McClawback 💰

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McClawback 💰

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Tonight: The latest on the hot housing market. Plus, a decimal-point error that'll make you feel so much better about whatever dumb thing you did at work this week. Let's get into it.

By Allison Morrow

📈 HOUSE CALL

Analysts are constantly trying to read the tea leaves of the housing market to get a sense of when things might start to cool off. After all, it's been a loooooong stretch of this pandemic-driven situation, where high demand and limited inventory have pushed home prices to record highs.

Surely it can't last much longer, right? Not so fast, my colleague Paul R. La Monica explains.

Market observers look to retailers like Lowe's as well as home-building companies to get a beat on demand. So this week, when Lowe's issued a disappointing sales outlook and Lennar missed its earnings forecasts, it might have seemed like the housing bubble was starting to deflate.

But on Thursday, the government reported that housing starts and building permits last month rose more than expected from October levels — strongly signaling demand remains high.

Sales are up; ditto mortgage applications, economists at Jefferies noted. "Demand is obviously not a problem... If anything, Omicron should cement housing demand, by demonstrating that the pandemic is far from being over." (I gotta be honest, guys, that's a really grim way to say people are scared as hell and fleeing to the 'burbs. )

Anyway, here's what we're seeing in the housing market crystal ball:

Even though its earnings disappointed, Lennar said that its backlog of homes increased 26%, meaning demand should stay elevated.
Housing stocks are trading near all-time high levels
Lowe's shares recently hit a record high. And rival Home Depot, the top performing Dow stock this year, is close to one as well.
The SPDR S&P Homebuilders ETF, which owns shares of most of the major builders as well as suppliers and retailers, is up nearly 50% this year.
Housing prices just keep on climbing. Redfin reported this week that the median home sale price as of December 12 was up 14% from a year ago to $359,750, just below the all-time high from late November.

There is one thing that could slow the breakneck pace of home-price growth next year: mortgage rates. The Federal Reserve has hinted that it could hike short-term interest rates three times next year to help fight inflation. That, in turn, could put pressure on longer-term bond yields, which influence the direction of mortgage rates.

#️⃣ NUMBER OF THE DAY

$284,495

An NFT trader who goes by the username maxnaut accidentally sold a $284,455 token for a fraction of its value after "a lapse of concentration." Maxnaut says he mistakenly listed the non-fungible token for 0.75 ether ($2,844) instead of 75 ether ($284,495). Whoops!

The NFT was instantly picked up by a bot account, which later resold the piece for 60 ether, or $227,558.

"I saw the error as my finger clicked confirm… I have no animosity to the botter, it's just part of the game," the trader said. "Once I clicked, there was no way of stopping it. And here within the beauty of the Blockchain you can see that it is both honest and unforgiving," he said.

💸 CLAWBACK

McDonald's settled a lawsuit with its former CEO, forcing him to repay his severance package of $105 million in cash and stock — one of the largest clawbacks of executive pay ever in Corporate America.

Much like a Big Mac, that is, um, a lotta bread.

Here's the deal: Steve Easterbrook was fired in 2019 after McD's board determined that he violated company policy by demonstrating "poor judgment involving a recent consensual relationship with an employee."

(OK, quick side note: It's almost comical how predictable these stories have become. Oh, a CEO engaged in and then lied about an inappropriate relationship with an employee? Heavens.)

Anyway, the following year McDonald's got a tip that Easterbrook was carrying on more than one relationship with employees, so it sued, accusing him of lying to the board about the extent of his relationships.

Ba da ba ba bah, not lovin' it. The top brass wanted their money back.

The evidence for those relationships, according to the lawsuit, came in the form of "dozens of nude, partially nude, or sexually explicit photographs and videos of various women," including photographs of the three employees. (So. Dang. Predictable.)

Easterbrook allegedly attached the images to emails he sent from work to his personal account. (Bro, did you skip the compliance training on email security?)

Easterbrook admitted in the SEC filing that he "failed at times to uphold McDonald's values and fulfill certain of my responsibilities as a leader of the company." He apologized to the board, former co-workers and the company's franchisees and suppliers.

WHAT ELSE IS GOING ON?

🍎 Apple is delaying its return to offices indefinitely and giving each employee $1,000 for equipment.

💸 Regulators in Washington may crack down on the industry behind "buy now, pay later," the increasingly popular method for consumers to purchase things online.

🚗 As new car prices go up at the fastest pace on record, Senator Elizabeth Warren is putting the blame, at least partly, on corporate greed.

⚖️ The government made its closing arguments in the trial of Elizabeth Holmes, arguing that she knowingly misled investors, doctors and patients about her startup's blood testing capabilities.