Juggling Dynamite

After debauchery comes the hangover; this one is far-reaching.

Demand for pricey timepieces from the top Swiss brands has cooled amid slowing economies, higher interest rates and the crash in cryptocurrencies, according to data compiled by London-based Subdial, a dealer in pre-owned watches. Prices peaked in February of last year following an unprecedented surge during the pandemic. Here is a direct video link.

Good macro discussion in this segment.

Alfonso Peccatiello, Founder of The Macro Compass, explains the last variables that have to weaken before a recession can be declared in the U.S. Abroad. China is facing a population crisis, with its workforce expected to shrink by 200 million people by 2050. What does this mean for global growth? Here is a direct video link.

Thirteen years of record-low interest rates drove record public and private capital into all forms of real estate and related credit/securities from 2010-2022. Now, sharply higher interest rates and contracting credit on offer are bursting the bubble as forced sales rise.

One broker estimates that 90 percent of office buildings in New York were distressed — either in terms of the level of debt or occupancy. “I think we are on the front edge of the forced sales,” this person said.  And it’s not just New York. See Financial storm bears down on US commercial real estate:

The results are evident in mounting strain around the country — from New York developers handing back obsolete office buildings to lenders, to foreclosures on heavily indebted apartment complexes in Houston and defaults on hotels and shopping malls in San Francisco. Banks, under scrutiny from regulators and investors, are now beginning to offload even performing property loans at a loss.

“I am not sure people have come to terms with how long the storm will hover and how much damage it will do,” said Scott Rechler, president of RXR, one of New York’s largest developers, likening the situation to a hurricane making landfall. “As for multifamily and other [commercial real estate], I believe that the markets are underestimating its potential severity.”