Exciting day for you! Chapter 11 filing.
The rise in share price over the last week or so has emboldened the bulls. Even news of the filing doesnāt phase them. Will be interesting to see the share price tomorrow.
Still watching Bitcoin. To me it seems a consortium is defending the price. Shows weakness, gets pushed back towards $20K. Itās leaking a bit, though.
Meanwhile, something is deeply wrong with U.S. home prices. The average mortgage rate went from about 3.11% to 5.65% since the start of 2022. Home prices climbed right through that. Theyāve dipped a bit now, but still considerably higher than at the start of the year.
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I wonder what it will take to get investment growing againā¦
Is it a trailing indicator?
A lot of people who have already bought may have long fixed deals and so may not yet be affected yet by the rise in interest rates. Also, perhaps there are fewer properties coming onto the market - fewer looking to sell and a drop in the number of houses being built?
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It is a lack of supply and fewer homes being sold at higher prices. Still, itās a weird stat. Generally, home prices will fall as interest rates rise.
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Historically though, for most regions home prices have been āstickyā - volumes collapse instead of prices. The 2008 meltdown was a major outlier for that, a generalized version of what was in the past generally associated with regional decline. What is truly weird about the US right now is the growth, a lack of liquidity alone doesnāt seem plausible as an explanation. Maybe money pulling out of other assets?
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There is some truth to that. Organized private equity buying homes and turning them into rentals. Ordinary people buying homes on sites like Roofstock and turning them into rentals. All of it pinches the ability of the younger generation to get into that first home. Still, with the cost of money doubling, one would expect some type of precipitous falloff at some point.
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Their stuff has been a bit rich for my wallet but this might make me think again
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Iāve just seen adverts by Aviva, a UK insurance company, where adult children are telling their parents to take out equity releases on their houses ābecause they deserve itāā¦I canāt help but feel appalled by thisā¦
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Reverse mortgages have been a big thing here for years. Watch any show where there is a high % of elderly viewers, golf or the Sunday morning news roundtables, and they are very heavily advertised (all benefit and no downside ever stated). Itās very exploitive and a couple of the people who shill for those companies (Tom Selleck) have taken serious heat for it (that ignore while sitting on their boat that their payments from these companies paid for)
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Yeah, I think they have been advertised here for quite a while too, but its usually a couple of old codgers or an ageing tv personality talking. I didnāt like those adverts or the product then either - but I find these ones trigger me more.
Odd ālessonā.
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Britain in disarray. Raising rates and buying bonds at the same time. Nutty idea. But anyway, Bank of England declares to buy some bonds and Wall Street rallies sharply. What a world.
BoE was basically forced into it. Banks were calling in margin loans from insurance companies/ pension funds which forced them into selling gilts to raise cash with some rumoured to be facing meltdown as gilt prices fell.
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Will be interesting to learn how many bonds they end up buying, if any. Maybe the announcement itself will be enough. It certainly gave other bond markets a shot in the arm, as well.
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Gilt yields tracking upwards again today. Iād say BoE is now in the nightmare situation of being an easy mark for speculators, compounding the pressure caused by simple reassessment of British economic prospects induced by the disastrous mini-budget.
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Yes, saw this being said by market commentators last night - who has the bigger pockets hedge funds or the BoE!