Author Archives: Bone Fish

Glitch Drains Wells Fargo Checking Accounts

CBS Local — Many Wells Fargo customers got a terrifying shock after finding their checking accounts drained due to a series of errors by the embattled bank. The Jan. 17 glitch reportedly emptied several customers’ accounts after processing their online bill payments twice and doubling transaction fees.

According to CBS News, the banking error also triggered overdraft fees on many checking accounts as customers around the country were mistakenly informed they had a zero balance. The bank’s phone lines were reportedly jammed through the night as angry customers demanded answers for the embarrassing mistake. Wells Fargo later put out a brief statement on Twitter explaining the situation.

The social media outrage was immediate as customers replied to the statement, many who were left without a way to pay for any goods.

Wells Fargo gave an update on the situation on Jan. 18 as the issue is apparently still unresolved.

“We are aware of the online Bill Pay situation which was caused by an internal processing error. We are currently working to correct it, and there is no action required for impacted customers at this time. Any fees or charges that may have been incurred as a result of this error will be taken care of. We apologize for any inconvenience,” Wells Fargo’s Steve Carlson said, via KCCI.

The glitch is the latest black eye for the company, which was involved in a massive scandal in 2016 after it was discovered Wells Fargo employees opened millions of fake accounts to meet sales goals. Several high-level executives at the banking giant have lost their jobs since the scandal broke.

By Chris Melore | CBS Philli

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How To Survive The Crypto Crash

Summary

  • Did a bear market in cryptocurrency just start?
  • Many people are convinced that cryptocurrency will crash sooner or later and investors should at least consider the possibility that this could happen.
  • What to do if you believe in the future of cryptocurrency and are currently invested?
  • Having experienced the previous Bitcoin bear market from the end of 2013 until 2015, I will share some lessons I learned.

Down from a maximum market capitalization of about $800 billion, the cryptocurrency market has been falling to less than $600 billion in a less than 2 weeks. At moments like these, it can seem like the sky is falling. Almost all cryptocurrencies have fallen dramatically in a very short time period. The big three Bitcoin (COIN), Ethereum and Ripple are all down more than 25% from their all time highs. At the time this article gets published it could already be very different, but fact is that we reached a period of extreme volatility. What should investors who believe in the future of cryptocurrency do?

A short retrospective: the previous cryptocurrency bear market

When looking at the total market capitalization of cryptocurrency, it seems that the market has exploded in 2017. Though cryptocurrencies (especially Bitcoin) have a longer history, it was only during the previous year that the market really took off. Just look at the graph below, it makes you feel that cryptocurrency was virtually non-existent before the beginning of 2017.

https://static.seekingalpha.com/uploads/2018/1/16/48701726-1516124905075807_origin.png

Source: coinmarketcap

This makes us almost forget that cryptocurrency already experienced some dramatic downturns in the past. It is barely visible in the graph above, but let us take a look what happens when we zoom in on the time period from the end of 2013 until 2015.

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Source: coinmarketcap

As we can see from the graph, from the end of 2013 total market capitalization of more than $15 billion dropped by about 75% to a bottom of around $4 billion in 2015. I think it is fair to say that this was a major bear market. Though there were heavy fluctuations in the price of cryptocurrency during this bear market, the entire process was much more gradual than you would expect of a market crash. Keep in mind that during this time period, a very big percentage of the cryptocurrency market capitalization consisted of Bitcoin only.

We can learn from this that, contrary to what many people are claiming, the expected ‘crash’ in cryptocurrency might as well prove to be a long bear market instead like in 2013-14.

My own experience during this bear market

At the end of 2013, I bought a limited amount of Bitcoin. Before buying I read a lot about the topic and I believed in the future of cryptocurrency. On top of this, I saw that the value of Bitcoin was booming and would not mind to get a quick win if the value kept rising quickly. But my main intention was to stay invested for a longer period of time.

At first, the value of my investment went up quickly. But of course, I did not foresee the huge bear market which started not long after I invested. At one point in time, my investment was down by about 75%. The only way I was able to stomach this bear market was by mentally writing off the entire investment. I still believed in Bitcoin though and had hope that it would recover eventually. It goes without saying that I am very happy that I didn’t sell in desperation. In hindsight, this probably means that I managed my risk tolerance in the right way, if I would have bought more Bitcoin I would have likely sold a big part of it during the downturn. A crash in cryptocurrency is different from a stock market crash: good companies still continue to pay dividend and make profit, even if their value drops dramatically. Bonds will still pay their coupon rate as long as the debtor doesn’t default. Cryptocurrency does not produce any of such income and can theoretically go to zero.

 

This is the reason why it is so important to manage your risk tolerance: honestly consider a worst case scenario and only buy cryptocurrency with money you can truly miss. Never buy crypto with borrowed money! You have the potential to win big, but might also lose much more than you own. People who went into debts to buy Bitcoin at the end of 2013 likely got slaughtered.

What options do investors have?

I am assuming that people who are invested in cryptocurrency believe in the long term viability of it. This article is not written for short term traders. There are a couple of things you can do when the crash or the bear market arrives.

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Option 1: Sell

The first option is to sell, wait until the crash is over and maybe invest again. This strategy has the glaring downside that you might mistime and miss a lot of profit. Even worse, there might be no crash or bear market at all. But this option is especially attractive if your risk exposure is relatively high or if you are already sitting on huge profits.

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Option 2: Buy the dip

If you truly believe in your investment, you can buy the dip. The difficulty of this strategy is that it stretches your exposure to risk. You might end up with a much larger risk than you intended, so be careful! When the market recovers quickly, this might be a winning strategy though.

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Option 3: Wait and postpone the decision

It is said that doing nothing is often the best strategy when it comes to investing. Re-evaluation of the potential options is something which most investors do all the time, and when you are not sure, not doing anything seems like an attractive choice. Make sure your exposure to risk is within your tolerance when choosing this option!

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Option 4: Protect your capital

This can be done in different ways: buying put options for instance is a way to ensure you will no longer be affected by a huge downturn. Diversifying your investment between multiple cryptocurrencies is also a solid strategy to not depend on a single cryptocoin. You could also buy put options on Bitcoin and go long a different cryptocurrency if you believe the second will outperform. Also, consider your exposure to stocks, bonds and cash. There are many possibilities to diversify, but no single one is the best, they all have their advantages and disadvantages.

Lessons learned

1. The predicted crash, if it arrives, might actually prove to be a long lasting bear market.

2. Only stay invested if you would be able to stomach a 100% loss of your crypto investment.

3. Never, and I really mean never ever, buy cryptocurrency on credit. If you did so, make this undone as soon as possible.

4. Surviving a possible crash is all about managing your risk tolerance.

5. Consider protecting your investment by diversification or buying protection.

6. Timing the market is very difficult. Do not invest to get rich quickly (unless you are a trader and really know what you’re doing).

7. If you do not believe a crash or a bear market is coming, by all means invest! But be sure to manage your risk tolerance and at least consider the possibility of a crash. It will happen eventually.

By Giesbers Investment Strategy | Seeking Alpha

The Fifth-Largest Diamond In History Was Just Discovered

Shares of Gem Diamonds surged +15% on Monday after the miner said it had unearthed one of the biggest diamonds in history. According to Bloomberg, Gem Diamonds Ltd. discovered a massive 910-carat diamond, about the “size of two golf balls” from the Letseng mine in Lesotho, the highest dollar per carat diamond mine in the world.

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The diamond is the largest ever recovered from Letseng and is classified as a D color Type IIa diamond, which means it has very few impurities or nitrogen atoms. More importantly, the diamond is the fifth-biggest ever found.

“Assuming that there are no large inclusions running through the diamond, we initially estimate a sale of $40m,” said Richard Knights at Liberum, citing the 1,109-carat Lesedi la Rona discovered in 2015, and it sold for $53 million.

“This would imply a $43m price tag for the Letseng diamond, but we place large caveats on this estimation, given that the pricing is rarely linear,” he added.

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Clifford Elphick, Gem Diamonds’ Chief Executive Officer, commented in Monday’s press release:

Since Gem Diamonds acquired Letseng in 2006, the mine has produced some of the world’s most remarkable diamonds, including the 603 carat Lesotho Promise, however, this exceptional top quality diamond is the largest to be mined to date and highlights the unsurpassed quality of the Letseng mine. This is a landmark recovery for all of Gem Diamonds’ stakeholders, including our employees, shareholders and the Government of Lesotho, our partner in the Letseng mine.

The Letseng mine resides in the kingdom of Lesotho, located inside South Africa, and at an elevation of 10,000 feet, it is the world’s highest mine. Perhaps, there is a correlation between the elevation and diamond size and quality since Letseng is famous for its high-quality diamonds.

The company’s official press release on Monday gave very little information surrounding the value of the diamond, or if there was even a buyer.

Its value will be determined by the size and quality of the polished stones that can be cut from it. Lucara Diamond Corp. sold a 1,109-carat diamond for $53 million last year, but got a record $63 million for a smaller 813-carat stone it found at the same time in 2015.

Shares of Gem, which list in London, advanced 14.25%, valuing the company around £126.59M. Since 2012, a lack of significant discoveries coupled with deteriorating financials has declined London shares more than -78%. Monday’s press release of the discovery could bolster the company’s cash position upon the sale of the diamond.

“The successful sale of this stone will be supportive for Gem’s balance sheet and push the company into a free cash flow positive position this year,” said Richard Hatch of RBC Capital Markets.

Last week, the company recovered 117-carat and 110-carat rocks from its mine. The three significant discoveries back-to-back could be an upward turn for the company and allow investors to ‘b-t-f-d’.

Here are some diamonds recovered by Gem include:

  • 2006 – Lesotho Promise (603 carat)
  • 2007 – Lesotho Legacy (493 carat)
  • 2008 – Leseli La Letseng (478 carat)
  • 2011 – Letseng Star (550 carat)
  • 2014 – Yellow (299 carat)
  • 2015 – Letseng Destiny (314 carat)
  • 2015 – Letseng Dynasty (357 carat)
  • 2018-  Letseng (910 carat)

Bloomberg identifies the world’s largest diamond finds:

The biggest diamond discovered is the 3,106-carat Cullinan, found near Pretoria, in South Africa, in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain. Lucara’s 1,109-carat Lesedi La Rona is the second-biggest, with the 995-carat Excelsior and 969-carat Star of Sierra Leone the third- and fourth-largest.  

Weaker demand for diamonds, coupled with a growing supply glut, has pushed the IDEX diamond index lower and lower. With the industry in free-fall, has Gem with its monstrous 910-carat rock produced an artificial bottom or is this a head fake?

https://www.zerohedge.com/sites/default/files/inline-images/Screen-Shot-2018-01-15-at-11.34.52-AM-1024x726.png

Source: ZeroHedge

 

China Downgrades US Credit Rating From A- To BBB+, Warns US Insolvency Would “Detonate Next Crisis”

In its latest reminder that China is a (for now) happy holder of some $1.2 trillion in US Treasurys, Chinese credit rating agency Dagong downgraded US sovereign ratings from A- to BBB+ overnight, citing “deficiencies in US political ecology” and tax cuts that “directly reduce the federal government’s sources of debt repayment” weakening the base of the government’s debt repayment.

Oh, and just to make sure the message is heard loud and clear, the ratings, which are now level with those of Peru, Colombia and Turkmenistan on the Beijing-based agency’s scale of creditworthiness, have also been put on a negative outlook.

In a statement on Tuesday, Dagong warned that the United States’ increasing reliance on debt to drive development would erode its solvency. Quoted by Reuters, Dagong made specific reference to President Donald Trump’s tax package, which is estimated to add $1.4 trillion over a decade to the $20 trillion national debt burden.

“Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track,” Dagong said adding that “Massive tax cuts directly reduce the federal government’s sources of debt repayment, therefore further weaken the base of government’s debt repayment.”

Projecting US funding needs in the coming years, Dagong said a deterioration in the government’s fiscal revenue-to-debt ratio to 12.1% in 2022 from 14.9% and 14.2% in 2018 and 2019, respectively, would demand frequent increases in the government’s debt ceiling.

“The virtual solvency of the federal government would be likely to become the detonator of the next financial crisis,” the Chinese ratings firm said.

* * *

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In a preemptive shot across the bow in the coming trade wars, last week Bloomberg reported that Beijing officials reviewing China’s vast foreign exchange holdings had recommended slowing or halting purchases of U.S. Treasury bonds. That warning spooked investors worried that sharp swings in China’s massive holdings of U.S. Treasuries would trigger a selloff in bond and equity markets globally. The report sent U.S. Treasury yields to 10-month highs and the dollar lower, although China’s foreign exchange regulator has since dismissed the report as “fake news.”

Still, Dagong was quick to point out that not much would be needed to crush the public’s confidence in the value of US Treasurys:

The market’s reversing recognition of the value of U.S. Treasury bonds and U.S. dollar will be a powerful force in destroying the fragile debt chain of the federal government,” Dagong said.

To be sure, China’s move is far more political than objectively economic, and is meant to send another shot across the bow as the Trump administration prepares to launch a trade war with Beijing in the coming weeks. Still, while both Fitch and Moody’s give the United States their top AAA ratings (and the S&P is the only agency to infamously downgrade the US to AA+ in 2011), US raters have also expressed concerns similar to Dagong‘s. From Reuters:

S&P Global said last month’s proposed U.S. tax cuts would increase the federal deficit and looser fiscal policy could prompt negative action on U.S. credit ratings if Washington failed to address long-term fiscal issues.

In November, Fitch said the tax cuts would give a short-lived boost to the economy, but add significantly to the federal debt burden. It warned that the United States was the most indebted AAA-rated country and ran the loosest fiscal policies.

Moody’s said in September any missed debt payment as a result of disagreement over lifting the debt ceiling, a perennial point of partisan contention in Washington, would result in the United States losing its top-notch rating.

China is rated A+ by S&P Global and Fitch and A1 by Moody‘s, with the three agencies citing risks mainly related to corporate debt, which is estimated at 1.6 times the size of the economy and mostly attributed to state-owned firms. 

Source: ZeroHedge

‘Extreme’ Rainfall on Thomas Fire Burn Areas Created Deadly Montecito Debris Flows

 

The disaster in Montecito was a rare event, statistically speaking – but it could happen again, geologists say

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A boulder field surrounds a Montecito home after the Jan. 9 storm that triggered deadly flooding and debris flows. (Mike Eliason / Santa Barbara County Fire Department photo)

The surging river of mud and boulders that engulfed swaths of Montecito from the mountains to the sea last week, killing 20, was a rare disaster – so rare, geologists say, that it may happen only once in a few hundred to a thousand years at that location.

But that doesn’t mean it couldn’t happen again this winter, said Ed Keller, a professor of earth science at UC Santa Barbara.

All of the communities below the scorched slopes of the Thomas Fire are at risk, he said.

“These areas are very vulnerable in the next two years to debris flows,” Keller said. “We could get another one right down Montecito Creek this year, if we get another big rainfall, depending on how much debris is left up in the basin. It’s not impossible.”

The catastrophic debris flow of Jan. 9 in Montecito is the deadliest disaster to hit the South Coast since a magnitude 6.8 earthquake struck Santa Barbara on the morning of June 29, 1925, leveling the downtown area and killing 13.

Debris flows launch massive quantities of rocks, boulders, trees and mud downhill. They are typically triggered after wildfires on steep mountainsides, when heavy rains wash away the soil.

“Big debris flows are relatively rare,” said Keller, who is applying for national funding to study the footprint and volume of the Jan. 9 event.

“They don’t occur after every fire in any one stream. The Thomas Fire was huge, and there are only a couple of places with really damaging debris flows. Montecito and San Ysidro creeks were primed for one.”

In catastrophic debris flows such as the one in Montecito, narrow canyons chock full of boulders start to flood and landslides may occur. Rocks and brush form temporary dams, then break through and roar downhill on thick slurries of mud. Car-sized boulders bob along like corks.

In Montecito, the wall of mud and debris was 15 feet high in some locations.

“You may get pulses of flows rushing out of canyons in the mountains,” said Larry Gurrola, a Ventura-based consulting geologist who is on Keller’s research team. “That material reaches the base of the foothills, chokes the streams, flows out over the banks and moves towards the ocean, dragging trees, brush, cars, utility poles and parts of homes along with it.”

Through the millennia, debris flows have shaped the terrain of the South Coast.

Almost all of Montecito and most of Santa Barbara is built on top of flows that occurred here over the past 125,000 years, Keller said: just look at the boulder field at Rocky Nook Park. That’s evidence of a catastrophic flow out of Rattlesnake Canyon in prehistoric times, he said.

During the past 50 years, the South Coast has seen a few destructive but not catastrophic debris flows.

Last February, during heavy rain in the burn area of the 2016 Sherpa Fire, a debris flow washed 20 cars and five cabins down El Capitan Creek and sent boulders into the surf. Emergency crews rescued two dozen campers from El Capitan Canyon resort. 

On Jan. 3 this year, county emergency preparedness officials showed the Board of Supervisors photos of damage from the debris flows that followed the Coyote and Romero fires of 1964 and 1971, respectively. Both years, San Ysidro, Olive Mill and Coast Village roads in Montecito were choked with mud.

This year, the stage was set for catastrophe after the Thomas Fire burned 440 square miles in December, largely in the backcountry of Ventura and Santa Barbara counties, becoming the largest fire in California history.

It scorched the chaparral that anchors the soil to the bedrock and created a “hydrophobic” layer in the ground – a kind of crust that repels water like glass.

In an era of year-round fire seasons, the Thomas Fire had not been fully contained when the rainy season got underway in earnest.

“It was just kind of the perfect storm, when all the bad factors line up together,” said Jon Frye, Santa Barbara County engineering manager. “There was no time whatsoever between the fire and the winter.”

The trigger for the catastrophic debris flow in Montecito, geologists say, was several bursts of extreme rainfall, beginning at 3:34 a.m. One of these was a 200-year event – more than half an inch of rain falling in 5 minutes. That’s a quarter of the total amount of rain, 2.1 inches, that was recorded in Montecito during the nine-hour storm.

A U.S. Geological Survey (USGS) debris flow hazard map that was widely circulated before the Jan. 9 storm showed the high probability of debris flows originating in the mountains above Mountain Drive in Montecito on the heels of the Thomas Fire.

The slopes there are on a “hair trigger,” said Dennis Staley, a USGS research geologist who helped prepare the map. The harder the rainfall, the bigger the flow, he said.

“We knew that if it rained very hard, there could be very significant debris flows,” Staley said. “If you plug in the intensities that were received, our prediction aligns with what we saw.”

In any given year, there is only a half-percent chance that half an inch of rain will fall on Montecito in five minutes, said Jayme Laber, a senior hydrologist with the National Weather Service in Oxnard.

“It was a typical winter storm, but five-minute rainfall was extreme, something that you don’t see very often,” he said.

The 5-minute, half-inch downpour began at 3:38 a.m. near Casa Dorinda, at Olive Mill and Hot Spring roads, county records show.

Between 3:34 a.m. and 3:51 a.m., three additional bursts of extreme rainfall – 50-year events with a 2 percent chance of occurring in any given year – were recorded on gauges near Gibraltar Peak and in downtown Carpinteria.

These were the heaviest short-term, high-intensity rainfalls recorded during the entire storm from Redding to San Diego, Laber said.

“It was horrible that it was right on top of the Thomas Fire burn area,” he said.

The first reports of the debris flow came in to the National Weather Service shortly before 4 a.m.

Meanwhile, there was no major damage in Ventura County during the Jan. 9 storm. Ventura County took the brunt of the Thomas Fire, but was not pounded on Jan. 9 with the short-term, high-intensity deluge that overwhelmed Montecito, Laber said.

The historical record shows that previous debris flows on the South Coast closed Highway 101 and caused a lot of damage to property but did not kill anyone.

In 1964, a few months after the Coyote Fire burned 100 square miles above Santa Barbara, Montecito, Summerland and Carpinteria, records show, a debris flow destroyed 12 homes and six bridges on Mission Creek in Santa Barbara.

Eye-witness accounts told of “20-foot walls of water, mud, boulders, and trees moving down the channels at approximately 15 miles per hour.”

During heavy rains following the 1971 Romero Fire, which burned 20 square miles in the mountains behind Santa Barbara, Montecito, Summerland and Carpinteria, Highway 101 was blocked for eight hours near Carpinteria. A wall of mud and water three feet high pushed across the freeway toward the ocean.

“Looking back, there is clear evidence that this type of thing happens in Santa Barbara with some regularity,” Staley, the USGS geologist, said.

Keller and Gurrola will be participating in a free panel discussion on wildfire and debris flows at the Santa Barbara Public Library Faulkner Gallery, 40 E. Anapamu St., in Santa Barbara at 6:30 p.m. Jan. 25. 

By Melinda Burns | Newshawk

 

Real Estate Community In Shock After Montecito Mudslides

Disaster strikes again in Southern California before it can recover from devastating wildfires

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The real estate community of Montecito, California, is in the heart of catastrophic mudslides burying Southern Santa Barbara County with an onslaught of flooding and debris — another crisis on the heels of the devastating Thomas Fire that scorched the area just weeks before.

“We had time to prepare with the fires,” said Realtor Cynthia (Cindy) York Shadian, head of Coldwell Banker’s Montecito and Santa Barbara operations. “We saw them coming. With landslides, you don’t have the luxury of even 15 minutes — it’s massive.”

Following heavy rainfall, the deadly mudslides began pouring into the area early Tuesday morning, so far claiming 15 lives, trapping around 300 people in their homes, and destroying 100 homes, according to the New York Times. “A number of homes were ripped from their foundations,” the LA Times reported, “with some pulled more than a half-mile by water and mud before they broke apart.”

Coast Village Road, where a number of Montecito real estate offices are based, was one of the hardest hit. The road has been closed off, though intrepid brokers were still making their way to check on the premises today.

Shadian’s office at 1290 Coast Village Road, across from the Montecito Inn, was at the “epicenter” of the mudslide but was miraculously saved from flooding thanks to being on slightly higher ground, Shadian said. “We are completely impacted,” she told Inman. “It’s scary, you put your toe in the mud and you don’t know how deep it is to get out of.”

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The Montecito Inn on Coast Village Road (Photo courtesy of Gary Goldberg)

Working from Coldwell Banker’s Santa Barbara office today, Shadian was keeping close tabs on her 128 agents in Montecito and Santa Barbara, who so far were all OK. But yesterday she had spoken to one of her Montecito agents whose own house flooded. He had saved several lives, she said, and was recovering from the trauma of enduring a living nightmare.

Another real estate pro with an office on Coast Village Road is Gary Goldberg, broker-owner of Coastal Properties, who spoke to Inman while he was en route to the office from a borrowed guest home. This was the second time he had evacuated in recent months, first from the fires, now the mudslides.

Goldberg spent Monday filling and putting down sandbags for clients. He helped one family — formerly buyer clients — who had just welcomed a new baby before the mudslides hit, along with one of his elderly clients.

On Tuesday, Goldberg was inundated with Facebook messages from concerned friends and colleagues.

“Being a local Realtor, clients call. My CPA called; you don’t talk to your CPA the first week of January!” Goldberg said. But his house and office emerged unscathed.

“My office is on the western half of Coast Village Road but the eastern half is lower lying and has tons of damage,” Goldberg said. He described the mudslide like “an avalanche of mud and water.”

Keller Williams’ top producer in Montecito, Louise McKaig, meanwhile, was staying put in her part of town and away from her office on Coast Village Road, fortunately located on the second floor.

“They [TV news outlets] keep showing the building we are in, but we are upstairs. Everything around us — over by the Montecito Inn — looks bad, there is mud in the lobby,” she said.

Some of McKaig’s clients had been affected by the mudslide. “Everything is at a standstill, people are just stunned,” she said. “You know people, you know they are missing — we see clients on TV — it’s sad … everybody has a connection here.”

Interactive Damage Map

 

By Lee Ann Canaday | Source: Active Rain

Home Prices Set To Soar In 2018

 

https://martinhladyniuk.files.wordpress.com/2014/07/0acf0-lereahd.png?w=287&h=432The temperature may be frigid across much of the nation, yet home prices are sizzling and sellers are in the hot seat.

Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic. That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon. Supply is actually falling even more now, and a strengthening economy is pushing demand. This will have potential buyers out early this year, trying to get a jump on the spring market. “Rising home prices are good news for home sellers, but add to the challenges that home buyers face,” said Frank Nothaft, chief economist at CoreLogic, in the report. Nothaft said the limited supply is the worst at the lower end, and will hit the growing number of first-time buyers hardest.

The largest metropolitan areas are seeing the biggest gains.

In the nation’s top 50 markets, half of the housing stock is now considered overvalued, based on market fundamentals, like income and employment. CoreLogic defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level. Las Vegas led the November report as not only being overvalued, but showing a double-digit annual price gain of 11 percent. San Francisco was not far behind at 9 percent, and Denver came in third at 8 percent. Las Vegas and Denver are both considered overvalued, but San Francisco is not, as incomes in the tech capital far exceed the national level. Of the nation’s 10 major markets with the biggest price gains, seven are overvalued. These include Washington, D.C., Houston and Miami. Boston and Chicago are still seeing price gains but are considered at value. Without a significant jump in home construction, prices will remain high and likely move higher. Mortgage rates could also move slightly higher, and new tax policy limiting mortgage and property tax deductions, is hitting homeowners in some states hard.

All will combine to make housing less and less affordable in the new year.

By Diana Olick | CNBC

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