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What’s Happening Is The Hangover Effect

A report from the Wall Street Journal on New York. “Despite a weak outlook for residential real estate, the number of building permits issued in New York City for new homes surged last year to the highest pace since 2015. It was the second-highest total since the end of the last big building boom in 2008. Even as permits spiked, the number of co-op and condo sales in the city fell last year in Manhattan, Brooklyn and Queens, with Manhattan sales plummeting to the lowest level in the last decade, according to Miller Samuel Inc. for Douglas Elliman real estate.”

“Some developers are predicting a lag in permits issued in the years ahead, as the market digests the large supply of condo inventory, and landlords wait in fear of the city and state expanding rent-regulation to more buildings. ‘We forecast a decline in units in the condo market because of the current oversupply,’ said Nancy Packes, a housing-market consultant who monitors the construction pipeline.”

“The continuing boom is supported by low interest rates and the willingness of lenders to provide funding for many new projects, especially outside of Manhattan, said Stephen Kliegerman, president of Halstead Property Development Marketing.”

The Fremont Tribune in Nebraska. “The land for Gallery 23 was purchased by developers in December 2016. It held a groundbreaking ceremony in September 2017. Kristina Young-Philbin, said the 115-acre mixed-use development project plans to add 178 homes around a new man-made lake. Two homes have already been listed for sale and a model home will be ready in Februrary, Young-Philbin said.Most of all, Young-Philbin said she wanted to stress the affordability and the flexibility with the pricing on Gallery 23.”

“‘The biggest thing for me is that you can’t build a new home backing up to a lake right now anywhere between Omaha and Fremont for a house price point of under $700,000,’ she said.”

“This is the eighth subdivision Don Peterson has worked on, said Marlin Brabec, chairman of its board. ‘We envision that a lot of these houses will be from people moving from an older house, maybe with a one-car garage into something that has a two-car garage and a ranch-style house,’ Brabec said. ‘But the market will decide. The market always decides how things are going to work.'”

The Omaha World-Herald in Nebraska. “New data reinforcing a local boom: Building permits show that the annual construction cost for Omaha projects given the green light in 2019 hit a 10-year valuation high, jumping 25% over the prior year. Economist Ernie Goss and others say, ongoing real estate development — driven in part by hungry investors capitalizing on low interest rates — has been a welcome boost vital to a community’s long-term physical and economic growth.”

“Goss is among those who think the local apartment market is becoming overbuilt and that developers soon will be seeing higher vacancy rates. But ask developer Chris Erickson, who co-founded City Ventures, and he says his recently built apartment complexes in Benson and downtown Omaha still have well-performing occupancy rates above 90%.”

“His team continues to build apartments at the La Vista City Centre site, and he expects those to fill as well. Generally, Erickson said, he has felt a ‘continued high level’ of construction over the past five to seven years, and he doesn’t expect a noticeable downturn any time soon. ‘We’ll start to see a slowdown in the next couple of years,’ he predicted. ‘Is that in 2020? I’d say not.'”

The Chattanooga Times Free Press in Tennessee. “The Chattanooga area has seen a sharp increase in proposed and completed housing developments in the past two years. 78, according to Times Free Press reports. With all the new projects taking shape, the increase in home prices has been outstripping wage and income gains, causing the region to become less affordable than in the past, according to a new study by the National Association of Realtors.”

“Rental rates have also been rising, yet prices remain cheaper than the U.S. average. One housing economist has pointed out that the area has seen more of a surge in housing units than jobs over the past 10 years, which could signal a potential oversupply in the market.”

From Westfair Online in Connecticut. “Boston-based WEEI-FM sports talk show host Greg Hill dropped an exclusive scoop: New England Patriots quarterback Tom Brady and his family had reportedly moved out of their home in Brookline, Massachusetts, and relocated to a recently purchased home in Greenwich. But there was one problem: the story was incorrect. The day after Hill’s story broke, WEEI quietly slipped an update on its blog that acknowledged ‘Brady does not in fact own a house in Connecticut.'”

“While it is not uncommon for news outlets to report stories that require a retraction, the Brady-in-Greenwich story sparked an excited frenzy that inadvertently highlighted lingering problems with the Greenwich real estate market and Connecticut’s overall economy. Houlihan Lawrence recently reported that Greenwich’s luxury housing market generated only 126 sales during 2019, a 18.7% drop from the 155 sales recorded in 2018. The median home price for a Greenwich luxury residence in 2019 was $4.08 million, a 1.7% decline from the $4.15 million set one year earlier. The total dollar volume for this market sector in 2019 was $633 million, a 17.6% tumble from 2018’s $769 million.”

From WFAA in Texas. “‘I still think what’s happening is the hangover effect,’ said Michael Coburn, broker/owner of RE/MAX Town & Country in Allen, in an interview with the Dallas Business Journal. ‘We had so many people buying so many houses in 2017 and 2018 that sellers could throw anything out on the market at any price and buyers were desperate to get a house, so they were paying it.'”

“‘Now the market has slowed down,’ Coburn said. ‘The giant demand from buyers that was pent up has decreased. Now you’re seeing houses stay on the market longer.’ Prospective buyers in North Texas are being more selective than they were in 2016, 2017 and the first part of 2018, Coburn said. ‘The market has shifted from where the sellers had the power to more of a flat market,’ he said, ‘and if your house isn’t fixed up, it’s more of a buyer’s market.'”

“With low mortgage rates and a steady stream of people moving to North Texas, Coburn doesn’t foresee housing prices declining in North Texas. ‘It’s still a great time to buy,’ he said. ‘I don’t see the market slowing up anytime soon, interest rates are still at all-time lows, and this market is going to continue to increase because we’re seeing so much population (growth) here. If you don’t buy now, it’s like, ‘When?’”

The Orange County Register in California. “Los Angeles County homebuying rose and prices increased as SoCal’s median hit an all-time high in December. Existing single-family houses: 4,306 sold, up 17.8% in a year. Median of $653,000. Newly built: Builders sold 396 new homes, up 17.5% in a year. Median of $642,500 — a 6.5% fall over 12 months.”

From Patch California. “Keller Williams Realty San Diego East Foothills in El Cajon, one of the largest residential real estate brokerages in San Diego County, has announced that Don and Tereasa Pittman of Jamul have joined the firm as a husband-and-wife real estate sales team. ‘We love working with first-time home buyers and helping other clients halt their foreclosure,’ said Tereasa.”

From Senior Housing News. “Real estate investment trusts (REITs) might soon feel ‘buyer’s remorse’ over recent decisions to bulk up their senior housing operating portfolios, according to Eric Mendelsohn, CEO of National Health Investors. In recent years, several factors drove some REITs to go big on RIDEA. With new supply, labor and other challenges squeezing their net operating income, senior housing operators have struggled with sizable rent escalators under triple-net leases, prompting some conversions to RIDEA.”

“Q: You’re expecting some ‘turbulence’ in 2020, which could bring opportunities for NHI? A: I think that the turnover that’s happening with some of the REIT tenants and operators is surfacing a lot of the issues that have been brewing for the past 24 months. I think there are some operators that aren’t doing as well as they could be. And I think some of the REITs might regret going 100% operational in RIDEA.”

“Operating revenues and NOI don’t always line up well [quarter to quarter] if you’re a public company — I learned that at Emeritus. So, there could be buyer’s remorse, and that could mean opportunities. That’s part of what you’re seeing with some of the operator replacements: Let’s not blame the real estate right away, let’s see if another operator can do better. And then if they can’t, then we’ll sell the buildings.”

“Q: Are you bearish on assisted living and memory care? A: I’m less excited about AL and much less excited about standalone memory care. Q: That’s because of the ongoing oversupply in standalone memory care? A: Right. And oversupply also in AL. I love the product, but people have to stop building new buildings. Let’s absorb what we have.”

This Post Has 156 Comments
  1. ‘We forecast a decline in units in the condo market because of the current oversupply’


    ‘The continuing boom is supported by low interest rates and the willingness of lenders to provide funding for many new projects’

    NYC doesn’t need any airboxes, much less a 27% increase. This is a perfect example that what’s going on has little to do with supply and demand. If not market forces driving these decisions, what is it?

    ‘Q: That’s because of the ongoing oversupply in standalone memory care? A: Right. And oversupply also in AL. I love the product, but people have to stop building new buildings.’

      1. Thank you for this data, Ben. Between boomers taking on Swedish Death Cleaning and their Millenial kids choosing experiences over stuff, it’s a good time to sell out of the self-storage business.

        In fact now might be a good time to sell out of all of the baby boomer culture of stuff. Hallmark is already failing. Next to go is Cracker Crater Barrel.

  2. ‘Existing single-family houses: 4,306 sold, up 17.8% in a year. Median of $653,000. Newly built: Builders sold 396 new homes, up 17.5% in a year. Median of $642,500 — a 6.5% fall over 12 months’

    New lower than existing = fooked.

    ‘We love working with first-time home buyers and helping other clients halt their foreclosure’

    It’s real and it’s here. Note that the REIC didn’t touch that Bakersfield debacle yet.

  3. ‘The biggest thing for me is that you can’t build a new home backing up to a lake right now anywhere between Omaha and Fremont for a house price point of under $700,000’

    Take a look at the photos. You couldn’t give me one of these shacks if I had to live through the winter in it.

    1. ‘The biggest thing for me is that you can’t build a new home backing up to a lake right now anywhere between Omaha and Fremont for a house price point of under $700,000’

      Care to wager on that?

    2. $700K is a LOT of coin. And some of them are row houses??!? For heaven’s sake who’s BUYING all this sh!t? Zillow shows plenty of new construction in West Omaha for a slightly less ridiculous $450K.

      As for me, if I were to spend $700K on a shack in Nebraska, it better be (a) a big acreage working bug-out farm (b) a restored historic house in the downtown district. Neither is a great choice, but both are certainly better than this.

  4. ‘We love working with first-time home buyers and helping other clients halt their foreclosure,’

    First they get them hooked on leverage and then they train them how to squat.

    What’s wrong with this picture?

      1. You may find it a Monet, once it becomes clear, when you look more closely, that your customers cannot pay the mortgage and you cannot sell the shack for enough to break even.

          1. Mr. Banker insists that all profits derived from the use of other people’s money be kept for his own personal amusement while the pain generated by any losses be shared among the vast multitudes of Others.

          2. The proper pejorative syntax is “Need I remind you.” But yeah, AFAIK, banks can still sell 100% of their loans up the food chain, no credit risk retention.

  5. Did you buy the dip on Wall Street?

    Coronavirus will ‘shake markets out of their buy-the-dip’ mentality, says El-Erian
    By William Watts
    Published: Feb 3, 2020 9:52 a.m. ET
    Faith in central banks will be stretched, investor says

    Mohamed El-Erian doesn’t appear impressed by the bounce shaping up for U.S. stocks on Monday.

    Investors ‘need to decide if they want to opt for more of the same, by continuing to implement an investment playbook that has served them well, or if they want to treat the viral outbreak for what it is — a big economic shock that could derail global growth and shake markets out of their “buy-the-dip” conditioning.’

    — Mohamed El-Erian

    1. Gold and silver down and the stock market up by 1 percent, definitely not an OMG we have a crisis consensus.

      1. The Pha$e1 Article v7.6 China Trade exmeption$ lever is getting polished up … tumbling commoditie$ price$ & no export$ is nutritious fodder for American farmers 2020

        China accuses U.S. of whipping up panic over virus as stocks tumble

        Reuters |Kevin Yao and Winni Zhou

        BEIJING/SHANGHAI (Reuters) – China accused the United States on Monday of whipping up panic over a fast-spreading coronavirus with travel restrictions and evacuations as Chinese stocks plunged on the first day back from the extended Lunar New Year holiday.

        China accused the United States of spreading fear by pulling its nationals out and restricting travel instead of offering significant aid. Relations between the two sides had just begun to recover after a long and bruising trade war.

        Washington has “unceasingly manufactured and spread panic”, Chinese Foreign Ministry spokeswoman Hua Chunying told reporters, noting that the WHO had advised against trade and travel curbs.

        “There is no reason for measures that unnecessarily interfere with international travel and trade,” he told the WHO’s Executive Board. “We call on all countries to implement decisions that are evidence-based and consistent.”

        Chinese delegate Li Song said the international community needed to treat the new virus outbreak objectively, fairly and not “deliberately create panic” among the general public.

        1. T$k, T$k …

          China trade agency to offer firms force majeure certificates amid coronavirus outbreak

          Reuters | Reporting by Muyu Xu and Tony Munroe; Editing by Kenneth Maxwell

          The CCPIT said companies that can provide legitimate documents, including proof of delays or cancellation of transportation, exports contracts and customs declaration, to it online system would be granted force majeure certificates. The agency says on its website that its certification is recognized and accepted overseas.

          The outbreak in the world’s second-largest economy has roiled global commodity markets, raising fears of weaker demand and disrupting raw material supply chains. A Chinese government economist has forecast the country’s economic growth may drop to 5%, or even lower, from 6.1% in 2019.

          China has extended the Lunar New Year holiday to at least Feb.2. But some regions, such as oil refining hub of Shandong province and automakers clustered Chongqing city, have asked companies not to resume operations before Feb. 10, in a bid to prevent the spread of the coronavirus.

          Force Majeure Certificate:

          These are certificates attesting the existence of force majeure circumstances i.e. circumstances beyond the control of the applicant such as fire, flood, industrial disputes etc. Please note that we can only certify factual details that can be evidenced. We cannot comment as to whether or not Force Majeure applies or argue such claims on behalf of the applicant. It is the responsibility of the applicant to claim Force Majeure and the issuing body’s role is to provide a certificate in support of such claim.

        2. It is amazing that someone who claims he is for the farmers keeps rejoicing when things go against them. Sounds like extreme TDS. However even quarantined people need to eat so farmers in the US will do just fine.

          1. ” …so farmers in the US will do just fine. ” aq

            You keep a yappin’ & U$ taxpayer dtRumpsis welfare payment$ keep a flowin’, but the $it.u.ation is just wor$er.

            BUSINESS NEWSJANUARY 30, 2020 / 4 day$ ago

            U.S. farm bankruptcie$ hit an eight-year high: court data

            Reuters | By P.J. Huffstutter

            CHICAGO (Reuters) – U.S. farm bankruptcy rates jumped 20% in 2019 – to an eight-year high – as financial woes in the U.S. agricultural economy continued in spite of massive federal bail-out funding, according to federal court data.

            The data also shows that such filings – known as “family farmer” bankruptcies – have steadily increased every year for the past five years.

            Farmers across the nation also have retired or sold their farms because of the financial strains, changing the face of Midwestern towns and concentrating the business in fewer hands.

            “I just had a farmer contact me last week, telling me he can’t get financing for his inputs this year and he doesn’t know what to do,” said Charles E. Covey, a bankruptcy attorney based in Peoria, Illinois.

            The increase in cases had been somewhat expected, bankruptcy experts and agricultural economists said, as farmers face trade battles, ever-mounting farm debt, prolonged low commodity prices, volatile weather patterns and a fatal pig disease that has decimated China’s herd.

            Even billions of dollars spent over the past two years in government agricultural assistance has not stemmed the bleeding.

            Nearly one-third of projected U.S. net farm income in 2019 came from government aid and taxpayer-subsidized commodity insurance payments, according to the U.S. Department of Agriculture.

          2. The farmland bubble was well documented here. I still find links but no time to post.

            ‘a fatal pig disease that has decimated China’s herd’

            These guys can’t do anything without some bug breaking out.

          3. Yeppers, & they are also releasing their emergency Spring grain$ from storage …

            HEALTHCARE |FEBRUARY 1, 2020 / 2 DAYS AGO

            China reports H5N1 bird flu outbreak in Hunan province

            BEIJING, Feb 1 (Reuters) –

            * China reported an outbreak of a highly pathogenic strain of H5N1 bird flu at a farm in Shaoyang city of the southern province of Hunan, the Ministry of Agriculture and Rural Affairs said on Saturday.

            * The case occurred on a farm with 7,850 chickens, 4,500 of which have died of the bird flu.

            * The authorities have culled 17,828 poultry following the outbreak. (Reporting by Judy Hua and Se Young Lee)

          4. ever-mounting farm debt

            A sad lesson on how reckless credit expansion destroys the economy from the foundations up.

  6. ‘I still think what’s happening is the hangover effect…We had so many people buying so many houses in 2017 and 2018 that sellers could throw anything out on the market at any price and buyers were desperate to get a house, so they were paying it. Now the market has slowed down’

    One thing that recurs in these articles is this tendency to reflect on the absurd conditions not that long ago.

    ‘sellers could throw anything out on the market at any price and buyers were desperate to get a house, so they were paying it’

    Seems insane, no?

    1. Sure helped close those sales when the “buyers” weren’t restricted from capital flight and now they are infected with a deadly flu… stock up and ramen realtor, this is going to be a tough year!

    2. “Seems insane, no?”

      In a logical world it would seem insane, but in the world we currently live in this sort of behavior is to be expected, even welcomed.

      1. Insanity is rare in individuals; but in groups, parties, nations and epochs, it is the rule.

        — Friedrich Nietzsche

  7. Disease trumps politic$! $uckerberg acts as $aviour!

    Newsletters | Events |Coronavirus2h

    Facebook will now take down posts that spread coronavirus misinformation

    Facebook will now take down posts that spread coronavirus misinformation
    The news: Facebook has started deleting posts that contain false claims about the coronavirus, especially ones spreading dangerous misinformation about treatment—such as that drinking bleach cures the virus—and incorrect advice about available health resources.

    Why it matters: This policy change, announced in a blog post, marks a welcome break from Facebook’s usual approach to false information. At best, misinformation flagged by its global team of fact-checkers has been downgraded in news feeds. But this still allows falsehoods to spread across the network and pop up in searches. Facebook started downgrading posts containing false information about the coronavirus last week, but misinformation continued to be shared in private groups set up to discuss the outbreak. This appears to have prompted Facebook to begin removing offending posts entirely.

    Social responsibility: Many would like to see this policy spread to other forms of misinformation, including false political ads or false claims about vaccines and cancer cures, but Facebook has given no indication that this will happen. Meanwhile, Twitter and YouTube are also rife with misinformation. Twitter says there have been 15 million tweets about the virus in the last four weeks, and the trend looks set to continue. At least there is no evidence of a coordinated attempt to spread deliberate falsehoods.

    Twitter, too: When people search for information about the virus on Twitter, the company now directs them to official pages from the Centers for Disease Control and Prevention. Google is directing people to the WHO.

    1. You mean like Twitter which took down Zero hedge for reporting HIV insertions into the coranavirus. Now even India is demanding an investigation of the biolab near Wuhan. Luckily we have a non PC president who had no problem restricting travel and ordering quarantines. In more good news an American company has already developed an experimental vaccine. Which is the only hope for subsaharan countries if the virus makes it to there. Read More articles which seem to be placing the overall mortality rate at 2 percent. Of course that depends on the level of care. Still only one death outside of China.

      1. the only hope for subsaharan countries if the virus makes it to there

        That seems a bit curious since flu and cold season are winter sports.

        reporting HIV insertions…

        Reporting it like fact? While a bizarre conspiracy theory does often have a certain appeal this one doesn’t have very sturdy legs at the moment.

        I have another one for you, that I made up myself: A virus’s whole business is gene splicing. It mixes and matches segments of RNA, changing both the DNA of the host cell and itself. That’s how these things evolve. Two different viruses may infect a single host cell at the same time, so eventually things can get interesting. You can see where I’m going with this.

          1. They were arresting doctors for talking about it in December. Only circumstantial evidence of guilt but combined with the location of the facility, the virus which looks engineered, the clear attempt to shift cases from the past to the present, it builds a strong circumstantial case against the Chinese. Zero Hedge had sufficient reason to question whether the virus was a bio weapon.

        1. It’s also velocity.of.mutation … HIV, mutates x17 faster than flu influenza, which is itself one of the fastest mutating viruses.

          1. Scientific Puzzles Surrounding the Wuhan Novel Coronavirus
            By Yuhong Dong

            February 3, 2020


            ‘There are many scientific questions regarding this novel virus. Based on recently published scientific papers, this new coronavirus has unprecedented virologic features that suggest genetic engineering may have been involved in its creation. The virus presents with severe clinical features, thus it poses a huge threat to humans. It is imperative for scientists, physicians, and people all over the world, including governments and public health authorities, to make every effort to investigate this mysterious and suspicious virus in order to elucidate its origin and to protect the ultimate future of the human race.’


          2. Scientific Puzzles

            It’s an interesting summary. My take-away is that there are lots of things clearly unknown at this point. Saying that such a mutation is “unlikely” isn’t convincing evidence that an evil scientist built this in his lab. Hopefully the truth will emerge. I have a natural aversion to jumping from assumptions to conclusions to “there must be consequences”. It’s lynch mob think.

            Minor takeaway: None of the recently epidemic viruses mentioned have a high commonality with each other genetically either.

          3. Yuhong Dong

            “Yuhong Dong holds an M.D. from Beijing Medical University and a doctorate in infectious diseases from Beijing University. Dong has 17 years of working experience in viral infectious disease clinical treatment and antiviral drug research. Dong worked as a doctor in the First Affiliated Hospital of Beijing Medical University and then later as a Medical Scientific Expert specialized in antiviral drug clinical research in Novartis R&D. She currently works as a Chief Scientific Officer in a Swiss Biotech company.”

            This article discusses six 2020 scientific publications, including the one that I’ve posted here a number of times.

          4. This article discusses six 2020 scientific publications

            Yes of course. The article says right at the beginning that they have a basket of unknowns, in plain English. I’m not dismissing this or the other scientists.

    2. “Read More articles which seem to be placing the overall mortality rate at 2 percent.”

      Do you have any clue of how they come up with that number, given that the raw mortality rate* for resolved confirmed cases remains stubbornly high at 40.6%?

      * 362 / (362 + 530) = 40.6%

      1. This is interesting, and scary.

        New Research Estimates 75,000 People in Wuhan Are Infected With Coronavirus
        3 FEB 2020

        More than 75,000 people – ten times the official tally of confirmed cases – have been infected with the coronavirus in Wuhan, ground zero of a global health emergency, according to research published Friday.

        “We estimate that 75,815 individuals have been infected in Wuhan as of January 25, 2020,” a team led by Gabriel Leung from the University of Hong Kong reported in The Lancet.

        As of January 31, the Chinese government said the number of confirmed cases had risen above 9,700 for all of China, including 213 deaths.

        For Hubei Province – including Wuhan, a city in central China of 11 million – the official figure was nearly 6,000 confirmed cases and just over 200 deaths.

        The World Health Organization on Thursday declared the outbreak a global health emergency, but said it was not recommending any international trade or travel restrictions.

        “The apparent discrepancy between our modelled estimates of 2019-nCoV infections and the actual number of confirmed cases in Wuhan could be due to several factors,” Leung said in a statement.

        A time lag between infection and symptom onset, delays in infected persons getting medical treatment, and the time needed to confirm cases with lab tests “could all affect overall recording and reporting,” he said.

        The study found that each person infected with the virus, which emerged in December, could have infected two to three individuals on average, and that the epidemic had doubled in size every 6.4 days.

      2. Because you have to be close to dead to even get into a hospital in Wuhan. Mild cases where the person just recovers on his or her own do not even get counted. As I have been saying from the beginning if you just throw out the data from Wuhan and use the rest of the data, you get a much more accurate picture of what is going on. The mortality estimate has been dropping for over a week now because scientists particularly outside of China now have enough patients to evaluate the strength of the virus.

        1. Basically your recover to death ratio is entirely useless. I will not even talk about the fact that it takes longer to recover so when you do have some exponential growth in cases recoveries will lag, it is so.logically obvious.. Finally even in China we see a leveling of the curve, in the data from John Hopkins. Of course outside of China the curve is flat it really never look exponential. Of course, as I have said for sometime China is showing us a rearview mirror view of the epidemic and passing it off as looking through the windshield. The rapid exponential growth occurred prior to the government admitting the epidemic. Now the Chinese are giving us the history of the epidemic and passing it off as real time.

          1. Also useless: Estimating a mortality rate before having any idea of how many are infected, or even bothering to define what “infected means”, or having any way to even estimate the number infected in case the definition extends to asymptomatic cases, or spouting statistics you read somewhere without providing any documentation of where they came from.

            There certainly are lots of useless discussions of the coronavirus mortality rate going on presently.

          2. “Basically your recover to death ratio is entirely useless.”

            Your misstatement shows that you don’t understand my calculation.

      3. (Total Deaths) / (Total Confirmed Cases) = 362 / 17,489 = 2.07%

        (Total Deaths Outside of China) / (Total Confirmed Cases Outside of China) = 1 / ( 17,489 – 17,306 ) = 1 / 183 = 0.55%

        1. A doctor friend said that it’s not so much a flu like virus that kills you, more likely the pneumonia that follows.

        2. As I mentioned previously, the calculation is a downward-biased estimate of the mortality rate, because some of the confirmed cases in the denominator will eventually end up in the numerator as deaths. We don’t know how many at this point.

          1. Here’s an example for you:

            Suppose there are 10,000 confirmed cases of which 200 survived and 200 fully recovered (roughly the situation at one point last week). There are at least three different ways one could estimate the death rate.

            1) If you assume all 9,600 of the unresolved cases will recover, the estimate is 200 / 10,000 = 2% (RR’s math).

            2) If you assumed none of the 9,600 unresolved cases will survive, the estimate you would get is
            (200 + 9,600) / 10,000 = 98%.

            3) if the remaining 9,600 survive at the same rate as those whose outcomes were already reported (50%), then 4,800 would die and 4,800 would survive. The resulting death rate estimate would be (200 + 4,800) / 10,000 = 50%.

            Now the 98% estimate and 50% estimates are likely too pessimistic. However, the assumption that none of the remaining 9,600 unresolved cases will end in death seems overly optimistic.

            In short, the 2% estimate is implausibly low.

          2. I don’t trust the calculation. Moe accurately, I don’t trust the denominator. Yes, the death rate is high for *confirmed* cases. But as we know, they are using scarce test kits only on the very sick. Confirmed cases are 20679 with 427 deaths. What if there are, say another 30,000 cases that were sent home without a confirmed test? Now, if any of those 30,000 of those cases were close to dying, they would have made it to a hospital and been tested and counted among the confirmed. So we can assume that the recovery rate for those hypothetical uncounted 30,000 is close to 100%.

            Now we have: 427 / (20679+30,000) = 0.84%

            But it’s still a crap shoot.

          3. What about that dude that died on the sidewalk in front of the hospital? Is there a term in the equation for him?

          1. Which makes the total about 1 percent. A few weeks ago the estimate was 2 to 4 percent, now it is 2 to 3 percent as scientists have obtained better information. Your estimate is off by more than an order of magnitude.

        3. From Wikipedia for case fatality rate:

          A case fatality rate (CFR, also case fatality risk, or case fatality ratio) is the proportion of deaths within a designated population due to a given medical condition (cases), of such cases over the course of the disease. A CFR is conventionally expressed as a percentage and represents a measure of risk. CFRs are most often used for diseases with discrete, limited time courses, such as outbreaks of acute infections.

          A mortality rate – often confused with a CFR – is a measure of the number of deaths (in general, or due to a specific cause) in a population, scaled to the size of that population, per unit of time.

          My calculations are case fatality rates.

          1. Thanks for the correction to my terminology. My calculations are also meant to estimate CFRs.

            To Oxide’s point, the number of hypothetical mild cases which may never be identified as coronavirus is indeed crapshoot, and gets to the definitional issue that has to be addressed: Without some recognizable threshold level of symptoms, CFR becomes meaningless, because the denominator is undefined and unknowable. Also your estimate is downward biased, because you assume no further coronavirus deaths will occur beyond the current count for a large number of unresolved cases.

          2. CFR becomes meaningless

            Which is the case for 2019-nCoV given all of the reasons noted by you, ABQDan, Oxide and BlueSkye.

      4. Unlike your 3 examples below that all have 10,000 confirmed cases in the denominator, this calculation does not use the number of confirmed cases anywhere. This calculation is neither a mortality rate nor a case fatality rate.

      1. You probably will be able to buy two used hospitals in Wuhan pretty soon really cheap. They will come with a lot of bleach.

  8. Manhattan Housing Prices Crater 18% YOY As NYC Rental Rates Plummet

    *Select price from dropdown menu on first chart

    A noted economist said, “A housing recovery is falling prices to dramatically lower and more affordable levels by definition.”

  9. There are at least 100000 cases and they go back to an escape from the weapons lab in November. Consequently, the doubling is much slower. Catching viruses on airplanes is very easy due to recycled air. Why is it that there are only cases in this country when the relationship is like husband and wife? Not one case where a passenger on a plane gave it to another passenger on a plane. This ain’t noravirus where the cruise ship gets covered in barf in a few days.

    1. “There are at least 100000 cases and they go back to an escape from the weapons lab in November.”

      Links, please.

    2. There are at least 100000 cases and they go back to an escape from the weapons lab in November.

      I, too, would like to see this information. You have not provided any link to substantiate this.

      1. One article was posted at 6:04 last night which identified that there were 100,000 cases and other information. I have identified the lab and the suspicious in many other posts, do not feel like repeating or even taking the time to find them.

        1. If you read that article it closely you will find to an intelligence connected person making such an accusation, honestly with out smoking gun evidence we never do. By talking about how the Soviet Union having a similar accident and how covering up an accident causes more damage, he cannot be accused of claiming we accused China but it does tell the Chinese we do know. I have hung out with enough high level intelligence people to know how the game is played. It is diplomatic but he never tried to say it is not what happened here.

          1. Not sure how I moved some words around. However I believe, that article is a diplomatically worded accusation. It tells China we know you released the virus, we know it was accidental but such behavior is a threat to world health. I was warning people about globalism and the uniparty almost thirty years ago. It was nutcase thinking then but the dots were there but people just did not want to connect them. Trump had been able to out them sufficiently it is now a mainstream view. Some people just need every piece of the puzzle before they can see the picture.

          2. Some people just need every piece of the puzzle

            Some people only need a thread to see the whole fabric. I do wonder, is writing an article in the newspaper with a lot of spy code talk how we do diplomacy now?

            One thing that you are obviously leaving out of this whole picture is the theory that two Chinese nationals stole this weaponized virus from a Canadian Biolab. Makes a much more interesting Bogey Man story.

          1. I read that entire link and there’s no evidence at all. Where are the links which provide EVIDENCE that it came from the research facility?

    3. I’ll leave out the weapons lab discussion, except to say that as a weapon it seems like pretty weak tea.

      Reports of the ease of transmission are inconsistent. For example, there’s a report of a superspreader in Wuhan who went for surgery and transmitted the virus to 14 health care workers. Then there’s the story in Germany of an infected but asymptomatic lady from China who passed it on to two workers at a seminar. The workers had very mild symptoms but then passed it on to two more workers who had no connection to the seminar or Chinese national.

      This raises lots of questions. Is there a difference between if you’re sneezed on or whether you pick it up from a surface? Maybe it doesn’t live long on a sterile surface? Maybe it’s slow to replicate in the body so healthy folks can defeat it quickly before full incubation? Is it easily spread but weaker after the person recovers? We don’t know.

      1. Oxide, I am not claiming a deliberate release. Pretty stupid to cripple your own economy. I am sure it was an accidental release of a work in progress. I am sure they wanted it more lethal and easier to spread. Their incentive to cover it up led to them not asking for help earlier. They did not want the world calling for the investigation that the Indian government is already requesting. A new coranavirus virus just happens to occur next to their bioweapons plant? The virus is not only a new coranavirus but has HIV genes and appears to many experts as being engineered? Sorry Wuhan does not happen to be the only place in China which eats bars and snakes. Doctors raise the alarm and are arrested? Cases are vastly underreported and the death rate cited does not come close to the rates reported in the rest of China and certainly outside of China? The first rule in the intelligence world is there are no coincidences. When you have as many as this not investigating and proving these are just coincidences is negligence and endangers national security. Zero Hedge should not have been banned, they should have been applauded for raising the issue.

  10. More!, More!, More!, … Fa$ter!, Fa$ter!, Fa$ter!

    Opinion: Central banks’ money printing buoys stocks, but for how much longer?

    MarketWatch |Published: Feb 3, 2020 | By Nigam Arora

    In a bid to support its stock market amid the coronavirus outbreak, China has cut reverse repo rates and injected massive liquidity. None of this helped the Chinese stock market from a rout. However, it has buoyed the stock market in the U.S.

    • Since the Fed started printing more money, the U.S. stock market has risen in lockstep with the Fed’s balance sheet.

    • The conclusion is unmistakable that the money the Fed is printing is going into stocks, especially in large-cap stocks such as Apple AAPL, +0.32%, Amazon AMZN, +0.76% and Microsoft MSFT, +1.37%.

    • The coronavirus is occurring after a 10-year bull market. SARS occurred when the market was beginning to recover from the 2000 crash.

    • The coronavirus is occurring when the stock market is very overbought. This was not the case with SARS.

    • The Chinese economy was much smaller in 2003.

    • Travel has dramatically increased since 2003.

    • Over the past few years, China has been the engine of global growth.

    • Before the coronavirus, the Chinese economy was growing at the slowest rate in 29 years.

    There are expectations that China will inject even more money into the financial system. If that is not enough, there is speculation of more money printing by central banks across the world. There is even talk of an interest-rate cut by the U.S. Federal Reserve.

    Can money printing reverse the economic damage from the coronavirus? Can money printing continue to take stocks to new highs?

  11. ‘A bellwether of the global shipping market has hit an all-time low as the spread of the coronavirus weighs on global trade.’

    ‘The fast-spreading virus and uncertainty around its impact on the world’s economy have rocked markets and sent commodities prices to multi-month lows in recent days. That has added pressure to shipping freight rates—the price at which cargo is delivered from one point to another—for the world’s largest raw materials ships, known as capesize vessels.’

    ‘The Baltic Exchange’s capesize index, which constitutes part of the Baltic Dry Index—an important proxy for the world’s shipping market—extended deeper into negative territory Monday, after slipping below zero for the first time ever on Friday.’

    “The coronavirus is definitely having an impact,” said one London-based ship broker. “We work in an environment where everything is just in time and it can have a knock-on effect pretty quickly once the wheels of the world stop turning.”

    1. ‘…after slipping below zero for the first time ever on Friday.’

      Didn’t know that was possible for other prices besides interest rates and housing.

      1. I dunno, it seems more logical than negative interest rates. “We’ll pay you to ship stuff on our empty boats.”

        Actually I’m surprised U-Haul hasn’t tried the same tactic — if you remember the good ol’ U-Haul index. Paying people to move stuff is probably cheaper than hiring professional drivers to move the trucks.

          1. Don’t the customers pay for their own fuel? And they can’t just leave a truck in the dock. They still need to have to get the trucks back to the undesireable cities, so more people can move out.

    2. Fortunately for Wall Street traders, there is no law that says the headline stock market indexes have to follow real economic activity.

      Feb 1, 2020, 08:35pm
      These 3 Global Economic Indicators Suggest Stock Market Problems
      John Navin

      The indicators are (1) the Baltic Dry Index, (2) the price of copper and (3) the price of oil — all in decline and in the kind of decline that eventually gets noticed by stock market participants. Some seem to have taken an interest already but perhaps not with the convincing kind of commitment you might see once the whole thing sinks in.

  12. Anecdotal evidence #23: Global $ynchronized $lowing is a $ocial Media digital myth.


    China’s independent refiners $lash operation$ as virus hits fuel $ales

    Chen Aizhu, Muyu Xu

    SINGAPORE/BEIJING (Reuters) – Independent refineries in China’s eastern Shandong province, who collectively import about a fifth of the country’s crude, have slashed output by 30% to 50% in just over a week as the coronavirus outbreak hit fuel demand and distribution, executives and analysts said.

    Utilisation rates dropped below 50% by the end of January at key plants, from around 66% a week earlier, the lowest since at least 2015, according to surveys of around 40 plants conducted by local consultancies JLC Network Technology and Longzhong Information Group.

    The sudden production cut left crude oil storage tanks full at China’s top crude import terminal of Qingdao, causing delays in discharging cargoes and leaving refiners, already under pressure from weak margins, facing hefty demurrage charges to compensate shipowners for delays.

    “The situation is grim – we have gasoline and diesel demand shrinking on one hand, and fuel logistics stalling on the other as local governments put in traffic curbs to contain the spread of the virus,” said a plant executive based in Dongying, a refining and chemicals hub in Shandong.

    He and other executives declined to be identified because they’re not authorized to speak to the media.

    The city of Dongying, home to some 40 teapot refineries, introduced a ban on Friday on vehicles entering the city from outside and asked local manufacturers to apply for special passes to facilitate the logistics required for production, two refinery executives briefed on the matter said.

    “This means refineries can’t move their products out, or at least it slows down the flows drastically” said the Dongying executive.

    He said a typical 60,000 barrels per day refinery uses 200-300 trucks a day to deliver refined fuel.

    A second executive estimated that even with such steep production cuts in place, most of the plants might have to reduce output again in about 10 days because of logistics constraints

  13. “‘The biggest thing for me is that you can’t build a new home backing up to a lake right now anywhere between Omaha and Fremont for a house price point of under $700,000,’ she said.”

    The idea of any house in Nebraska costing that much is simply absurd.

    1. The notion of any house at that price anywhere is absurd.

      So the conclusion is, Nebraska housing market is as every bit as fraudulent as NY, CA, OR, WA, CO and FL.

      Good to know.

      1. Depending on where you are, those states at least have a decent number of jobs that would support a $700K house (unwise as it would be). Like two married lawyers bringing home $350K total. Or two GS-14s in DC making $260K combined ( I know several of these couples personally). But Omaha? Maybe they are all competing for Warren Buffet.

        But even if I made a million bucks a year I wouldn’t buy one of those crapshacks in the photos. Waterfront? Who needs waterfront on weeknights? That’s what vacays are for. Buy one an hour away for cash and you don’t need to worry about the $10K deduction limit.

  14. Just heard from a longtime friend who is a flight attendant, her main route is to China. No mas, they said right now it looks like until May 1

    1. Is she with Delta? They’re the only ones I’ve heard so far publicly say they were going to stop through April.

  15. “Fortunately for Wall Street traders, there is no law that says the headline stock market indexes have to follow real economic activity.“

    – “In the short run, the market is a voting machine, but in the long run, the market is a weighing machine.” – Benjamin Graham

    – There’s sentiment and valuation. Right now we have a classic Pavlovian response to the cattle-prod of the Fed. Recall that it didn’t work out in 2000, 2008 either. Bubbles always pop.

    1. – With all the central banks ‘liquidity injections’ (I.e. financial heroin). The ‘markets’. can seemingly go up forever. I have no idea when or how this ends, but the prognosis for the addict is poor, with death by overdose a typical outcome.

      – Just don’t call these ‘markets’ anymore. That includes housing.

      1. I would have thought he would have been getting those expensive but certainly worth it executive medical exams where they capture cancer really early based on extremely expensive blood work and other tests. It is a shame I hope he pulls through.


      Amoral monsters.

      Paul Joseph Watson | – FEBRUARY 3, 2020

      Blue check marks on Twitter couldn’t contain their delight.

      “It’s not cool to joke about Rush Limbaugh having cancer. You might jinx it,” said writer Johnny McNulty.

      Writer and director Xavier Burgin called Limbaugh “an odious, white supremacist, scum of the Earth” and said his cancer should be celebrated as “good news for Black History Month.”

  16. $ad …

    NYMEX Crude Oil CLc1

    49.99USD …CHANGE -1.57(-3.05%)

    TODAY’S RANGE | 49.91- 51.97
    52 WEEK RANGE | 49.91 - 66.60

    As of 1:24 PM PST Feb 03 ∙

    1. Chris Matthews mentioned how E.Warren has fallen out of favor. You’ve all probably seen the viral video where a voter has a conversation with Warren:

      Voter: I scrimped and saved to put my daughter through college. Now you’re forgiving student loans. Will I get my money back?
      E.Warren: Of course not!

      The very tone of voice Warren uses is off-putting. There is a clear sense of entitlement that she wants to help herself to tax money to give to people who don’t really deserve it. That alone is enough to sink her in an election.

  17. Panic is starting to break out among the corrupt, captured Democrat Old Guard at the Spector of losing control of their patronage, graft, and pay-to-play influence peddling rackets. I may have to send another $25 donation to Bernie Sanders, as the entertainment value of watching the crony capitalist Democrat Establishment freak out is worth every penny.

    1. He better have taken a few big stacks of hundreds from that over billion dollar skid of money we sent to Iran.

    2. Oh this is delicious: “Kerry was overheard by an NBC News analyst saying “maybe I’m f—ing deluding myself here” and explaining that to run, he’d have to step down from the board of Bank of America and give up his ability to make paid speeches. ”

      Yeah, THIS guy sounds eager for public service. (He was ok when he was younger, but he’s clearly tainted now.)

  18. So Atlanta Fed estimate of GDP for this quarter currently stands at 2.9 percent. Could it be that Trump’s US first policies actually work? KAGA. The trade deal and the impacts of the remaining tariffs keep us humming along. It sucks to be selling commodities to China unless you have a trade deal which mandates purchased but that is Brazil and Australia’s problem.

    1. Pay no heed to what’s behind the curtain: Namely, money being created out of thin air and a trillion dollar deficit.

      1. If you have an economy of 23 trillion dollars and you have nominal growth of say 5 percent. You can run a deficit of 1.15 trillion dollars and not make the the debt to GDP ratio worse. That is close to where we are. When the monstrosity of a budget compromise was passed, Democrats getting all their social programs, Republicans defense spending, I said the Democrats had made an error. They vastily increased the chance of no recession in 2020. The Democrats cannot practice fiscal austerity even when it benefits them. The Democratic house has increased the chances of Trump winning. The irony is a more conservative Republican house would have reduced his chances. In 2018, Trump focused his efforts on retaining the Senate and kept the judicial appointments rolling. Due to their hatred of him, they cannot even see his genius.

    1. No it may have been 20000 since the real number now is over 100000. We do.not know and we will never will. Most of the cases resolved themselves without being counted by the Chinese. What we do know there are less than 200 cases outside of China and no sign of exponential growth. China is publishing the numbers it wants to.cover up what really happened. Mortality rate outside of China is less than .55 percent and dropped and that includes related deaths due to complications. Outside of China is real time, the numbers in China are distorted history.

      1. Most of the cases resolved themselves without being counted by the Chinese.

        Some in recovery, some in death labeled as something else.

        But yeah…remains to be seen on the exponential growth outside of China. If it really does turn into a mostly China-only thing I’m going to to predict it’s either the lack of Vitamin D theory OR the squat toilets theory. But I’m still expecting it to take off everywhere eventually.

    2. Overhang. Even if everyone had quaratined themselves two weeks ago, we would STILL see the numbers increase as prior infections finally incubated and presented symptoms. The real number will be about three weeks from now, as we see how infectious this is with precautions in place.

      1. Also real: when we have enough resolved cases of similar vintage to reliably estimate the death rate…

    3. Speaking of flu’s… think it would be challenging to have some native wuhans hand package up a couple cases of ramen? I would like to donate some to the next big NAR seminar.

      1. When the first case emerged, nobody could have foreseen an incipient epidemic.

        Except for maybe someone as sharp as Senator Tom Cotton.

  19. Coronavirus: Bay Area has highest concentration of U.S. cases — that shouldn’t be a surprise
    Four of 11 U.S. cases reported in Bay Area; Travis AFB tapped for quarantine facility
    SAN JOSE, CA – FEBRUARY 2: Dr. Sara Cody, Santa Clara County Health Officer speaks at press conference on Sunday Feb. 2, 2020, in San Jose, Calif. Cody announced that an adult female is the second case of the novel coronavirus in Santa Clara County. (Aric Crabb/Bay Area News Group)
    By John Woolfolk and Julia Prodis Sulek Bay Area News Group
    PUBLISHED: February 3, 2020 at 11:13 am | UPDATED: February 3, 2020 at 6:34 pm

  20. LOL@ as of right now the Wall Street Journal has Biden finishing in *FIFTH* place in Iowa.

    Suck it, neocons.

    1. Actually mayor Pete seems to have won the most politically. He is now the center’s answer to Bernie.

  21. First the Iowa poll and now the results, at least the Clinton machine knew how to be dishonest without being quite so obvious.

    1. They’re going to assassinate Bernie.

      They can’t defeat him in a fair election, so they’re going to kill him.

  22. It will be subtle like something that looks like a heart attack, if they do it. They had a good plan, run Warren to split the progressive base, have only one major neo-con run. However, now Bernie is dominating the progressives. Their hand-picked neo is missing a few steps, Mayor Pete is viable and Bloomberg is running,splitting the globalists neocons base three ways. That is the path to victory for Bernie and they know it.

    1. The race of the neocons? Ha ha ha

      The biggest neocons of all, who happens to have a fake orange glow will be the victor. Good times ahead…..

  23. The Financial Times
    Coronavirus outbreak: UK urges all its citizens to leave China

  24. Is it possible to find 1 Realtor who is not a Liar?

    “The Impossible Dream”

    To dream the impossible dream
    To fight the unbeatable foe
    To find the worlds only honest Realtor
    To search wherever he go

    This is my quest
    To follow that star
    No matter how hopeless
    No matter how far

    To fight for the right
    Without question or pause
    To be willing to march into Hell
    For a heavenly cause

    And I know if I’ll only be true
    To this glorious quest
    I’ll find one buyer not screwed
    Fore I’m laid to my rest

    And the world will be better for this
    That one man, scorned and covered with scars
    Still strove with his last ounce of courage
    To reach the unreachable star

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