think. Everyone was up in arms when it was built a few years ago. Front yard was being used as a full sized soccer pitch by original owner. Clear views to the city from the peak of First Mountain is the real selling point.
Stanton listing I think. Everyone was up in arms when it was built a few years ago. Front yard was being used as a full sized soccer pitch by original owner. Clear views to the city from the peak of First Mountain is the real selling point.
Ten 419.6
Jobs. I will be out of pocket