Not only that. They WERE SHORTING assets using users’ deposits as collateral. Double fuckery. Anyone can check their wallets and see for themselves.
Hint: it wasn’t BTC they were shorting, but a much more valuable asset. And try and pinpoint the start of their demise (quickly trying to cover their shorts) with a certain staking announcement. You will be surprised.
Once job layoffs begin to become more common, it's going to be over for a lot of people in regards to their housing. So many people are 100% leveraged. I just don't understand it. People that had no business spending in the last couple of years acquired vehicles at hugely inflated prices, new homes, etc. Economy is cyclical, how do individuals get caught in a mess when they already know what happens?
HELOCS being pushed hard on the retail banking side. Banks desperate to get 1st or 2nd lien on homes. Also encouraging those who already have HELOCS to increase the credit line or offering a 1% apr if they start using the one they have
People seem to think they can just hold their home forever because they locked in 30y rates.
Lots of homeowners' equity is underwater, just because you aren't personally marking to market doesn't mean it isnt so. Like holding a low yield bond to maturity.
For buying primary residence in the near future, do you think better just wait until rate goes higher, and thus house price should be cheaper, assuming the same monthly payment? Or it just doesn't matter regarding timing?
No idea why anyone would trust another to run their DeFi when blue chips are offering 100% (Synthetix) APY and over that for v3 pool creators on Uniswap.
Hey guys - curious for your take on my real estate plan given BTB’s bearish sentiment toward investment real estate.
Situation: recently sold a business, financially independent, primary residence paid off, cash stored in money market for the most part)...holding some crypto as well that I bought over a year ago that’s been cut in half or more. Employer will pay me post 1/1/23 for ongoing consultation.
Plan is to start some wi fi biz, publish, try and average 4-5% per year over the next 30 years on paper portfolio (trad stocks/index funds/etc), and to invest about $2M in short term vacation rentals near the Smoky Mountains. The national park is free - their visitors don’t seem to dip much during recessions, and while cabin rentals have lots of competition, if you do it well you should get lots of repeat vacationers. Plan on conservative down payment of 30-35% on rentals, so $2M should control $6-$7M. Hope to generate $600k once fully invested and maybe clear a six figs as passive real estate income.
How does this square with your thinking about the market at the moment?
If I bought a house in the past year at top price, my interest rate is 3% or less. If I'm a forced seller (aka have cut back on all discretionary spending, spent my savings, cant find a new job after being fired, etc etc), I will have to sell and buy a house 25% cheaper, which doesn't exist in most of the cities with the bigger jumps in home values in the country. Rents haven't risen as much as home values so there is a possible option to do that for some, but definitely not with no job and in the situation above. So, my question is, what does this person I described do?
If I bought 1 year+ ago, I have a lot of equity AND a cheap interest rate. The sharp increase in interest rates makes anybody with 50% less that much less likely to sell, and anybody who bought a few years ago has a ton of equity, also making they less likely to sell, which means the supply of homes being brought on the market remains very small. Yes, we're seeing some homes come to the market but the baseline for what is normal and needed for a healthy market is still far from being reached.
I think the segment of buyer who is levered to the gills, with bad credit, low reserves, poor job security, is tiny in comparison to '08 and will not be anywhere prevalent enough to cause any severe drop in RE prices.
Cherry on top is BlockFi CEO blocking you on BirdApp. Based on these blowups, ScamFi (incorporated in USA) is likely a huge target for the SEC to "protect investors".
This only strengthens the use case for DECENTRALIZED lending platforms (collateralized loans, liquidating diliquent borrowers, floating interest rates based on demand, etc.)
Aave has $5.23B TVL but why didn't they need a bailout - kwestchinz 4 play-doh...
Housing Question for Bull:
Got your point on avoiding rentals for long-term tenants now. But what about properties in a popular warm-weather area renting short-term to families on vacation (Abnb, VRBO)?
Not only that. They WERE SHORTING assets using users’ deposits as collateral. Double fuckery. Anyone can check their wallets and see for themselves.
Hint: it wasn’t BTC they were shorting, but a much more valuable asset. And try and pinpoint the start of their demise (quickly trying to cover their shorts) with a certain staking announcement. You will be surprised.
Once job layoffs begin to become more common, it's going to be over for a lot of people in regards to their housing. So many people are 100% leveraged. I just don't understand it. People that had no business spending in the last couple of years acquired vehicles at hugely inflated prices, new homes, etc. Economy is cyclical, how do individuals get caught in a mess when they already know what happens?
HELOCS being pushed hard on the retail banking side. Banks desperate to get 1st or 2nd lien on homes. Also encouraging those who already have HELOCS to increase the credit line or offering a 1% apr if they start using the one they have
The math on the reduction on home prices makes sense.
I'm guessing some subset of those who bought homes at elevated prices will not be able to afford their mortgage (laid off, fired, etc).
So next logical step for them is to either sell the house at a loss--and lose any equity they gained--or do some form of strategic foreclosure.
What's the timeline for this de-leveraging where the lenders it seems will be bailed out while the borrowers hold the bags?
2008 crash suggested de-leveraging finished around 2012-2013. So 4-5 years. With all the money printing, does that increase the de-leveraging time?
People seem to think they can just hold their home forever because they locked in 30y rates.
Lots of homeowners' equity is underwater, just because you aren't personally marking to market doesn't mean it isnt so. Like holding a low yield bond to maturity.
For buying primary residence in the near future, do you think better just wait until rate goes higher, and thus house price should be cheaper, assuming the same monthly payment? Or it just doesn't matter regarding timing?
SO GOOD. Thank you.
Why would Celsius trust 3AC to give them a 12% return?
What could 3AC do that Celsius couldn't do themselves?
No idea why anyone would trust another to run their DeFi when blue chips are offering 100% (Synthetix) APY and over that for v3 pool creators on Uniswap.
Don't want to do DeFi? 50/50 BTC/ETH.
lol'ed at the tweet screenshot - literally got 3/3 a year ago
I am sure banks have measured risk correctly
Buy now pay later loans are marked AAA, while 54% of the consumers are confident they can pay the full amount at the end of the month
This will go well
Which exchange do you use to buy btc every Friday BTB? I’d like to use that exchange myself if you’re willing to share
Good explanation and appreciate the example.
My takeaway is that those exchanges are glorified pyramid schemes funded by debt capital.
Hey guys - curious for your take on my real estate plan given BTB’s bearish sentiment toward investment real estate.
Situation: recently sold a business, financially independent, primary residence paid off, cash stored in money market for the most part)...holding some crypto as well that I bought over a year ago that’s been cut in half or more. Employer will pay me post 1/1/23 for ongoing consultation.
Plan is to start some wi fi biz, publish, try and average 4-5% per year over the next 30 years on paper portfolio (trad stocks/index funds/etc), and to invest about $2M in short term vacation rentals near the Smoky Mountains. The national park is free - their visitors don’t seem to dip much during recessions, and while cabin rentals have lots of competition, if you do it well you should get lots of repeat vacationers. Plan on conservative down payment of 30-35% on rentals, so $2M should control $6-$7M. Hope to generate $600k once fully invested and maybe clear a six figs as passive real estate income.
How does this square with your thinking about the market at the moment?
If I bought a house in the past year at top price, my interest rate is 3% or less. If I'm a forced seller (aka have cut back on all discretionary spending, spent my savings, cant find a new job after being fired, etc etc), I will have to sell and buy a house 25% cheaper, which doesn't exist in most of the cities with the bigger jumps in home values in the country. Rents haven't risen as much as home values so there is a possible option to do that for some, but definitely not with no job and in the situation above. So, my question is, what does this person I described do?
If I bought 1 year+ ago, I have a lot of equity AND a cheap interest rate. The sharp increase in interest rates makes anybody with 50% less that much less likely to sell, and anybody who bought a few years ago has a ton of equity, also making they less likely to sell, which means the supply of homes being brought on the market remains very small. Yes, we're seeing some homes come to the market but the baseline for what is normal and needed for a healthy market is still far from being reached.
I think the segment of buyer who is levered to the gills, with bad credit, low reserves, poor job security, is tiny in comparison to '08 and will not be anywhere prevalent enough to cause any severe drop in RE prices.
Cherry on top is BlockFi CEO blocking you on BirdApp. Based on these blowups, ScamFi (incorporated in USA) is likely a huge target for the SEC to "protect investors".
This only strengthens the use case for DECENTRALIZED lending platforms (collateralized loans, liquidating diliquent borrowers, floating interest rates based on demand, etc.)
Aave has $5.23B TVL but why didn't they need a bailout - kwestchinz 4 play-doh...
Housing Question for Bull:
Got your point on avoiding rentals for long-term tenants now. But what about properties in a popular warm-weather area renting short-term to families on vacation (Abnb, VRBO)?
"Smart" investors understand what you wrote here. What's the endgame for owners on BlockFi, etc? Why bail them out? What does SBF want with them?