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When It Busts, It Busts

A report from the Wall Street Journal. “Housing markets across the world, from the U.K. to China to Australia, are losing steam. In 18 large economies, world-wide residential investment dropped on a year-over-year basis for four consecutive quarters through September, the longest stretch of declines since the 2008-09 crisis, according to Oxford Economics’ analysis of national accounts. For global cities like New York, London and Vancouver, Canada, another factor is at work, according to the IMF. In the period of low interest rates following the global financial crisis, wealthy investors in the hunt for better yields swooped in to buy properties in major financial hubs. In effect, residential prices in those cities have become globally synchronized much as stocks and bonds are.”

“Now, home prices in large cities are pulling back, according to an index of high-end markets in 45 cities maintained by Knight Frank. ‘It matters because…the housing market is a big asset market which has quite large potential impacts on consumer spending,’ said Adam Slater, an economist at Oxford Economics. ‘It tends to be a sector when it booms, it booms; when it busts, it busts.'”

From Crain’s New York Business. “Homebuyers are interested in the Hamptons again. It took the biggest price cuts in more than four years to bring them to the closing table. Seller discounts averaged 12.9%, the largest since 2015. ‘This confirms that the buyers are there but they’re waiting for the sellers,’ said Jonathan Miller, president of Miller Samuel. ‘Sellers are traveling farther to meet the buyer, but they were much more aggressive in setting high prices to begin with.'”

“But sales were still tepid in the context of history: With 400 deals, it was the second-weakest fourth quarter in 11 years, Miller Samuel and Douglas Elliman said.”

From Patch Charlestown on Massachusetts. “This townhouse, situated on Pier 7 right on the water in Charlestown is the most expensive home on the market in Charlestown right now. Is it too expensive? It appears to have been on the market for a little while. It was listed in 2016 for $1,850,000, then in 2017 the price dropped to $1,825,000. It was relisted later that year at $1,799,000, and then later the price dropped by $9,000. This October it was listed again at $1,650,000.”

From Narcity on Tennessee. “Laguna Beach and The Hills were the shows that ruled television in 2006 and during our peak childhood. Aside from Lauren Conrad, Kristin Cavallari was another front runner in these shows and even has her own E! show and she resides in our great state of Tennessee. Her Tennessee estate is up for sale and you can buy it for yourself.”

“Kristin Cavallari and her husband, Jay Cutler, put their enormous Nashville estate up for sale in June of 2018 for $7.9 million. Since then, the price has been cut down to $4.95 million. In 2012, the reality TV star and ex NFL quarterback bought this beautiful home for $5.3 million and completed many renovations and add ons, hence the original asking price.”

From Autoevolution on California. “You’re out of luck if you’re still on the market for new real estate, because this mansion in Bel Air sold at the end of last year – for pennies, compared to the asking price. But it’s so unspeakably glamorous and unreal that it’s worth revisiting. It’s called the Billionaire Mansion and it’s situated at 924 Bel Air Road, in an enclave that ensures maximum privacy and the most spectacular views of Los Angeles and the ocean. It spans 38,000 square feet across 4 stories and includes anything from a non-functional helicopter slash art display to a mind-blowing car collection with only the rarest, bespoke cars and motorcycles.”

“Real estate developer Bruce Makowsky personally curated the car collection, making sure to offer the lucky owner of this stunning mansion only the best that money can buy. Oh, and in case of a fire, you can use extinguishers with Dom Perignon to put out the flames, because Makowsky thought to turn champagne bottles into working fire extinguishers fit just perfectly with the idea of the Billionaire Mansion. ‘I wanted to redefine what super-high-end luxury homes are all about,’ Makowsky explains. ‘I wanted to break all the molds.'”

“Makowsky was able to break all the molds, indeed. When the house was first listed for sale at $250 million, it was the most expensive in the U.S. and among the priciest in the world. However, despite it’s jaw-dropping attributes, the massive cost and the many years spent working on it, it proved too much of a gamble: its price dropped to $188 million in 2018 and $150 million in early 2019. In October 2019, Billionaire Mansion finally found its owner for ‘just’ $94 million – pennies compared to the asking price and the treasures amassed inside.”

The Shawnee Mission Post in Kansas. “I am comfortable saying that many areas of KC ended 2019 with more housing inventory than they had seen in several years. For example, at the end of 2019, the city of Leawood had 6.4 months of housing supply. That is the highest housing inventory that Leawood has seen in December in several years. The annual average of inventory is 3.9 months which is technically still a seller’s market. But the front line indicators such as days on market and current inventory levels are suggesting otherwise. Lastly, median home prices in Leawood are down 9.8 percent when you compare the last two Decembers, or $49,425.00 in real dollars.”

“Now let’s consider the luxury housing market in Mission Hills. This may complete the picture for you and give you a hint as to how the market is changing and will continue to change in 2020. Mission Hills ended 2019 with 13.5 months of housing supply. Yes, that means it would take over a year for all of the active homes for sale to sell in Mission Hills. You might think, ‘oh that’s normal for luxury homes. They probably don’t sell that quickly and there probably aren’t that many buyers for those homes, right?'”

“Not really. Just a few months earlier in April 2019, there was only 4.4 months of housing supply, which is technically a seller’s market. That is right, a seller’s market in Mission Hills, Kansas. Oh how quickly things can change. The annual average of housing inventory in Mission Hills is 10.6 months, which means that they are now in a buyer’s market. This is most evident when we look at median home prices in Mission Hills. The two year average median home price is $935,000.00, but in December 2019 it was $790,000.00 which represents a 24.7 percent drop in home prices.”

“The seller’s market that once existed all over KC and in almost all price ranges is now being compressed. Please visualize our real estate market in layers with the luxury home market on top (750K+) all the way down to the last of the starter homes under 200K that are still available in areas like Prairie Village, Mission, Roeland Park, Merriam and Lenexa.”

“Now visualize the market correction as a big foot stepping on our market and pressing downward. The pressure from the foot (market correction) is pushing the seller’s market down to only the most approachable price ranges while leaving anything over 300K to feel the effects of the market correction such as an increase in housing supply, higher days on market, and a drop in median home prices.”

From Fox Business. “Due to a global housing market slowdown, purchasing a home now seems harder than ever. For buyers who are looking to complete their first home purchase, it’s important to avoid several critical and expensive home buying mistakes. One-third of home buyers go over their initial home budget, according to research from Owners.com. Aside from going over budget, having a low down payment and entering the housing marketing with a large student loan debt burden can also put homeowners in a difficult financial position post-purchase.”

“Those who overspend often end up regretting it. 68 percent of millennials in a Bank of the West survey said they had buyers remorse after purchasing their first home. The 2019 NerdWallet Home Buyer Report echoes these findings: 25 percent of respondents in the report no longer feeling financially secure following their home purchase.”

This Post Has 90 Comments
  1. ‘For global cities like New York, London and Vancouver, Canada, another factor is at work, according to the IMF. In the period of low interest rates following the global financial crisis, wealthy investors in the hunt for better yields swooped in to buy properties in major financial hubs’

    Yellen bucks looking for a place to die.

    ‘you can use extinguishers with Dom Perignon to put out the flames, because Makowsky thought to turn champagne bottles into working fire extinguishers fit just perfectly with the idea of the Billionaire Mansion’

    I’ve long said one of the biggest problems with California is drug use.

    1. Gotta agree that is the dumbest thing I have ever heard. And I hear about so much stupidity on this blog that is really an achievement.

      1. “Fire extinguishers with Dom Perignon”

        That will come in handy to help the house burn faster for insurance fraud purposes when no one wants to buy this white elephant.

    2. Meanwhile, Harry and Meghan want to spend their real bucks in Vancouver:

      “According to a report today by British tabloid The Sun, the royals are interested in purchasing a Kitsilano waterfront home in the Vancouver Westside — right on Point Grey Road. The property’s asking price based on the market listing is $35.88 million. This is well above BC Assessment’s 2020 assessed value of $20.678 million, with $19.295 million from the value of the land and $1.383 million from the value of the structure.”

      https://dailyhive.com/edmonton/meghan-harry-sussex-vancouver-kitsilano-mansion

      1. Celebrities usually get ripped off blind on house purchases. The sellers see them coming a mile away.

  2. ‘Cavallari and he put their enormous Nashville estate up for sale in June of 2018 for $7.9 million. Since then, the price has been cut down to $4.95 million. In 2012, the reality TV star and ex NFL quarterback bought this beautiful home for $5.3 million and completed many renovations and add ons, hence the original asking price’

    Well it was cheaper than renting…

  3. Will history blame the present housing bust on the coronavirus outbreak?

    We’ll have to remind them that the bust was already well underway at the outset of the outbreak.

    1. Scientist who simulated the global impact of a coronavirus outbreak says ‘ the cat’s already out of the bag’ and calls China’s efforts to contain the disease ‘unlikely to be effective’
      By Mark DeCambre
      Published: Jan 27, 2020 8:21 a.m. ET
      Toner’s team ran a simulation of the impact of a hypothetical coronavirus that was resistant to vaccine and easily transmittable
      AFP/Getty Images
      The coronavirus outbreak in China has resulted in more than a dozen cities seeing travel restrictions.

      Probably, the cat’s already out of the bag.

      — Eric Toner, M.D.

      Scientist and scholar Eric Toner, quoted above in an excerpt from a Friday interview with the business-news channel CNBC, explained that China’s efforts to contain the current outbreak of a fast-moving upper-respiratory illness are “unlikely to be effective.”

      Cases of the illness, which is related to SARS, or severe acute respiratory syndrome, and MERS, Middle East respirator syndrome, have now turned up in a number of countries beyond China, where the illness originated in Wuhan City.

      The number of infections of coronavirus, or CoV, in China has risen to nearly 3,000, according to the Wall Street Journal. On top of that, the official death toll has climbed to at least 80, including a doctor treating flu-stricken patients in Wuhan, from 56 as of Sunday. The Journal reported that the outbreak was overwhelming Wuhan-area resources and hospitals.

      Beijing has shut down parts of the Great Wall, as well as more than a dozen cities, restricting the movement of some 50 million people, and canceling events related to the Lunar New Year, one of the busiest periods of travel and consumerism in the country.

    2. I’m not so worried if it’s “out” or not. The real unknown here, for me, is the mortality rate. If it’s 2.6% as is implied by 80 deaths / 3,000 infections then, while I am sorry for the dead, that’s probably not much worse than the common flue. But we can’t trust Chinese data, so…

      1. My guess is that the current estimates of contagion and mortality rates are low, by not properly considering latent cases or eventually deaths. Its not a simple arithmetic exercise to get the math right.

      2. The real unknown is whether the virus is contagious before symptoms appear. The China health minister said yes, 14 days. The CDC says no evidence of it yet. I think we’ll know a lot more in the next week or so.

      3. I posted the common flu numbers yesterday and it was something like .14 percent deaths so even that number is much worse. Moreover the number from yesterday day had the number as around 30 times worse. It is no Ebola but it is very bad.

        1. As I mentioned yesterday, a lower mortality rate could paradoxically imply an increased transmission rate. People who die quickly have little opportunity to share a disease, especially if severe symptoms increase the chances they will be quickly isolated. Conversely, a longer period with milder symptoms increases the exposure of others to the risk of catching the disease, particularly if the contagion-during-incubation-phase hypothesis proves accurate.

          1. P-Bear,the cuddliest, most musical, doom-porner. FWIW, I’m with you. Thought youd get a giggle out of the fact that my school told us we could request disinfectant spray bottles from the custodians if we were concerned. My inquiry as to whether the janitors will be asked to disinfect classrooms daily was met with stone silence from admin.
            Let’s see how long it takes to get ADA way down with factual information conveyed calmly to 200 18 year olds. Will it have a geometric or exponential effect? Inquiring minds want to know.

      4. I posted yesterday the death rate from the flu is .14 percent and the estimate is that this is 30 times worse.

      5. The Spanish influenza of 1918 had a mortality rate of 3%. The common flu has mortality rate of less than 1%.

        1. 44 people died in Toronto during the 2003 SARS outbreak. Almost the same number of people died as pedestrians trying to cross the street.

    3. Does it seem like the number of reported cases is growing explosively?

      Health and Science
      CDC is monitoring 110 possible coronavirus cases across 26 states in US
      Published Mon, Jan 27 2020 11:46 AM EST
      Updated an hour ago
      Berkeley Lovelace Jr.

      Key Points
      — U.S. health officials are currently monitoring 110 people across 26 states for the coronavirus, including the five patients who contracted the deadly infection in China and brought it back to America.

      1. 769 new cases announced overnight…is that alot?

        China locks down 17 cities as number of confirmed coronavirus infections soars
        Published: Jan 27, 2020 12:34 a.m. ET
        On Saturday, the U.S. State Department ordered the evacuation of all U.S. personnel at the Consulate in Wuhan
        By Quentin Fottrell
        Personal Finance Editor

        The number of coronavirus infections has spiked, Chinese officials announced Saturday.

        The pneumonia-causing illness that infects the respiratory tract is now responsible for 80 deaths in China of Sunday, up from 56 the day before, and at least 2,744 infections, up from 1,975, health officials in China said. On Saturday, the trade association of Chinese travel agencies also said that it would suspend overseas tour groups and flight/hotel vacation packages for Chinese citizens, effective Monday.

        1. New incremental increase in estimated number of cases is 4500 – 2744 = 1756.

          Accelerating is the correct term. Exponentially…

          Death toll from Wuhan coronavirus tops 100 as infection rate accelerates
          By James Griffiths, CNN
          Updated 12:00 AM ET, Tue January 28, 2020

          Hong Kong (CNN)
          The death toll from the Wuhan coronavirus has topped 100, with more than 4,500 cases confirmed across China, as US authorities warned against all “non-essential” travel to China.

          Authorities in Hubei, the Chinese province at the center of the outbreak, said an additional 1,300 cases had been confirmed, bringing the total in the region to over 2,700. The majority of those are still in hospital, with more than 125 in critical condition.

    1. Takoma Park again? Why the obsession, hon? I’ve walked through Takoma Park a lot. Lots of older Craftsman and Queen Anne’s. Very well kept, liberal as heck. High value because it’s near a subway station.

  4. “The seller’s market that once existed all over KC and in almost all price ranges is now being compressed. Please visualize our real estate market in layers with the luxury home market on top (750K+) all the way down to the last of the starter homes under 200K that are still available in areas like Prairie Village, Mission, Roeland Park, Merriam and Lenexa.”

    Market compression explains why the low end eventually gets crushed after the high end craters. The comparitive values of housing in different quality tiers is relatively stable over time. So after the top end craters by 50%, the lower tiers fall like a line of dominoes.

    1. Going to make do for now with what I have. I’ve bookmarked a couple items to get once this blows over, but for now prices and availability of any of things has gone crazy.

      1. Just remember that the most dangerous place (for a healthy person) during an outbreak is the hospital.

        P100 respirators in stock and price not jacked up at all. Second day delivery for my address.

  5. 1) “When It Busts, It Busts”

    – Housing is just part of “The Everything (I.e. Central Bank) Bubble.”

    – The Fed and DJT own this. The unwind is proportional to the “wind.” Epic.

    2) “Will history blame the present housing bust on the coronavirus outbreak?”

    – Once the Fed and other CB’s blew the bubble, the popping was already baked into the cake. HCoV not a cause, although it may accelerate the move to the downside. Same with 2020 Recession and higher unemployment. It’s inevitable.

    – Folks, this (artificial) economic expansion and bull market are the longest on record, but just as night follows day, bust follows boom. Again, CB’s and leadership own this. They’re a pox upon the free people of the world. Who needs ‘em?

    1. The statement just isn’t true. The reason housing loans enjoyed such low interest rates for decades is prices didn’t go up or down very much. In the early 70’s a shack price in Palo Alto was roughly the same as the small north Texas town I grew up in. When considering a mania in housing, the first question should be, when did it start?

      1. I couldn’t find a link to early 1970’s prices in Palo Alto, but found a 1980 median of $148K

        https://www.paloaltoonline.com/news_features/weekly25/covermain.shtml

        My parents sold their shack in Orange County (Fountain Valley) in the early 1970’s for about 30K. Being that Palo Alto wasn’t as far out in the boondocks as Fountain Valley was, I’m guessing that a comparable house in PA at the time would have been a little more, maybe $35K. Of interest, this was in the early days of Silicon Valley. From what old timers have told me, STEM pay was pretty ordinary back then.

        I have no idea of what a house went for in a small Texas town at the time.

      2. Those Palo Alto (Santa Clara county) houses were small modest homes many built after WWII, sized just right to optimize the veteran’s home loan program. They had lots of glass, a flat single sloping roof, small lot size, usually a 3br/1ba and the driveway was two strips of concrete surrounded by lawn.

        Except for “Whisky Gulch” the ghetto was on the east side of the 101 freeway, East Palo Alto, which is in San Mateo county. Now lots of Asian families are gentrifying the ghetto especially out toward the municipal airport.

  6. Worser and worser and worser and worser… This is gonna be a doozy.

    Guys I found a real dumpster fire submarket here in Philly. Google “brewerytown philadelphia” and do some street view (it’s pretty up to date in this case). You will see literally hundreds of new rental units and hundreds more about to deliver. Start on the western side of the hood and move north and east. If you looked up “real estate bubble” in the dictionary it would show a picture of this Brewerytown. I have never seen anything like it in my life and I have lived in DC and London. Purchase prices, I believe, are JUST starting to role over. A renovated, shiny 2/1 currently rents for $1,200 a month and that has been declining recently. I have seen some deals on those close for up to $350k in the last three months. Fraud?

    1. Awesome. Now travel about 6 blocks northeast, toward the Martin Luther King Recreational Center. The name alone is rather suggestive.

    1. “struggling to find properties to buy”

      I’m not struggling, will be renewing my lease again this spring.

      I can easily qualify for a 15 year loan with 20+ percent down, but I won’t buy. Ramen for REALTOR is what’s on the menu.

      1. As long as it comes pre-sealed. Otherwise,beans and rice. Nutritionally perfect AND cost-effective!

  7. From an article in Forbes:

    “But there’s a counteracting force that is beginning to shift the dynamic. New, luxury apartment inventory is flooding markets like Atlanta; Phoenix; Portland, Oregon; and Dallas, pushing up the median rent price and making the rent-versus-own argument a bit more balanced.”

    I have never seen the phrases “inventory is flooding the market” and “pushing up the median rent price” in the same sentence before. The doublespeak is getting ridiculous.

    1. “The doublespeak is getting ridiculous.”

      Yeah, well you use what works. If people were not so dumbed-down then then this doublespeak would be laughed at rather than granted the status of True Wisdom.

      1. Here’s a good read …

        The Comforts of Mindless Consistency
        https://www.martialdevelopment.com/comforts-of-mindless-consistency/

        And here’s a snip or two …

        The program claimed it could teach a unique brand of meditation that would allow us to achieve all manner of desirable things, ranging from simple inner peace to the more spectacular abilities—to fly and pass through walls—at the program’s advanced (and more expensive) stages.

        (snip)

        More interesting to me, though, was the effect upon the rest of the audience. At the end of the question period, the two recruiters were faced with a crush of audience members submitting their seventy-five-dollar down payments for admission to the TM program. Nudging, shrugging, and chuckling to one another as they took in the payments, the recruiters betrayed signs of giddy bewilderment.

        Outside the lecture room after the meeting, we were approached by three members of the audience, each of whom had given a down payment immediately after the lecture. They wanted to know why we had come to the session. We explained, and we asked the same question of them.

        [The group spokesman] put it best: “Well, I wasn’t going to put down any money tonight because I’m really quite broke right now; I was going to wait until the next meeting. But when your buddy started talking, I knew I’d better give them my money now, or I’d go home and start thinking about what he said and NEVER sign up.”

  8. I’m listening to the AEI conference. One slide:

    ‘The QM Patch: Latest from the CFPB8In a letter to Sen. Mike Rounds (R-SD), chairman of the Senate Subcommittee on Financial Institutions and Consumer Protection, CFPB Director Kathleen Kraninger informed Rounds that “based on the ANPR input, the CFPB has decided to propose an amendment to the Rule which would move away from DTI and instead include an alternative, such as a pricing threshold (i.e., the difference between the loan’s annual percentage rate (APR) and the average prime offer rate (APOR) for a comparable transaction). The proposed alternative would be intended to better ensure that responsible, affordable mortgage credit remains available to consumers in a manner consistent with the purposes of Sections 129B and C of the Truth-in-Lending Act (TILA) and to facilitate compliance with those sections.*In the slides that follow, we will evaluate this announcement from the perspective of the seen, the unseen, and the foreseeable: •APOR rate spread: how good a predictor of risk?•Are the anecdotes true that most loans are “documented until the borrower qualifies”? •The Stressed Mortgage Default Rate Approach: abetter way to ensure that responsible, affordable mortgage credit remains available to consumers.”

    ‘Predictions: since the APOR margin also does not accurately capture risk, replacing the Patch with the APOR margin rule is subject to gross manipulation and is dangerous. Replacing the Patch with the APOR margin rule would provide no effective friction to unsustainable levels of home price appreciation, thus prolonging what is already an unsustainable price boom.’

    1. Credit tightening continues, especially for first time buyers. From stupid Mel Watt highs of course. FHFA on path to “de-risk” the GSE’s.

  9. Sky News Australia

    Writer Corrine Barraclough says she believes Australians “don’t know what we’re up against,” as newly confirmed cases of the deadly coronavirus are announced across the nation.

    https://www.youtube.com/watch?v=fmD9CLUqAQg

    A comment:

    ‘yeah, I’m not really feeling ‘trusting’ Winnie the Flu and the CCP without a second opinion…’

  10. Here’s a little comparison cheat sheet for Wuhan coronavirus. I think it’s useful to compare to the previous forms of coronavirus. Everything is from Wikipedia unless otherwise noted.

    ———————————————————————————–

    SARS: Severe acute respiratory syndrome (SARS) is a viral respiratory disease of zoonotic origin caused by the SARS coronavirus (SARS-CoV). Between November 2002 and July 2003, an outbreak of SARS in southern China caused an eventual 8,098 cases, resulting in 774 deaths reported in 17 countries,[1] with the majority of cases in China mainland and Hong Kong[2] (9.6% fatality rate) according to the World Health Organization (WHO).[2] No cases of SARS have been reported worldwide since 2004.[3] In late 2017, Chinese scientists traced the virus through the intermediary of civets to cave-dwelling horseshoe bats in Yunnan province.

    MERS: Also known as camel flu,[1] is a viral respiratory infection caused by the MERS-coronavirus (MERS-CoV). [2] Symptoms may range from mild to severe.[3] They include fever, cough, diarrhea, and shortness of breath.[2] Disease is typically more severe in those with other health problems.[3] Mortality is about one-third of diagnosed cases. The overall risk of death may be lower as those with mild symptoms may be undiagnosed. Just under 2000 cases have been reported as of 4 April 2017.[5] The first identified case occurred in 2012 in Saudi Arabia and most cases have occurred in the Arabian Peninsula.[2][3] A strain of MERS-CoV known as HCoV-EMC/2012 found in the first infected person in London in 2012 was found to have a 100% match to Egyptian tomb bats. A large outbreak occurred in South Korea in 2015.

    WUHAN VIRUS: Here’s a link to a (somewhat) real time map updated by John’s Hopkins —

    https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

    I found the date of patient zero as December 8, 2019. So we can be confident there are AT LEAST 3,000 cases and 82 deaths in the first 6 weeks. It’s in Tokyo, Seattle, LA, San Fransisco, Toronto, Taipei, Bangkok, Phnom Penh, Singapore, Kuala Lumpur, Seoul, Beijing, Shanghai, Hong Kong, and others. By my count it is in 17 countries, which already matches the maximum geographic extent of SARS.

    So maybe less lethal than MERS but spreads quicker than SARS? I understand we are all guessing at lethality right now though.

    Any epidemiologists or public health folks read this blog? I would love to know how Wuhan compares at this stage of the game. If we are going to speculate, let’s do so responsibly.

  11. ‘Sales of new U.S. single-family homes fell unexpectedly in December…The U.S. Commerce Department report on Monday also showed downward revisions to sales for the prior three months, bucking a recent streak of fairly strong housing data.’

    ‘New home sales slipped 0.4% last month to a seasonally adjusted annual rate of 694,000 units, with sales in the South dropping to the lowest in more than a year. It was the third straight monthly decline in sales. November’s sales pace was revised down to 697,000 units from the previously reported 719,000. September and October sales were also marked down.’

    ‘There were 327,000 new homes on the market last month, up 1.6% from November. At December’s sales pace it would take 5.7 months to clear the supply of houses on the market, up from 5.5 months in November.’

    https://finance.yahoo.com/news/u-home-sales-fall-unexpectedly-172801036.html

    1. Or Treasurys…

      10-year Treasury yield hair’s breadth away from key 1.60% level amid coronavirus spread
      Published: Jan 27, 2020 2:09 p.m. ET
      10-year Treasury yield approaches breach of 1.60% support level
      By Sunny Oh

      Treasury yields retreated on Monday, amid a rising death toll from the coronavirus in China, along with the escalating number of cases, which has spurred demand for assets perceived as havens like government paper.

      How is government debt performing?

      The 10-year Treasury note yield (TMUBMUSD10Y, -4.85%) tumbled 7 basis points to 1.610%. The benchmark maturity hit its lowest level since Oct. 10 on Friday, and is less than 40 basis points away from its all-time low of 1.32% hit on June 2016.

      The 2-year note rate (TMUBMUSD02Y, -3.34%) was down 3.9 basis points to 1.447%, while the 30-year bond yield (TMUBMUSD30Y, -3.71%) slipped 6.5 basis points to 2.063%.

      What’s driving Treasurys?

      The number of coronavirus cases increased in China, with more than 2,700 cases and at least 80 deaths being reported in the world’s second-largest economy. If the virus isn’t contained, analysts say the short-term damage it could dent investor hopes that global growth will continue to stabilize in China, with the signing of a phase one trade deal between Beijing and Washington.

      See: Coronavirus is dealing an early blow to bearish bond-market bets in 2020

      1. So far the virus had lowered interest rates in the US and lowered gasoline prices throughout the world. I see how the virus hurts the Chinese economy but how it causes a world wide recession is hard to see until there are a lot more cases worldwide. Right now it seems more like a stimulus in countries such as India which were on the verge of recession but now are enjoying lower oil prices.. Even seems like a stimulus here. The virus is very dangerous so the few hundred people in the US who have been exposed are being closely monitored like they have Ebola. It is not like measles which is incredibly infectious. It is more like Ebola lite, it is far less deadly than Ebola and only somewhat more contagious. Had the Chinese released it first in the US it might have had the impact they may have wanted. However by probably accidentally starting the epidemic in China, they really shot themselves in the foot. Bat feet anyone?

        1. So Tesla fanboys how is that new plant going? As soon as they allow production to start up after the coronavirus shutdown you can have a car with Chinese parts and fully loaded with coranavirus.

        2. FYI 8/2000 = 0.4%. However, not all identified cases which will ultimately result in a death have already resulted in a death. Thus the raw percentage of known cases which have resulted in death is a downward-biased estimate of the true mortality rate.

          Coronavirus outbreak: Mongolia closes China border
          By Louis Casiano | Fox News
          Fear escalates over coronavirus: What do Americans need to know?

          Dr. Janette Nesheiwat explains the risks and symptoms.

          The government of Mongolia said Monday it has closed its large border with China, and Malaysia announced that it would bar visitors from the Chinese province at the epicenter of the coronavirus outbreak after medical officials warned its ability to spread was growing.

          The ban makes both nations the second and third countries to close its border with China, following North Korea. Malaysian officials said they would halt the issue of visas for Chinese travelers from Wuhan, where the virus was first reported last month, and surrounding areas.

          The decision was made after consultations with experts and following the advice of the World Health Organization. Mongolia has also closed its schools, playgrounds and universities until March 2.

          HOW DANGEROUS IS CORONAVIRUS?

          Mongolia has not had any reported cases of the virus. Malaysia reported one.

          Chinese authorities have scrambled to contain the disease, which began in Wuhan and has killed at least 80 people and infected nearly 2,000 others. Last week, the government suspended plane, train and bus travel to the city, which has a population of roughly 11 million people.

  12. Have been reading about the liberation of the death camps in Eastern Europe on the 75th anniversary. The media is going out of their way to say the Soviets liberated the camps and avoid saying the Russians liberated the camps. Doubt most millennials can even tell you who the Soviet are. It is amazing, orange Man Bad and Putin bad, Xi good, please ignore that China may have accidentally released a weaponized virus.

    1. Try reading, “The Last Battle” by Cornelius Ryan. It’s something to be avoided by the faint of heart.

    2. Bernie’s field organizers are telling Project Veritas undercover operatives that the gulags weren’t all that bad, while openly talking about putting anyone who doesn’t go along with their socialist program in re-education camps. And these asshats think I’m going to be meekly handing over my guns?

  13. “You might think, ‘oh that’s normal for luxury homes. They probably don’t sell that quickly and there probably aren’t that many buyers for those homes, right?’”

    Penthouse Rihanna rented still on market after a decade

    “A penthouse in Chinatown that singer Rihanna rented is back on the market for $15.95 million. The duplex unit at 129 Lafayette St. has been for sale on and off since 2009… at one point asking as much as $18.75 million…. the owner bought the unit for $6.1 million in 2005.”

    https://nypost.com/2020/01/22/penthouse-rihanna-rented-still-on-market-after-a-decade/

  14. Gilbert AZ inventory just popped back over 800 again. Went to 875 a few
    months back then knife-catched back down to 564. Let’s see if the supply of lemmings has run out this time….

    1. I remember last bust in Arizona. The inventory explosion was like no other market I’ve ever seen. And when you pull up pictures, all of the houses look the same. So, once the tsunami gets rolling, the sellers are competing strictly on price, because Arizona is about as vanilla as it gets when it comes to houses.

      1. Fun. And the thing is… I have a number of issues with our current president. But it’s even more clear that the Democratic party.. and to be honest, a good part of the Republican Party has still to this day not truly understood the real reasons why Trump was elected and what the majority of the population of this country is feeling, thinking and experiencing. No scratch that.. the DNC hasn’t learned a darn thing and has doubled down sticking it’s head in the sand while the tide rolls in.

        That old traditional Chinese curse- “May you live in interesting times” is about to be supplemented with 2020’s “Hold my ($DRINK)” when it comes to the elections and what the voters are actually trying to say.

        1. But it’s even more clear that the Democratic party.. and to be honest, a good part of the Republican Party has still to this day not truly understood the real reasons why Trump was elected and what the majority of the population of this country is feeling, thinking and experiencing.

          What’s the saying here? “It’s hard to get a man to understand something…”

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