The Bad News Report

[Madison Parkitect]

8 minutes ago, KJHburg said:

I would not look for any crash in housing properties to wait to buy a rental homes.  Prices may come off their highs but does that mean crash in prices.  Rental home purchases should be looked as long term investment income stream.  All my rental properties when down in value in the 2008/2010 period all have recovered but I continue to own them so even when they dipped it prices it had no affect on me.  Large number of homes in the market that are rentals are own by institutional investors and they would love to squeeze out me the mom and pop investor (won't ever happen while I am alive)

It is much tougher to get a mortgage loan nowadays and even if unemployment goes up and foreclosures go up I don't think we have the level of foreclosures we had in 2008-2010.   

We're definitely looking at them as long-term investments and know they'll come back even if there is a crash, but we probably wouldn't be paying cash for the first one or two so we want to be smart about mortgage rates, total costs, etc. 

[videtur quam contuor]

https://www.zerohedge.com/news/2019-09-03/us-manufacturing-weakest-10-years-new-export-orders-collapse

This is from some of the most reliable indicators. Some call the 50 level stable, others call it stagnant. Regardless, the most important thing is trend which is down.

Anyone looking at the world econ factors, those mentioned above by A2. and those we read everyday about Europe loss of growth, uncertainty abounding, trade conflicts, political intractability, would never call this an inspiring situation. 

I recall in 2008-09 I did what most others did, I followed the herd, even without realizing it. I reduced spending, converted to cash, avoided risk without concern for return. I participated fully in the Great recession. My plan this time is to avoid doing so.

[A2.]

26 minutes ago, Madison Parkitect said:

Really appreciate all this info, @A2. I'm in the process right now of trying to figure out what to do with a small amount of money we have (do we stay in our current house and renovate a little and wait for the crash to buy a rental property, do we stay in our current house and buy a rental property now, or do we buy a new primary residence now and keep our current house as a rental), so it's nice to get another opinion from someone knowledgeable.

Anytime MP. I’m no fortune teller, so please take all I post with a grain of salt. If anyone says they know exactly when and how things will play out, they would be lying. Even the best of the best hedge their bets. However, the best thing to hold onto during any downturn is common sense. It’s truly a rare commodity these days.

Just remember, the sun will still come up tomorrow, and regardless of any recession, we all have a reason to be thankful. 

Be thankful, be happy, and most importantly post on UP! Community is an awesome thing. You guys are my virtual buddies. We share a love for seeing our little place on this Earth be the best it can be. And with so many passionate about the QC, the future is bright. 

18 minutes ago, KJHburg said:

I would not look for any crash in housing properties to wait to buy a rental homes.  Prices may come off their highs but does that mean crash in prices.  Rental home purchases should be looked as long term investment income stream.  All my rental properties when down in value in the 2008/2010 period all have recovered but I continue to own them so even when they dipped it prices it had no affect on me.  Large number of homes in the market that are rentals are own by institutional investors and they would love to squeeze out me the mom and pop investor (won't ever happen while I am alive)

It is much tougher to get a mortgage loan nowadays and even if unemployment goes up and foreclosures go up I don't think we have the level of foreclosures we had in 2008-2010.   

So that’s where all that money comes from to buy that sugary goodness KJ! 

Edited September 3, 2019 by A2.

[Vitamin_N]

Just happened to read this. I had no idea the negative interest rates were spreading beyond sovereign debt:

It is not just governments that can borrow at negative yields. Siemens AG, a German corporation, recently sold $3.9 billion worth of bonds at an average -0.3% and the offering was oversubscribed. Some investors (pension funds) were disappointed they couldn’t buy. Danish banks are selling home mortgages at a -0.5% interest rate. You read that right; they are paying homeowners to borrow money.

 

[A2.]

32 minutes ago, Vitamin_N said:

Just happened to read this. I had no idea the negative interest rates were spreading beyond sovereign debt:

It is not just governments that can borrow at negative yields. Siemens AG, a German corporation, recently sold $3.9 billion worth of bonds at an average -0.3% and the offering was oversubscribed. Some investors (pension funds) were disappointed they couldn’t buy. Danish banks are selling home mortgages at a -0.5% interest rate. You read that right; they are paying homeowners to borrow money.

 

Yup. We are officially in the Twilight Zone. 

[lancer22]

44 minutes ago, Vitamin_N said:

Just happened to read this. I had no idea the negative interest rates were spreading beyond sovereign debt:

It is not just governments that can borrow at negative yields. Siemens AG, a German corporation, recently sold $3.9 billion worth of bonds at an average -0.3% and the offering was oversubscribed. Some investors (pension funds) were disappointed they couldn’t buy. Danish banks are selling home mortgages at a -0.5% interest rate. You read that right; they are paying homeowners to borrow money.

 

This may be a stupid question but why in the world would people do this? Why not just stay in cash.

 

Edited September 3, 2019 by lancer22

[A2.]

 

35 minutes ago, lancer22 said:

This may be a stupid question but why in the world would people do this? Why not just stay in cash.

 

This would definitely be the common sense thing to do. Along with buying  gold, crypto, etc.  The issue is with larger sums of money, it becomes increasingly difficult to conduct business of any consequence solely in cold, hard cash. However, your question raises the other point, which is governments want desperately to move to a “cashless” society. 

It then gives them the ability to have capital controls without the ability for you or anyone to escape their financial  lunacy.

They will say it’s to eliminate crime on things like  drug dealing and other Nefarious activities, but what they really want is control.

The other thing, to be a bit of a conspiracy theorist, is to collapse the entire system and then create a new global currency altogether from the ashes of the orchestrated collapse. At some point that will not be a conspiracy theory. It will happen, probably in our lifetimes (if your under 50).

(trust me when I say that people will actually beg for it, if the current economic system does go down) 

ps—-I hope those aren’t Blackhawks flying over me now for being a bit out there. Their coming to take me away hehe. Their coming to take me away haha! lol!

A2 

Edited September 3, 2019 by A2.

[urbanlover568]

1 hour ago, tarhoosier said:

https://www.zerohedge.com/news/2019-09-03/us-manufacturing-weakest-10-years-new-export-orders-collapse

This is from some of the most reliable indicators. Some call the 50 level stable, others call it stagnant. Regardless, the most important thing is trend which is down.

Anyone looking at the world econ factors, those mentioned above by A2. and those we read everyday about Europe loss of growth, uncertainty abounding, trade conflicts, political intractability, would never call this an inspiring situation. 

I recall in 2008-09 I did what most others did, I followed the herd, even without realizing it. I reduced spending, converted to cash, avoided risk without concern for return. I participated fully in the Great recession. My plan this time is to avoid doing so.

Europe can't even generate growth with negative interest rates at the moment. Argentina is about to collapse also, they are restricting foreign currency to reduce the impact. With tariff increases, margins and profits decrease and so will hiring. When hiring decreases, that will be the final domino.  I cut out all non-essential spending and cancelled future vacations to save as much money as I can.  Bezos and Cook also sold a significant amount of shares last week.   

[tozmervo]

1 hour ago, Vitamin_N said:

Just happened to read this. I had no idea the negative interest rates were spreading beyond sovereign debt:

It is not just governments that can borrow at negative yields. Siemens AG, a German corporation, recently sold $3.9 billion worth of bonds at an average -0.3% and the offering was oversubscribed. Some investors (pension funds) were disappointed they couldn’t buy. Danish banks are selling home mortgages at a -0.5% interest rate. You read that right; they are paying homeowners to borrow money.

That kind of statement definitely has a ring of "the new subprime lending crisis"

[CarolinaDaydreamin]

1 minute ago, tozmervo said:

That kind of statement definitely has a ring of "the new subprime lending crisis"

Actually could lead to rising home costs if real estate is seen as a more stable investment than institutional debt. Would also see gold and crypto rise...

[urbanlover568]

6 minutes ago, tozmervo said:

That kind of statement definitely has a ring of "the new subprime lending crisis"

Shouldn't be. Mortgage's are not sold in bulk that way anymore. They don't put the A's on top anymore.  Very few defaults currently 

[Hushpuppy321]

On 9/1/2019 at 5:39 PM, mpretori said:

NCDOT cutting up to or over 1,000 jobs.

 

https://www.newsobserver.com/news/local/article233969157.html

Been following a lot of the comments here - for what its worth, Transportation Construction Workers in North Carolina are already facing massive slowdowns\recession style statewide due to cutbacks and money mis-management.  I wish the General Assembly and Governor would work together to address this.  The issue is only exacerbated by FEMA not reimbursing the State (NCDOT) for emergency work conducted related to the last two (2) hurricanes (Sept & Oct of 2018).

General Public would be shocked if they knew how many projects will be and are already affected.  Some of the most high profile projects ( and federally funded) are starting\will continue but many critical projects being pushed back, delayed, suspended, etc.  

So much for our push to repair\modernize our infrastructure.  

Edited September 3, 2019 by Hushpuppy321

[jednc]

20 hours ago, A2. said:

 I am never doom and gloom, just realistic. I warned in late 2007 a lot of my friends to take measures to protect their hard earned savings and investments from what would eventually be one of the worse financial debacles in modern history. I was ridiculed then by many as markets and home prices kept going up, but I was willing to speak truth to spare many some pain. I am not being negative, just warning that this recession will be quite severe. If we can’t be real, then what’s the point. Plus I would rather people prepare than simply whistle past the graveyard. I could be like other talking heads and tell you it’s all good and keep on rolling like nothing is going to happen. But then I would be being dishonest to myself.  That said, I am not a fortune teller. However,  I am willing  to put my neck, my money and most importantly my name on the line to warn you and others of what is dead ahead. The timing is always tough, but suffice it to say it will be within 18 months. And you can take that to the bank. 

ps—-I am not mad in my response towards you jednc (or anyone who might disagree with my comments for that matter), but I just don’t want anyone to overlook what is about to unfold abroad and here stateside. This calamity is coming. We can be foolish and act as though it’s not, or we can prepare. The best part is in preparing for any storm, you never lose, even if the storm isn’t as bad as predicted. But to do nothing is utter stupidity. 

A2

Glad you aren't mad. I wasn't mad when I posted either. No reason for either of us to be mad. I just am an optimist for the most part and I didn't do anything to shore up my assets in 2007. Everything took a hit, sure. But, I rode out the storm and everything came back stronger than ever. Just like the market has ALWAYS done. No one needs to be warned and in a way, some of the bad expectations are self fulfilling. The more people read doom and gloom, the more they react and negatively affect the economy. I simply wanted to point out you do have a track record of pessimistic prognostication.

How in the heck that made me a MAGA guy to mpretori I have no idea, not do I understand why it would matter if I were.

[urbanlover568]

2 minutes ago, jednc said:

Glad you aren't mad. I wasn't mad when I posted either. No reason for either of us to be mad. I just am an optimist for the most part and I didn't do anything to shore up my assets in 2007. Everything took a hit, sure. But, I rode out the storm and everything came back stronger than ever. Just like the market has ALWAYS done. No one needs to be warned and in a way, some of the bad expectations are self fulfilling. The more people read doom and gloom, the more they react and negatively affect the economy. I simply wanted to point out you do have a track record of pessimistic prognostication.

How in the heck that made me a MAGA guy to mpretori I have no idea, not do I understand why it would matter if I were.

It's fine to be a optimist, but reality is reality. 

[jednc]

7 hours ago, Miesian Corners said:

And as I recall, the economy collapsed, Wachovia failed, and billions in payroll left Charlotte. That wasn't melodrama, that was our reality. 

My reality was I was frozen for a few pay raise and that's about it. No real effect other than that. I take that back...NC elected a Republican majority NCGA. I'm still suffering those effects (I am a R, but that stupid super majority has almost ruined us all).

But, by all means if you want to run and cry under your bed because of what a2 has said then have at it. I'll just stay the course.

[urbanlover568]

New push to ban smokeable hemp could cost NC farmers thousands. 

 

https://myfox8.com/2019/09/02/new-push-to-ban-smokeable-hemp-could-cost-nc-farmers-thousands/

[jednc]

Just now, mpretori said:

It's fine to be a optimist, but reality is reality. 

Agree. I think reality is, no matter how much hand-wringing we do, the economy will do what it's going to do. The last time this happened, based on posts here, it was like the world was going to end. I can only speak from my own experience, but 2008 wasn't really much of a big deal for me. I survived and thrived as I expect everyone here did also. 

If, on the other hand something terrible happened to someone personally on this board because of 2008, none of the negative prognostication made a difference then did it? If something horrible happened, and you were warned, then the warning didn't really help. That's about as much of a realist as I can be.

I still do not understand your reaction to my initial post. Could you explain?

[tozmervo]

2 hours ago, mpretori said:

Shouldn't be. Mortgage's are not sold in bulk that way anymore. They don't put the A's on top anymore.  Very few defaults currently 

I don't mean literally the same thing, but the concept of negative interest (especially in the commercial world) just reeks of people trying to make fast money with a tool that will ultimately blow up. 

[urbanlover568]

1 minute ago, tozmervo said:

I don't mean literally the same thing, but the concept of negative interest (especially in the commercial world) just reeks of people trying to make fast money with a tool that will ultimately blow up. 

For sure. Agreed. 

[tozmervo]

Maybe in 10 years we'll have a sequel to "The Big Short" with a reprisal of Margot Robbie taking a bubble bath, explaining what the hell negative interest is

[A2.]

2 hours ago, jednc said:

I simply wanted to point out you do have a track record of pessimistic prognostication.

While being as sincere as possible jednc, I have to 100% disagree. I don’t have a history of being pessimistic, I have a history of being right. If you knew me you would know I’m a total optimist.

However,  being optimistic or pessimistic has NOTHING to do with calling out a downturn. Those are emotional dispositions of a persons persona, while the other is simply acknowledging we are on the precipice of a significant economic event. If warning people is pessimistic, then maybe I should just focus my commentary to my profession. The only real reason I post the items I have is because, like it or not, it does have a direct impact on development. And last I checked that’s why we all love to be on UP. 

 I like to warn people so that they don’t have to lose half of their life’s savings and wait years trying to rebuild a nest egg. Being overly (or even blindly) optimistic has cost many people a lot of money. I have seen many people lose it all, especially people who were levered.  Plus while many here are younger on this board, those who are older have to be better prepared and can’t afford to have another 2008. When a person is withdrawing 5% of their portfolio in retirement, then they take a 20%, 40%, or even 50% hit, they are toast. Literally they are done. Their entire lifestyle is changed and likely until they pass. So to me it’s more pessimistic to not warn someone (or possibly one of their older friends or family members) than to just say be happy as markets will one day come back. For those, the markets never come back fast enough to make up for their loss in their retirement years. Never. 

Lastly,  I haven’t been on UP in years, so to suggest I have a “history” of being negative is a little disingenuous since I haven’t had a history here to speak of since a decade ago.   

Admittedly in my early days at UP, the only time I did come across as what some would perceive as pessimism, was simply trying to warn my UP pals what was coming. I was laughed at and ridiculed by many then, including my own co-workers. Sadly, they got burned. I never rubbed it in, and spiked the football. I just moved along and called it a day. 

Hopefully you don’t view me as a pessimistic person, but if so, it’s your right to do so. 

Here’s to hoping I am 100% wrong! I will gladly take being wrong and laughed at, rather than being right and seeing what I truly  believe are darker financial  times ahead  .

(just remember it’s my job to comment and advise, so sometimes that bleeds over into our virtual community. Please know I have no disrespect for you or others who view things differently jednc )

 

Sincerely,

A2

 

Edited September 3, 2019 by A2.

[U_R_]

Uhh... Please don't tell me that I am the only one who is extremely confused. 

[KJHburg]

Everyone in good times should save money and live within their means and have 9=12 months of living costs in savings.  My income dropped 80-90% in the last depression and it was a depression in the real estate industry.  I survived only because of smart investments that helped pay my mortgage during the tough times and I cut back spending drastically.  I was forced to take vacations at my condo at the beach because I owned it! I believe in delayed gratification and when I purchased a new vehicle I saved for 3 years before I bought it.  Our universities do a terrible job and public schools teaching people about personal finances.  I happened to learn this  from my dad and grandfather.  When my grandfather's car died in Asheboro coming from Charlotte to my college graduation in Greenville  he bought a new car on the spot in Asheboro and wrote a check for it (and yes it was good)  His occupation a retired city of Charlotte employee who worked at the Irwin Creek Sewer treatment plant.  

It is NOT how much you make it is how much you SPEND.     people call me tight, cheap etc I used to get upset but that was years ago.  I now think it is a badge of honor.   I may shop at Walmart and TJ Maxx and Ross but believe me I have plenty.    I  control MY finances and money not the other way around.    Good times never last but tough people do.  

This message has been brought to you by Dave Ramsey and as he says "paid off real estate is a cash cow"

[Desert Power]

20 hours ago, A2. said:

Ps—-if you want data points as to the why this market and economy are in trouble focus on the Bond market. It’s the canary in the coal mine. And right now, it’s screaming recession. Not to mention we have trillions in sovereign debt with negative yields. This is an insane situation and the resulting effects are more dire than I have the time to type up. Just know that with local, state and federal deficits growing to all tine highs and personal and corporate debt equally as high, the end result is not a good one. Not to mention the actual inversion of the yield curve which is telegraphing trouble dead ahead. 

 

Yep.  Have been slowly taking money off the table since the inversion and continue as it persists/gets deeper.  Also, like you, I remain bullish on Charlotte regardless of a recession.  I am certainly keeping heavily invested (percentage wise, I'm no developer) in local, transit adjacent real estate.

[A2.]

1 hour ago, KJHburg said:

Everyone in good times should save money and live within their means and have 9=12 months of living costs in savings.  My income dropped 80-90% in the last depression and it was a depression in the real estate industry.  I survived only because of smart investments that helped pay my mortgage during the tough times and I cut back spending drastically.  I was forced to take vacations at my condo at the beach because I owned it! I believe in delayed gratification and when I purchased a new vehicle I saved for 3 years before I bought it.  Our universities do a terrible job and public schools teaching people about personal finances.  I happened to learn this  from my dad and grandfather.  When my grandfather's car died in Asheboro coming from Charlotte to my college graduation in Greenville  he bought a new car on the spot in Asheboro and wrote a check for it (and yes it was good)  His occupation a retired city of Charlotte employee who worked at the Irwin Creek Sewer treatment plant.  

It is NOT how much you make it is how much you SPEND.     people call me tight, cheap etc I used to get upset but that was years ago.  I now think it is a badge of honor.   I may shop at Walmart and TJ Maxx and Ross but believe me I have plenty.    I  control MY finances and money not the other way around.    Good times never last but tough people do.  

This message has been brought to you by Dave Ramsey and as he says "paid off real estate is a cash cow"

Amen KJ! Your one wise grasshopper! With a heck of some photography skills to boot!  

A2