Another Lehman moment is coming, and people are still thinking we are heading for a soft landing

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Despite China’s economic troubles, Cramer says its market won’t collapse


Real Estate and Stock Prices Are at Risk of Crashing as Deflation Could Soon Hit the US

Wermuth Asset Management warns of an impending risk of deflation in the US due to declining stock and real estate values. Despite recent inflation figures, the firm cites the vulnerability of the overpriced stock market and commercial real estate debt nearing $1.5 trillion in maturity. Economist Dieter Wermuth believes the focus should shift from inflation to deflation risks, especially with the S&P 500 being “dangerously overpriced” and potential troubles in the commercial real estate market. The firm anticipates central banks will recognize deflation as the primary concern by September.

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Office Buildings Face Obsolescence as Banks and Investors Brace for Losses

Scott Rechler, CEO of RXR Realty, warned of significant losses for banks and investors as many office buildings become obsolete. While top-tier Class A buildings will prosper, lower-tier buildings face potential obsolescence. The US office vacancy rate recently hit an all-time high of 13.1%. Goldman Sachs and other banks are buying distressed properties, anticipating a drop in prices. With $1.5 trillion of debt in the commercial real estate sector nearing maturity and banks reducing lending, experts predict a possible commercial real estate crash, with office prices potentially dropping by 35% in the coming decades.





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Housing Bust 2: San Francisco House Prices Plunged -29% in 16 Months

San Francisco’s housing market is showing alarming signs of decline, with the median price of single-family homes plummeting by 8.5% in July compared to June, marking a 14.1% drop from last year. Since its peak in March 2022, prices have collapsed by a staggering 29%. This trend parallels the 2007 housing bust, though current indicators suggest an even sharper descent this time. The broader Bay Area also isn’t immune, experiencing a 5.2% drop in July, with a 16.3% plunge since April 2022.

US Leading Indicators Tumble for 16th Straight Month, the Longest Streak of Declines Since ‘Lehman’

The US LEI has seen its 16th consecutive decline, echoing the dire trends of the 2007-2008 Lehman crisis. Despite the CEI’s subtle stability, July’s significant LEI drop, spurred by weak orders and rising interest rates, portends a bleak economic horizon. The 7.5% year-on-year LEI descent is nearing its worst since 2008, excluding COVID anomalies. The Conference Board anticipates a recession between Q4 2023 and Q1 2024, dispelling hopes of a ‘soft landing’ for the US economy.

Time to watch “The Big Short” again

Ladies and Gentlemen, prepare for landing