caroline: from bloomberg's world headquarters in new york, i am caroline hyde. romaine: a lot of market volatility. the s&p 500 index having its worst day since may and now we will get some earnings. lynn art, the homebuilder, is going to report momentarily. we will dig into how skyrocketing housing prices are adding to a lot of concerns about inequality and an entire

generation of homebuyers at risk of being left behind. caroline: -- taylor: we are getting earnings and frankly, the numbers do not look good. third quarter revenue, 6.94. estimates were $7.25 billion. third quarter, that looks like an improvement here. you think about adjusted earnings-per-share, right -- home sales, gross margin, 28%, right in line. fourth-quarter deliveries looking a little bit light. new orders looking a little bit light. you can see pretty much across the board, may be starting to feel some of the supply chain pressures. caroline: in a statement, the ceo saying, adjusting our

fourth-quarter delivery guidance, reflecting supply chain constraints. supply chain challenges will continue into the foreseeable future. taylor: we are going to do a lot of this. we are going to take a look at sort of that broad-based market selloff that we got today. let's do it all with our bloomberg cross asset reporter, katie gray felt. one of the biggest property owners in china, you cannot ignore what today meant for ever grant. katie: it was interesting to see this come to the surface in u.s. markets as the story has been brewing. that was my first question to analysts this morning, why now? the answer i got was that people were looking for a chance to de-risk. we ran into some volatility last week. you think about a wall of worry,

earnings forecast. that is why you saw the s&p 500 index fall almost 3%. some pretty healthy dip buying into the close. still closed negative, of course. romaine: i will ask you about high-yield bonds. sometimes there is risk on, risk off sentiment. it did not kind of signal risk off today, did it? katie: no. although you did see this wholesale de-risking, you did not really see it budge with the bond spreads. we look into it, we still see high-yield spreads. i was telling the people about this, why aren't high-yield spreads moving? you did see some movement in

high-yield commodities. the answer i got, basically this is not a u.s. story. yes, we are seeing some contagion risks. the fact that i yields are not moving, that is a signal that maybe you want to buy the dip. caroline: so this is just a china story, that is what they are saying? and it still we get any worries from the federal reserve later in the week, it remains? katie: if you look at what was selling off today, if you look at the msci emerging markets next china index, obviously -- markets x-china index, that does not have any china exposure. kroger fell over 1%. that is a u.s.-only change. that feeds into the story that people are just looking to take

chips off the table today. caroline: maybe they will put them back on tomorrow. coming up, we will be switching gears, discussing the housing affordability issues. we were talking with the prime minister from ireland about soaring prices across the board. adena hefets is with us, ceo of a company looking to change that, divvy homes. this is bloomberg. ♪

romaine: we are focused on housing inequality today. it is a global problem, u.s.

problem, and it is getting worse here. he tech about the inability of regular people to buy a house where they work or want to live, it is harder to do that. caroline: input costs going up, labor costs going up. it has been like this for years. the 90 kingdom has seen for the last decade, the price point, oecd house price income ratio, excess of 100% in the u.k.. new zealand, netherlands, canada. basically nowhere in the developed world left untouched to a certain degree. let's dig into all of that in terms of the inequality element. the cofounder and ceo of divvy, a rent to own housing started. talk about how you are trying to make what is seemingly out of reach for many a little bit more in reach. adena: thank you for having me

on today. the focus of divvy is really providing access to homeownership for everyone. our view is that mortgages have become more challenging over time. there has to be an alternative to provide people and on-ramp. we provide a rent to own the product that allows renters to build equity in the rental property. taylor: what are customers telling you about how this has helped them and some of the affordability -- some of the affordability issues that this has helped solve? adena: the way i think about it is pre-covid and post-covid. what we have seen post-covid is that there is a couple of effects happening. the first is that there are rising home prices. you touched on this earlier. we do not build enough inventory for a long time, so supply is

really constrained. two, demand has really spiked. no one wants to live in a multi-family apartment studio during covid. so, demand for housing has increased. at the same time, it is more challenging today to get a mortgage then it was pre-covid. the reason why is because most mortgage originators are focusing on refinancing. because rates are so low, most of the volume they can do is -- it has become quite a bit more challenging for people to get a mortgage post-covid. romaine: you are sitting there in the bay area, which is probably quite emblematic of a lead the issues we have with housing accessibility in this country. one we talk about sort of the ability to buy a home, it is not just the ability to get a

mortgage, but a lot of times homeowners are competing against investors, competing against companies rather than regular people like you and me. i am wondering, do we ever get back to a housing market where it is just one potential homeowner up against another potential homeowner? or will this be this david versus goliath battle of big investors and bigger and bigger adena: companies? adena:my view is that homes will --adena: my view is that homes will be almost primarily bought and sold by corporations in the future. divvy is definitely part of it. the difference between divvy and other corporations is we put the power in the hands of homebuyers. we let our customers pick out the home. divvy then buys it for them. we put out an all cash quick close offer. we give this leverage to our customers. there are other companies out

there doing the same thing. the core mission behind divvy is to give access to homeownership, not necessarily to provide an all cash bid, but there are plenty of brokers switching to offering all-cash bids to some of their consumers wanting to put down offers on homes. the open doors, the ibuyers of the world, able to buy homes, people who can buy cash offers, no appraisal contingencies, short due diligence period. caroline: how are you trying to level the playing field in terms of credit checking people? making sure you are getting all of the right reads of them to make sure they are the right people to be jointly purchasing on behalf of? adena: we put all of our customers through credit underwriting model, and the goal

is to make sure that we are setting them up for success and that they are not going to move into this house and on day one feel overstretched. the majority of our customers are health-care workers. think nurses, x-ray tax. the biggest issue is often student debt. because of large amounts of student debt, they cannot get a mortgage. the second-biggest is 1099 workers. think uber drivers. for them, if you do not have w2 income, it is quite hard to qualify for a mortgage. we are able to underwrite people who may be could not get it underwritten by the traditional financial system. we are able to make smarter risk trade-offs and decisions where they can build up over the course of three years, get their taxes in order, for example, to get a mortgage on the road. i want to be very clear.

we cannot accept everyone. but our goal is to give people as much of a shot at being able to get a home, then build up equity and savings and be able to buy that home back when they are ready. romaine: interesting stuff. i'm fascinated by your company and business model and hope to have you back sometime soon to talk about any progress you have made. coming up, we will continue this conversation that is really around housing inequality, and we will take a look at the muni market. our next guest, stanford professor and author of "the bonds of inequality." destin jenkins will be joining us to discuss the impact and history of municipal bonds and how it may have contributed, exasperated. taylor: worlds are colliding. muni bonds and "what'd you miss? ."

romaine: i have never been this excited for a reasonable bond conversation. caroline: you can tell by the tone of your voice. this is bloomberg. ♪ ♪

caroline: let's bring you some breaking news regarding crypto. robinhood, we understand, is testing a new crypto wallet and asset features within its app. many have been anticipating this. this is being uncovered by our own mark gurman. a new version of the iphone app, saying the company's software is including pages for users to sign up for a crypto wallet user. taylor: for our u.s. audience,

caroline means beta. adena: how did -- taylor: -- caroline: how did the romans say eddie? probably my way. taylor: we have been looking and examining the bottom-line impact of diversity. our focus this week, the muni market. a stanford professor and author of "the bonds of inequality: debt and the making of the american city," destin jenkins, argues that the history of inequality in the 21st century in america is in part the history of municipal debt as well. perhaps layout the arguments. you take us back to san francisco i believe in the 1940's through present day. where are you seeing the connection? destin: very good to be here with you. i think the kind of point of departure is to think about the familiar story of the good and

noble quality of the miscible bond market. in many ways, that is true. the principal market participant in channel the savings into the infrastructure needs of cities and states around the country. but, it is also true that the business of debt, buying, selling, rating municipal bonds, was a powerful generator of different and overlapping iniquities, whether it is in terms of spatial inequality, deciding which neighborhoods or projects were worthy of investment, thinking about the inequality of wealth, the upward distribution of revenue sources. it tries to take that familiar story, to some extent it is largely true, but there is also something we have missed, and that is the overlapping forms of inequity. romaine: to get to the essence

of what miscible bonds are or rather what they are used for here, many would say, you need this money, you need the borrowing in some way or another to finance basic infrastructure, you needed to finance other ambitions that these cities had been disabilities have. is there a way that these cities could accomplish that without basically borrowing? destin: a fantastic question. for this, we kind of have to go to wait forgot proposal during the 1960's, trying to figure out if there was something structural built into the credit rating process. the proposal was that absolutely there was a bias built into it. how do ratings analysts in the 1960's figure out what is a aaa bond or what is a baa bond? the proposal was that there is

something fundamentally biased about the process. that for instance favor suburbs over cities that have been disadvantaged by federal policies. the market is exacerbating, in some sense creating inequity, and the proposal was to put forward low interest loans, federal grants directly to municipalities as a way of circumventing the power dynamics. caroline: you say black neighborhoods were continuously deemed unworthy of debt. if now we understand that you cannot have that sort of racial inequality going on at that level and you start to invest in black neighborhoods, you create these unwanted side effects, pricing out of those that live there. that you don't have this sort of gentrification that we have seen in certain parts of brooklyn, which ends up meaning that what was the heart and soul of the black community becomes less of

one. destin: the gentrification issue does start to come into play for instance in the early 1980's. you had neighborhoods that were traditionally redlined. new clientele, sort of professional class, move to the city and displaces residences -- displaces residents, and they respond by way of investing in city services and infrastructure. it is absolutely a concern. one question is whether the bond market is capable of responding to the spillover effects. frankly, it is a question that should be asked about federal grants and zero interest rate loans as well. there is no single solution. i do think the book makes a compelling case that the bond market exacerbates inequities and we should be attuned to that.

taylor: is there a city, is there a prescription that can show us how to turn things around? destin: the way i like to approach the question is not so much about a city that gets it right but about the trade-offs. if we start to think about the threat of climate change and the importance of building infrastructure, that response to the threat of climate change and environmental destruction, there is an opportunity to borrow and fortify these neighborhoods to improve the infrastructure. at the same time, that process for borrowing to protect disadvantaged communities and communities more generally should not make us lose sight. just because interest rates are low does not mean -- perhaps

exacerbate again the dynamics. romaine: i want to leave on this question here, that basically these are neutral intermediaries here, basically here to facilitate the flow of money, but at the end of the day, they are neutral. is that a myth or is that real? destin: it is a great question and i would just leave the viewers with the example of the naacp and core civil rights organizations that rejected that idea. in the late 1950's and 1960's, you still had underwriters who insisted they were neutral but continued to finance segregated education in the south. the idea that bankers are intermediaries is part of a myth that is told the bond market has

nothing to do with differentials . caroline: fascinating. assistant professor of history at stanford university and the author of "the bonds of inequality: debt and the making of the american city." romaine: it is a good book. caroline: go read it. meanwhile, comments made friday on bloomberg tv, finance holdings, insider trading and market manipulations, not finance u.s., which is a separate entity. it was the former ceo of finance u.s. who recently stood down, not finance holdings. we remove the clip online. taylor: "bloomberg technology" is next in the u.s. romaine: this is bloomberg. ♪

>> from the heart of where innovation, money and power combined in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: i'm emily chang in san francisco and this is "bloomberg technology." the death toll by covid-19 in the u.s. has surpassed that of the 1918 influenza pandemic. ne many