The Kobeissi Letter Profile picture
Feb 15 14 tweets 6 min read Read on X
This is absolutely insane:

Since DOGE began discussing mass layoffs, the median home price in Washington DC has FALLEN by -$139,000.

In 30 days, nearly 4,000 homes have been listed for sale in and around Washington DC.

What is happening? Let us explain.

(a thread) Image
Here's a chart showing median home price in the Washington, DC area.

In November 2024, the median home in Washington, DC was worth ~$699,000, according to Redfin.

Today, the median home is worth $560,000, marking a -20% drop in ~3 months.

Mass selling is an understatement. Image
There are now nearly 8,000 homes for sale in the Washington, DC metro area.

Nearly HALF of these homes have been listed for sale over the last 30 days.

Since November 2024, nearly 5,000 homes have been listed for sale, well above average.

So, what exactly is happening here? Image
Year-over-year, home listings in the Washington DC metro area are up ~23%.

Parts of Virginia are seeing 60%-70%+ jumps in year-over-year listings.

Keep in mind, this is during the winter months in a housing market that has been historically LOW on supply.

Truly insane. Image
Listings accelerated after DOGE's federal employee buyout offer was announced.

The offer pays employees through September 2025 if they quit, with 5%-10% of employees expected agree.

As of this week, 65,000 federal employees have accepted the buyout offer, per WSJ. Image
Today, Fox News reported that 3,600 probationary Health and Human Services employees were laid off by DOGE.

This is expected to save $600 MILLION in taxpayer dollars annually.

The 65,000 DOGE cuts so far are now saving an estimated ~$38 billion in annual taxpayer dollars. Image
On day 8 of the formation of @DOGE, the below announcement was made.

DOGE is reportedly saving the US Government $1 billion PER DAY.

This means DOGE could reduce US deficit spending by 20% in YEAR 1.

More layoffs are coming as workforce reduction has been a primary DOGE goal. Image
Here's where it gets even more interesting:

There has been a SURGE in new listings in Washington, DC with a listing price of $1,000,000+.

There are now 525 listings of $1+ million and 44 listings worth $5+ million.

This suggests high-profile job exits are rising. Image
Just wait until we see the effects on commercial real estate in Washington, DC.

DOGE announced plans to eliminate up to TWO-THIRDS of US government office buildings, per WSJ.

Not a single major US government agency is currently occupying even 50% of their office space. Image
DOGE has specifically noted that Washington, DC federal government buildings are particularly empty.

On average, they are just 12% occupied.

The Department of Agriculture saw just ~456 of 7,400 employees use their office.

The DC real estate market is just getting started. Image
If you zoom out further, there are ~15 THOUSAND homes for sale around Washington, DC.

In fact, there are so many homes for sale in the downtown area that Zillow is grouping 280 homes together.

This is an unprecedented level of selling in a generally "strong" housing market. Image
Are layoffs and rising inventory in DC a coincidence?

Time will tell. But, we see more layoffs ahead as DOGE looks to cut $4 billion/day.

With US debt up $13 TRILLION since 2020, spending cuts are needed.

Follow us @KobeissiLetter for real time analysis as this develops. Image
DOGE's goal of rapidly reducing the $1.8 trillion US deficit will impact MULTIPLE markets.

The 10-year note yield has fallen ~40 bps from its high and gold is nearing $3000, even as inflation rebounded.

Subscribe below to see how we are trading it:

thekobeissiletter.com/subscribeImage
With mortgage demand at 30-year lows, stocks at all time highs, and DOGE disrupting government spending, tons of change is coming.

As investors, we must evolve with this change.

Be sure to turn on @Kobeissiletter post notifications to receive our real-time analysis.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with The Kobeissi Letter

The Kobeissi Letter Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @KobeissiLetter

May 25
What is happening in Japan?

In 45 days, Japan's 30Y Government Bond Yield rose a MASSIVE +100 basis points, to a record 3.20%.

Over $500 BILLION worth of "safe" 40Y Japanese Government Bonds have lost 20%+ in 6 weeks.

Is Japan's bond market imploding?

(a thread) Image
What's happening in Japan is not "normal."

Japan's 40Y government bond that was yielding ~1.3% two years ago is now yielding 3.5%.

As yields continue to surge, inflation has begun to rebound and Japan's economy is decline.

It appears Japan is entering a recession. Image
The surge all began when the Bank of Japan (BOJ) made a major policy shift.

After years after BUYING bonds, the BOJ stopped doing so.

This resulted in much more bond supply hitting the market, which drove yields higher.

And, the BOJ has a colossal balance sheet still. Image
Read 15 tweets
May 23
The trade war is back:

After a brief pause, Trump just threatened 50% tariffs on the EU beginning June 1st and 25% tariffs on Apple.

In 5 days, the S&P 500 has erased -$1.5 trillion of market cap.

What's next? Here's why you NEED to watch the bond market.

(a thread) Image
First, at 7:19 AM ET today, President Trump made the below post.

As Apple, $AAPL, has moved iPhone production to India, Trump said this was not acceptable.

Trump says iPhones must be made in the USA or face tariffs of at least 25%.

The S&P 500 to 5820 on this news. Image
24 minutes later, President Trump made the below post.

He said he is "recommended a straight 50% tariff on the EU, staring June 1st."

This was the first escalation since the 90-day tariff pause and it sent S&P 500 futures down to 5750.

But, why now? Image
Read 13 tweets
May 21
What just happened?

At 1:00 PM ET, the S&P 500 fell nearly -80 points in 30 minutes without any major "news."

What actually happened was a weak 20Y Bond Auction which sent US Treasury Yields soaring.

Investors MUST watch yields here. Let us explain.

(a thread) Image
The US frequently conducts bond auctions, where investors can buy US Treasuries (debt).

Today, the US conducted a $16B auction of 20Y Bonds.

Typically, these auctions happen with minimal impact on markets.

However, today was different which sent yields soaring. Image
Today was different because demand for the bond auction was weak.

In other words, investors wanted to buy these bonds for LESS than initially expected.

The high yield came in at 5.047%, well above expectations of 5.035%.

When bond prices fall, yields rise, as we just saw. Image
Read 14 tweets
May 17
It's official:

For the first time in history, Moody's has downgraded the United States' credit rating.

Moody's cites concerns over soaring US debt levels with interest on US debt set to hit 30% of REVENUE by 2035.

What does it all mean? Let us explain.

(a thread) Image
This isn't the first time the US has seen a credit rating downgrade.

In 2011, S&P downgraded the US' credit rating from AAA to AA+.

As seen below, the downgrade came with an ~8% drop in the S&P 500 in 2 months.

The 10Y Yield fell as much as ~35% within the first 2 months. Image
In 2023, Fitch downgraded the US' long-term credit rating from AAA to AA+.

They cited concerns over rising US debt levels, unaddressed fiscal challenges, and Fed rate hikes.

This seemed to pave the path for the historic Moody's downgrade that we just received. Image
Read 13 tweets
May 5
Gold won't stop.

Gold is surging again, now trading above $3,300/oz, even as the S&P 500 is up +17% from its April 7th low.

Since 2020, the gold ETF, $GLD, has now OUTPERFORMED the S&P 500 by 35 percentage points.

Are you still watching gold?

(a thread) Image
Heading into 2025, $GLD was underperforming the S&P 500 since 2020 by ~10%.

However, as uncertainty has risen, $GLD is now up +109% since 2020 compared to +74% in the S&P 500.

But, why are gold prices surging even as the market recovers?

Uncertainty remains the answer. Image
The equity market's rebound has been a product of SENTIMENT.

The Fear & Greed index is up ~54 points since its April 2025 low.

However, we have not seen a material reduction in macroeconomic uncertainty.

Equity and gold markets are telling two different near-term stories. Image
Read 12 tweets
May 3
This is insane:

Warren Buffett's Berkshire Hathaway just announced they now hold a record $348 BILLION in cash.

Since 2022, Buffett's cash balance is up $239 BILLION and he has net SOLD stocks for 10-straight quarters.

What does Warren Buffett see here?

(a thread) Image
Below is Berkshire Hathaway's balance sheet:

They now hold $305.5 BILLION of US Treasury Bills and $36.9 billion of cash in their insurance and other business.

In their Railroad, Utilities and Energy business, they hold another ~$5.3 billion of cash.

This is unprecedented. Image
To put this in perspective, the US Federal Reserve currently holds $195.3 billion in US Treasury Bills.

This means that Berkshire Hathaway now holds ~$110.2 billion MORE of T-bills than the Fed.

Berkshire Hathaway's T-bill balance is ~56% HIGHER than the Fed itself. Image
Read 12 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(