Saturday, August 19, 2023

China's economy is flailing. Here's how its problems could spill into global markets.

China's economy is flailing, and its troubles could spill over into the rest of the world
China's economy is flailing, and experts warn that its troubles could weigh on global growth and business.
  • China's economy is facing headwinds ranging from an unstable property market to weak consumer demand.
  • Experts told Insider that a worsening scenario in China bodes poorly for global markets and other economies like the US.
  • Both Janet Yellen and Joe Biden have recently warned of China's spillover risks.

China has built itself into a world power with a massive impact on the global economy through decades of steady growth, huge trade volumes, and an expanding, productive population. 

After President Xi Jinping lifted Beijing's extreme "zero-COVID" policies in December, experts expected that Chinese demand and business would come roaring back so strong that the entire world economy would feel the effects of its reopening. 

But the opposite has happened, and experts say the repercussions of China's economic stumbles could reverberate well beyond its borders.

The world's second-largest economy looks strikingly weak coming out of the pandemic, and its troubles have ballooned to such an extent this month that Treasury Secretary Janet Yellen warned of China's risks to the US the same week President Joe Biden likened it to a "ticking time bomb." 

Chinese officials have warned experts against painting the economy in a negative light, though the data paint a clear picture of an economy in trouble. 

Tuesday data — which came less than an hour after a surprise rate cut from China's central bank — showed China's industrial production, retail sales, and exports all performed weaker than expected, and the report omitted youth unemployment, which had hit a record high of 21.3% in the prior month.

All this is unfolding against a backdrop of an unstable property sector, headlined most recently by a bankruptcy filing by Evergrande, the most heavily indebted property developer in the world, and Country Garden Holdings' two missed coupon payments on its bonds

Here's what all this could mean for the rest of the world's markets. 

Collapsing trade 

Given its major role in global trade, none of these troubles are China's alone. 

Alfredo Montufar-Helu, the head of the China Center at the Conference Board, told Insider that the country still accounts for about 30% of global growth, and any domestic slippage will have far-reaching implications on markets around the world.

"Unlike during the Great Financial Crisis, China will not drive the global economic recovery in the aftermath of the COVID-19 pandemic," he said. "As its economy continues facing downward pressures, its growth momentum might slow down further, in turn exacerbating the already significant pressures that the global economy is facing."

One way this is already being felt is in the softening of Chinese demand, which has led to a sharp drop in trade. This week's data showed China's exports have declined for three consecutive months, and imports have slipped for five months. 

On the plus side, lower demand dampens inflationary pressures, which could potentially make life easier for the Federal Reserve and other central banks as they continue to battle high prices in their economies. 

Yet, this can have a negative impact on producers and exporters in the US and other markets, Montufar-Helu said, and replacing the missing demand may not be easy. 

Keith Hartley, chief executive of supply-chain analytics firm LevaData, noted that China consumes a significant portion of the world's commodities, and softer demand there means an inventory glut for US companies and shrinking profits, as well as less business for countries that rely on commodity exports.

"For the US, sectors like agriculture and manufacturing reliant on exporting to China could see reduced sales, potentially causing economic slowdown and job losses," Hartley told Insider. 

While a prolonged slump for Chinese exports could weigh on nations' manufacturing industries and disrupt supply chains, he said it also opens the door for other countries like the US to diversify their sourcing strategies, and begin relocating manufacturing outside of China. 

Exporting deflation

American companies with ties to China are already feeling the effects of the slowdown. 

A handful of chemical and manufacturing companies have reported lower second-quarter sales, and some have pulled back their outlook for the rest of the year, as Insider's Noah Sheidlower wrote Thursday.  

As a result of widespread declines in China's consumer prices, many Americans could see pricier cars and personal-care products, and some companies could lose revenue and resort to layoffs.

"One of the biggest risks is that China starts exporting deflation to the world, hurting corporate profits in the U.S. and around the world," Dexter Roberts, a senior fellow at the Atlantic Council, told Insider.

"A Chinese slump would hurt both the many American companies that derive a significant portion of their revenues from China, and those who may not be directly invested or sell to China, but would be hurt by global deflation."

Housing crash

Slumping domestic demand in China and weak consumer spending largely stems from risks in the domestic property market, but there are spillover risks from that sector as well. 

The Conference Board's Montufar-Helu said housing assets are estimated to account for around 70% of Chinese households' wealth, and the uncertainty is making people hold onto their cash rather than spend it.

Property market tumult is weighing on China's overall growth, he said, by crimping industrial output, discouraging spending, eroding government revenue levels, and increasing risks across the financial sector. 

"The real estate boom over the past decade attracted considerable amounts of foreign capital, including from the US," Montufar-Helu said. "Chinese developers are facing significant liquidity constraints, and so the likelihood of them defaulting on US-denominated bonds is growing."

And as the housing crisis deepens, it will become harder to China to right the ship, creating a lasting drag on future global growth. 

David Roche, president and global strategist at Independent Strategy, said in a CNBC interview this week that the Chinese economic model is now "washed up on the beach" with little chance of a rebound.

Global markets haven't fully priced in the trouble in the property market, he explained.

"They really don't have the approach to surgically get rid of bad debts and bad assets, and at the same time, they're not going to be able to rely on their traditional measures of growth," Roche said. "That's the big problem."

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A tick bite gave me Alpha-gal syndrome. Now, I'm allergic to meat and its byproducts and only eat 1 meal a day.

Lon Wilhelms looks off to the left side of the frame, lit in the warm orange glow of the sun, with the open water behind her.
Lon Wilhelms enjoys spending time outdoors, but since developing Alpha-gal syndrome, she's become much more cautious.
  • Lon Wilhelms got Alpha-gal syndrome from a lone star tick bite.
  • The syndrome made her allergic to mammals and their byproducts.
  • She starts her day with a specific coffee brand and only eats one meal a day — dinner. 

This as-told-to essay is based on a conversation with Lon Wilhelms, about her experience living with Alpha-gal syndrome. It has been edited for length and clarity.

Everybody has a different story. For me, it started when I came down with COVID-19 in July of 2022, and all these things started going wrong with me. I had heart palpitations, hives, tongue and eye swelling, and I even fainted a couple of times.

No matter how much rest I got, things didn't get better. I wound up going through about four months of testing, with doctors searching for signs of celiac disease, Lyme disease, and many other things.

Eventually, I came back positive for Alpha-gal syndrome. And I had never heard of it in my life.

Alpha-gal is more than just a red meat allergy

Close up of hands picking out meat at grocery store
Meat that comes from mammals is a no go for people living with Alpha-gal syndrome.

When I first got the call, the nurse who delivered the news said I just had to avoid eating hooved animals, like pigs and deer. She told me that Alpha-gal was commonly known as the red meat allergy, and that if I didn't eat those animals, I should be okay.

I was pretty curious about that. It seemed so odd to me. So I went online and started doing some research, and found out it could be about more than avoiding hooved animals.

For me, I found I was sensitive to anything that comes from a mammal. That includes meat and milk, but also many shampoos, cosmetics, lotions, medications, and even certain brands of bottled water.

And I found out it's not just as simple as eating vegan products. A seaweed that's commonly used in them has a similar chemical structure to the sugars in meat that I'm allergic to, and can also make me sick.

So I realized that in the five months since I had started feeling bad, I had been ingesting the things that were making me sicker.

I got overwhelmed very quickly

There are no national regulations that make manufacturers include information about mammalian meat on their product label. So I got overwhelmed really quickly, unsure of what foods I could trust.

For the first month after I found out, all I felt safe eating was Ritz crackers and peanut butter. It got so bad that my doctors had to start giving me injections to make sure I had enough nutrients to survive.

Part of the reason this was so hard for me to adjust to was because I had never heard of anything like this happening. So when the CDC released its report in July about how Alpha-gal is becoming more common, it made me hopeful that awareness would spread.

The more people hear about it, I hope, the more they'll begin to understand it.

lone star tick
A close up view of the Lone Star Tick.

The guessing game

The lone star tick is common in the rural part of the East Coast I live in. It's the species thought to be responsible for Alpha-gal.

I was last bitten by a tick two years before I was diagnosed. My bite took a while to heal, but I brushed it off, figuring I had just developed a bit of an allergy to tick bites. I never suspected anything more serious.

My doctor thinks my symptoms had stayed dormant for years because my immune system was strong enough to keep them down. But when I got so sick with COVID, it allowed the syndrome to push past my body's defense system and become active.

lone star tick range
A map that shows where the lone star tick is common in the United States.
Every person with Alpha-gal has different reactions to mammalian products. Some people get really bad GI (gastrointestinal) issues, some people get hives, some people get heart palpitations, and some people have full-blown anaphylaxis, like you think of for severe peanut allergies.

Some people can have milk or butter and be fine. Others can't even eat food that is prepared in the same place as red meat.

It's just this whole guessing game. Regardless, most of us take daily antihistamines, carry stronger products like Unisom melts, and keep EpiPens with us at all times, in case we have a severe reaction.

Oh, and if you're wondering, some of us can't even take certain types of Benadryl, because it has gelatin.

It's a wonderful community

Here's the thing about Alpha-gal: I've found not a lot of people understand it, and many doctors don't even understand it. It was really confusing and lonely figuring things out for myself early on.

But through all my research I found a Facebook group for people living with Alpha-gal. That was a game-changer. 

The people there had already done all the heavy lifting for me, researching what products are safe and what products are dangerous. They took the time to learn the chemical names for the different animal byproducts and identify them on labels, or to mail manufacturers themselves with questions.

Now, there are pages and pages of brands that they've sorted through that I know I can eat. On my own, I might not have bothered eating foods I wanted to eat for fear of having a reaction. 

It's because of this group that I did eventually learn how to start incorporating normal foods again. It's a really wonderful community.

Lon and her daughter pose for a photo together.
Lon poses for a photo with her daughter.

Now, I usually eat one meal a day

Now, my diet is quite different from what it was before Alpha-gal, but it's better than it was early on in my diagnosis. I really miss cheese, but for other products, like butter, I've found some excellent plant-based substitutes.

I find it's easier for me to think about what I can eat. That includes birds and seafood. I mean honestly, I'm lucky to have that.

Most days now, I have my morning coffee with a brand I found through the Facebook group, I head to work, and then I come home to have a meal with a safe protein and some vegetables.

It might not seem like much, but I'm learning every day, and I'm just relieved to have what I can have now.

I hope other people never have to know this disease the way that I do. I hope they never get it. But they should learn what it is and how they can get it so that they're more vigilant when it comes to ticks.

You should avoid the pests at all costs. But if you do get bit, if it's possible, take the tick with you to the doctor to see if it's infected.

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Friday, August 18, 2023

One in 5 Chinese young adults looking for work is unemployed. The lack of work slows down the whole economy

A group of Chinese workers witting at desks and working on computers.
Some Chinese companies have a "996" work culture where staff work from 9 a.m. to 9 p.m., six days a week.
  • Over one in 5 Chinese young adults looking for work can't find it, according to China's National Bureau of Statistics.
  • The Chinese government didn't report rates for July, saying it had to reevaluate its methodology.
  • According to UNICEF, youth unemployment can lead to social and economic unrest. 

Chinese youth unemployment hit an all-time high in June, and it's impacting the entire Chinese economy negatively.

In June, China's National Bureau of Statistics reported that for ages 16 - 24, employment hit a record high of 21.3% — or more than one in 5 people.

"The trend of youth unemployment is unmistakable because NBS' own data, no matter how it has been calculated, shows that the urban youth unemployment rate has nearly doubled since 2019 and keeps growing," said Sun Xin, a lecturer at King's College London, told NBC News in an email.

Sun also mentioned that the problem is exacerbated by "harsh business environments" that reduce hiring in foreign firms, while the state sector is unable to provide enough jobs that fit graduates' expectations.

For their July data released last week, Chinese government officials entirely omitted the data on youth unemployment.

A spokesperson told from the bureau told CNBC that the Chinese government did not release data on youth unemployment because it is reassessing its methodology and because of economic and social changes.

The rate of unemployment doesn't necessarily mean there's a lack of jobs in China for people to take. According to reporting from The New York Times, young people in China who graduated from higher education institutions haven't been able to find the white-collar jobs they want — jobs they went to school for.

With China's economy already recovering slower than expected from catastrophic shutdowns during COVID-19, the unemployment rates could be especially harmful.

The Times also reported that amid the crisis, Chinese leaders are telling young people to take jobs they might be overqualified for rather than have no job. Leader Xi Jinping encouraged them to learn how to "eat bitterness," or endure hardship to build character.

But it's not quite that simple. According to research from United Nations Children's Fund, youth unemployment impacts present and future economic growth and stability. The report also warns that youth unemployment can have "significant and serious social repercussions" and social unrest.

The Wall Street Journal reported that one young job-seeker, Liu Xingyu, was upset that older Chinese people felt her generation is "too picky."

"They're not from our generation, and they don't understand us, so their opinions don't matter much to us," said Liu to the Journal.

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Instacart is going public. For real, this time.

An Instacart shopper at a ShopRite store in New Jersey
Instacart is reportedly targeting an IPO as soon as September. It's not the first time the grocery delivery company has tried to go public.
  • Instacart is reportedly planning to go public in an IPO as soon as September, per Bloomberg.
  • The grocery delivery company has reportedly tried to go public multiple times before.
  • The report comes weeks after Instacart cut base pay for its shoppers.

You'll soon be able to buy Instacart stock — but we've heard that before.

The grocery delivery company could go public as soon as September, Bloomberg reported on Thursday.

Instacart could file plans for the IPO with the US Securities and Exchange Commission as soon as next week, according to Bloomberg. The plans would include details about the company's financial performance, which have not been available to the public so far.

Instacart declined to comment on the report.

The reported IPO plans come weeks after Instacart cut base pay for its shoppers to $4 per order from $7. Since then, some Instacart workers have started searching for other jobs, saying that their earnings have fallen so much that shopping and delivering orders through the platform is no longer worth their time.

Reports about Instacart planning an IPO have trickled out for nearly three years.

Demand for grocery delivery rose in the early months of 2020 as consumers avoided going to stores and socially distanced to avoid catching and spreading COVID-19. Against that backdrop, Instacart started preparing for an early-2021 IPO by hiring bankers, CNBC reported in November 2020.

But over the last two years, many customers have become comfortable doing their own shopping again. In March 2021, the Information reported that Instacart paused plans to go public, opting to wait and see what post-pandemic demand for its services would look like.

Many white-collar employers have required their workers to come back to physical offices after a prolonged work-from-home phase during the pandemic. That's made ordering groceries for delivery less attractive, since remote workers are more likely to order groceries online, according to a survey conducted earlier this year by Morning Consult.

Instacart reportedly filed for a direct listing in early 2022. As the year went on, though, it started considering a traditional IPO. An IPO involves raising money by issuing new shares, while a direct listing raises no new capital and only allows existing shares to change hands.

Instacart reportedly targeted an IPO before the end of 2022, according to the Wall Street Journal.

But those plans, too, were scuttled. Few companies, especially in the technology sector, went public in 2022. Instacart CEO Fidji Simo cited the slow IPO market as one reason Instacart delayed its offering again, the Journal reported last October.

Demand for grocery delivery has continued to weaken, according to consultancy Brick Meets Click. Online grocery sales in the US for July were $7.2 billion, down 7% from a year ago, according to a survey from Brick Meets Click and Mercatus.

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Overblown perceptions of 'wokeness' in the military are making it harder to recruit new people, top Pentagon leader says

General Mark Milley, Chairman of the Joint Chiefs of Staff, in Brussels, Belgium on June 15, 2023.
General Mark Milley, Chairman of the Joint Chiefs of Staff, in Brussels, Belgium on June 15, 2023.
  • The country's top general said "wokeness" perceptions are a "contributing factor" to recruitment challenges.
  • He argued that such perceptions are overblown, but they're having an impact anyway.
  • Republicans in recent years have increasingly derided the military as "woke."

The military has been struggling to recruit new members. And according to the nation's top general, "wokeness" is playing at least a small role.

In an interview with the Washington Post, Gen. Mark Milley — the Chairman of the Joint Chiefs of Staff — cited the COVID-19 pandemic as a key reason driving the recruitment shortfalls, noting that military recruiters couldn't engage in normal on-campus high school recruitment for two years. He also pointed to data showing that recruits are failing a key academic test to get into the military, which he also suggested was caused by the pandemic.

But while Milley insisted that "wokeness" isn't the main reason for the recruitment shortfall, he did say it was a "contributing factor."

"I personally think that it's overstated," Milley said of "wokeness," adding: "There are things that are done in the military that certainly, you know, raise that as an issue, but the actual facts suggests that it's much less significant than perhaps the perception is."

He went on to address drag shows on military bases and critical race theory, two issues that Republicans in recent years have sought to highlight as "woke" issues plaguing the military.

"I don't agree with drag queen shows being on military bases. I don't think that's appropriate," he said. "How many times it happened? It happened a few."

The military recently banned drag shows on military bases after Republican Rep. Matt Gaetz of Florida raised the issue during a House hearing in March.

"Same thing with critical race theory," he added. "Agree or disagree with critical race theory, it is not a theory that the Department of Defense or the military is embracing and shoving down people's throats." 

Republicans have claimed that the theory — a way of understanding how race has impacted society and policy — is being taught within military training and school instruction on military bases.

The House-passed version of this year's National Defense Authorization Act would explicitly ban the practice after 9 House Democrats joined with Republicans to approve an amendment to do so that was proposed by Republican Rep. Chip Roy of Texas.

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Thursday, August 17, 2023

China Evergrande, the world's most heavily indebted property developer, just filed for Chapter 15 bankruptcy protection

Evergrande
The logo of Evergrande Real Estate on a crane in Hangzhou, east China's Zhejiang Province.
  • China Evergrande has filed for US Chapter 15 bankruptcy protection.
  • It is the world's most indebted developer with about $340 billion in liabilities as of end-2022.
  • Evergrande's filing came amid a real-estate crisis and its spillover impact on the economy in China.

Embattled Chinese property developer China Evergrande — the world's most indebted developer — just filed for bankruptcy protection in the US on Thursday.

This is the latest development in a troubled saga that began when the developer faced a liquidity crunch in 2021. It first defaulted on an offshore dollar bond in December of that year.

Evergrande — which had $300 billion worth of liabilities when troubles first began and saw its liabilities balloon to about $340 billion by the end of 2022 — is seeking protection under Chapter 15 of the US bankruptcy code, according to a Thursday court filing seen by Insider. Chapter 15 protects the US assets of non-US companies undergoing restructurings.

Tianji Holdings, an Evergrande affiliate, also sought Chapter 15 bankruptcy protection on Thursday, per the filing.

Evergrande's Chapter 15 filing mentions ongoing restructuring proceedings in Hong Kong and the Cayman Islands.

Once China's second-largest developer, Evergrande faced a liquidity crisis in 2021 that triggered broader concerns about the country's real-estate sector, which — along with related industries — contributes as much as 30% to the country's GDP. 

Guangzhou-based Evergrande posted a net loss of 105.91 billion yuan, or $14.5 billion, in 2022, compared with a loss of 476.04 billion yuan in 2021, per results filed to the Hong Kong Stock Exchange in July.

Evergrande's Chapter 15 filing came amid fears of widening economic woes in China as the country's real-estate crisis emanates. There are concerns that China's property crisis could spill over into the broader domestic and global economy.

And the hits keep coming for China's real-estate sector.

Earlier this month, Country Garden, China's biggest private-sector developer by sales, missed interest payments on two US-dollar-denominated bonds.

Days after Country Garden's troubles broke, news emerged that a major Chinese trust company Zhongrong International missed repayments on dozens of investment products since late July.

The events are concerning as they point to deepening troubles in the world's second-largest economy, which has been struggling to recover following nearly three years of on-off COVID-19 lockdowns.

Trading in Evergrande shares was suspended in March 2022.

Evergrande did not immediately respond to a request for comment from Insider.

The case is China Evergrande Group and Jimmy Fong, 23-11332, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).

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Why is RFK Jr.'s voice raspy? He has a neurological disorder called spasmodic dysphonia

Robert F. Kennedy Jr. speaks.
Robert F. Kennedy Jr. speaks at the Des Moines Register Soapbox at the Iowa State Fair on August 12, 2023.
  • Robert F. Kennedy Jr. was diagnosed with spasmodic dysphonia around 1996.
  • One symptom of the rare neurological disorder is a raspy voice.
  • There is no cure for the condition, but patients can undergo speech therapy or counseling.

Robert F. Kennedy Jr., the nephew of John F. Kennedy, has stepped back into the spotlight recently, not only for his longshot run to secure the 2024 Democratic party nomination but also for using his campaign to promote conspiracy theories about vaccines and COVID-19.

A Morning Consult survey suggested Kennedy's favorability among Democratic voters remains low, at a 38% approval rating, but his family's political lineage and his controversial views have garnered the candidate some considerable attention. The poll had a margin of error of +/- 2 percentage points. 

While on the campaign trail, people are once again asking about Kennedy's distinctly raspy voice.

Kennedy, 69, previously revealed he was diagnosed in his early 40s with a rare neurological condition called spasmodic dysphonia.

"It began as a mild tremble for a couple of years," Kennedy told Oprah Winfrey in a 2007 interview, adding that he believed his condition worsened over the years.

Here's what we know about the disorder.

What is spasmodic dysphonia?

Spasmodic dysphonia is a neurological disorder that causes involuntary spasms in the muscles of the voice box, also known as the larynx, according to John Hopkins Medicine.

In other words, the vocal cords don't vibrate as they typically should.

This condition can strain an individual's ability to speak, sometimes causing their voice to sound hoarse or breathy. Humming, laughing, singing, swallowing, and crying can also be impacted.

There are three kinds of spasmodic dysphonia.

The most common type is adductor spasmodic dysphonia, in which the vocal cords tighten up, causing a person's voice to sound strained, according to the Cleveland Clinic, a nonprofit medical center.

Abductor spasmodic dysphonia is where the muscle spasms cause the vocal folds to stay open. In this case, a person's voice can sound breathy, according to the medical center.

Some people can have a rare mix of both types.

What causes spasmodic dysphonia?

The exact cause of spasmodic dysphonia is unknown, according to Michigan Medicine of the University of Michigan.

"Spasmodic dysphonia is thought to be caused by abnormal functioning in an area of the brain called the basal ganglia," according to the National Institute on Deafness and Other Communication Disorders. "The basal ganglia help coordinate the movements of muscles throughout the body. "

Research has also found abnormalities in the areas of the cerebral cortex — the area of the brain that controls muscle movement, the NIDCD wrote.

Spasmodic dysphonia may also be inherited, but a specific gene for the disorder has not yet been identified.

Is spasmodic dysphonia painful?

The condition is not known to be painful, but it does make the ability to speak difficult.

When asked if it hurts to talk, Kennedy told Winfrey: "No, but it's an effort."

Kennedy recently told NewsNation that he feels the condition makes it "problematical" for people to listen to him.

"I cannot listen to myself on TV," he joked. "So I feel sorry for you guys having to listen to me."

Can spasmodic dysphonia be cured?

Symptoms of spasmodic dysphonia, which is a chronic condition, often develop around middle age, according to the American Speech-Language-Hearing Association.

The symptoms can also be more acute when under stress.

There is no cure for the condition, according to the University of Pennsylvania Health System. But there are treatment options available, including speech therapy and psychological counseling to treat mild cases. Botox injections are also an option.

"Each Botox injection provides about three months of relief from symptoms and there is no limit to the number of Botox injections you may receive for this condition," according to Penn Medicine.

How rare is spasmodic dysphonia?

The disorder is rare and impacts about 1 per 100,000 people, according to a 2011 study published in The Journal of Neuroscience.

Other notable people with spasmodic dysphonia include "Hellboy" actress Selma Blair, CBS News correspondent Jeff Pegues, and journalist Diane Rehm.

Kennedy's campaign team could not provide comment before the time of this story's publishing.

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Foreign investors are giving up on China as capital flows reverse

A Chinese flag flying over Shanghai street
A Chinese flag flying over Shanghai.
  • Foreign investors are giving up on China as the country's post-COVID rebound fizzles.
  • They resumed dumping Chinese stocks and bonds after Beijing's pledges to boost the economy briefly lifted hopes.
  • Exchanges in Shanghai and Shenzhen have seen nine straight days of outflows among overseas traders.

Foreign investors are giving up on China as the economy's post-COVID recovery continues to fizzle with little hope of relief from Beijing.

In recent weeks, global investors have resumed dumping Chinese stocks and bonds after briefly seeing inflows last month, when the government pledged more help for the economy. 

Hong Kong's Stock Connect trading scheme, which allows foreigners to trade mainland-listed stocks, had seen 54 billion yuan ($7.4 billion) of net purchases after a July 24 promise from the Communist Party's politburo for support. But according to the Financial Times, those gains are now nearly all gone.

In addition, stock exchanges in Shanghai and Shenzhen have seen nine straight days of outflows among overseas traders, according to Bloomberg, tying a record streak. During that span, foreign investors sold 46.2 billion yuan of mainland Chinese stocks.

Meanwhile, foreign institutional investors shed 37 billion yuan worth of Chinese bonds in July, according to data out Wednesday from China's foreign exchange regulator.

While officials in Beijing raised hopes last month with bullish talk of aggressive support, they have failed to deliver on actual policies that indicate expansive moves, and analysts don't expect any to come as the central government is seen as wary of adding too much debt.

Recent weeks have also seen fresh signs that the Chinese economy is getting worse, with retail sales and industrial output slowing further and consumer prices slipping in deflationary territory.

Portfolio managers told the FT that the pace of selling has picked up this month and will likely accelerate further, even after a surprise rate cut from the central bank this week.

The pessimism among global investors is translating to China's benchmark stock gauge as well. The CSI 300 index of Shanghai- and Shenzhen-listed shares have nearly given back all of its 5.7% gain after the July politburo meeting.

Meanwhile, the yuan has also felt the effects of the reversal and has dropped 2.4% against the dollar this month. That prompted Beijing to pressure state-run banks to intervene in currency markets this week to prop up the yuan.

The recent outflow of capital on the part of global investors picks up where they left off in the spring, as weakness in China's economy was becoming clear following a first-quarter bounce.

According to Reuters, $1.71 billion worth of mainland shares were sold by foreigners in May, outpacing April's $659 million withdrawal. 

Following China's ending of its COVID-19 restrictions in December, bullish hopes for an economic rebound led to investments worth $25.05 billion in the first five months of 2023. 

That's compared to $6.36 billion in the entirety of 2022, Reuters reported. But the hopes that fueled this year's heavy investment have been dashed as growth continues to cool across a number of Chinese sectors. 

In addition to the consumer and manufacturing sectors, the real estate market — which serves as a key store of wealth in China's economy — has also been getting worse. In July, China's new-home prices fell for a second consecutive month and at a faster pace.

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DeSantis debate strategy memo urges him to defend Trump whenever Chris Christie attacks the former president

ron desantis
Florida Governor Ron DeSantis speaks at a press conference to announce the opening of a monoclonal antibody treatment site for COVID-19 patients at Lakes Church in Lakeland, Florida on August 21, 2021.
  • The first GOP presidential debate is scheduled for August 23.
  • A group close to Ron DeSantis' super PAC legally released hundreds of documents online giving him campaign advice.
  • A strategy memo suggests DeSantis should defend Trump following any attacks from Gov. Chris Christie.

Debate strategy advice from a group close to the super PAC supporting Florida Gov. Ron DeSantis' presidential campaign urges him to defend former President Donald Trump from any personal attacks by fellow candidate Chris Christie.

On Thursday, the New York Times reported that Axiom Strategies, a company owned by the Never Back Down campaign's chief strategist, hosted a tranche of hundreds of documents on its website detailing strategies DeSantis can use in his campaign, polling numbers, and more

Among the documents included on the site was a debate memo giving DeSantis and his campaign general advice about how to approach the first Republican presidential debate. It advises him to "go after Joe Biden and the media 3-5 times," share his "positive vision," and "hammer Vivek Ramaswamy in a response."

And while Trump has repeatedly suggested he won't attend the debate on August 23, saying he'd instead watch it to see whom he "MIGHT consider for Vice President," the debate strategy memo hosted by Axiom Strategies urges DeSantis to defend the former president against inevitable attacks against him by Christie.

"Trump isn't here so let's just leave him alone," the memo suggests DeSantis could say in response. "He's too weak to defend himself here."

The memo also notes DeSantis could deflect an attack on Trump from Christie by trying to pit the the other candidates against the former governor of New Jersey.

"We're all running against him," the document suggests he could say. "I don't think we want to join forces with someone on this stage who's auditioning for a show on MSNBC."

Christie's campaign did not respond to Insider's request for comment.

While on the campaign trail, Christie has been the loudest voice against Trump in the GOP presidential race, appearing on television show after television show to boost his campaign by putting down the 45th president.

Christie's strategy appears to be working to some degree: According to a recent poll out of New Hampshire, Christie just surpassed DeSantis in support for the GOP primary.

The firm's advice for DeSantis to act as a bodyguard of sorts for Trump on the debate stage comes as Trump holds a commanding lead in GOP primary polling. According to an average of national polls deemed "major" by FiveThirtyEight, Trump holds a 38.8 percentage point lead over DeSantis, who's sitting in second place with an average of 15% total support.

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Listen to ex-Tesla workers describe Elon Musk's 'production hell' in their own words, from working through a raw sewage leak to sleeping on the factory floor

Tesla worker told Bloomberg that the company tracks their keystrokes.
Tesla workers described their experience at the automaker in a podcast with The Verge.
  • Tesla workers described what it was like to work through "production hell" in a new podcast.
  • The ex-Tesla workers told The Verge that they worked long hours and faced high pressure to deliver.
  • One worker said he had to work through a raw sewage leak, a claim the company has previously denied.

Tesla workers shared their experience working at the automaker during Elon Musk's stretches of "hardcore" production in a recent podcast from The Verge.

In an episode of "Land of the Giants," some former Tesla employees talked about what it was like to see people collapsing from what they said was dehydration — or sleeping on the factory floor after 12-hour shifts. 

"What I saw was a lot of people sleeping on the floor, people working 10, 12 hours a day, six, seven days a week," Carlos Gabriel, a former Tesla employee who worked at the company in 2020, said of his experience at the Fremont factory. Musk has also said he slept on the factory floor from time to time.

Gabriel previously told The Washington Post in 2020 that he had been terminated and alleged he'd lost his job after he spoke up about working conditions at the facility during the COVID-19 pandemic. At the time, Tesla did not comment on Gabriel's claims.

Huibert Mees, chief engineer on the Model S suspension who worked at Tesla from 2009 to 2015 before leaving for Apple, told The Verge the work was "all-consuming."

"You put in the hours and it was weekends and it was 8, 9, 10 at night every night," he said on the podcast.

Denis Duran — a former Tesla employee who started working for the company in 2014 during the Model 3 production ramp-up that Musk has dubbed "production hell" — said on the podcast that he remembers seeing another worker throw up on the factory floor and faint from dehydration. He also said he recalled a raw sewage leak that some Tesla workers were told to continue working through.

"We couldn't believe that it was almost like past our feet, the sewage and we even asked like 'Are we gonna shut it down? This is ridiculous.'" Duran said on the podcast. "They were like: 'No, no we need to keep running. This is not going to stop a line.'"

The ex-Tesla worker said the company made a pathway that the workers could walk on over the raw sewage. Duran and three other Tesla employees originally told Bloomberg about the incident in 2018. At the time, a spokesperson for Tesla told Insider that the company was not aware of any instances in which managers told workers to walk through sewage.

Duran told The Verge he worked for Tesla for five years before he left the company. During that time, he said he worked through a fire and saw a man's leg crushed by a car on the assembly line. Duran has since become vocal about his experience at the factory and called the carmaker a "modern day sweatshop" in a video he filmed with the More Perfect Union in 2021. He told The Verge Tesla HR was called in to address some of his safety concerns, but "everyone there in the meeting was too terrified to say anything."

"Nothing is more important to us than the safety of our employees," A Tesla representative told Insider when Bloomberg first published Duran and other worker's safety complaints in 2018. "This is not to say that there aren't real issues that need to be dealt with at Tesla or that we've made no mistakes with any of the 40,000 people who work at our company. However, there should be absolutely no question that we care deeply about the well-being of our employees and that we try our absolute hardest to do the right thing and to fail less often. With each passing month, we improve safety further and will keep doing so until we have the safest factory in the world by far."

Elon Musk has dubbed the Model 3 production ramp up "production hell."
Elon Musk has dubbed the Model 3 production ramp up "production hell."

Another former Tesla employee, Melvin Berry, said Musk was on a short fuse during the early stages of Model 3 production ramp-up which the Tesla CEO dubbed "production hell."

"Let's say you dropped something, let's say you do something wrong, you get fired on the spot because Elon is coming out of a room looking down at you," Berry said of his experience at the company in 2015 and 2016.

Musk has been accused of rage-firing employees in the past, something he has denied. In 2018, Wired reported that Tesla employees were told to avoid passing Musk's desk because he had a habit of going on "rage-firing" sprees. A book about Musk published last year said the entrepreneur had a reputation for exploding at top executives and employees on the assembly line. In the past, Musk has called the allegations of rage-firing  "false" on Twitter and said he gives "clear and frank" feedback to employees.

Berry left the company in 2016. He was awarded $1 million in a racial discrimination lawsuit against Tesla in 2021. In the lawsuit, he alleged that he was called racial slurs by supervisors on the production line at Tesla while the company turned a blind eye.

While some former Tesla employees expressed concern about some of the company's practices, Mees said on the podcast that the EV company never would have succeeded without Musk's determination.

"To do something like this in the time we had with the with the resources that we had the money we had, there's no other way to do," Mees said on "Land of the Giants."

A spokesperson for Tesla did not respond to a request for comment from Insider.

Listen to the full podcast here.

Do you work for Tesla or have insight to share? Reach out to the reporter from a non-work device and email at gkay@insider.com

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Wednesday, August 16, 2023

I can make $1,300 a day cleaning roofs and gutters. It's one of the easiest and highest-paying side gigs out there — here's how I got started.

Spencer Claeys arms crossed
Spencer Claeys is based in Seattle, Washington.
  • Spencer Claeys is the owner of Northwest Pro Wash
  • He says that power washing, roof and gutter cleaning are easy side hustles. 
  • Claeys says you don't need much equipment or experience to start making money. 

I can tell you that cleaning roofs and gutters is one of the easiest but highest-paying side jobs you can do. I can make more than $1,300 in a day.

There is so much demand

Spencer Claeys with tools.
Claeys likes to use a leaf blower to help clean gutters.

I've been doing this for about four years now. I got started with basic pressure washing and went door-to-door. I cleaned exteriors like driveways and decks. The business was great, but people kept asking me if I did roofs.

Eventually, I decided to give it a shot because the demand was super strong. Ever since, I've been busy.

I stopped going door to door during the Covid-19 pandemic. But people still needed their homes maintained, so I ran a Facebook ad with four different services; roof cleaning, gutter cleaning, pressure washing, and roof and gutter combo. The roof and gutter option took off, and I still use Facebook ads to find clients.

In Washington State, where I live, we have a massive amount of trees and rain — which means a lot of stuff falling from the sky. The roofs grow moss, and the gutters clog easily. It's the perfect area for this business.

The money is great

I charged $300 my first time for a full moss treatment and gutter clean. Now I charge double that price for three to four hours of work. I make about $3,000 per week working with one other person. I aimed for $2,000 a week when it was just me. I also usually get a tip between $30 and $100.  

Before this, I was working at a job for something like $15 an hour. Now I can make hundreds per day. I'm sometimes like, "Holy crap" — what I can make in a day would have taken me weeks before, and I don't even have a boss.

Plus, I spend lots of time talking with the client, and we're really just chilling. I work with cool people daily — sometimes, they'll hand me a beer while working. Someone even gave me a bottle of Jack Daniels as a present and I've received a chainsaw, pizza, and other dinners.

People really appreciate it when you do a good job. It's a nice feeling when they're grateful, you know you worked hard, and you earned good money.

At first I was a little apprehensive

Spencer Claeys on a roof
Clayes says some roofs are more challenging than others.

 

 

 

 

 

 

 

 

 

 

 

I wasn't sure what chemicals to use or what to do at all. I actually looked up how to clean roofs on YouTube on my way to my first job. But I got it done, and now I teach people how to clean roofs on YouTube, so it has come full circle.

It only took me a few weeks after that first job to get comfortable with it. It's pretty straightforward, and you don't need to overcomplicate it.

Cleaning a roof involves blowing off or brushing off the debris that falls from trees. You also have to treat the roof with some sort of basic chemical (basic as in not acidic because moss and other fungi like acidic environments). Then, you make sure no branches or anything are touching the roof. I use a leaf blower to clean out the gutters. That's basically it.

You don't need much equipment: I use a leaf blower, a ladder, and a brush. I also have a soft-wash tank for spraying roofs, but you don't need that to start. You can use a powder treatment instead, like laundry detergent or zinc powder. Either of those are fine.

I worked pretty much every day I could

I have another person who works with me now. We usually do six days a week on a roof. A couple of roofs per day is manageable.

I've taken a step back to pursue social media and to coach people on how to build their businesses, but I'm still out there on roofs and picking up cleanings.

Some roofs are more difficult than others

I've had certain roofs take me days. You should look at the size of the roof and steepness before setting a price. Doing the harder roofs is optional, but they pay better.

There have been certain roofs where I look at them, and there's no amount of money they can pay me to get up on it. Some old roofs are too slippery and difficult to walk on.

It's a young man's game

I'm 27, so I'm not old yet, but roof cleaning is more of a young man's game. Once you get past the age of 40 or 50, you don't want to be up on a ladder. Just be safe. Rope up when you need to, and make sure you have sturdy boots. I've been in this business for years and only heard of one person falling off.

But if you're a young dude, I don't think there's anything better than just going out and cleaning stuff — it's quick money. If you were to go out right now knocking on doors, you could make $300 to $500 bucks today.

If you make money through a lucrative and unique side hustle, email Jenna Gyimesi at jgyimesi@insider.com.

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'Rich Dad Poor Dad' author Robert Kiyosaki slams Janet Yellen for trumpeting Bidenomics: 'What is she smoking?'

Janet Yellen
Treasury Secretary Janet Yellen.
  • "Rich Dad Poor Dad" author Robert Kiyosaki took a jab at Janet Yellen for touting Bidenomics. 
  • "What is she smoking?" Has she been food shopping lately? Has she filled her gas tank lately?" the personal finance guru said. 
  • The Treasury Secretary on Monday cheered Biden's Inflation Reduction Act for driving economic growth at a time when Americans are financially strapped. 

"Rich Dad Poor Dad" author Robert Kiyosaki slammed US Treasury Secretary Janet Yellen for touting Bidenomics in a Monday speech. 

At the Inflation Reduction Act anniversary in Las Vegas, Nevada, Yellen cheered President Joe Biden's economic policies, saying his agenda has "helped drive a massive boom that is touching every corner of the country." 

She highlighted a robust US labor market, falling inflation, and consumer sentiment at nearly a two-year high as part of her Bidenomics sales pitch.

But Kiyosaki pushed back, suggesting Yellen's comments don't reflect economic problems including higher prices of automotive fuel and some food items, and rising credit-card debt.

"Treasury Secretary Janet Yellin says the IRA Inflation Reduction Act is "turning point" in saving our planet, "what is she smoking?" Has she been food shopping lately? Has she filled her gas tank lately? How many businesses closing? How about credit card debt? Biden's team worst leaders in history," Kiyosaki said in a Wednesday post on X

His comments come after US inflation ticked up in July, snapping a multi-month decline. Data showed the Consumer Price Index rose 3.2% annually, up from June's 3.0% increase.

That's despite the Federal Reserve hiking interest rates from near-zero levels to upward of 5% in a bid to cool price pressures. 

Higher food and fuel prices have shown how living costs have remained elevated for US consumers, with orange juice and cocoa rising to their most expensive levels in years. Meanwhile, US gas prices are jumping again, rekindling fears of an inflation rebound – and underpinning Kiyosaki's point. 

Like Kiyosaki, other market commentators including "Shark Tank" investor Kevin O'Leary also have blamed Biden's massive fiscal-spending binge during the COVID-19 pandemic for high inflation and rising interest rates.

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TikTok influencers want to rent you a very cool home. Just don't call them landlords.

A house has multiple individuals in rooms swiped in and out, much like a person scrolling through TikTok videos
Social media sparked a rise in the popularity of "house hacking," a fancy new term for the age-old concept of being a landlord that has been repackaged for a new generation of real-estate investors.

Late last year, Kelly Clark was flush with cash from a divorce settlement and eager to embark on a new career. It was finally time, she decided, to become a landlord. 

Clark, who worked in computer sales and interior design before leaving the workforce to raise her children, had come across the term "house hacking" while scrolling through BiggerPockets, a real-estate-investing website. In forums and webinars, investors sang the praises of buying up a house or small multiunit building, living in part of the home, and renting out the rest to tenants who cover the mortgage payments each month. Her then-husband scoffed at the notion of taking on roommates and sacrificing their hard-earned privacy. Despite his protests, Clark found the idea tantalizing. After all, who wouldn't want to live pretty much for free?

At the age of 56, Clark got her chance. In January, she bought a modest four-unit apartment building in Spokane, Washington, for $399,000. With a loan insured by the Federal Housing Administration, she put down just 3.5% of that sticker price, or roughly $14,000, and poured another $100,000 of her savings into renovating the century-old property. She lives in one of the units and plans to rent out the other three at prices that will more than cover her $2,800 monthly mortgage payment. The terms of her loan require that she live at the property for at least a year, but Clark said she hoped to eventually refinance the property and apply the same strategy to additional investments. Recently, she got a letter from her insurance company informing her that the building was valued at more than $800,000.

"I would love to spend my entire life house hacking," Clark, who now helps other investors find and manage properties, told me. 

While live-in landlords are far from a novel concept, the pandemic-era fever around passive income and real-estate investing has sparked a rise in the popularity of house hacking. TikTok influencers and real-estate gurus quickly picked up on this fervor. Using flashy, emoji-laden graphics and buzzwords like "living for free" or "the simplest way to become a millionaire," they brandish house hacking as a no-brainer for those looking to make money in real estate and get their foot in the door of today's brutal housing market. The approach isn't limited to those with rich parents or lucrative jobs: With the aid of government-backed loans that require smaller down payments, they say, pretty much anyone can hack their way to wealth. 

The reality, of course, is more complicated than that. Hackers take on large amounts of debt to fund their purchases, which could pose a risk if home prices fall. Aside from typical roommate issues — clean the dishes in the sink, anyone? — house hackers need to brace themselves for the possibility that they'll have trouble finding tenants, or end up with renters who damage the property or don't pay on time. And then there's the backlash against the very idea: Online commenters have accused house hackers of exploiting their tenants.

Silicon Valley "trailblazers" are fond of rediscovering businesses that already exist — from buses and offices to dorms and juices — and selling them at a fat markup. In that sense, the use of house hacking can be viewed as just a thinly veiled attempt to rebrand and sanitize the idea of a "landlord," conjuring images of tech-enabled progress, rather than the balding guy down the hall who picks up your rent check each month. The great innovation of house hacking is just a flashy repackaging of an age-old idea for a new crop of investors — namely, millennials and Gen Zers. But even if the methods aren't exactly original, the broad adoption of the terminology shows how pretty much everyone is searching for an edge in today's cutthroat housing market

'Hack' your way to wealth

Brandon Turner, an influential figurehead of BiggerPockets, kicked off the house-hacking craze in 2013 with a blog post titled, "How to 'hack' your housing and get paid to live for free." The post outlined a simple way for anyone — well, at least those with "decent credit, a stable job, and a small amount of savings" — to free themselves from the shackles of renting and start building wealth through real estate. The key, Turner wrote, was to purchase a small multifamily property such as a duplex, triplex, or four-plex, live in one of the units, and rent out the others for more than the monthly mortgage payment.

"This is much more than simple tricks or ideas to shave five minutes off your workday," Turner, who left the company last year to focus on his own investment firm, wrote. "This is epic, life-changing stuff."

The post became hugely influential, inspiring thousands of copycats who iterated on the idea. While Turner's initial strategy emphasized small multifamily buildings, some house hackers applied the concept to single-family homes. Ryan Lehman, a 25-year-old software engineer and real-estate investor in Seattle, told me he got his start by reading books, talking to investors, and, of course, spending time on BiggerPockets. Lehman said he was drawn to Turner, who didn't grow up around the real-estate business and rose to fame by touting a simple approach to investing that focused on achieving financial freedom. 

"I was like, 'If Brandon can do this, I can probably do it,'" Lehman told me. 

In August 2020, Lehman arrived in Seattle and briefly rented a room from a couple of house hackers who offered to show him how they managed various aspects of being a landlord, including maintenance and rent collection. A few months later, he bought a five-bedroom home for $620,000, putting down 5% of the purchase price with savings from internships and earnings from the stock market. It was a challenge to find tenants at first, he said, but by sacrificing some privacy, he was able to cover his expenses each month — without pulling from his own pocket.

"I basically bought my house, and then everything started by kind of going crazy as far as house prices and stuff like that," Lehman told me. "There's some skill I guess, just from learning and making sure I'm not doing anything crazy. But there's so much luck involved."

Another key component of house hacking is the use of low-down-payment loans from the Federal Housing Administration. Unlike loans for investment properties, which typically require the buyer to put down at least 15% of the purchase price, these loans offer buyers with lower credit scores or income the opportunity to put down as little as 3.5%. The catch with these loans is that you need to stay at the property for at least a year. But even that isn't much of an obstacle for those looking to build a miniempire of real estate. 

There's some skill I guess, just from learning and making sure I'm not doing anything crazy. But there's so much luck involved.

After buying his first house at 24, Craig Curelop, a former employee of BiggerPockets who's now a Realtor focused on helping investors, told me that he began moving into a new property every 12 months "like clockwork," taking on a new loan each time and refinancing other properties in his growing portfolio. In 2019, he published a book called "The House Hacking Strategy: How to Use Your Home to Achieve Financial Freedom."

"With mortgage payments high and rent so high and all of that, how do you get ahead in this world where wages aren't rising but costs are?" Curelop said. "There's all of this 'Woe is me' talk, but then there's a handful of people that are actually doing something about it. And I think house hacking is one obvious way to eliminate, or at least drastically reduce, what likely is your largest expense."

Selling the dream

You'd be forgiven for thinking that all this sounds sort of ho-hum — a mere refresh of the ancient idea of owning and renting out property. In fact, a huge swath of landlords in the US could fall under the "house hacker" umbrella: Of the roughly 49.5 million rental units in the US, about 46% are on small rental properties with between one and four units, according to the US Census Bureau. About 70% of those small rental properties, or about 15.9 million, are owned by individual investors.

But online influencers have worked hard to make the idea seem groundbreaking and alluring to young investors and people who are sick of their 9-to-5 jobs. TikTok is full of videos that break down the strategy, often in effusive terms that sell the idea of "living for free" or never having to pay rent again. 

"Wait, you're my landlord?" the personal-finance influencer Addison Jarman, playing the role of an astonished renter, asks in one TikTok post.

"Yeah, it's called 'house hacking," the owner and roommate, also played by Jarman, who has 4 million followers, replies. "I make $1,900 off y'all paying rent each month."

YouTube will definitely make it seem very easy

Recently, some property owners and real-estate influencers have even insisted upon doing away with the term "landlord" altogether and replacing it with euphemisms like "housing provider." The term "house hacker" offers a similar shield: If you own a house and are renting out a couple of rooms to friends who cover your mortgage, it may sound kinder than calling yourself their landlord. 

"The term 'landlord' is archaic, offensive, and divisive," Jay Parsons, the head of economics for RealPage, a real-estate-software company, tweeted in November 2021. "And it's used more by reporters/policymakers than it is used in real life everywhere but in a few big coastal cities like NYC and SF."

John Liang, a YouTuber and TikToker who shares tips on credit cards, personal finance, and real estate to an audience of more than 2.3 million TikTok followers, said house hacking represented "one of the more accessible ways" for people to jump into the housing market. The ability to finance nearly 97% of the purchase opens the door to buyers who don't have huge piles of savings, he said. And the strategy solves several problems at once: the questions of where you'll lay your head at night, how you'll pay for it, and how you'll build wealth. In May, Liang posted a TikTok video in which he acted out a scenario between a house hacker and a pair of tenants whose rent payments exceeded the monthly mortgage expense. 

"Wait, so we're buying you this house?" one renter asks. 

"Technically, you're paying me to buy this house," Liang's landlord persona replies.

The hacking haters

In the comments sections of several flashy TikTok posts on house hacking, some people pushed back, proposing harsher substitutes for the term, including "leech" and "parasite." The complaints either revolved around the duplicity of posing as a roommate when you're really the landlord or the very act of using someone else's monthly payments to cover the expenses of a property — again, not a new concept.

In day-to-day life, some house hackers seek to avoid sticky situations by concealing that they're the owner of the house, hiring property managers to handle things such as rent collections, cleaning and maintenance, and, in the worst-case scenario, evictions. The hacker might then pose as just another tenant, or an associate of the management company. Curelop, who told me he's aware of this practice, said he's "very against it."

"I think lying in any capacity is just wrong and shouldn't be done," Curelop said. "My suggestion is always to not flaunt that you own the place. If a tenant asks, don't lie. But you don't need to tell them if they don't ask. It's not really an important detail."  

For his part, Liang, who now owns three multifamily properties, said he had no problem with the term "landlord." "I understand, definitely, some of the resentment toward landlords over the past couple of years," Liang said. Curelop called the online backlash "unfortunate," making the case that "anyone can do this."

While house hacking is often more accessible than other forms of real-estate investing, the videos used to sell people on it tend to gloss over the very real risks of buying up property — risks that both Liang and Curelop made sure to point out when I spoke with them. 

"YouTube will definitely make it seem very easy," Liang said.

Curelop said he emphasized to clients the importance of tenant screening to make sure they ended up with renters who would be considerate and prompt on payments. House hackers should also be prepared to front the entire mortgage payment if their roommate arrangement doesn't work out the way they'd hoped, although Curelop told me hackers are usually able to offset at least some of their mortgage by collecting rents, even if they have to lower prices. Plus, there are macroeconomic factors to consider: Rising home prices have made it tougher to find good deals, while the rental market has softened from its COVID-19-era peak. Even Turner, the original house-hacking evangelist, told Insider in 2021 that the rental market had shifted from "something you can do as a mediocre investor to something you need to be an expert at."

"In 2012, any property you bought would make money as a rental," Turner told Insider's Daniel Geiger. "Today if you take a random property, it will lose money."

The benefit with house hacking, as opposed to a regular investment property, is that it doesn't have to turn a profit for it to be considered worthwhile. If you're able to defray your housing costs at all, you may chalk that up as a win. 

At the end of the day, no matter the semantics, house hackers can't fully insulate themselves from the sometimes messy realities of being a landlord. When I first spoke with Clark, the house hacker in Spokane, she was renovating one of her units and had another that'd been sitting on the market for three weeks — way longer than she'd wanted. She dropped the price and eventually found a tenant, but acknowledged that the rental market has cooled off from its heyday in spring 2022. Regardless, Clark told me, she'll be fine with the income she anticipates will one day materialize. And the temporary struggles haven't dimmed her view of house hacking. 

"I totally love it," Clark told me. "I would love to do it for as long as I can."


James Rodriguez is a senior reporter on Insider's Discourse team.

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I left NYC and bought a house in Montana. I had a big job title but a terrible bank account — now I'm happier and my money goes further.

a woman in a cowgirl outfit
Shallon Lester.
  • Shallon Lester is a YouTuber who moved from New York City to Bozeman, Montana, in June 2020.
  • She purchased a five-bedroom house and realized she'd rather feel rich than big-city cool.
  • Even though she loves Montana more than she had expected, she's found the dating scene to be tricky.

This as-told-to essay is based on a conversation with Shallon Lester, a YouTuber living in Bozeman, Montana. It has been edited for length and clarity.

I'm a YouTube creator who grew up in California, but I lived in New York City for more than 12 years and worked as the editor of a magazine. Once COVID-19 hit, the party was (literally) over, and all I was left with was the vexing drudgery of big-city life without the fun.

I didn't know a single person in Montana, but after I visited Bozeman, something about it felt like home. It called to me.

I moved to Bozeman in June 2020, and I've loved it — the winters are even growing on me. It's nice to hibernate and slow down.

In NYC, I barely kept my head above water. I had a big title but a terrible bank account and felt trapped. Now I live in a five-bedroom house in a rural area, and I love it.

What I miss about NYC

a woman in sunglasses and a cowboy hat
Lester.

The only thing I really miss is wearing my designer clothes and not getting funny looks, but swapping Christian Dior for Mossy Oak is a small price to pay to live somewhere safer, saner, and slower.

I look back on my life in NYC and see how anxious and exhausted I was. I travel a lot and would dread coming home to Manhattan. Now, no matter how great my vacation is, I'm always thrilled to be heading back to Bozeman.

But it has taken me three years to fully shed the manic-city-girl energy and lean into a slower pace of life. I've had to cultivate patience and softness in a way that I didn't have to in Manhattan.

Bozeman is small enough that you never know whom you're going to run into, so you have to mind your manners. People are aware of you in a way that they aren't in a big city, where you can blend in.

Buying a house in Montana

a group of women on a patio in all pink
Lester with her friends at her house in Montana.

After two years of renting, I bought a house for $1 million last summer. My house has a theater on half an acre and includes a guest house I rent out full time for $2,000 a month. I bought my house in cash, so I don't have a mortgage. Having an extra $2,000 a month is amazing. Saving like this would've been impossible for me in NYC.

If you told me when I lived in NYC that I would end up in the suburbs in a big house on a quiet street, you may as well have told me I would live on Rikers Island.

But the coronavirus pandemic snapped the fear-of-missing-out syndrome out of me, and I've never looked back. It felt great to put down real roots and escape the trade-up mentality of NYC.

Cost-of-living expenses

Gas tends to be $3 less per gallon than it is in California, and you can have a steak dinner at a nice restaurant with a glass of wine for under $60 a person. Manicures and hair salons are cheaper, too (highlights and a cut in NYC would cost me more than $400, but I pay $150 here). But I'll admit that the quality is better in big cities.

It also costs less to care for my dog, and he has more space to roam around.

Trading the big-city cool factor for an easier cost of living was the best decision for me. Feeling cool isn't as important as feeling rich.

Making friends

a group of women outside in Montana
Lester and her friends.

I lucked out and have a great group of friends, but dating is a little trickier. I think the men in Montana I've met have a very different type of intelligence than I'd found in NYC: They can build things, they can kill things, and they're very tactile and useful. I find it so cool and sexy, but they don't really find my type of intelligence sexy. I'm sarcastic, witty, and nerdy. The guys I've met here are more into intelligence that has a real world application.

Priorities are also different here. Businesses are understaffed, and it's common to see employees not show up to work if it's a good ski day or the first day of elk-hunting season.

Guys I've met seem to gravitate toward girls who need saving, or who may have jobs but not careers. I'm not quite ready to settle down yet, so dating is still fun for now.

Social-media influencing in Bozeman

I'm one of the only YouTubers in the area. I was afraid my followers wouldn't care about me if I wasn't a "cool" New Yorker anymore, but I've noticed the opposite. I think it's been inspiring for them to see that you can radically change your life, make choices that seem scary or impossible, and not only survive it but also be happier.

However, I have struggled to secure brand partnerships with local businesses. Many haven't gotten on board with influencer advertising because they don't see the value, so I've stuck to nationwide or global brands.

In Montana, people also assume influencers are huge self-centered jerks, so it can be a bit of an uphill battle to prove I'm pretty cool and nice and, more importantly, not trying to turn Montana into Los Angeles or Manhattan. I moved here to let it change me, not the other way around.

Advice for moving from a big city to a rural area

Lean into it. Have respect for the local politics and way of life. Sink your teeth into one big local hobby, whether it's CrossFit, fishing, or rodeos. It will show locals you're there to assimilate, not colonize.

To make friends, have a routine — the same coffee shop, same yoga class — and use your big-city boldness to invite people to do things.

Have you relocated and want to share your story? Email Lauryn Haas at lhaas@insider.com.

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