Connect with us

Business

Poxel S.A. reports 1H results

Continue Reading
Advertisement

Business

Falling home prices shouldn’t collapse the financial system, says hedge funder who made $4 billion betting on the 2008 housing crash

The U.S. housing market is experiencing one of the most rapid and dramatic shifts in its history.

The reason is pretty simple: Spiked mortgage rates are sidelining buyers across the country. 

And it’s far from over. Last week, Fed Chair Jerome Powell even went as far as to call it a “difficult correction.”

While the speed and breadth of the slowdown have some Americans worried about a repeat of the 2008 housing bust and subsequent global financial crisis, others aren’t as concerned. John Paulson, the hedge funder who famously pocketed $4 billion betting against the U.S. housing market in 2008, is among those who believe history isn’t repeating itself.

“We’re not at risk of a collapse today in the financial system like we were before,” Paulson told Bloomberg on Sunday. “Yeah, it’s true, housing may be a little frothy. So housing prices may come down or they may plateau, but not to the extent it happened [in 2008].”

A tale of two Wall Street oracles

Paulson, who started his hedge fund (which has since been converted to a family office), Paulson & Co., in 1994 and boasts a net worth of $3 billion, believes that the housing market is on stronger footing than it was at the start of the Great Financial Crisis.

“The underlying quality of the mortgages today is far superior. You don’t even have any subprime mortgages in the market,” he said. “In that period [2008], there was no down payments, no credit checks, very high leverage. And it’s just the opposite of what’s happening today. So you don’t have the degree of poor credit quality in mortgages that you did at that time.”

After the blow-up of the 2008 housing bubble and subsequent global financial crisis, senators passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in order to ensure the stability of the U.S. financial system and improve the quality of U.S. mortgages.

The act created the Consumer Financial Protection Bureau (CFPB), which is tasked with preventing predatory mortgage lending. In the years since the CFPB’s creation, the average credit rating of homebuyers has improved dramatically. Leading up to the 2008 housing bust, U.S. homebuyers’ average credit rating was 707. In the first quarter of this year, it was 776, according to data from Bankrate.

Bank of America Research analysts led by Thomas Thornton also found that the portion of buyers with so-called “superprime” FICO scores of 720 or above hit 75% this summer. During the years preceding the 2008 housing bust, just 25% of buyers boasted similarly strong credit.

The Dodd-Frank Act also established the Financial Stability Oversight Council which monitors the health of major U.S. financial firms and sets reserve requirements for banks, and the Securities and Exchange Commission (SEC) Office of Credit Ratings which verifies the credit ratings of major firms after critics argued private agencies gave misleading ratings during the financial crisis. Both of these regulatory bodies have helped to improve the resiliency of the U.S. financial system and banks during times of economic stress.

Paulson noted on Sunday that banks were highly leveraged during the financial crisis and took risks that would be seen as unacceptable in today’s markets after the Dodd-Frank act established the Volcker Rule, which prevents banks from making some specific types of risky investments.

“The problem, in that period of time, was the banks were very speculative about what they were investing in. They had a lot of risky subprime, high-yield, levered loans. And when the market started to fall, the equity quickly came under pressure,” he said, noting that the average bank now has three to four times as much equity as they did during the Great Financial Crisis of 2008, which makes them less susceptible to default.

While Paulson isn’t worried about a repeat of 2008, hedge funder Michael Burry, who also rose to fame predicting and profiting from the Great Financial Crisis, as depicted in the book and movie “The Big Short,” has warned for years that he believes the global economy is in the “greatest speculative bubble of all time in all things.”

Burry argues that central banks created a bubble in everything from stocks to real estate with loose monetary policies after the Great Financial Crisis, and pandemic-era spending meant to boost the economy only made things worse.

Now, as central bank officials around the world shift stances to fight inflation and continue raising interest rates in unison, the hedge fund chief argues asset prices will fall dramatically.

“There is risk growing in many sectors. The unfettered narrative feeding itself until the absurdity explodes, revealing the folly to all and easily starting a revolution,” Burry said in a cryptic, since-deleted Sept. 21 tweet.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.



Source link

Continue Reading

Business

The U.S. housing market stares down an even bigger economic shock—mortgage rates near 7%

Unbeknownst to buyers lining the sidewalks outside of frenzied open houses this spring, the Pandemic Housing Boom was already in its final inning. In March, Fortune published a pair of articles titled “The housing market enters uncharted waters“ and “An economic shock just hit the housing market“ arguing just that: The red-hot housing market would quickly shift in the face of spiked mortgage rates, which had jumped from 3.2% in January to over 4% by late March.

Not only did higher mortgage rates help to cause the Pandemic Housing Boom fizzle out, but it was replaced by what Federal Reserve Chair Jerome Powell now calls a “difficult correction.”

“For the longer term what we need is supply and demand to get better aligned so that housing prices go up at a reasonable level and at a reasonable pace and that people can afford houses again. We probably in the housing market have to go through a correction to get back to that place,” Powell told reporters last week. “This difficult [housing] correction should put the housing market back into better balance.”

The bad news for mortgage brokers and builders? This housing correction is far from over.

In fact, the shock hitting the U.S. housing market continues to grow: On Monday, the average 30-year fixed mortgage rate jumped to 6.87%. That marks both the highest mortgage rate since 2002 and the biggest 12-month jump (see chart below) since 1981.

Anytime the Federal Reserve flips into inflation-fighting mode, things get challenging for rate sensitive industries like real estate. Higher mortgage rates lead to some borrowers—who must meet lenders’ strict debt-to-ratios—losing their mortgage eligibility. It also prices some buyers out of the market altogether. A borrower in January who took out a $500,000 mortgage at a 3.2% rate would be on the hook for a $2,162 monthly principal and interest payment over the course of the 30-year loan. At a 6.8% rate, that monthly payment would be $3,260.

The economic shock caused by elevated mortgage rates, of course, underpins the ongoing housing correction. The housing correction is the U.S. housing market—which had been based on 3% mortgage rates—working towards equilibrium. As buyers pull back, the housing correction will cause inventory levels to rise and home sales volumes to fall. It’s also putting much of the nation at risk of falling home prices.

We’re already starting to see home price declines in bubbly housing markets like Austin, Boise, and Las Vegas. However, home price declines have yet to hit the whole country. According to Zillow, just 117 housing markets saw home price declines between May and August. In another 500 plus housing markets, prices were either flat or prices rose.

But more markets could soon move into the falling home price camp. As long as mortgage rates remain near 7%, housing analysts tell Fortune we’ll see downward pressure on home prices in the near term.

“The longer that [mortgage] rates stay elevated, our view is that housing is going to continue to feel it and have this reset mode. And the affordability resetting mechanism right now that has to happen is on [home] prices,” Rick Palacios Jr., head of research at John Burns Real Estate Consulting, tells Fortune.

The big question: How much can “pressurized affordability”—a 3 percentage point jump in mortgage rates coupled with frothy home prices—push home prices lower? Unlike the 2008 housing crash, this time around we don’t have a housing supply glut nor a subprime crisis.

Want to stay updated on the housing correction? Follow me on Twitter at @NewsLambert.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.



Source link

Continue Reading

Business

How much protein do I need in a day?

Protein, one of three types of macronutrients, helps our bodies repair the muscles, bones, and cells vital to keeping our bodies structurally intact. In fact, we are made up of roughly 10,000 various proteins that help us function. Protein is made up of chains of amino acids, and because the nine essential amino acids are not made by the body, we must get protein from food. 

But how much protein do we actually need every day? Ideal protein intake varies by age, activity level, and weight. It also depends on the nutrients consumed alongside a protein source, so it may be more complex than merely packing in a sirloin steak or a load of lunch meat and calling it a day. 

How much protein is enough? 

The general recommendation is that most healthy adults need about 0.8 grams of protein per kilogram of body weight. You can also multiply your weight in pounds by 0.36 to calculate the rounded ideal number of grams. For example, a person who weighs 170 pounds would need around 62 grams of protein per day or about 69 grams for someone who weighs 190 pounds. 

Anywhere from 10% to 35% of your daily caloric intake should be protein, according to the National Academy of Medicine, a wide range that underscores how protein intake varies greatly depending on the individual. 

Rather than getting caught up in complicated calculations, some experts say to just focus on eating protein rich foods throughout the day, such as seafood, lean meats, poultry, eggs, legumes, nuts, seeds, and soy products. Incorporating protein throughout your day, along with a balance of fruits, vegetables, grains and dairy may be an easier way think about it. 

Additionally, the recommended daily allowance of protein is not a “one-size fits all” approach, Siera Holley, a registered dietician at The Ohio State University Wexner Medical Center tells Fortune. Factors such as pregnancy, amount of exercise, and age all may play a factor in how much protein people should aim for, she says. 

How much protein do you need as you age? 

Muscle mass begins to reduce starting in your 30s. Known as sarcopenia, it’s “the age-associated loss of muscle mass and function,” says Roger Fielding, senior scientist in nutrition, exercise physiology, and sarcopenia at the Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts University. The general recommendation may not account for the fact that older adults need more protein to counter this muscle loss. Studies have shown a correlation between increased protein intake for older adults and improved cognitive function and physical health

Roughly 50% of women and 30% of men 71 and older don’t get enough protein, according to the 2020-2025 dietary guidelines. As you age and muscle mass begins to shrink, some experts recommend increasing protein intake to 1–1.2 grams of protein per kilogram of body weight beginning at age 40. 

How much protein do you need if you exercise regularly? 

Activity level can also alter how much protein you need to build and repair muscles. If you’re active and do strength training, consuming more protein post workout makes sense, Fielding says. 

For those regularly active, consider upping protein intake to 1.2 to 2 grams per kilogram of body weight. And this protein should also be spaced out during the day, with a prioritization of carbohydrates and protein following exercise. 

What’s the best type of protein? 

Don’t just think about eating more meat. Consider proteins that are not high in saturated fats and not highly processed, which can strip them of core nutrients.

Legumes provide protein and are rich in fiber, so they are digested slower and make you feel more satisfied and full, for example. This is why the protein “package” matters—the host of qualities within a protein that determines how healthy it is. Consider lean meats, plant-based meats and seafood as well. 

Protein-rich foods:

  • Salmon: 27 grams of protein for a 5 oz salmon
  • Lean chicken breast: 54 grams of protein for a 6 oz lean chicken breast 
  • Whitefish: 38 grams of protein for one filet of whitefish
  • Turkey breast: 29 grams of protein for 3 ½ oz of turkey breast 

Vegetarian protein-rich foods:   

  • Lentils: 12 grams of protein for a ½ cup of lentils 
  • Greek yogurt: 15-20 grams of protein for a 6 oz cup of yogurt
  • Eggs: 6-8 grams of protein in one egg 
  • Chickpeas (garbanzo beans): 14.5 grams of protein for one cup of chickpeas 

When’s the best time to have protein? 

Protein can help decrease hunger because it metabolizes slowly. Therefore, spreading protein intake throughout the day is beneficial. 

“Studies have shown that most people consume the bulk of their dietary protein at the evening meal with far less being consumed at breakfast and lunch,” Fielding says. “There is evidence that the distribution of protein intake throughout the day may be better for maintenance of muscle mass than consuming the majority of protein at one meal.” 

Is there such a thing as too much protein? 

It is indeed possible to eat too much protein. Excess protein can lead to bad breath, heart disease and kidney disease. For those with kidney disease already, or at higher risk for the disease, too much protein can be harmful so you should talk to your doctor to understand your protein needs. 

While there isn’t a specific limit, it’s important to spread protein throughout the day and choose lean sources that are not high in saturated fats. A diet rich in red meats can raise your risk of heart disease and colon cancer

Source link

Continue Reading

Facebook

Latest

Modi urges environment ministers to give maximum boost to circular economy Modi urges environment ministers to give maximum boost to circular economy
National4 days ago

Modi urges environment ministers to give maximum boost to circular economy

It was inaugurated when I became the Prime Minister. A huge amount of money was wasted due to this delay....

BJP MP Janardan Mishra cleans the school toilet with his hands, shared the video on Twitter BJP MP Janardan Mishra cleans the school toilet with his hands, shared the video on Twitter
National4 days ago

BJP MP Janardan Mishra cleans the school toilet with his hands, shared the video on Twitter

When the MP saw that the toilet of the center was very dirty, it was not cleaned, he decided to...

Pilot started lobbying for the post of CM, indicating new responsibility from high command Pilot started lobbying for the post of CM, indicating new responsibility from high command
National4 days ago

Pilot started lobbying for the post of CM, indicating new responsibility from high command

Pilot will now meet Congress interim president Sonia Gandhi. Pilot said that Sonia's decision has to be accepted by everyone....

Indian e-commerce platform Meesho is paying attention to the mental state of its employees Indian e-commerce platform Meesho is paying attention to the mental state of its employees
Business4 days ago

Indian e-commerce platform Meesho is paying attention to the mental state of its employees

The e-commerce platform has announced an 11-day companywide break from October 22 to November 1. Well, this is not the...

IPhone 14 can detect car crash, you also know what is the news IPhone 14 can detect car crash, you also know what is the news
National4 days ago

IPhone 14 can detect car crash, you also know what is the news

During the experiment, the crash detection feature was activated within 10 seconds of the accident. After detecting a crash, the...

Tata Consultancy Services (TCS) has ended the practice of work from home, you also know Tata Consultancy Services (TCS) has ended the practice of work from home, you also know
Business4 days ago

Tata Consultancy Services (TCS) has ended the practice of work from home, you also know

“Senior TCS leaders are working from TCS offices for some time and our clients are also visiting TCS offices Your...

NIA raided 93 locations of PFI, arrested 106 members, know the whole matter NIA raided 93 locations of PFI, arrested 106 members, know the whole matter
National4 days ago

NIA raided 93 locations of PFI, arrested 106 members, know the whole matter

This action of NIA and ED is going on in Uttar Pradesh, Kerala, Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, Assam,...

TMC leader takes a jibe at Shubhendu Adhikari, I am a man, CBI-ED can't even touch me, know the whole matter TMC leader takes a jibe at Shubhendu Adhikari, I am a man, CBI-ED can't even touch me, know the whole matter
National4 days ago

TMC leader takes a jibe at Shubhendu Adhikari, I am a man, CBI-ED can’t even touch me, know the whole matter

TMC wrote on its Twitter account, BJP's 56 inch chest model has been busted today. After this, party MP Locket...

If Gehlot becomes the president, he will have to leave the CM's chair, know what Rahul said If Gehlot becomes the president, he will have to leave the CM's chair, know what Rahul said
National5 days ago

If Gehlot becomes the president, he will have to leave the CM’s chair, know what Rahul said

On the question of objection to the name of the pilot, Gehlot said, 'I do not discuss anyone's name and...

India will now find other options for weapons and oil, will reduce its dependence on Russia India will now find other options for weapons and oil, will reduce its dependence on Russia
Business5 days ago

India will now find other options for weapons and oil, will reduce its dependence on Russia

Let us tell you that the relations between Russia and India are old. Although, Relations between India and America have...

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.