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They Were Fine, They Were Luxury, They Were Great, But Look At Them Now

A report from the Wall Street Journal on New York. “More New York City hotel owners are defaulting on their mortgages, succumbing to a crush of new supply and rising expenses. Colony Credit Real Estate Inc. recently hired a brokerage firm to sell the mortgage on the 1,331-room Row Hotel near Times Square at a loss, according to people familiar with the matter. Colony Credit said in a 2018 public filing that the loan package had a principal balance of $260.2 million. The loan could now sell for as little as $50 million, say people familiar with the matter. Several other hotel owners have had similar trouble.”

From KGET in California. “January saw home supply and demand in Kern County continue to decline, local appraiser Gary Crabtree says. New listings last month dropped 6.4 percent from 722 in December 2019 to 676 last month. Crabtree said home sales dropped 15.4 percent from 564 in December to 477. Crabtree said such a decline is common after the holiday season and is typical in the housing market. However, Crabtree said what is unusual is that the median sale price dropped by $13,500 last month, or 5.1 percent.”

The Atlanta Journal Constitution in Georgia. “The continued growth in the Sugarloaf area has not gone unnoticed or without opposition. A proposed 265-unit apartment complex was denied by the planning commission in February. A neighbor formally opposing the project at the meeting warned of potential oversaturation of the market. ‘Something is going to drop,’ said Hing Lee, a Duluth resident, referring to the Sugarloaf apartments. ‘Look over at the apartments around the Gwinnett Place Mall. Fifteen years ago, they were fine, they were luxury, they were great. But look at them now.'”

The Real Estate Journal. “The days of big monthly increases in apartment rents might be over, at least for now. That’s one of the takeaways from Zumper’s February National Rent Report. In Minneapolis, the median one-bedroom apartment stood at $1,400 in February, up a fairly flat 0.7 percent from January and completely flat when compared to February of 2019. Median two-bedroom rents actually fell in Minneapolis, dropping 2.8 percent in February to $1,750. That also represents a drop of 9.3 percent when compared to the same month one year earlier.”

From WSMV on Tennessee. “Nashville has more than 9700 short-term rental units – and a lot of neighbors are feeling the pinch. Cleveland Park in East Nashville is an example. Life-long resident Sam McCullough has short term rentals on either side of his house, and one across the street. ‘You don’t know who’s next to you on the weekends,’ he said. ‘Neighborhoods are unrecognizable.'”

“Metro council now has limits on short-term rentals in residential neighborhoods, but it hasn’t stopped entire buildings from being constructed specifically for the short-term rental market, where the property zoning allows it. One example is Hendrix Cleveland Park, which is under construction at 829 Lischey Avenue. There are eight units, four bedrooms each, and all are being built as short-term rentals. Investors are buying them up at $700,000-plus per unit.”

“Metro Council member Sean Parker, who represents district 5 where McCullough’s neighborhood is, has introduced a bill that creates a new type of zoning – it will allow multi-family housing, but explicitly prohibit short term rentals. Parker said the city needs more multi-family housing, but he said too many multi-family developments are selling as short-term rentals.”

From WTOV on Pennsylvania. “Sometime in the first half of 2020, officials say we’ll find out if a cracker plant is coming to Belmont County. But, what will it all look like? The future is next door in Beaver County, Pennsylvania. Nearly 4 years ago, Shell announced it had chosen the site in Potter Township to build its newest ethane cracker, an investment of around $6 billion that would employ 6,000 construction workers and create 600 permanent jobs.”

“What isn’t so obvious is what happens next. What happens when construction is done and 6,000 becomes 600? It’s something the county and its businesses will have to reckon with. ‘I’ve said that all along. Having lived in an area where there’s a chemical industry like this. If somebody overbuilt, some businesses will have overbuilt and will have to adjust accordingly,’ said Helen Kissick, president of the Beaver County Chamber of Commerce.”

“‘You don’t build permanent supply for temporary demand. If you are investing in a hotel-like project, you have to believe in that. Sometimes, that’s a gut feel,’ said Marcus Piatt, who operates the hotels for Millcraft Investments.”

The Boston Globe in Massachusetts. “Nardella Thomas had already been evicted from her home by the time she contacted Boston Community Capital, a Roxbury-based group that specializes in helping distressed homeowners. After her son’s father lost his job, she explained, she just couldn’t afford the mortgage any longer. So Thomas was ecstatic when the nonprofit group bought her Webster home from the bank in 2012, then sold it back to her, along with a mortgage she could afford.”

“But the relief was only temporary. Thomas said she realized there were costly strings attached in all the paperwork she had signed when she tried to refinance her house six years later: She owed Boston Community Capital an extra $49,000 before she could get a new loan. ‘Why do I have to give you all this money?’ she remembered asking Boston Community Capital officials. ‘I haven’t been late in five years and my credit is good. This woke me up. If it happened to me, who else did it happen to?'”

“That extra charge — called ‘shared appreciation’ — is at the heart of a class action lawsuit filed Friday alleging ‘predatory lending’ against an organization more accustomed to accolades than accusations. And it’s raising questions about the best — and fairest — way to help people facing foreclosure on their homes.”

“Sara Jane Shanahan, a lawyer for BlueHub, told the plaintiffs’ lawyers that all their clients saved money from working with BlueHub — even after the shared appreciation payment. Plus, they got to keep their homes. ‘If not for the SUN program, your clients would not have received any appreciation, because they would have lost their homes to foreclosure,’ Shanahan wrote.”

“Cheryl Ortiz was living with her husband and four kids in their Southbridge home in 2010, when her husband ruptured a disk in his back, was diagnosed with cancer, and her graduate school loans came due. The value of the house had dropped so much that refinancing wasn’t an option. After they tried unsuccessfully to sell the house, they went to what was then Boston Community Capital in 2013. In an interview with PBS ‘Newshour’ in 2015, Ortiz said that, with the group’s help, ‘We have a good place to live. My kids have their friends.'”

“But her view changed two years after the interview aired when she went to refinance and learned that she couldn’t close the deal until she paid $39,520 in shared appreciation. ‘Yes, I got my house back’ thanks to BlueHub, Ortiz said. ‘But you didn’t know what’s coming: the bomb that’s going to be dropped on you the day you go to refinance.'”

This Post Has 117 Comments
  1. 3 May 2017

    Which US hotel markets are on the bubble?

    ‘As the hotel industry continues on the path toward a downturn, it’s time to begin looking at warning signs for which markets are poised to experience a large drop.’

    By Jack B. Corgel, Managing Director, CBRE Hotels’ Americas Research

    ‘At a recent gathering, I was involved in a group conversation with hotel property investors who agreed that they have been “choking on the numbers” in certain U.S. hotel markets. Stated differently, their spreadsheet models explode once either acquisition prices or development costs are entered to evaluate hotel opportunities, especially in red-hot markets.’

    ‘They asked, “Should we pay such high prices now, given that the boom may turn into a bust?” As a college professor, I offered the standard response: “It depends, what do you think?” As a hotel market forecaster, I promised to think and write about hotel property market bubbles with regard to their questions, and likely those of others, about current pricing in local markets.’

    ‘Boom and bust experiences over the past few decades—with tech stock prices and housing prices, for example—have generated an avalanche of books and articles about short-term, extraordinary asset pricing volatility. A summary of these writings appears as follows:

    ‘The grand debate centers on whether asset price bubbles either emerge from rational responses to fundamental stimulants by market participants or from irrational behaviors, such as sentiment and over-optimism, not directly related to fundamentals (see surveys by Glasser and Nathanson, 2014; and Mayer, 2011).’

    ‘The other grand debate involves measurement. The time-honored definition of a bubble is when asset prices markedly depart from fundamental values. The analysis machinery becomes clogged when trying to deal with the term “markedly depart” and further challenged with attempting to compute “fundamental values.” Hence, no firm conclusions have been reached about how to detect bubbles ex ante. Ex post detection is far easier, in some cases like a slam dunk into a five-foot-high basket!’

    ‘Credit excesses have been found to be instrumental in the creation of many, but not all, asset market bubble cases (see Levitan and Wachter, 2013). Non-credit causes come in many different flavors. Examples of housing market bubbles from non-credit related causes include supply-side constraints and demand factors such as income instability, and social interaction issues (see Jorda, Schularick and Taylor, 2016).’

    ‘All of the research on real estate bubbles focuses on housing markets except Levitan and Wachter (2013), who laid the blame on mortgage credit excesses in pricing of commercial real estate during the last cyclical peak. To my knowledge, no publications have addressed hotel market bubbles.’

    ‘Exhibit 1 presents the results of an analysis whereby the value of a typical hotel in each market during Q4 2016 is compared with its corresponding value at the previous market peak—in other words, the quarter of previous peaks differ somewhat by market. Unique indexes are produced for each market. The height of the bars shows how much in percentages that the value indexes changed in real terms during the current recovery and expansion period.’

    ‘Here is the complication: Values are not prices! A price is an observable fact and a value is an estimate from a model designed to predict what a price should be. The two components of values (V) presented in Exhibit 1 are NOI and capitalization rate, where V = 1/R (NOI). If the values mostly come from NOI expansion, then they have a decidedly fundamental origin. If multiple expansion is the main determinant of value, then the pricing (normal or extraordinary) of incomes takes center stage.’

    ‘To this point, the bars in Exhibit 1 are split into two parts such that the darker segment represents multiple expansion and the lighter segment shows the NOI growth contribution. The height of the bars does not portend a hotel price bubble, but instead shows which markets are prone to the largest busts should local conditions suddenly change.’

    https://www.hospitalitynet.org/opinion/4082501.html

    1. Coronavirus in N.Y.: Without Chinese Tourists, Business Sags
      New York and other tourist destinations around the world are facing precipitous drops in demand for hotel rooms and restaurants.
      A mostly empty street in typically bustling Chinatown in Manhattan.
      Credit…James Estrin/The New York Times
      By James Barron
      Published Feb. 4, 2020
      Updated Feb. 5, 2020

      The manager of a hotel near Newark Liberty International Airport that relies on tourists from China estimated the loss from the coronavirus outbreak at “well over $100,000 and climbing.”

      A company that arranges Chinese-language bus tours of the sights in Manhattan is dealing with as many as 300 cancellations from Chinese tourists who cannot come to New York this week.

      The owner of a travel agency in Queens who had booked trips for 200 Chinese tourists this week and next has already thought about when he might have to lay off two of his five employees.

      With health officials scrambling to deal with an outbreak that is spreading around the world, tour operators and travel agents in the New York area are bracing for the economic pain that will come with empty rooms in hotels and empty seats on tour buses.

      1. Can’t get masks, now food gets a “not.so.feel.good” ma$$age.

        China’s con$umer inflation $oars to 8-year high

        MarketWatch |Published: Feb 9, 2020

        Food prices in January grew 20.6% from a year earlier, accelerating from a 17.4% increase in December. Pork prices surged 116% on year in January, extending from a 97% increase in December. Pork prices alone boosted headline CPI by 2.76 percentage points in January.
        BEIJING–China’s consumer inflation hit its highest level in more than eight years in January due to impact from the coronavirus outbreak and the Lunar New Year, official data showed.

        The consumer price index climbed 5.4% in January from a year earlier, the highest reading since October 2011, when the index grew 5.5%, the National Bureau of Statistics said Monday

      2. Coronavirus is starting to hit the financials. People are finding out just how much stuff China makes. DOW is way down, gold is jumping.

        1. $ad. mini.Pha$e 1 v7.6 + (-force majeure$) + U$Dollar @ 99.25 & ☝👏= 0 as in Zero gain$ in “Trade.War$.are.$o.ea$y!”

          Shares of U.S. LNG firms tumble as China demand slumps
          Reuters | By Arathy S Nair, Scott DiSavino

          BENGALURU/NEW YORK (Reuters) – Shares of U.S. liquefied natural gas companies tumbled on Thursday as China’s biggest importer of the fuel suspended some purchases amid weaker demand and a global glut that has driven prices to record lows.
          China is the world’s second-largest LNG importer but its spot purchases have nearly ground to a halt as the economic effects of business closings due to the spread of the coronavirus, as well as lower heating demand from a relatively warm winter.

          Shares of Cheniere Energy Inc, the largest U.S. exporter of LNG, dropped to their lowest in over a year before finishing down 3.4% at $57.65, while Tellurian Inc fell 7.4% to $7.07, and NextDecade Corp lost 5.6% at $4.70.

          U.S. gas producers are counting on LNG exports to absorb record production from the shale boom. Those exports jumped 68% to a record 5.0 billion cubic feet per day in 2019 after soaring 53% in 2018.

          Reuters reported on Thursday that China National Offshore Oil Corp (CNOOC) had declared force majeure, which allows companies to suspend contracts after unexpected events like natural disasters.

        2. $ynchronized Global $lowing, is a $ocial media digital myth!

          COMMODITIE$:
          Nippon $teel to cut 10% of steel output capacity, faces record lo$$

          Reuters | By Yuka Obayashi, Aaron Sheldrick

          TOKYO (Reuters) – Japan’s Nippon Steel Corp said on Friday it will shut nearly 10% of its production capacity, an unprecedented move in the once-dominant Japanese steel industry hit by falling demand at home and competition from China.

          The world’s third-biggest steelmaker is setting aside $3.6 billion in charges and will close three blast furnaces in Japan, as it confronts a period of waning demand as Japan’s population declines.

          “Industrially, Japan is starting to look a lot like North America and Western Europe with a declining growth environment for steel demand and steel use domestically

          ” … he said Nippon Steel was recognizing the competitive landscape had changed, although he assumed the company could not yet have factored in the impact of the coronavirus on regional supply chains.

          Akio Migita, executive vice president of Nippon Steel, told a news conference the U.S.-China trade war had added to the challenges.

          “We have been facing unprecedented harsh conditions with steel demand from the manufacturing industry declining and steel prices slumping amid the U.S.-China trade war

        3. T$k, T$k, … Aluminium too! … $ad.

          COMMODITIE$

          Hydro’s shares sink as profit$ di$appoint, aluminum market cool$

          Reuters | Victoria Klesty, Terje Solsvik

          “I think the fourth quarter (had) … lower demand than we anticipated at the end of the third quarter,” Chief Executive Hilde Aasheim told a news conference.

          Softer demand from European industry throughout last year, and a more recent decline in U.S. markets, reduced the sales of finished products, such as components for the auto industry and for construction, Hydro said.

          The company’s shares fell more than 11% to a six-month low as major business units missed forecasts, analysts said.

        4. I do find the gold move interesting. However, a 200 point move in the Dow these days in only a .66 percent move. Way down is an overstatement.

  2. “…That extra charge — called ‘shared appreciation’ — is at the heart of a class action lawsuit filed Friday alleging ‘predatory lending’ against an organization…”

    ‘shared appreciation’ – Could of been a line from “Goodfellas”

    “If we wanted something, we just took it.” – Goodfellas

    1. “Shared appreciation”.

      I like it. Unless there happened to be a depreciation that needed to be shared; That I would not like.

      Share in the profits but not in the losses. As I said, I like it.

        1. In order to offer the FB a lower-cost mortgage, BCC basically spent money to fill the holes in the mortgage. So yeah, you could say they shared payments and shared in the losses, only indirectly, and on the front end. Effectively, BCC bought her a cramdown in return for part of the profits at the time of sale, and any refinance is technically a sale.

          “Why do I have to give them all this money?” Because that was a condition of being bailed out.
          “I haven’t been late in five years and my credit is good.” But you were late and had bad credit beforehand, which is when they bailed you out.

          So it looks like Nardella isn’t going to cash out as much cash as she planned.

    2. “’If we wanted something, we just took it.’ – Goodfellas”

      If I want something I just present to an ignorant puke a sheet of paper fully covered with a lot of interesting words that ends with a dotted line and he willingly signs it over to me.

  3. ‘Crabtree said what is unusual is that the median sale price dropped by $13,500 last month, or 5.1 percent’

    Good thing everybody is putting 20% down…

  4. ‘Hendrix Cleveland Park, which is under construction at 829 Lischey Avenue. There are eight units, four bedrooms each, and all are being built as short-term rentals. Investors are buying them up at $700,000-plus per unit’

    Sacré bleu!

  5. ‘In Minneapolis, the median one-bedroom apartment stood at $1,400 in February, up a fairly flat 0.7 percent from January and completely flat when compared to February of 2019. Median two-bedroom rents actually fell in Minneapolis, dropping 2.8 percent in February to $1,750. That also represents a drop of 9.3 percent when compared to the same month one year earlier’

    Minneapolis was a beast of the apartment bubble. Not any more. How’s that 4% cap rate now fellas?

    1. At this stage of the bubble, most “investors” don’t know what CAP rates are. They are just piling in because the guy down the street made easy money in real estate for a few years and they want a piece of the action.

      1. “They are just piling in because the guy down the street made easy money in real estate for a few years…”

        Ponzi finance works great up until the next crash…

  6. From the comments in the WSJ piece:
    “Check the tax bill on a room in NYC. People vote with their feet when they see that.”

    Same with the California coastal hotels.

    1. From the article:

      ‘New York’s average daily room rate fell to $255.16 last year, according to research firm STR. That is down from $271.15 in 2014 and the lowest figure since at least 2013. A continued construction boom could push these numbers down further: 22,117 new hotel rooms were under construction or in planning as of January, according to STR.’

      QE is deflationary.

      ‘The debt, which is secured by a long-term lease on the hotel rooms, has been in default since 2018 because income from the rooms isn’t enough to cover debt payments and rising expenses, according to filings with the Securities and Exchange Commission and people familiar with the matter.’

      ‘Several other hotel owners have had similar trouble…As of Feb. 10, at least 21 mortgages backed by New York City hotels were on a watch list for potential difficulties, according to research firm Trepp LLC. The figure only includes loans that were packaged into bonds.’

      ‘in default since 2018 because income from the rooms isn’t enough to cover debt payments and rising expenses’

      A couple of things: this bubble popped years ago. And making a profit IS important!

      1. Imagine what it’s like for family members coming to town to pay even $255? It may be lower, but it sure as hell isn’t low.

        The price of the property was too high.

        1. Remember that Beatles tune, Taxman?

          “If you drive a car, I’ll tax the street
          If you try to sit, I’ll tax your seat
          If you get too cold, I’ll tax the heat
          If you take a walk, I’ll tax your feet”

        2. Going to GDC in SF next month. Room rates in SF are twice that and more. Easier to rent an AirBnB on the south side of the city for the entire team.

    2. LOL@ we are currently renovating a hotel in downtown Boulder and making alot of money on this job. New LED dimmable and bluetooth enabled mirrors made by https://www.electricmirror.com/ in all 200+ rooms. The wall sconces installed with them however are all cheap Chinese garbage i.e. mount the base level and half of the glass cylinders are visibly not plumb, because cheap Chinese garbage.

      They are paying alot of money for this renovation, and we are happy to take their money and do future work there.

      1. Bluetooth mirrors? Do they record you too?

        I have every intention of resisting the Internet of Things as long as I can. I do not need my kitchen appliances to be hooked up to the eye in the sky. My electric smart meter is bad enough. And who knows what my 2017 Camry has on me. I’m sure it already knows I listen to Enigma.

        1. If there is a speaker (yes) there is probably a microphone. We install these on the same 120 volt lighting circuit that feeds the whole room, but there is no CAT5 or CAT6 data wire into the mirror itself.

        2. ‘who knows what my 2017 Camry has on me’

          In 2015 I bought a new Toyota. It turned out I got a much better deal in Texas so I flew out there, bought it and drove back to Arizona. The dealership had no idea I was doing that. Fast forward a few months and I get to within 500 miles of my first oil change, right when you start to get the dashboard indicator. The phone rings and it’s the Texas dealership asking me to bring it in for an oil change. I mentioned I was in Arizona and the only way they could know it was time to change the oil was if the technology in the vehicle was communicating with Toyota, probably using my phone, which had synced up with the vehicle. The lady started to mutter and generally act embarrassed. Yes, the vehicles are spying on us. I’d bet they track driving habits (speeding and such) and sell it to insurance companies, etc.

        3. ( Spiffy hits “pause” on Winamp in the middle of playing ‘Age of Loneliness (Enigmatic Club Mix)’ in order to compose a reply to Oxide… )

          As someone who was a firmware engineer on a ‘connected’ device, I’m also firmly in the group resisting putting IoT devices in the home.

          As for your 2017 Camery listening to you.. it’s been going on for a while, starting with GM’s OnStar and other cars that added hand-free bluetooth or “SOS Call” capabilities. And it’s not exactly been a secret:

          Cartapping: How Feds Have Spied On Connected Cars For 15 Years

          My 2006 BMW has this issue – I was shocked recently to see that it’s still capable of sending service reminder data via cellular modem (to BMW NA who sent it to my local dealer) as I was pretty sure it was using 2G Cellular – a quick check online shows that 2G won’t be fully decommissioned in the US until end of this year. I suppose I can always pull the related fuse, and deal with the warning messages…

  7. Gold tops $1600 an oz for the first time since 2013, with silver shooting up even more on a percentage basis. Oh dear. The Fed can prop up its Ponzi markets into perpetuity as long as retail investor muppets buy into the con game, but it’s Game Over once the flight to safe haven assets begins in earnest.

      1. Bitcoin has to be the biggest scam in the history of finance. At least tulip bulbs produce flowers.

        1. But but, it takes a lot of electricity to produce. Lol I just do not understand millennials, they go on endlessly about how we need to lower co2 emissions but they then waste hydropower to produce something with no intrinsic value.

        2. I don’t understand how all these bitcoin and alt coin devotees can get away with this “limited supply” lie in every interview and no one challenges them on it. Anyone with a computer and enough programming skills can create a new version of any of these things and the ones that already exist are infinitely divisible so it doesn’t matter If there is one or one million. Bitcoin is divisible up to a point but that point is just a policy decision. It can be changed at anytime to make it more divisible. It is in fact infinitely divisible so the number of coins is totally meaningless.

          1. I gave up years ago on trying to educate the public on the cryptoscam.

            Apparently, so long as people are willing to fork out thousands of dollars per unit of imaginary coins, said imaginary coins are very valuable.

          2. That’s true.

            And also for receiving payment without any chance of getting coronavirus from handling the paper currency…

          3. John g, I agree. So far, The only thing limiting the number of coins to 21000 is a “promise.” There’s no physical or electronic or practical barrier that I can see. If someone breaks that promises, the price will immediately plummet to cost, which IIUC is $4K for electricity. And the price will probably drop further.

          4. If someone breaks that promises, the price will immediately plummet to cost, which IIUC is $4K for electricity.

            The electricity is a sunk cost. I don’t see that having any affect on the price unless there is enough demand to warrant mining for more. Which means enough demand without any mining to raise the price above the mining price. Which means no effect at all except to maybe reduce a very high price by bringing more supply online.

      2. I’m looking at cryptos right now, and they are all up, most 4% or more. I guess that money fleeing the Dow had to go somewhere.

  8. ‘The real estate market will be one of the key strongholds of the US economy in 2020, making select mortgage bets attractive allocation options. In Pimco’s latest outlook the Newport Beach-based firm highlighted this sector as one of its key convictions for 2020’

    ‘The firm’s global economic advisor Joachim Fels also highlighted that the decline in mortgage rates in 2019 has brought buy-to-rent and payment-to-income affordability ratios back to November 2016 levels.’

    ‘Moreover, credit score requirements for new mortgages have eased year-over-year,’ Fels added. ‘

    ‘The firm said both US agency and non-agency mortgage-backed securities have appealing valuations and liquidity profile.’

    ‘We see non-agency mortgages as offering relatively attractive valuation along with a more defensive source of credit and carry and better market technicals than generic corporate credit exposure,’ the team stated.’

    ‘Despite his overall positivity on select mortgage bets, Fels also voiced his concerns about riskier segments of the credit market, such as private credit, leveraged lending and high yield debt. In his view, these areas might be running into difficulties if rather than picking up growth slows further in 2020.’

    ‘Moreover, despite solid bank equity positions, post-crisis regulation creates incentives for banks to ration credit when heading into a downturn. With speculative grade lending currently around 35% of GDP, stress across these sectors would be more than enough to contribute to a recession,’ Fels added.’

    https://citywireamericas.com/news/pimco-backs-mbs-bets-as-us-home-prices-rise/a1323876

    ‘speculative grade lending currently around 35% of GDP’

      1. Blue, I think it is just a comparison between the amount of loans as a percentage of the GDP and not an attempt to assert that the loans are part of the GDP. Of course, as loans are spent they are counted as part of the GDP, unless they are buying foreign goods.

    1. ” …voiced his concern$ about ri$kier segment$ of the credit market$, such as private credit$, leveraged lending$ and high yield debt$. In his view, these areas might be running into difficultie$ if rather than picking up growth $lows further in 2020.’

      Bahaahaaahaaaaaahhaaaaa, he’$ concerned, Bahaahaaahaaaaaahhaaaa!

  9. Several other hotel owners have had similar trouble.” I have yet to hear of a homeless hotel shelter go out of business….

    Mayor DeBozio would be in ecstasy if he can house 1500 homeless in the times square area at a fire sale price

    1. Why does a homeless person — or at least a chronically homeless person — need to live in NYC? Has anyone actually asked that question? In a non-rhetorical way?

  10. “We don’t need China!” … “We need China!” dtRumpsis tantrumosis chaostica

    Trump blast$ propo$ed restriction$ on China trade, wants China to buy U.$. jet engine$

    WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday blasted proposed restrictions on trade with China and said national security cannot be used as an “excuse” to make it difficult for foreign countries to buy U.S. products.

    The series of tweets was an apparent reference to reports over the weekend that the U.S. government is considering whether to block General Electric Co (GE.N) from continuing to supply engines for a new Chinese passenger jet.

    Washington is also eyeing limits on other components for Chinese commercial aircraft such as flight control systems made by Honeywell International Inc (HON.N).

    Center to the possible crackdown on the sale of U.S. parts to China’s aircraft industry is whether shipments could fuel the rise of a serious competitor to U.S.-based Boeing Co

    “The United States cannot, & will not, become such a difficult place to deal with in terms of foreign countries buying our product, including for the always used National Security excuse, that our companies will be forced to leave in order to remain competitive,” Trump wrote on Twitter.

    (Donnie has morphed into “The.Mayor” from the Nightmare.before.Christmas) … look @ his head $pin!

          1. I think most people find Highway’s posts a waste of time. Hard to troll when you are not read. I will only read when someone comments on his post and only when that poster says something interesting.

          2. Bloomberg is making Bernie’s nomination more likely, $400 million spent and he has widenen Bernie’s lead over the nearest neo-con to 12 percent. Cannot wait for the results of his next $600 million, probably be spent trashing Bernie, causing Trump to raise to a 90 percent chance of being reelected.

          3. “making Bernie’s nomination more likely”

            From articles released within the past 24 hours: Bernie is polling 66% Hispanic support in Nevada, and 31% support among primary voters nationwide.

            Health care. The environment. Getting money out of politics. Is it really that complicated?

            When you vote for a corporate Democrat, you are voting for candidates who take money from people like Ed Buck, who has a disturbing *pattern* of black male prostitutes dying from meth overdoses in his West Hollywood apartment.

            That’s what your corporate DNC calls “minority outreach” LOLZ.

        1. No worrie$ aqdanny.boy … Coal, like Boeing, will bee $ailing on those Dec 2019 tailwind$ you keep on blah, blah blahin’ about, any.day.now!

  11. I think Ben’s view is the right one. NYC remains a desirable destination, and room rates are high. People just paid too damn much for the property.

    That may be said of more than hotels, in more places than NYC.

    https://larrylittlefield.wordpress.com/2020/02/14/the-commercial-real-estate-future-bankruptcy-foreclosure-workout-value-added-reinvention-and-redevelopment/

    It’s like a ball that has to be kept floating at the top of a tube by someone blowing on it from below. First is was a ping pong ball, then a golf ball, then a baseball. Soon it will be a bowling ball. How hard can they blow for how long, and how much force can the sides of the tube take? Harder, longer and stronger than I would have thought.

  12. I agree Boo. However, I need to see gold over $2000 and silver over at least $20 before I will really believe they are losing Control.

    1. Ah, gold. There are option$, there are $olution$!: Got Gold bitcoin$?

      COMMODITIE$ | FEBRUARY 17, 2020

      Britain’$ Royal Mint launches gold-backed $ecurities tradable on London $tock Exchange.

      LONDON (Reuters) – Britain’s 1,100-year-old Royal Mint said on Monday it will launch an exchange-traded product this week backed by physical gold held in its vault in Wales, which will trade on the London Stock Exchange.

      They now hold almost 3,000 tonnes of gold worldwide, worth around $140 billion at current prices, according to the World Gold Council.

      The Royal Mint was forced in 2018 to freeze plans for a digital gold token after the UK government vetoed a proposal to have it trade on a cryptocurrency exchange, Reuters reported at the time.

        1. ” …backed by physical gold held in its vault in Wale$”

          No wonder$ The Wel$h want to bee free of Thee English!

          Long.live.Thee.Queen.of.Wales!

    2. A-dan, my theory is that this is a temporary setback due to coronavirus. Once the virus fades (if it does), and the supply chains fill back up, there’s going to be a lot of pent-up demand unleashed. At the same time, banks will be manipulating everything in sight to keep Trump in office. I expect a reprieve around late summer, with all-time highs in the DOW. But after the election, and after a dismal X-mas season, and if corona reappears… get yer peas and ammo and Katie bar the door.

  13. 1 in 5 people making more than $100,000 a year are still living paycheck to paycheck
    By Catey Hill
    Published: Feb 15, 2020 1:06 p.m. ET
    And that doesn’t bode well for their retirement savings
    Getty Images/iStockphoto

    Making bank doesn’t mean you have money in the bank.

    Fully 18% of people who earn more than $100,000 say they live paycheck to paycheck, according to a survey of 8,000 workers by global advisory firm Willis Towers Watson. “There’s a high correlation between high pay — and living in a high-cost area and having an advanced degree,” Shane Bartling, the senior director for retirement for the firm, explains of why so many people making a chunk of change say they’re still living paycheck to paycheck.

      1. Mortgage$ … ( lower on the current li$t )

        Nix, nix, nix …

        Top 5 Reason$ Why People in U$A Go Bankrupt:

        1. Medical Expen$e$.
        2. Job Lo$$.
        3. Poor or Exce$$ Use of Credit.
        4. Divorce$ or $eparation.
        5. Unexpected Expen$e$.

        6 days ago

        Investopedia › … › Debt Management
        Top 5 Reason$ Why People Go Bankrupt – Inve$topedia

    1. “Experts say there are ways to up your retirement savings, even if you’re feeling financially stretched. First, look for ways to slash your current spending to free up extra cash or consider a side gig to earn more.”

      No more food! Great idea! I could probably lose that 10 extra lbs quickly
      Get 2 jobs! So glad this Trump economy is helping me!

  14. Was looking at some houses for sale in Austin, Tx. Seeing price reduction in few of those. Is the boom over for Austin, or Tejas for that matter?

      1. $wisssssh, $wisssssh, $wissssh …

        Coal, $trike 1, … Boeing, $trike 2, … Oil, $trike 3 & yer OUT!

        COMMODITIES | FEBRUARY 16, 2020

        Oil trader$ rent $outh Korean $torage after viru$ hits China$ demand.

        Julia Payne, Dmitry Zhdannikov, Florence Tan

        LONDON/SINGAPORE (Reuters) – Several top trading houses have rented millions of barrels of crude storage in South Korea this month to hold excess oil supplies after the coronavirus outbreak dampened demand in China, the world’s largest importer, trading sources said

        Supplies in the region are piling up after Chinese refineries cut output by about 1.5 million barrels per day (bpd) over just two weeks.

        Trading firms Trafigura [TRAFG.UL], Glencore and Mercuria as well as the trading division of French oil major Total have rented close to 15 million barrels of storage tanks from South Korea’s state oil firm Korea National Oil Corp (KNOC) [KOILC.UL], they said.

        The traders took on new storage leases for three or six months, with a contango market structure – in which longer-dated oil futures trade at a premium – defraying some costs while they wait for a rebound in demand after China recovers from the outbreak, the sources said.

        The virus has severely hit prompt demand, causing a build-up of crude meant to be sold to Chinese refiners after the Lunar New Year holidays, traders said. Cargoes arriving in Asia from late February to April are being offered in the market, they said.

      2. Off over 10% on the month, so I guess you lost 9 out of ten of your day trading bets and have to crow about the one. I read that our LNG exports to China are getting crushed at the moment.

  15. Maybe there is a case for using Bitcoin as currency after all?

    How long can the new coronavirus last on surfaces?
    By Yasemin Saplakoglu – Staff Writer 7 hours ago
    Some coronaviruses can linger on surfaces for up to 9 days.

    China’s central bank is taking steps to deep clean and even destroy its cash out of fears that the new coronavirus can survive on the surface of money and potentially spread, according to CNN.

    But how long can the new coronavirus linger on surfaces, anyway? The short answer is, we don’t know. But if this new coronavirus resembles other human coronaviruses, such as its “cousins” that cause SARS and MERS, it can stay on surfaces — such as metal, glass or plastic — for as long as nine days, according to a new study. (In comparison, flu viruses can last on surfaces for only about 48 hours.)

    1. as long as nine days

      A few seconds in the sunshine would do the trick, even on an overcast day. If you can’t do that, a $20 LED UV nail gel curing lamp. Alternately, water at over 140 degrees F. Your water heater probably isn’t that hot.

    2. I admit I’ve gotten a bit nervous during the stock-up trips I’ve been doing in the past week. There’s a LOT of surfaces that are hard to avoid. Touchscreens, bag racks, keypads, shopping carts, gas handles, you name it.

  16. $uffering $helter.$hack New$ From Thee “oh, $ee!” ( O.C.) … $ad.

    “Before moving to Orange County from San Diego, Navaro ran and lost five elections as a liberal Democrat, including Congress.”

    Laguna Beach home with ties to Peter Navarro, Trump’s trade hawk, seeks $3.3 million

    OC Register |By Sandra Barrera

    The couple bought the home in 2010 for $1.05 million, property records show.

    In February 2019, the house was listed for $3.895 million. The asking price has dropped twice.

    Orange County court documents show Navarro and LeBon, who were married in 2001, are divorcing. LeBon filed for divorce from the noted economist citing irreconcilable differences in late November 2018 after nearly 17 years of marriage. The couple separated earlier that same month.

    Navarro, 70, serves as the director of the National Trade Council at the White House and the architect of President Trump’s trade policies. The UC Irvine business school professor emeritus and economist has, as previously reported in the Orange County Register, authored books that call China’s economic policy the “planet’s most efficient assassin” and raised the specter of war with the Asian giant.

    Last year he admitted quoting a fictional character named Ron Vara — an anagram of Navarro — in several books dating to 2001, the Chronicle of Higher Education first reported.

    Following this revelation, the publisher of Navarro’s 2011 book, “Death By China,” said it would add an advisory note to future copies.
    The note on bookseller Amazon.com reads, “in this book, various quotes and viewpoints are attributed to a ‘Ron Vara’. Ron Vara is not an actual person, but rather an alias created by Peter Navarro in order to present his views and opinions.”

  17. Latest Chinese numbers show less than 1700 new infections. So the question is whether the epidemic is waning or the Chinese just want us to think so. I said three weeks ago, they would inflate the numbers to they were close to the real numbers and then start reporting real numbers. It is hard to believe that the R0 would not go down with everyone under a strict quarantine and wearing masks. Whether it is really below 1.0 is open to debate. However that is clearly what they are claiming.

    1. or the Chinese just want

      If you don’t think the numbers are truthful, predicting a coincidence with the truth is very foolish.

      1. Sharing mathematical insights with a propaganist attorney is about as useful as casting pearls among swine.

    2. It’s entirely plausible that the scale of the outbreak has outstripped their capacity to document it.

      Coronavirus outbreak
      Chinese film director Chang Kai and family die from coronavirus

      Four members of same family die during self-quarantine at centre of outbreak in Wuhan
      Emma Graham-Harrison
      Tue 18 Feb 2020 15.35 EST
      Last modified on Tue 18 Feb 2020 15.37 EST
      A woman wearing a protective face mask walking along a deserted street in Wuhan

      A Chinese film director, his sister, mother and father have all died from the coronavirus, the latest high-profile victims of the disease in Wuhan, the city at the centre of the outbreak.

      Chang Kai, 55, died on 14 February. His parents died over the previous two weeks, after the family spent days together in self-quarantine, the Chinese magazine Caixin reported. Chang’s sister died hours after he did, and his wife is in a serious condition.

      Death rates in Wuhan and surrounding Hubei provinces have been higher than in the rest of China and beyond. Many patients reported struggling to find a bed in hospitals filled far beyond capacity, even as the government built new hospitals and converted spaces like an exhibition centre into makeshift medical centres.

      Others have died despite intensive medical care including a whistleblower doctor and the head of a hospital. An environmental activist and his wife are also thought to have been killed by coronavirus, although they were not tested for the disease.

      The World Health Organization has said that although the disease would be mild in four of five patients, about 20% will have more severe symptoms.

      There are concerns that initial government advice for those with symptoms to stay at home may have exacerbated the toll from the disease, with close confinement leading to whole families being infected.

      Chang had nursed his father at home after he fell sick in late January. He took the older man to several hospitals, but could not find a bed, Caixin reported. On 28 January he was the family’s first victim but others had already become infected.

      1. Sounds like that 80/20% number may be dependent on other factors such as genetics or medical/environmental history. Otherwise it would be a really strange coincidence for everyone in the same family to die.

  18. Japan appears to be “on the cusp of a large outbreak and maybe epidemic growth in Japan. We need to watch that very closely. They’ve had a doubling of cases just in the last four days” with a total of 59 confirmed cases and one death so far, Gottlieb said on “Squawk Box.”

    1. $ynchronized Global $lowing is a $ocial media digital myth.

      Home Market$ | Asia

      Japan’$ export$ fall for 14th straight month

      MarketWatch | By Megumi Fujikawa | Published: Feb 18, 2020

      TOKYO–Japan’s exports fell in January from a year earlier for the 14th con$ecutive month, and economists expect the coronavirus outbreak to weigh on demand in the months ahead.

      Japan’s exports “are expected to remain weak as the supply chain has been interrupted by the novel coronavirus and growing uncertainty over the global economy,” said Masato Koike, an economist at Dai-ichi Life Research Institute.

    2. When is their National “Go.Fly.A.kite!” day?

      Japan suffer$ wor$t economic $lump in five year$

      AFP | By Miwa Suzuki |February 16, 2020

      Japan has suffered its worst quarterly GDP contraction in more than five years, with a tax hike and a deadly typhoon taking a toll on the world’s third-largest economy.

      The nation’s gross domestic product in the three months to December shrank 1.6 percent from the previous quarter, even before the novel coronavirus outbreak in China hit Japan, according to official data published on Monday.

      “Also, exports might struggle as delays of parts shipments from China could disrupt supply chains,” he said.

      He added it was “possible” that the economy will shrink for a second consecutive quarter, the technical definition of a recession.

      Health minister Katsunobu Kato on Sunday urged the public to avoid crowds and “non-essential gatherings”, including Japan’s notoriously packed commuter trains, to prevent the virus from spreading.

      1. Of course this does not consider the additional negative economic impact of the coronavirus outbreak.

        1. Once the production line sneezing stops, Chinese export product$ (virus.free) can re$ume to attain $ustained growth a$ap!

          CORONAVIRU$

          Coronavirus$ could impact 5 million companie$ worldwide, new research shows

          CNBC | Published: MON, FEB 17 2020 |By Elliot Smith

          KEY POINT$:

          A $pecial briefing i$$ued by global busine$$ research firm Dun & Bradstreet analyzed the Chinese provinces most impacted by the virus, and found they are intricately linked to the global business network.I

          Almost half (49%) of the companies with subsidiaries in impacted regions are headquartered in Hong Kong, while the U.S. accounts for 19%, Japan 12% and Germany 5%.

          Dun & Bradstreet researchers found that at least 51,000 companies worldwide, 163 of which are in the Fortune 1000, have one or more direct or “tier 1” suppliers in the impacted region.

          The Dun & Bradstreet report identified that the top five major sectors, accounting for more than 80% of businesses within impacted provinces, were services, wholesale trade, manufacturing, retail and financial services.

      2. “…and a deadly typhoon taking a toll on the world’s third-largest economy.”

        The 2011 Fukushima Daiichi nuclear disaster will continue to cost them dearly for decades to come.

  19. Did medical authorities ever determine whether asymptomatic transmission of coronavirus is possible?

    1. Coronavirus
      14 Americans test positive for coronavirus after evacuation from quarantined cruise ship
      More than 300 U.S. citizens and family members who had been on the Diamond Princess cruise ship were evacuated.
      Americans evacuated from cruise ship infected with coronavirus
      Feb. 17, 2020, 1:54 AM PST / Updated Feb. 17, 2020, 8:36 AM PST
      By Yuliya Talmazan and Kurt Chirbas

      Fourteen Americans who were among the hundreds of people evacuated from a quarantined cruise ship off Yokohama, Japan, on Sunday have tested positive for the novel coronavirus that has claimed nearly 1,800 lives in a growing outbreak in China.

      More than 300 U.S. citizens and their immediate family members who had been passengers on the Diamond Princess cruise ship were taken off the vessel and repatriated back to the United States on two chartered flights that landed at Travis Air Force Base, California, and Lackland Air Force Base, Texas, early Monday.
      Americans evacuated from Diamond Princess cruise ship arrive in Texas

      In a statement, a State Department spokesperson said Monday that the American evacuees were all deemed asymptomatic and fit to fly before being processed for evacuation.

      But during the evacuation process, after passengers had left the ship and gone to the airport, U.S. officials received notice that 14 passengers, who had been tested two to three days earlier, had tested positive for COVID-19, the disease caused by the novel coronavirus.

      “These individuals were moved in the most expeditious and safe manner to a specialized containment area on the evacuation aircraft to isolate them in accordance with standard protocols,” the spokesperson said.

      The State Department made the decision to allow the 14 individuals, who were in isolation, separated from other passengers and who continued to be asymptomatic, to remain on the aircraft to complete the evacuation process after a consultation with health officials, according to the statement.

      1. The Financial Times
        Coronavirus
        Coronavirus latest: Death toll breaches 2,000 as number of cases reaches 75,000

        Coronavirus
        CDC warns against releasing cruise ship passengers in Japan
        US Centers for Disease Control says those disembarking pose ‘ongoing risk’
        new 32 minutes ago

        1. FYI 2,000/75,000 = 2.67% is a lower bound estimate of the case fatality rate, assuming no additional deaths among confirmed cases.

          1. Chinese CDC study finds Covid-19 virus to be more contagious than SARS or MERS
            By James Griffiths and Nectar Gan, CNN
            Updated 3:02 AM ET, Wed February 19, 2020
            What do you need to know about coronavirus?

            Hong Kong (CNN) A comprehensive study of more than 72,000 confirmed and suspected cases of the novel coronavirus by Chinese scientists has revealed new information about the deadly infection which has brought much of the country to a halt.
            Carried out by a group of experts at the Chinese Center for Disease Control and Prevention and published in the Chinese Journal of Epidemiology on Monday, the study is the largest and most comprehensive examination of coronavirus cases so far.
            It found that the novel coronavirus is more contagious than the related viruses which cause SARS and MERS. While the resulting disease, Covid-19, is not as fatal on a case-by-case basis, its greater spread has already led to more deaths than its related coronaviruses.

        2. A calculation that avoids downward bias that results from assuming no further deaths among unresolved cases is CFR = (Total deaths) / (Total deaths + Total recoveries) = 2,012 / (2,012 + 14,750) = 12%.

  20. Apparently not everyone has enduring faith in the central banking cartel’s ‘stimulus without limits’ policy.

    Economy & Politics
    Project Syndicate
    Opinion: The stock market is ignoring these ‘white swan’ events that could upend everything, Roubini warns
    By Nouriel Roubini
    Published: Feb 18, 2020 1:37 p.m. ET
    — From hot wars to weaponized financial assets, the U.S. faces severe economic, financial, political, and geopolitical disturbances
    — Russia and China would each like to undercut American hard and soft power abroad by destabilizing the U.S. from within.

    NEW YORK (Project Syndicate) — In my 2010 book, “Crisis Economics,” I defined financial crises not as the “black swan” events that Nassim Nicholas Taleb described in his eponymous bestseller, but as “white swans.”

    According to Taleb, black swans are events that emerge unpredictably, like a tornado, from a fat-tailed statistical distribution. But I argued that financial crises, at least, are more like hurricanes: they are the predictable result of built-up economic and financial vulnerabilities and policy mistakes.

    There are times when we should expect the system to reach a tipping point — the “Minsky Moment” — when a boom and a bubble turn into a crash and a bust. Such events are not about the “unknown unknowns,” but rather the “known unknowns.”

    1. The nonstop ads in California of Bloomberg and Sanders ads is annoying.

      Hard to believe that people actually make decisions based on these sound bites.

  21. From yesterday:

    ‘credit score requirements for new mortgages have eased year-over-year,”

    Add to that the fact that conforming loan limits went up in Jan in the bubbliest areas by 5.38%, from $726k to $765k, and it explains why everything at the low end of my market is sale pending suddenly. Will they ever run out of new and lower tiers of broker and broker borrowers to exploit in order to juice the market every January?

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