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☆ This year could be the breaking point for commercial real estate distress, research firm says
▼ + stars: | 2024-01-23 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Read previewThis year will be when the distress brewing in commercial real estate finally reaches its breaking point, according to Capital Economics. The research firm pointed to pessimism that has clouded the commercial real estate sector for the past year. Around $541 billion of commercial real estate debt officially matured in 2023, though fallout was muted as many loans were granted extensions, the firm said. Meanwhile, property investors like Brookfield are raising cash to potentially buy cheap commercial real estate properties that hit the market. AdvertisementSome commentators have warned of an even more severe crash coming for commercial real estate.

Persons: —, Kiran Raichura, Raichura, Kyle Bass Organizations: Service, Capital Economics, Business, Fed, International Monetary Fund Locations: Brookfield

☆ Empty-Nest Baby Boomers Won't Sell 3-Bedroom Homes Millennials Need
▼ + stars: | 2024-01-23 | by ( Eliza Relman | Jennifer Sor | ) www.businessinsider.com time to read: +6 min

As people age, they need homes that are more accessible and easier to maintain. Large homes often have multiple floors, yards, and other features that make them trickier to navigate for older people. AdvertisementSchuetz says there's not a dearth of large homes in the US. Instead, there's really just a mismatch between large homes and occupants who don't need them. But many more family-sized apartments and other homes will need to be built to make up for the lack of large homes on the market.

Persons: —, Jenny Schuetz, Redfin, Schuetz, Daryl Fairweather, Redfin's, I've, Fairweather, it's, there's Organizations: Service, Business, Brookings Institution

☆ America's real estate market could see a $1 trillion default wave as things turn 'very ugly,' billionaire CEO says
▼ + stars: | 2024-01-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Read previewAmerica's real estate sector could see up to $1 trillion of debt defaults over the next few years, according to Cantor Fitzgerald CEO Howard Lutnick. The billionaire Wall Street executive pointed to trouble brewing in the US real estate market, particularly in commercial real estate, where experts say there's around $1 trillion in debt approaching maturity over the next few years. He estimated $700 billion to $1 trillion in real estate debt could default, which could slash "hundreds of billions" in real estate equity. "I think it's going to be a very, very ugly market owning real estate over the next 18 months to two years," he added. Experts have been warning of trouble coming for the commercial real estate sector since early 2023, when banking turmoil tightened credit conditions for regional lenders, which finance a large percentage of all commercial real estate loans.

Persons: —, Cantor Fitzgerald, Howard Lutnick, Lutnick Organizations: Service, Business, Wall, Reserve, Fox Business

☆ There are 3 bullish signals flashing that point a recovery in the housing market, Compass CEO says
▼ + stars: | 2024-01-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

The housing market is flashing signs of life, Compass CEO Robert Reffkin said. AdvertisementThe housing market is flashing a handful of bullish signals for the year ahead, according to Compass CEO Robert Reffkin. The founder of one of the nation's top real estate brokerages said he believed the housing market will be on the path to recovery in 2024. But more owners appear to be moving out of necessity or have warmed up to the idea of selling as mortgage rates head lower. At this rate, buyers are outpacing sellers in the market, Reffkin said, noting that Compass's real estate agents are seeing more business in the new year.

Persons: Robert Reffkin, Reffkin, —, brokerages, Freddie Mac, Sam Lafoca, LM Otero, Sellers, Phil Noble, I've, Barbara Corcoran Organizations: Service, National Association of Realtors, CNBC, Community, Getty, Associated, REUTERS, Mortgage, Association, New Locations: lancaster California, USA, Dallas, Kirkham, England

☆ The housing market will take off in a 2024 renaissance as construction, demand are set to surge, National Association of Home Builders CEO says
▼ + stars: | 2024-01-19 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Read previewThe housing market is about to exit its slowdown and take off in a new growth period, according to National Association of Home Builders CEO Jim Tobin. AdvertisementThat's partly because mortgage rates have continued their steady decline in recent months. At the same time, prospective buyers are likely warming up to the new norm of 6% mortgage rates, and could be readying themselves to jump back into the housing market, he said. "I think that the world is getting ready to realize that we're no longer going back to those 3%-4% mortgage rates. Improving affordability conditions could cause home sales to jump 5% while home prices decline 1% in 2024, according to Redfin.

Persons: —, Jim Tobin, Tobin, Freddie Mac Organizations: Service, National Association of Home Builders, Business, Yahoo Finance, Mortgage, Association . Housing

☆ The Fed has to start cutting rates to avoid tipping the economy over, and 8 cuts are coming in the next 2 years, Bank of America chief Brian Moynihan says
▼ + stars: | 2024-01-19 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The Fed will slash interest rates eight times over the next two years, Bank of America predicted. Officials will want to avoid "tipping the economy over" with its policy, BofA CEO Brian Moynihan said. AdvertisementThe Federal Reserve could end up slashing interest rates eight times over the next two years to prop up the US economy, according to Bank of America CEO Brian Moynihan. That implies 200 basis-points of rate cuts to come over the next few years, taking the Fed's benchmark rate down to the 3.25%-3.5% range. The Fed has hit pause at its recent meetings following an aggressive year-and-a-half of interest rate hikes.

Persons: Brian Moynihan, —, Moynihan Organizations: Bank of America, The New, Fed, Service, Bloomberg, Economic, New York Fed

☆ The housing market is breaking out of mortgage rate lock as a wave of sellers look poised to list their homes in the coming years, Zillow says
▼ + stars: | 2024-01-16 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The housing market could be breaking free from the "rate lock" phenomenon that froze activity in 2023. That's because owners appear less deterred by high mortgage rates when considering whether to sell their homes, Zillow said. 21% of owners are considering selling their homes in the next three years, a Zillow survey shows. Currently, mortgage rates look to be less of a determining factor when considering a sale." Prices and mortgage rates are expected to continue easing slightly this year, Redfin economists predicted.

Persons: Zillow, —, That's, Sylar Olsen, Freddie Mac Organizations: Service

☆ It's getting harder than ever to become a self-made billionaire. But inheritances are still going strong.
▼ + stars: | 2024-01-14 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

Billionaires minted through inheritance outpaced self-made billionaires last year for the first time in a decade. Related storiesIn recent years, rates of economic opportunity have begun to fall again. Rates of economic opportunity have declined steadily since 1940, Opportunity Insights data shows. He says that's why there are fewer self-made billionaires today than there were in the past. "I think there's much work to be done to try to restore rates of economic opportunity to those observed several decades ago," he said.

Persons: —, Max Kunkel, Matthew Staiger, Staiger, Forbes, heiresses, Kunkel Organizations: Service, UBS, Harvard, Insights, Business, Economic

☆ Inflation is stuck and the Fed can't lower prices without damaging the economy, top economist Mohamed El-Erian says
▼ + stars: | 2024-01-12 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Inflation looks to be stuck above the Fed's target rate, top economist Mohamed El-Erian said. If the Fed lowers inflation to 2% too quickly, it risks "crushing" the economy, El-Erian has warned. AdvertisementThe Federal Reserve's inflation fight has hit a wall, and central bankers can't lower prices in the economy any further without causing damage, according to top economist Mohamed El-Erian. El-Erian warned last year that inflation would likely get stuck around the 3%-4% mark, thanks to persistent pressures in the economy that will push prices higher, he said. Other commentators on Wall Street have warned of the possibility of resurgent inflation as price pressures in the economy linger.

Persons: Mohamed El, Erian, — Organizations: Service, Allianz, Bureau of Labor Statistics, Bloomberg, CPI, stoke, El, New York Fed, Cleveland Fed Locations: El, That's, Red

☆ Markets are underestimating the potential for an economic slowdown, and 'greedflation' won't help investors anymore, Societe Generale says
▼ + stars: | 2024-01-11 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

download the appSign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read previewInvestors are underestimating the risk of an economic slowdown, and "greedflation" among companies can't prop up the market any longer, Société Générale said in a note this week. Firms hiking prices likely helped avoid a deeper slump in profits stemming from a slowing economy, Société Générale strategist Albert Edwards said. "The Greedflation driven surge in margins helped stop the profits slowdown turning into a deep downturn. A recession still poses a decent risk to the economy, though investors have warmed up to the prospect of a soft-landing.

Persons: —, Société Générale, they're, Société, Albert Edwards, Greedflation, Edwards, –, Evercore, quant, Andrew Lapthorne, David Rosenberg Organizations: Service, Business, Bureau of Labor Statistics, Federal Reserve, New, Fed, Institute of Supply, Evercore ISI

☆ Putin's social media ban cost Russia's economy more than $4 billion last year
▼ + stars: | 2024-01-11 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

Russia lost over $4 billion last year from internet disruptions, a new report says. Those losses are partly fueled by Russia's aggressive bans on Western social media sites. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementPutin's social media ban was partly responsible for costing the Russian economy billions of dollars in 2023, a new report says. Russia began limiting access to Western social media platforms like Facebook and X in the weeks after it began its invasion of Ukraine in 2022.

Persons: — Organizations: Service, Business Locations: Russia, Ukraine

☆ Commercial real estate could hit a breaking point this year as falling property values spur bankruptcies and forced selling, research firm says
▼ + stars: | 2024-01-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

The commercial real estate sector could hit its breaking point as property values keep falling. That could bring on a wave of bankruptcies, forced sales, and mergers, the firm said. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementCommercial real estate could face a reckoning this year as property values continue to fall, according to Capital Economics. The research firm pointed to the difficulties commercial real estate faced last year, with property values falling an estimated 11%.

Persons: — Organizations: Capital Economics, Service, Business

☆ America's economy should be 'thrilled' billionaires like Jeff Bezos and Warren Buffett exist, think-tank director says
▼ + stars: | 2024-01-10 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Billionaires are actually great for the economy, a director at the American Enterprise Institute argues. That's because billionaire innovators produce trillions of dollars of value for the US. The center-right think tank's Michael Strain argues that billionaires produce many times their net worth in value for the economy through their innovations. But billionaire innovators — not billionaire heirs and heiresses — may be the exception to that, Strain said. AdvertisementIn fact, billionaire innovators should be considered "worthy of emulation" for children, Strain added, praising an array of business icons.

Persons: —, Elon Musk, Jeff Bezos, Michael Strain, heiresses, Strain, Bezos, Mark Zuckerberg, Bernard Arnault — Organizations: American Enterprise Institute, Service, Amazon, Syndicate, Economic

☆ Trump says he hopes the US economy will crash within the next year to avoid being a 'Herbert Hoover'
▼ + stars: | 2024-01-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Former President Donald Trump said he hopes the US economy will crash within the next year. That's to avoid being a "Herbert Hoover," who was president when the Great Depression began. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementFormer President Donald Trump hopes the US economy will crash within the 12 months so he doesn't get the blame for a downturn if he wins a second term. Related stories"When there's a crash, I hope it's going to be during this next 12 months because I don't want a Herbert Hoover," Trump told Lindell TV, according to CNN.

Persons: Donald Trump, That's, Herbert Hoover, —, Trump, Lindell, –, Franklin Roosevelt Organizations: Service, CNN, Bloomberg Locations: –

☆ Claudine Gay's 6-month stint as Harvard president was the shortest in school history
▼ + stars: | 2024-01-02 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Claudine Gay's six-month term as Harvard president ranks the shortest in the school's history. AdvertisementClaudine Gay's resignation as Harvard president makes her six-month term the shortest in the school's history, according to historical data on Harvard's website. Gay began her tenure as school president in July last year, becoming Harvard's first Black president and its second-ever female president. While Alan Garber, the school's chief academic officer, is now serving as interim president, Gay isn't leaving Harvard entirely. Liz Magill, who testified before Congress alongside Gay about antisemitism concerns while president of University of Pennsylvania, has since resigned from her post.

Persons: Claudine Gay's, Gay, —, Harvard's, Alan Garber, Gay isn't, Liz Magill Organizations: Harvard, Harvard Corp, Service, University of Pennsylvania

☆ Collapsed US money supply is a threat to employment, growth, and inflation, Wharton professor Jeremy Siegel says
▼ + stars: | 2023-12-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

US money supply has seen its longest stagnation since World War II, according to Jeremy Siegel. "You can't really have a growing economy when the M2 money supply is decreasing," Siegel told CNBC. AdvertisementThe US money supply is flashing a major warning to the US economy, according to Wharton professor Jeremy Siegel. Money supply then rebounded through the summer, but has recently returned to its decline, nearing April's low. Advertisement"You can't really have a growing economy when the M2 money supply is decreasing," he warned.

Persons: Jeremy Siegel, Wharton, Siegel, — Organizations: CNBC, Service, Federal Reserve, Federal, Atlanta

☆ Russia's economy faces 3 obstacles to further growth as capital, industry, and its population wither, researcher says
▼ + stars: | 2023-12-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

Russia's economy could end up looking a lot like it did in the Cold War, a researcher writes. Russia's population fell by around 3 million from 2017 to 2022. The drop in population has bred a number of problems for Russia's economy as it shifts to a wartime footing, including a record shortage of workers. All that points to great difficulty faced by Russia's economy, he added. Other economists have sounded similar warnings for Russia's economy, though the nation itself has insisted on its resilience over the past year-and-a-half.

Persons: —, Vladislav Inozemtsev, Inozemtsev, Imnozemtsev Organizations: Service, Middle East Media Research, Kremlin, International Monetary Fund Locations: Russia, Ukraine, China, Moscow

☆ The economy is flashing a worrying signal that hasn't been seen since right before the 2008 crisis
▼ + stars: | 2023-11-30 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The US economy is flashing a worrying signal about the health of the consumer. The gap between growth of GDP and gross domestic income hasn't been this large since 2007, Macquarie said. That's evidenced by a worrying indicator, which hasn't flashed a warning this loud since right before the 2008 recession, according to Macquarie strategists. Yearly growth in gross domestic product is currently outpacing gross domestic income by the most since 2007, Macquarie said in a note. The gap between the two could also explain why Americans feel poorly about the economy despite robust GDP growth, Macquarie added.

Persons: Macquarie, —, hasn't, That's, Thierry Wizman Organizations: Service, Macquarie, Macquarie Group

☆ Wall Street's dream of 'immaculate disinflation' is becoming reality and the economy is doing a lot better than people think, Nobel economist Paul Krugman says
▼ + stars: | 2023-11-29 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

"Immaculate disinflation" is becoming a reality, according to Nobel economist Paul Krugman. Inflation coming down without sparking a recession is a dream scenario for Wall Street. By a number of metrics, the economy is better off than it was a few years ago, Krugman said. AdvertisementWall Street's dream scenario is becoming a reality – and despite gloomy sentiment in pockets of the market, the economy is actually doing way better than people think, according to Nobel laureate Paul Krugman. But slowing inflation hasn't triggered a rise in unemployment or the start of a recession, pushing Wall Street closer to its dream scenario.

Persons: Paul Krugman, Krugman, —, Joe Biden Organizations: Service, Commerce Department, New York Times, Bank of America, RBC Capital Markets, Deutsche Bank

☆ The stock market could plunge as much as 27% when the economy finally tips into recession, investment research firm says
▼ + stars: | 2023-11-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

That's because the US economy remains on track to enter a recession as high interest rates take a toll. A downturn could cause stocks to plummet as much as 27%, the investment research firm predicted. Economists have been warning of a potential recession since 2022, when central bankers began to aggressively raise interest rates to tame high inflation. AdvertisementLending conditions are tightening under the influence of higher-for-longer interest rates, leading some experts to warn of a coming default cycle on the horizon. "Cracks" also appear to be forming in the job market as firms slow their pace of hiring, BCA strategists said.

Persons: — Organizations: Research, Service, BCA Research, Fed, ECB, Deutsche Bank , Bank of America, RBC Capital Markets

☆ JPMorgan boss Jamie Dimon says the US is addicted to debt, and it's created a dangerous sugar high in the economy
▼ + stars: | 2023-11-28 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

America's debt problem has caused a dangerous sugar high for the economy, Jamie Dimon said. The JPMorgan chief pointed to the enormous surge of new debt taken on during the pandemic. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. AdvertisementThe US is practically addicted to debt – and that's put the economy in a dangerous position, according to JPMorgan CEO Jamie Dimon. The rest of the global economy is also staring at a "cocktail" of risks, Dimon added.

Persons: Jamie Dimon, —, that's, Dimon Organizations: JPMorgan, Service, Wall Street, Federal Reserve, Global Investment Summit, Penn Wharton Budget Locations: London

☆ Rate cuts are likely coming next year, but investors shouldn't bank on them saving the market
▼ + stars: | 2023-11-27 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +8 min

download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . In today's big story, we're looking at why the rate cuts investors have been praying for might not be the godsend they imagined. But rate cuts won't necessarily be the win markets are hoping for, Business Insider's Jennifer Sor writes. Still, some interest rate traders are predicting rate cuts coming as soon as this March, according to CME's FedWatch Tool. Another key piece of the economy facing headwinds complicates the case for rate cuts being a boon for investors.

Persons: —, I've, we're, Patrick Semansky, Jennifer Sor, CME's, Jennifer, Insider's Dominick Reuter, Miles Goodloe, Domenic, Robert Oszust Jr, Domenic Boresta, Alice Brooks, Jennifer Campbell, Sean Jacobsohn, he's, Jacobsohn, Chelsea Jia Feng, They're, it's, Gen, Bradley Cooper, Ben Affleck, Greta Gerwig, Bill, Bill —, Bill Nye, Science Guy, Manolo Blahnik, Jimi Hendrix, Steve Bannon, Bruce Lee, Dan DeFrancesco, Naga Siu, Hallam Bullock, Lisa Ryan Organizations: Service, Tech, Business, Federal Reserve, Fed, UBS, Big Tech, Retail, Walmart, Target, Financial Times, Echo, Khosla Ventures, Science Locations: Washington, Miles, Chelsea, New York City, San Diego, London, New York

☆ It's never been harder to build wealth. Blame high interest rates and the US housing market.
▼ + stars: | 2023-11-25 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

That's largely because it's become much harder to buy a home, the "big ticket" to wealth for most Americans. Less wealthy Americans have also been slammed by high inflation, high borrowing costs, and meager wage gains. An inaccessible housing market spells trouble for those looking to build up their nest eggs, according to BankRate senior industry analyst Ted Rossman. With ever-more Americans priced out of the housing market, that gap could grow wider. The struggle to build wealth — by way of the housing market or other means — has been reflected in the latest economic data.

Persons: It's, it's, —, Ted Rossman, Rossman, aren't, Fannie Mae, Michael Neal, Neal, Bankrate's Rossman Organizations: Service, Federal Reserve, Business, Federal, National Association of Realtors, Realtor.com, Urban Institute Locations: –

☆ 'The consumer slowdown has begun': America's deteriorating shopping spree in 4 charts
▼ + stars: | 2023-11-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +5 min

According to Deloitte, the consumer spending slowdown is already starting. "The stellar US economic growth recorded in the third quarter was largely due to the strong growth in consumer spending. However, it is widely expected that consumer spending will decelerate in the holiday season, thereby putting financial stress on retailers and their suppliers." Spending intentions have plummetedThe negative trend in retail sales could continue, as spending intentions among Americans have plummeted over the past few months, according to Deloitte's spending intentions index. Americans' spending intentions are the lowest they've been all year.

Persons: —, Ira Kalish, Kalish Organizations: Deloitte, Service, Wall, Conference, Survey

☆ Binance CEO to step down, plead guilty in anti-money laundering probe
▼ + stars: | 2023-11-21 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

The CEO of Binance will plead guilty to Justice Department charges. Changpeng Zhao will step down from his leadership role and Binance will pay a $4.3 billion fine. NEW LOOK Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Zhao is set to plead guilty to anti-money laundering charges, and Binance will pay a $4.3 billion fine at a federal court, sources told the Journal. Binance is also set to plead guilty to the related charges, sources added, potentially putting an end to a Department of Justice investigation spanning nearly five years.

Persons: Binance, Changpeng Zhao, —, Zhao, he'll Organizations: Department, Service, Wall Street Journal, Commodity Futures Trading, Department of Justice, Prosecutors, Reuters Locations: Russia, Iran

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