CRE Becomes A Nightmare On Elm Street!

  • the dollar drifts on Monday…
  • the euro is a currency in waiting…

Good Day… And a Tom Terrific Tuesday to you! What a beautiful day it was here yesterday, and we had company to share it with! Good friends, Jack and Lorraine, from the Pokenos, were in town and spent the day with us! On the beach! I know, my hip is barking at me right now for that trip to the beach, but it was well worth it, being with good friends… Then dinner last night with Jack and Lorraine, and good friend Gus, who’s from Longisland… (That’s how they pronounce it )  It was like old times here in Juno Beach… And I loved it!  Nina Simone greets me this morning with her great song: Feelin’ Good…   Don’t know that one? YouTube it, and I think you’ll say, WOW!

Well, the dollar after starting the day down 3 index points from the overnight markets rallied to end up 1 index point on the day…  I told you the dollar bugs were on a Hard Habit to Break! But that will change, in the near future, when Russia and China announce they are backing their currencies with Gold…  

Speaking of Gold, it ended the day down $1.30 yesterday, to close at $2,024.10, and Silver added to its early morning gain of 31-cents to close at a gain of 39-cents and a price of $23.08… I’m not going to keep talking about how Silver will outperform Gold this year, I’ll just wait until year-end, and say: neener, neener, neener, I told you so! 

The price of Oil wiped out the early morning loss to gain more than $1 on the day , and end the day with a $79 handle! It’s taken some time for Oil traders to get the idea that there’s a problem in the Red Sea… But they finally go it, apparently, with the price of Oil moving higher almost daily…    And the 10 -year added 3 basis points to its early morning yield yesterday, ending the day with a 4.18% yield. 

yes, the higher yield in the 10-year is helping to support the dollar right now… So, do you think the folks at the Treasury and the bond boys ever get together and talk?  Because it sure looks that way to me! 

In the overnight markets last night… There was just a tad of slippage in the dollar as the BBDXY has lost just less than 1 index point.. .So, basically flat if you will… The currencies have all been subjected to the dollar bugs buying over and over again, and their (the currencies) all look tired and worn… This could be a signal to buy a currency that’s down and out, for it’s bound to come back, once the dollar selling begins… Gold is up $4 in the early trading today, and Silver is down 18-cents… Silver was bound to see some profit taking after its recent surge in price, so I have to think that this is just a correction in Silver, and it will pick up again either later today, or tomorrow… So, use this morning’s sell off to back up the truck… I’m just saying… 

The price of Oil has surged higher again and trades this morning with a $77 handle… Nothing new here, just the same old Red Sea gauntlet, and Oil buyers looking to buy elsewhere or pay the piper for a roundabout delivery…  And bonds are biding their time, trading with a 4.16% yield this morning. 

And there was this bright bit of news (NOT!) in Woflstreet.com this morning, “The portion of the $4.7 trillion in U.S. commercial real estate debt that will come due this year – and in theory must be paid off through a sale, refinanced, or extended to avoid default – has ballooned from $659 billion to $929 billion, the Mortgage Bankers Association said today.

The reason the loan maturities ballooned in 2024 from the initial figure of $659 billion to $929 billion today is that many loans that matured in 2023 and were supposed to be paid off in 2023, were in fact not paid off.

Instead, the loans have been modified and extended into 2024 and others were extended further into the future, the MBA said in its report today. The dollar amounts reflect the unpaid principal balance as of December 31, 2023.”

Chuck again… This CRE market has become a Nightmare on Elm Street… and looks scary to me folks… this is a market that’s going to see a lot of pain, and tears in the coming months, and a few defaults will be thrown in for good measure… I’m just saying… 

Remember when I made a BIG DEAL out of the Bank of Japan’s Gov. saying that “when the BOJ hikes rates”?   And thought that it would be so good for yen and bad for the dollar to see Japan get out of the negative yields policy… But, so far, this has not come to pass… And it appears to be yet another false dawn by the BOJ… A head fake, if you will… And I think the yen traders now see this all unfolding and have taken to selling yen again… The yen is trading with a 149 handle this morning, and I wouldn’t be surprised to see it go to 150… 

The euro remains a currency in waiting… What is the euro waiting on? C’mon you know what… The euro needs the dollar to be weak for it to move higher… At the end of the year 2023, it appeared that we were heading into a period of time where the dollar would be weaker, but the PPT and their treasure chest of funds, bought dollars to start the year, and the dollar bugs haven’t looked back since…  

And everyone, not just the crybabies here in the U.S., but all over the world were respective Central Banks hiked rates to combat high inflation are starting to sound like spoiled brats, and throwing a temper tantrum in the Grocery story aisle, because they can’t get their Central Bank to cut rates fast enough… Yes, inflation as weakened from its high, but prices are still high, everywhere, and inflation has shown that it’s sticky and not going anywhere… So, here’s memo to the likes of the Bank of England, the European Central Bank, and Reserve Bank of Australia… Don’t fall victim to the calls for a rate cut… I think you’ll find that by not cutting rates that inflation continues to be squelched… And isn’t that what you want? 

I guess that’s the question… Do Central Banks around the world really want to squelch inflation? Or, like here in the U.S., the elite that run the country, need inflation to inflate away the debts…  And that’s the same mantra for the Fed/ Cabal/ Cartel, folks… 

The U.S. Data Cupboard this morning has the STUPID CPI… I would say that sans any input from the administration, this STUPID CPI report will show an uptick in inflation during Jan…  I talked about this report a lot yesterday, so not wanting to sound like a broken record, I’ll just add that another uptick in inflation will put another nail in the coffin of a rate cut as early as May… 

To recap… The dollar didn’t move much yesterday or overnight, with just a bit of slippage in the BBDXY… I think most dollar traders were waiting for the STUPID CPI report today to give them direction for the dollar. The Commercial Real Estate (CME) is in dire straits (and not the band!), and Chuck believes that there will be lots of angst and tears in the coming months in this market… Can you say, default?  I think you had better acquaint yourself with the word, because we’re going to see it used a lot in the coming months… 

For What It’s Worth…  This came to me from longtime reader, Bob… and it talks about how the U.S. is becoming a lawless society… I’ve got to say to that, I hope not… But given what I’ve seen in the city of St. louis these past few years, it could very well become to pass…  This article can be found Here: Chaos Reigns In The Streets Of America As An Epic Crime Wave Terrorizes The Nation (blacklistednews.com)

Or, here’s your snippet: “f you were hoping that the United States would become a lawless society, you have now gotten your wish.  Some of the numbers that I am about to share with you are just mind blowing.  For example, I had no idea that police in New York City were injured by criminals thousands of times last year.  All over the nation, law enforcement is losing control and violent criminals are getting the upper hand.  We have never seen anything quite like this before, and I am entirely convinced that this crime wave is only going to get worse as economic conditions deteriorate.  Even in our capital city, crime is completely and utterly out of control.  If you can believe it, the number of carjackings in Washington D.C. was up 97.9 percent last year…

Residents of the District of Columbia paid the sixth-highest amount on car insurance when compared to the 50 states in 2023 with an average annual full-coverage rate of $2,756 last year – which amounts to nearly $230 a month, according to a report by Insurify. The report found that Washington, D.C., residents’ car insurance premiums were 37% higher than the national average, which was $2,019 for a full-coverage policy, as national auto insurance rates increased by 24% last year.

Police data show carjackings in the nation’s capital spiked by 97.9% in 2023 with 958 reported carjackings last year compared to 484 in 2022, with motor vehicle theft up 82% from 3,756 in 2022 to 6,829 in 2023. Vehicle theft in the greater Washington-Maryland-Virginia area also rose by 68% last year, according to the National Insurance Crime Bureau.

Vehicle theft is even worse in some areas along the West Coast.

In Oakland, approximately one out of every 30 residents had a vehicle stolen from them in 2023…

Robberies grew 38% last year in Oakland, according to police data. Burglaries increased 23%. Motor vehicle theft jumped 44%. Roughly one of every 30 Oakland residents had a car stolen last year, according to a San Francisco Chronicle analysis.”

Chuck again… You know, I used to explain to my kids, when they used to listen to every word I said, that the thing that make the U.S. better than 3rd world countries is that we are a nation of laws… And People follow the laws, and that keeps society on the Up and Up…   We need laws, to make society work… I’m just saying… 

Market Prices 12/13/2024: American Style: A$ .6523, kiwi .6114, C$ .7435, euro 1.0783, sterling 1.2673, Swiss $1.1376, European Style: rand 18.8493, krone 10.4774, SEK 10.4221, forint 359.09, zloty 4.0085, koruna 23.4497, RUB 91.35, yen 149.34, sing 1.3444, HKD 7.8176, INR 83.01, China 7.1936, peso 17.09, BRL 4.9552, BBDXY 1,241.86, Dollar Index 104.06, Oil $77.38, 10-year 4.16%, Silver $22.90, Platinum $906.00, Palladium $937.00, Copper $3.72, and Gold… $2,028.30

That’s it for today… Today is the birthday of my very good friend, Duane… Happy Birthday Dewey!  And it was also the birthday of my oldest sister, Brenda, who we lost many years ago to cancer…  And it’s also Shrove Tuesday!  Or Fat Tuesday for all you non-Irish people!  I’m going to ask Kathy to make me a stack of pancakes this morning! Last Saturday was the Soulard Mardi Gras parade and celebration in the Soulard neighborhood of St . Louis… This is a HUGE parade and celebration and quickly became the 2nd largest Mardi Gras celebration only behind New Orleans…  So, no meat on Fridays for 6 weeks for yours truly… Down here it’s pretty easy to keep with the program with all the fresh fish that’s available… So, once again, Happy Birthday, Dewey! And The Temptations take us to the finish line today with their great song: I Wish It Would Rain…   I hope you have a Tom Terrific Tuesday today, and please oh please, oh please, Be Good To Yourself! 

Chuck Butler