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It’s A Bloodbath

It’s Friday desk clearing time for this blogger. “Fannie Mae and Freddie Mac are expected to retain ‘limited and tailored government support’ after they are freed from U.S. control, Treasury Secretary Steven Mnuchin said in a letter to lawmakers. Mnuchin’s response could help quell concerns that bond investors, banks, credit rating companies and even real estate agents have raised about the plans for overhauling Fannie and Freddie, which backstop $5 trillion in mortgage bonds.”

“Groups including the Securities Industry Financial Markets Association, one of Wall Street’s top lobbying groups, have warned that making changes without an explicit guarantee of Fannie and Freddie’s bonds could be devastating to the market.”

“In the fourth quarter, Zillow said the operating cost for each home was an average of $318,667, while the average home sold for $317,155 — a loss of $1,512 with each sale. And that’s before accounting for interest expenses and holding costs, which amounted to an additional $4,895 in losses per home. Mike DelPrete, a real estate tech strategist said one of Zillow’s advantages in the iBuying space is the company’s stomach for ‘sustained unprofitability’ as most iBuyers are currently losing money on the strategy.”

“‘[Zillow’s] entire Homes division is losing tens of millions of dollars each month,’ he said. ‘It’s a bloodbath. They have plenty of cash to burn to withstand the massive losses. It’s pretty staggering.'”

“The Fannie Mae fictitious California employer list started in 2018. With its January fraud alert, the list has grown to 65 companies that appear to be scheming up and down the state. Typically, the borrower and the mortgage loan originator are in cahoots to come up with a fictional job with fictional wages so the borrower can qualify for a home loan. Ok. Fair enough. But, why is Fannie Mae only naming California employment fraudsters? Surely, the other 49 states have their fair share of crooks.”

“Is mortgage application fraud trending? As far as I can find, nobody else was banging the trash can lids on crooked mortgage cronies. And, why not throw the book at the bad guys? Fannie Mae didn’t respond. What about Freddie? Not sure. ‘It’s our policy to not comment on ongoing investigations,’ wrote Freddie Mac spokesman Chad Wandler.”

“The California Attorney General’s office does not provide information about complaints received and the FBI doesn’t have a clear way to track Fannie Mae referrals. Whether Fannie is an outlier or the canary in the coal mine on this issue, here are some things to think about when you know you are on the edge of qualifying for a mortgage. Can you say what you are planning on doing over a loudspeaker? If you can’t, then don’t do it. If somebody tells you the financial upside is worth the risk, or everything is fine or you won’t get caught, just remember when the smack hits the fan everybody always runs to their own corner and points the finger at everyone else. Freddie Mac had a lame but appropriate tagline some years back: Don’t borrow trouble.”

“Once listed for $100 million, an elaborate Beverly Hills spec house has been on the market for about three years, undergoing several major price cuts. Now, the developer, prolific spec home builder Nile Niami, says he’s sold the property for roughly $40 million. But the reality is a little more complicated. The new owner is Joseph Englanoff, according to people familiar with the deal. Mr. Englanoff is one of Mr. Niami’s lenders. Through an entity known as Yogi Securities Holdings LLC, he has lent a company tied to Mr. Niami tens of millions of dollars across a portfolio of roughly half a dozen projects, records show.”

“Among them is the massive roughly 100,000-square-foot megamansion , which is nearing completion in Bel-Air. Slated to list for $500 million, the project was originally scheduled to come on the market in 2017 but has been bogged down by financing and construction delays, according to legal documents and people familiar with the situation. Mr. Niami declined to comment on how much, if any, cash had actually changed hands as part of the transaction, or if the deal was a form of debt cancellation.”

“After spending millions on a renovation, Mingfei Zhao is selling the 12-bedroom, 12-bathroom, 11 fireplace house in Vancouver’s First Shaughnessy neighbourhood, which is a heritage conservation area. He’s listed the property with an asking price of $27-million. If a foreign buyer purchases the Rosemary at full price, they’re looking at $6.665-million, just for property transfer tax and foreign buyer tax, says long-time west side realtor Bryan Yan. ‘Not to mention empty homes taxes, because these guys usually have more than one home,’ he adds. ‘It’s going to be difficult to sell, because in the luxury market right now, based on real estate board stats, there have been no sales.'”

“The number of private landlords has hit a seven-year low, with 222,570 leaving the sector since the government began to cut tax reliefs and increase the regulatory burden. The exodus has reduced the number of privately rented homes by 156,410 since its peak of 5.29 million in 2017, according to Hamptons International. The estate agency’s numbers suggest that the majority who have left are so-called accidental landlords, with one property each.”

“David Smith, of the Residential Landlords Association said: ‘Landlord confidence is at an all-time low. The stamp duty changes are preventing them purchasing more homes, so they’re not expanding their portfolios. There is also nervousness around the Renters’ Reform Bill. It’s a perfect storm.'”

“House prices in Fife dropped more than average for Scotland in December, new figures show. Owners of flats fared worst. They dropped 2.9 per cent in price, to £84,123 on average. Semi-detached was down 1.6 per cent to £140,172 , and the averaged terrace house price dropped 2.25 per cent to £108,631. ​First-time buyers spent an average of £​107,700 on their property – ​£1100 less than a year ago.”

“The number of properties up for short-term lease in Greece has soared from just 130 in 2010 to over 200,000 by the end of 2019, according to a survey. Chasing fast returns is not just transforming more and more property owners into aspiring hoteliers, but is also bringing a reduction to the revenues expected. Of course, the oversupply of homes has also drastically reduced revenues and yields.”

“Bengaluru’s real estate sector has shown some revealing trends. While one study shows there has been a decrease in the sales of residential accommodation another found that purchases of homes depend substantially upon vaastu compliance. A recent study found the city had around 70,000 unsold housing units, about 52 percent of the total supply.”

“Apartment rents in Hong Kong have dropped to their lowest in almost two years as people leave the city and homeowners opt to lease rather than sell. Rents have been under pressure since the social unrest started in June, with Covid-19 fears now also hurting demand. In several cases, landlords offered tenants discounts as steep as 12 percent off from current levels, said Letizia Garcia Casalino, Colliers International’s head of residential services. Several transactions have been reported with homeowners selling at a loss. An apartment in Yuen Long sold for 13 percent – or HK$1.2 million – less than its original listing price, reports said.”

“Other homeowners who are reluctant to cut their asking prices have resorted to leasing their properties, said Matthew Hung, deputy regional sales manager at Centaline Property Agency. ‘This has increased supply and added to pressure on rents.’ Hung added: ‘Some sellers don’t want to let go of their property at a cheap price.'”

“Attention from regulators spells more trouble for a highly leveraged, loss-making company that’s applied the WeWork model to China’s housing market. The regulators say their preliminary talks with users reveal broader risks in rental loans from Danke and other residential rental platforms in China. The company, which raised $130 million in its New York debut this January, is operating at an operating loss of $324 million during the first three quarters in 2019, a threefold increase on the $100 million loss recorded in the same period of 2018.”

“Ziroom, another apartment rental major in the country, suffered a similar PR crisis after releasing similar exploitative policies during the epidemic. The rental loans add leverage to residential apartment rental platforms, saysWang Shan, analyst and operating director at online stockbroker Tiger Brokers. Wang characterized these moves as an attempt by the platforms to ‘pass the crisis to homeowners.’ The moves especially hurt owners who purchase their real estate with bank loans, she added: ‘Banks are not making cuts on mortgage payments. The capital chain will break if the situation continues.”

“More than one in four new apartments completed in the Brisbane CBD since 2016 remain unsold, according to a new report by valuation firm m3property. The report, which seeks to quantify the level of oversupply and price-discounting in the Brisbane apartment market since it peaked four years ago, has found that a total of 1500 apartments remain unsold across the inner city, or just a little more than 10 per cent of completed stock within 5 kilometres of the CBD.”

“This is up from 8.1 per cent in December 2018 and 8.9 per cent in July last year. The proportion of unsold stock was more than double in the CBD at 25.6 per cent. According to m3property, buyers within 5 kilometres of the CBD copped a 3 per cent loss on average when they resold their new units. The average loss was substantially higher at 7.4 per cent in Brisbane’s inner north, which includes Fortitude Valley, Bowen Hills and Newstead, suburbs that have been swamped with new apartment developments in recent years.”

“At the 90-storey Brisbane Skytower developed by Billbergia and AMP Capital, off-the-plan buyers have been hit by bank valuation declines of as much as 25 per cent at settlement. Those selling units have seen values fall by as much as 10 per cent. A one-bedroom apartment bought off-the-plan for $515,480 in 2014 (and settled in September 2018) is up for sale fully-furnished with an asking price of $470,000, a drop of 8.8 per cent.”

This Post Has 161 Comments
  1. ‘off-the-plan buyers have been hit by bank valuation declines of as much as 25 per cent at settlement’

    But Australia is red hot…

    1. “But Australia is red hot…”

      The only thing hot about Australian RE is the bush fires. Struth, but she’ll be right.

    2. From Wiki: “Off-plan property is a property before a structure has been constructed upon it. Pre-constructions are usually marketed to real estate developers and to early adopters as developments so that the purchaser can secure more favorable finance terms from their lenders.”

  2. ‘The Fannie Mae fictitious California employer list started in 2018. With its January fraud alert, the list has grown to 65 companies that appear to be scheming up and down the state. Typically, the borrower and the mortgage loan originator are in cahoots to come up with a fictional job with fictional wages so the borrower can qualify for a home loan. Ok. Fair enough. But, why is Fannie Mae only naming California employment fraudsters? Surely, the other 49 states have their fair share of crooks’

    They do. Eat yer crowz jingle male.

    1. “…are in cahoots to come up with a fictional job with fictional wages so the borrower can qualify for a home loan…”

      Of course, we all know that a “Director of Strawberry Planting” makes at least $150K/year.

    2. ‘The Fannie Mae fictitious California employer list started in 2018. With its January fraud alert, the list has grown to 65 companies that appear to be scheming up and down the state.’

      NINJA loans coming back? “no income, no job, and no assets.”

      Some apropos Yogi Berra-isms:

      “It ain’t over ’til it’s over.”
      “It’s deja vu all over again.”
      “We made too many wrong mistakes.”
      “You can observe a lot by watching.”
      “The future ain’t what it used to be.”

      1. If people don’t want to buy a house at an inflated price, we can’t stop them.

        (I don’t know how to do italics on this blog. 😕 )

    3. Hey I just saw a sign in my neighborhood today with the self designated sobriquet “the honest realtor” emblazoned across it. So y’all have been wrong the whole time. Turns out not all realtors are liars.

    4. This whole post-2012 bubble has been built on fraud. A realtor told me at an open house back in 2014 she had a “financing guy who could work miracles.” And that was before prices went really insane. So if buyers couldn’t afford 2014 prices, they definitely couldn’t afford 2016, 2018 or 2020 prices.

  3. ‘Groups including the Securities Industry Financial Markets Association, one of Wall Street’s top lobbying groups, have warned that making changes without an explicit guarantee of Fannie and Freddie’s bonds could be devastating to the market’

    This whole sh$t cart is hanging by a thread.

    1. ea$y pea$y, lemon$ squea$y:

      Old fool$ with “new.tool$!” = “$uper.$tar$!”

      Home | Economy & Politic$ |Federal Re$erve | The Fed’$

      All-$tar economist$ urge Fed to use QE and ‘new tool$’ to fight next rece$$ion — just move sooner and go bigger than cri$i$!

      MarketWatch |Published: Feb 21, 2020 | By Greg Robb $ENIOR ECONOMIC$ REPORTER

      Central banks should be humble about likely effectiveness of these tools

      The Federal Re$erve should use the $ame tool$ to fight the next rece$$ion that they developed during the financial cri$i$, even though the controver$ial $trategies only achieved $o-$o result$, according to a new paper released by a group of all-$tar economist$ Friday.

      Global central banks won’t be able to rely on their traditional policy tool of slashing their benchmark interest rates to fight the next recession because rates are already low or negative.

      The paper said policymakers should use some mix of tools, including:

      • QE, or quantitative easing, which is buying assets and expanding the central bank’s balance sheet to push long-term interest rates down;

      • Negative interest rates, to make it expensive for lenders to sit on cash;

      • Forward guidance, or telling the market that rates would stay low for a specific period of time so that rates don’t spike at the first sign of a recovery.

      • Yield curve control, which extends the maturity of interest rates that the central banks target.

      Policies used during the financial crisis, some of which are part of this new prescription, were controversial. In the U.S., congressional Republicans strongly objected to the Fed’s QE programs, for instance.

      The paper, which studies the crisis response in eight countries, stressed that some tools only worked occasionally, which central banks should bear in mind when fighting the next recession.

      “Our results are decidedly mixed. Most of the time, new monetary policies were insufficient to overcome financial headwinds,” the paper concluded.

      Home
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      All-star economists urge Fed to use QE and ‘new tools’ to fight next recession — just move sooner and go bigger than crisis

      Published: Feb 21, 2020 10:16 a.m. ET

      12
      Central banks should be humble about likely effectiveness of these tools

      MarketWatch photo illustration/Getty Images, iStockphoto
      The tools the world’s leading central bankers used to fight the financial crisis were insufficient most of the time, a paper by leading economists concludes.
      Author photo
      By

      GREG
      ROBB
      SENIOR ECONOMICS REPORTER

      The Federal Reserve should use the same tools to fight the next recession that they developed during the financial crisis, even though the controversial strategies only achieved so-so results, according to a new paper released by a group of all-star economists Friday.

      Global central banks won’t be able to rely on their traditional policy tool of slashing their benchmark interest rates to fight the next recession because rates are already low or negative.

      The paper said policymakers should use some mix of tools, including:

      • QE, or quantitative easing, which is buying assets and expanding the central bank’s balance sheet to push long-term interest rates down;

      • Negative interest rates, to make it expensive for lenders to sit on cash;

      • Forward guidance, or telling the market that rates would stay low for a specific period of time so that rates don’t spike at the first sign of a recovery.

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      • Yield curve control, which extends the maturity of interest rates that the central banks target.

      Policies used during the financial crisis, some of which are part of this new prescription, were controversial. In the U.S., congressional Republicans strongly objected to the Fed’s QE programs, for instance.

      The paper, which studies the crisis response in eight countries, stressed that some tools only worked occasionally, which central banks should bear in mind when fighting the next recession.

      “Our results are decidedly mixed. Most of the time, new monetary policies were insufficient to overcome financial headwinds,” the paper concluded.

      Policies proved powerful enough only about half the time in the United States, a little more in Europe and only rarely in Japan, the economists said.

      About 20% of the time, the new tools backfired and financial conditions tightened. And in many cases, global conditions that were influencing policy were “insensitive” to individual central bank policies, they said.

      Despite this checkered record, the economists said the central banks should double down and be more aggressive.

      “We view the limited success in easing financial conditions in the face of global headwinds as a justification for more activist policy, not less,” the economists concluded. It was just important that central banks be humble about what results to expect, they added.

      The paper was written by two leading private-sector economists, Michael Feroli of J.P. Morgan Chase, and Catherine Mann of Citigroup and three leading academics, Stephen Cecchetti of Brandeis International Business School, Anil Kashyap of the University of Chicago Booth School of Business, and Kermit Schoenholtz of the NYU Stern School of Business.

      The analysis will be discussed at an all-day conference of top global central bank officials and economists, sponsored by the Chicago Booth School in New York later Friday.

      💄💸🐙👑👼 :

      The irony in the paper’s conclusion is reminiscent of a remark from former Fed Chairman Ben Bernanke, who once quipped that quantitative easing worked in practice but not in theory.

      On a hopeful note, the paper said that the next recession might not be as severe as the financial crisis. But there is a strong chance that the next U.S. recession will coincide with a downturn in the rest of the world.

      1. A Chinese friend told me yesterday everyone from her home city is staying home and nobody is going out to work or shop. The city is in a different province and has a population of about 7.5 million people. Seems we are not being given the complete picture by the MSM.

        1. Everybody with friends in China knows. The American MSM doesn’t care. Yet.

          We just got our first confirmed case here today. Older guy with grown kids, tech worker, just came back from CNY on February 2nd and then started showing symptoms later. Claims to have self quarantined and the media believes him. Nobody is asking about how much his wife has self quarantined…and she’s the one who picked him up from the airport and presumably has been doing all the shopping and such in the last 19 days. Some of the people on my wife’s local WeChat group know who he is but aren’t saying in order to protect his privacy. Which is fine…glad he doesn’t have kids at school…but there’s no way he and his wife have done enough to guarantee that nobody else is going to get it. But the MSM isn’t worried at all.

          1. Update already, actually now they are saying it was the wife that has it and just came back from China for Intel. And her husband’s company has quarantined several people now…not sure what company that is.

          2. And her husband’s company has quarantined several people now

            Once this starts in Silicon Valley, it’s going be wild fire.

    2. Remind me. What’s the leverage at the GSEs again (loans to assets). Isn’t it something like a million to one (in the ballpark)? So how does that work if NPLs go up even a little? Doesn’t that end it right there, meaning round 2 of taxpayer bailouts? Of course, that would never happen and it didn’t happen in housing bubble 1.0. Oh, wait a minute…

  4. “‘[Zillow’s] entire Homes division is losing tens of millions of dollars each month,’ he said. ‘It’s a bloodbath. They have plenty of cash to burn to withstand the massive losses. It’s pretty staggering.’”

    Phuc degenerate gamblers who think they can make a killing by buying at a bubble peak.

    1. Zillow charges 7.5% to the seller as well. Some people find the ability to sell quickly attractive though. Zillow says it can close in as little as 5 or as much as 60 days.

      My neighbors recently used a service call Knock. Knock pays cash for the seller’s target home which the seller then moves into. Knock lists the seller’s now vacant home and the seller gets permanent financing on their new home when the old one sells. Not sure of the pricing.

      Living in a house that is listed for sale would be a hassle I can imagine, as would carrying two notes.

      1. There are some realtors around here who do the same thing — they keep a stock of houses. Their radio ads say “If I don’t sell your house for the price we agree on, I will buy it myself.” What they don’t say is that to get this deal, you have to buy one of the houses that they have in stock.

        That seems pretty limiting to me. Honestly I’d rather rent an apartment and a storage unit.

    2. Just why would a company be interested in losing millions upon millions of dollars? I really don’t get it.

      1. “Just why would a company be interested in losing millions upon millions of dollars? I really don’t get it.”

        Because they believe they will be profitable in next round when they lose billions upon billions.

    3. “…‘It’s a bloodbath. They have plenty of cash to burn to withstand the massive losses. It’s pretty staggering….”

      Wasn’t that line stolen from “WeWork”?

      1. “Mike DelPrete, a real estate tech strategist said one of Zillow’s advantages in the iBuying space is the company’s stomach for ‘sustained unprofitability’ as most iBuyers are currently losing money on the strategy.”

        Zillow had a good idea and a nice business. But was that enough? Nooooo.

        1. But was that enough? Nooooo.

          It never is enough. No matter how much you make, if you’re publicly traded there is always pressure to make more profit.

  5. Coronavirus slows China’s property market to a crawl — and even the most robust real-estate app is no match
    By Tanner Brown
    Published: Feb 21, 2020 8:33 a.m. ET
    The residential real-estate market was already in a bad place before the outbreak began in Wuhan
    Wikimedia Commons/Gkxdavid99
    A retail location of the real-estate firm Lianjia as photographed in January 2019.

    Zhu Min decided to put her three-bedroom apartment on the market two months ago. She had inherited the aging first-floor unit from her grandparents and felt it was time to trade it in for a newer, higher-floor unit, away from the noise and exhaust of bustling Chengdu, one of China’s biggest and fastest-growing cities.

    She got an agent through the country’s leading real-estate brokerage, Lianjia, who agreed to help her sell her apartment and hunt for a new one. Within a day, Lianjia sent a photography team to Zhu’s apartment, took panoramic footage that was uploaded to allow virtual “walkthroughs” of the apartment. Zhu was impressed with how realistic the digital viewing was.

    “I’ve lived here for five years, and it was pretty much like actually being in my apartment,” she said of the virtual-tour experience. The next week she was busy showing the place to a stream of prospective buyers. She and one of them began haggling over the sales price.

    Then the coronavirus hit.

    “It’s been like a desert,” she said. “Nobody has come since the outbreak.”

  6. ‘Former Vice President Joe Biden defended the nearly 800 unelected superdelegates that will vote in extra rounds of voting that could be triggered if no Democratic presidential candidate wins a majority of delegates, arguing in favor of a brokered convention.’

    ‘Former New York City Mayor Michael Bloomberg, Sen. Elizabeth Warren (D-Mass.), Sen. Amy Klobuchar (D-Minn.), and former South Bend Mayor Pete Buttigieg, all said they support a brokered convention.’

    https://www.theepochtimes.com/biden-defends-superdelegates-as-he-argues-for-brokered-convention_3245929.html

    Bernie gets screwed again.

      1. Remember his push-up challenge? What a wing-nut.

        ‘Democratic presidential contender Joe Biden on Thursday calls a man in Iowa a “damn liar” and “fat” and “too old to vote for me” after the man accuses Biden of getting his son Hunter a job with a Ukrainian gas company. The former vice president Biden then challenged the man — who had also questioned Biden’s fitness for the White House given his age — to feats of strength, endurance and intelligence.’

        “I’m not sedentary,” said the 77-year-old Biden. “You want to check my shape on, let’s do push ups together, let’s run, let’s do whatever you want to do, let’s take an IQ test.”

        https://www.cnbc.com/2019/12/05/biden-calls-iowa-voter-damn-liar-and-fat-after-ukraine-accusation.html

        1. ‘the guy entertaining as hell’

          ‘BARBARA RANSBY: Joe Biden did so much more than vote for the war. He was the chair of the powerful Senate Committee on Foreign Relations, and he really used his control over that committee to make sure that a majority of the U.S. Senate voted to authorize the war. And that’s a very serious thing. It’s questionable whether the authorization to start the war could have even passed Congress without all that Biden did to get it approved. So, he really did play a major role in bringing us into the Iraq War, a terrible, terrible war. And this was much more responsibility — he bears much more responsibility than many other senators who simply voted for it. Of course, the statement about chemical, biological and nuclear weapons were false. And many experts already concluded this at the time of the Senate hearings, but Biden didn’t allow these experts to testify. That’s really significant. As chair of the Foreign Relations Committee, Biden was able to control the Senate debate on the war, and therefore much of the information that most senators received and that major media outlets reported was really distorted.’

          ‘DANNY GLOVER: There were other Democrats in the Senate who wanted to put limits on Bush’s ability to start a war in Iraq. For example, if there was no imminent threat to the United States and the United Nations did not authorize a war, then President Bush would have to come back to Congress for another resolution. But Biden shot this down.’

          ‘SEN. JOE BIDEN: So, the reason why I oppose the amendment of my friend from Michigan is because the basic premise upon which I began is consistent with where my friend from Connecticut begins, and that is that the threat need not be imminent for us to take action. That’s authority we’re about to delegate to the president.’

          ‘STEPHEN ZUNES: So, the fact that he would take such a stridently pro-war position, that he would use that role to limit the debate the way he did, played a major factor in getting enough defections from the Democratic majority to join with almost-unanimous Republican support to make the war resolution pass. As a result, I don’t think it would be unfair to say that Biden played a more important role than probably anybody in Congress in making the Iraq War possible.’

          https://truthout.org/video/new-film-shows-how-biden-played-leading-role-in-push-for-us-to-invade-iraq/

      1. Still can’t “laugh and walk away” now can you?

        Biden’s campaign needs money, when you donate you’ll be in good company:

        “Prominent Democratic donor Ed Buck was reportedly arrested Tuesday after another man overdosed on methamphetamine at his California apartment.

        Buck was charged with maintaining a drug house at his West Hollywood address and accused of supplying meth last Wednesday to a 37-year-old man who overdosed but survived, according to KABC.

        Los Angeles prosecutors portrayed Buck as a sexual deviant who preys on vulnerable victims.

        “From his home, in a position of power, Buck manipulates his victims into participating in his sexual fetishes,” prosecutors wrote in court papers obtained by the newspaper.

        “These fetishes include supplying and personally administering dangerously large doses of narcotics to his victims. … Not deterred by the senseless deaths of Moore and Dean, the defendant nearly killed a third victim last week.”

        https://nypost.com/2019/09/18/dem-donor-ed-buck-arrested-after-third-man-overdoses-at-his-la-home/

    1. If things go the way the polls show, Dems will be in a real bind. The polls say that Bernie will win delegates simply because five candidates are splitting the non-Bernie vote. If Bernie gets the most primary delegates and the nomination, Trump will beat him.

      If they broker something where Bernie is screwed again, the Bernie bros will … well I don’t know. Do they hate Trump enough to suck it up and “vote blue no matter who?” Will they wait to see who the nominee is? Will they say home? That’s the trillion-dollar question.

      Wild cards:
      1. Bernie’s health. If Bernie has another health issue, everything is going to into disarray even worse.
      2. VP choices. Dems are clamoring for a POC to mitigate the white-boy club.

      1. Maybe he can have AOC as his POC VP? That’d make the DNC ultra-blue and when they win they could push their GDP-enhancing GND on AMLO via a reworked NAFTA.

        Yes, I had alphabet soup for lunch.

          1. Is that you, Senator Klobuchar? 😉

            Seriously, that donnybrook on MSNBC was just a warm-up for what the MAGA Group, Inc. will do to whoever the Dems toss into the volcano…

        1. Maybe he can have AOC as his POC VP?

          She’d be the natural choice, she’s had his back from the beginning. But apparently she’s not old enough yet or something. I think Tulsi would be a good choice. But the Russian conspiracy set would lose their minds.

        2. AMLO?

          Andres Manuel Lopez Obrador, the Mexican president. For some reason the Mexican media usually refers to the current president by his initials.

      2. If Bernie gets the most primary delegates and the nomination, Trump will beat him.

        I’m not totally convinced. If I had to make a wager, it’d probably be on Trump, but I am not going to underestimate Bernie. His message is loud and clear, and there are a lot more “have nots” in this country than “haves.”

        1. One of my co-workers wants to sell all his assets (he has a lot) to cash on the belief that Bernie Sanders will take everything he’s got. TBH I’m not inclined to disagree.

          1. Will he covert his HODLings to gold and bury it in the backyard?

            He could deposit them in a foreign bank, not that it would stop Sanders.

        2. there are a lot more “have nots” in this country than “haves.”

          So let’s tax the “haves” until they’re “have nots” and pass those tax dollars on to the already rich, connected oligarchs. Good times!

          1. Hey, I’m one of the “haves.” I’ve got six figures liquid, which is more than most can say. I’m not in your fancy tech worker league, but I still make $50 per hour.

            That being said, I see zero chance of Bernie taking my money. I mean, really, you think he’s going to figure a way to start draining peoples’ checking accounts, or taxing them? He’d take a bullet to the brain before that happened.

            We have a serious problem in this country right now. The oligarchs looted it. Sitting around saying “Bernie bad” is no different than saying “orange man bad.” Bernie is surging because of the financial rape that the .1% have handed to the rest of us.

          2. I see zero chance of Bernie taking my money.

            Me too. Of course, he couldn’t find all of it!

            The fact that Bernie would have no party support for his programs leaves a hole. Ross Perot syndrome. The Dems have no coherent suggestions of how to fix what’s wrong, only focused on removing the guy that is not them. If they tried to identify what caused our problems, they would sound like the guy they hate?

          3. I see zero chance of Bernie taking my money

            You don’t think he’s going to push for an increase in taxes? Increase capital gains taxes (so asset price increases due to inflation get confiscated, even though it’d just preserving purchasing power)? Perhaps your money won’t be taken on a “nominal” basis, but it sure will be on a real basis.

            Note that I never said “Bernie bad”. I just objected to the concern about the ratio of “haves” to “have nots”. There’s also a lot of people making poor decisions, not working hard and sacrificing to get ahead. Sorry, but those folks don’t deserve to be “haves”. Yet somehow these folks deserve money taken from my pocket, according to people like Bernie.

            Oligarchs and regulatory capture is bad. I agree. But socialism is not the solution. Attacking corruption and reducing the size of the federal government and the # of regulations is how to level the playing field. Do that before reaching your hand in my pocket.

          4. If Bernie’s elected most Dems will be happy to vote for his tax increase proposals, starting with the huge payroll tax increase that will be needed to fund “Medicare for All”. Also expect that income taxes will increase for the middle class. Of course this will require Dem control of the House and the Senate.

          5. Oligarchs and regulatory capture is bad. I agree. But socialism is not the solution. Attacking corruption and reducing the size of the federal government and the # of regulations is how to level the playing field. Do that before reaching your hand in my pocket.

            +1

          6. You don’t think he’s going to push for an increase in taxes? Increase capital gains taxes (so asset price increases due to inflation get confiscated, even though it’d just preserving purchasing power)? Perhaps your money won’t be taken on a “nominal” basis, but it sure will be on a real basis.

            Versus the same thing that’s already happening now? My taxes went up under this current administration. I have yet to file this year. Further, my cost of living is skyrocketing, yet my pay isn’t. I don’t gamble in the stock market, so capital gains taxes do not affect me. My money is already being taken, so I’m not sure what your point is.

          7. Oligarchs and regulatory capture is bad. I agree. But socialism is not the solution. Attacking corruption and reducing the size of the federal government and the # of regulations is how to level the playing field. Do that before reaching your hand in my pocket.

            And who’s going to go after the oligarchs and regulatory capture, Bernie or the current president? I’d put my money on Bernie in that regard.

            I’m a non-partisan swing voter. I have been voting since I was 18. I voted Bush 1 twice (in spite of “no new taxes” remember that?), he lost the 2nd time. I voted for Bob Dole against the incumbent Clinton because I didn’t think Perot stood a chance. I voted for Bush 2 the first time, then voted for Kerry (a real “hold your nose” moment for me) because Bush was a miserable failure. I then voted for Obama the first time. After I saw what a liar and failure he was I couldn’t vote for him a 2nd term. I voted for our current president, but his policies have done nothing but make my life more expensive through hyperinflating rents and asset prices, and increased taxes. Yet you think I should keep voting for that? Pfft.

          8. My taxes went up under this current administration

            Yes, because of your state government, not the federal government. The problem is you no longer get a free ride from those living in states who are more prudent with their spending.

            If you want to fix that, then fight to reduce taxes (and presumably spending) in your state.

          9. but his policies have done nothing but make my life more expensive through hyperinflating rents and asset prices

            I think your anger is directed to the wrong place. The president doesn’t control the printing press — that’s congress and the federal reserve. The previous administration is the one who failed to put bankers in jail, and failed to regulate the ratings agencies. And it’s congress which failed to pass meaningful laws to stop it from happening again.

            Certainly a lot more could be done by our current administration — stop raising (even lower) FHA limits. Stop the USDA 0% down loans. Repeal FASB 157. But these issues already existed, and many were driven by existing appointees, such as Mel Watt.

          10. I think your anger is directed to the wrong place. The president doesn’t control the printing press — that’s congress and the federal reserve.

            Anger? I’m not angry, just mulling over my options for this next election. I voted for the current president who, by the way, essentially bullied the FED into the current rate cut nonsense. Did you miss that, drummin? We were on the path to normalizing rates when the President, who ran on a platform of Yellen’s policies creating a “big, fat, ugly bubble,” yet he turned around and did the same thing, actually creating an even larger disaster. This whole thing is going to melt down. Obama was terrible, but doubling down on his policies to make the damage even worse was stupid, especially since the FED was on the right path.

          11. The previous administration is the one who failed to put bankers in jail, and failed to regulate the ratings agencies. And it’s congress which failed to pass meaningful laws to stop it from happening again.

            Certainly a lot more could be done by our current administration — stop raising (even lower) FHA limits. Stop the USDA 0% down loans. Repeal FASB 157. But these issues already existed, and many were driven by existing appointees, such as Mel Watt.

            Wholeheartedly agree with you on this.

          12. essentially bullied the FED into the current rate cut nonsense. Did you miss that, drummin? We were on the path to normalizing rates when the President, who ran on a platform of Yellen’s policies creating a “big, fat, ugly bubble,” yet he turned around and did the same thing, actually creating an even larger disaster.

            I’d say that there’s a big difference between Yellen and Trump’s culpability, if what you suggest is true (that the fed lowered rates at Trump’s behest). The fed is supposedly independent, and doesn’t answer to the president. So, best the pres can do is make a request or suggestion. Yellen, on the other hand, had direct input/control.

            Was Trump hypocritical? For sure. Did he lower rates himself? Absolutely not. Did the Fed bend to political pressure? All we can do is speculate.

            If the Fed can be controlled by the executive branch/political pressure, then I guess we have nothing to worry about with “unelected bankers” controlling our money supply — it appears our elected politicians actually control it!

      3. Maybe the cabal will pay Bernie to dropout of the race à la Lyndon LaRouche, or be ready to duck that .30-06 round?

        1. the cabal will pay Bernie to dropout of the race

          He appears to have been well compensated for rolling over in 2016. When did he acquire that lake house? When were those lucrative book deals? When was the federal investigation against his wife dropped?

          1. lucrative book deals

            Fronting for the cabal pays well.

            https://abcnews.go.com/Entertainment/wireStory/ukraine-diplomat-marie-yovanovitch-book-deal-69130403

            “Financial terms were not disclosed, but two people familiar with the deal told the AP that the agreement was worth seven figures, even though the book is not expected until Spring 2021, months after this fall’s election. They were not authorized to discuss negotiations and spoke on condition of anonymity to discuss financial terms. Yovanovitch was represented by the Javelin literary agency, where other clients include former FBI Director James Comey and former national security adviser John Bolton.”

  7. ‘The mid-engined 2020 Chevrolet Corvette Stingray has finally hit the production line but there remain heaps of C7 Corvettes sitting on dealership lots across the United States looking for homes. During a recent press event for the C8 Corvette, the guys over at Corvette Blogger were informed by Chevrolet marketing manager Steve Majoros that there are around 2,600 new C7 Corvette models just waiting to be snapped up.’

    ‘Shortly after the new Corvette was unveiled in July last year, it emerged there was a touch over 6,000 examples sitting in dealerships. Those in the market for a 2019 Z06 can find one with an $8,338 discount straight from Chevrolet and it’s likely that many dealerships are also offering their own discounts in a bid to shift inventory.’

    ‘In December, Chevrolet was offering the C7 with $3,000 in owner loyalty cash to current Corvette owners, alongside a $6,404 price reduction below MSRP across all models, resulting in potential savings of up to $9,404.’

    https://www.carscoops.com/2020/02/there-are-nearly-2600-new-c7-corvettes-for-sale-with-generous-discounts-in-the-u-s/

    1. ‘Good news for wine drinkers. Because growers planted too many grapes in California, prices are expected to drop to their lowest levels in five years.’

      ‘Local wineries like Mazza Vineyards say that grape glut won’t affect them, because they make their wines with local or regional grapes. “As a producer it really doesn’t have that much significance on us, because we’re not purchasing grapes from the west coast,” Bob Mazza said. “Most of our grapes are grown locally or regionally at least so it’s not going to have that much of an impact in terms of our supply chain.”

      ‘Mazza admitted though that the over-planting of vines out west is significant. “California has a tendency to plant acres of grapes in the thousands. So when they’ve planted 2-3 thousand acres of grapes 3 to 4 years ago, that’s fairly significant,” he said. “Just to give you an impact, that’s the amount of wine grape acreage that’s located in Erie County, so they plant in one year what we grow totally in this area.”‘

      https://www.erienewsnow.com/story/41733454/wine-prices-expected-to-drop-local-producer-talks-about-the-impact

      1. ‘The market for rare whisky has been on a continuous rise, and almost every month brings with it headlines of bottles prices breaking records at auction or new, high-end bottles being released by brands for astronomical prices.’

        ‘In the past 6 months, however, the market for rare whisky has been showing signs of slowing and the recent auction of the ‘Perfect Collection’ by Whisky Auctioneer, one of the most covered and broadcast auctions of the millennium, has clearly shown that a market peak for whisky is indeed on the way, reported international media on Wednesday.’

        ‘The star lot for the 2nd part is the aforementioned, record-breaking Macallan 1926. No doubt, most collectors and whisky fans the world over will be watching closely as bidding begins, to see if another steep price drop will follow. Even if a single buyer comes in strong, the overall theme shows a ceiling for rare whisky bottles, as many secondary sellers in the industry have grown greedy.’

        ‘With the huge price increases, the market was bound to reach a ceiling eventually and with the disasters taking place across the globe, the mood of investing in a fun category such as whisky has been dampened.’

        https://www.thenews.com.pk/print/616898-market-drop-seen-in-world-s-largest-whisky-collection-auction

        1. Great examples of the bubble in almost everything, and how it creates overcapacity in almost everything.

      2. I used to talk about this wine bubble a long time ago. There has been a glut of grapes, vineyards and wine for over 10 years. It’s amazing how much money rich people will pour down the drain.

    2. VaaaaRooooooom!

      Home | Personal Finance$

      Out$tanding auto-loan balance$ just hit a new record and delinquencie$ are on the ri$e — should you be concerned?

      MarketWatch | By Elisabeth Buchwald |Published: Feb 21, 2020

      Nearly $66 billion of the $1.33 trillion$ in out$tanding loan$ were over 90 days delinquent in the fourth quarter of 2019, up from $57 billion for the same period last year

      Automobile-loan delinquencies are at a record high, but experts say this may not impact your ability to get a loan for your car purchase.

      Some 85% of new cars in the U.S. are financed with a loan or a lease, according to Experian EXPGY, +0.21% . The average price of a new car has risen over the past decade from $28,600 in 2009 to $37,200 in 2019, according to the automotive information site Edmunds.

      The value of the average subprime auto loan is $30,633, according to Experian data from the third quarter of 2019. Subprime borrowers, whom Experian identifies as those with credit scores between 501 and 600, pay an average of $574 a month.

      Companies that are not “fully covering credit risk in their pricing strategy need to tighten up their underwriting,” he said, “if credit losses begin to negatively impact performance”.

      🙈🙉🙊:

      The National Automobile Dealers Association did not respond to a request for comment on the future supply and demand for automobile loans.

      The company doesn’t publicly disclose these figures for the U.S.

      The three companies did not comment on the recent Fed data.

      1. I just saw an advertisement for GM’s new half ton diesel today. MSRP is $65,000. FOR A HALF TON. This is unsustainable. They’re going to have to cut $20k+ off a lot of these things to move them once the meltdown is in full swing.

      2. So, who wants to pay $60K for last year’s model?

        Especially when there is such a huge difference between the models and the new base model isn’t much more than that.

        Around here I keep hearing ads on the radio lately for Ram “Eco Diesel’s” for about 15k off MSRP. Not sure how much they MSRP for, but that sounds like a nice discount.

        1. Around here I keep hearing ads on the radio lately for Ram “Eco Diesel’s” for about 15k off MSRP

          I think that might be because the EcoDiesel has a 3 liter engine. I think that has to be hard sell for those who expect at least twice the displacement.

  8. eu·phor·ic
    /yo͞oˈfôrik,yo͞oˈfärik/
    adjective | adjective: euphoric

    characterized by or feeling intense excitement and happiness.

    “a euphoric $ense of ever.more profit$ from under.priced $tocks & $helter.$hacks.$hortages!”

    $helter.$hacks! = euphoric! … $tock$! = euphoric! … U$ Dollar! = euphoric! … 💵💪💲

    BUSINE$$ NEW$ | FEBRUARY 21, 2020 | (Reuters) – KING DOLLAR

    Take Five: “Our currency, your problem” – all over again

    “For now, the 1971 comment by U.$. Trea$ury $ecretary John Connelly comes to mind: “The dollar is our currency, but it is your problem.” It’s certainly a problem for the global economy”

    The dollar juggernaut rolls on. The U.S. currency has rocketed to a near three-year high versus the euro EUR=, a 10-month high against the yen and an 11-year peak versus the Aussie. This month alone it’s added 2.5% against six currency peers.

    Economic indicators are reinforcing the U.S growth engine’s outperformance. The United States has the highest bond yields among developed nations and its companies keep beating earnings forecasts. It’s relative resilience to coronavirus damage makes it today’s safe-haven of choice.

    President Donald Trump has been oddly silent on the subject but it’s probably a matter of time before he accuses rivals of devaluing their currencies to aid exports. Could the G20 meeting in Riyadh be the forum where Washington starts to chastise? And will it do that in private meetings or opt to name and shame?

    Another question is when dollar strength will make its impact felt on U.S. trade and companies’ bottom lines. Corporate America waving red flags may be what finally gives the dollar pause.

    A YEN FOR YOUR THOUGHTS:

    Japan-watchers have seen this movie before. In 2014, a sinking economy forced a rush of yen out of Japan. And rumor has it that this week’s sudden 2-yen drop in the currency past 112 per dollar was caused by Japanese pension funds sending cash overseas, maybe even with the government’s blessing. If 2014 is a guideline, the depreciation has long legs.

    Yen weakness is what the doctor would prescribe; the world’s third-largest economy is reeling as neighboring China struggles and coronavirus cases at home mount. Recession looks likely as tourism, factories and consumer demand struggle; even the Olympics in July may be at risk. If upcoming industrial output and retail sales data further amplify the fears, it might be a catalyst for the Bank of Japan to abandon its elusive inflation target and prioritize growth.

    -Yen’s safe-haven status under siege as Japan’s economy

    1. Filed under: “collateral U$ Dollar damage$”

      BUSINE$$ NEW$ | FEBRUARY 21, 2020

      King Dollar rule$ the FX heap as viru$ threaten$ global growth

      Reuters|By Ira Iosebashvili, Saqib Iqbal Ahmed

      NEW YORK (Reuters) – A powerful surge in the dollar threatens to magnify the pain for companies and nations already struggling with the economic fallout of the coronavirus.

      The rally is being fueled by investors pouring money into U.S. stocks and bonds amid expectations that the country will be less vulnerable to the economic fallout from the coronavirus, which already threatens to dent China’s growth rate and push Japan and the eurozone into recession.

      Investors seeking a comparatively safe place to put their cash amid uncertainty over the virus’ trajectory and economic impact are also piling into the dollar. That effect has been heightened in recent weeks as concerns over Japan’s economy have weighed on the yen, traditionally a popular destination for nervous investors.

      Meanwhile, though yields on U.S. Treasuries have dipped, they continue to exceed those offered by other developed countries, increasing the dollar’s allure to income-seeking investors.

      “You get some of the best growth in the developed world, plus a yield,” said Clifton Hill

      Hill came into the year expecting a trade deal between the United States and China to benefit a wide range of assets around the world, but the strengthening dollar has pushed him to shift his view.
      Companies in the materials and technology sectors are among the most exposed to currency headwinds, with around 50% of the corporations in both sectors deriving the greater part of their revenues from abroad

      At the same time, the dollar’s strength is likely to increase the burden on developing countries, especially those more exposed to the economic effects of China’s coronavirus-led slowdown.

      Total dollar-denominated debt held by emerging markets stood at $6.4 trillion as of the third quarter, according to the Institute of International Finance. That debt becomes more difficult for countries to service when the dollar rises.

      He is now betting the buck will rise against a range of Asian currencies including the Korean won and Thai baht, and positioned for a decline in various commodity prices, which tend to weaken when the dollar rises.

  9. ”Fannie Mae and Freddie Mac are expected to retain ‘limited and tailored government support’ after they are freed from U.S. control,”

    Putting the guy on the diving board just as the pool is being drained. Not gonna be pretty.

    Gold chart looks like clear sailing between here and 1800$.

    1. “Gold chart looks like clear sailing between here and 1800$.”

      Bugs: “eh, you could bee right Doc!”

      Home | Inve$ting | Stock$

      Opinion: This $imple math means $tock-market return$ will be anemic over the next decade

      By Mark Hulbert |Published: Feb 18, 2020

      Hard to see how the $&P 500 can rise very much in a low-growth world.

      CHAPEL HILL, N.C. — It’s virtually certain the stock market over the next decade will not come anywhere close to equaling its historical total return of 6.9% annualized above inflation.

      And it’s even more certain that the S&P 500 index SPX, -0.96% won’t match the 11.5% annualized real total return it produced over the last decade.

      So the best case is for the stock market to grow more or less in lockstep with the overall economy over the next decade.

      And that’s hardly something for the bulls to celebrate. According to the Congressional Budget Office, real GDP in the U.S. is projected to grow at a 1.7% annualized pace through 2030. And, low as that is, it almost certainly is too optimistic, for two reasons: Economic projections are almost always too rosy (the CBO assumes no recession over the next decade, for example), and in any case publicly traded companies inevitably grow more slowly than the overall economy.

      Historically, total profits of publicly traded corporations have grown at an annualized rate about one percentage point lower than GDP.

      That means the CBO’s projection translates into a projected inflation-adjusted total return for the S&P 500 of 2.6% annualized: The sum of 0.7% from earnings growth (one percentage point less than the CBO’s GDP projection) and the current dividend yield of 1.9%. That’s less than a third the historical rate and only a sixth of the last decade’s annualized growth.

      What about bond$?

      Lest you think this discussion means you should get out of all equities, let me hasten to add that the prospect for bonds is even worse. The 1.55% yield on the 10-year Treasury TMUBMUSD10Y, -3.29% right now is 0.07 percentage point below what the Cleveland Federal Reserve reports expected inflation to be over the next decade (1.62%). That means that the 10-year Treasury’s inflation-adjusted expected return is minus 0.07%.

      Rather than urge you to make a wholesale shift out of equities, my point is to reduce your expectations for both stocks and bonds.

      We’ve been $poiled rotten by the out$ized return$ of both a$$et cla$$es over the last decade. Don’t expect those returns to continue forever.

      1. “TMUBMUSD10Y, -3.29%”

        If you change the sign on that number and tweak it a little, it starts to look like a 3%+ daily gain for HODLers of 10 year Treasurys.

        1. What diviides the USA today is two camps , and it isn’t racism.

          First Camp…..
          Globalist, Elite, one percenters, Wall Street Casinos, Monopoly Cartels, Government workers, ilegal immgrants, Commies and Red China and others that want to take over.

          Second Camp…..

          Private sector workers in USA that are being ripped off by the first Camp.

          1. Are retirees on a government guaranteed pension plus social security or living off Fed-protected assets in camp one or camp two?

          2. Are retirees on a government guaranteed pension plus social security or living off Fed-protected assets in camp one or camp two?

            Camp one.

          3. Lots of current pensioners retired from private sector jobs which used to offer pensions. (I used to do the maths on some of them…)

          4. Perhaps someone should have had Trump define what his personal definition of the word “winning” was during the election.

            Mulvaney says U.S. is ‘desperate’ for more legal immigrants:

            “We are desperate — desperate — for more people,” Mulvaney said. “We are running out of people to fuel the economic growth that we’ve had in our nation over the last four years. We need more immigrants.”

            https://www.washingtonpost.com/politics/mulvaney-says-us-is-desperate-for-more-legal-immigrants/2020/02/20/946292b2-5401-11ea-87b2-101dc5477dd7_story.html

            My wife gets called into her manager’s office yesterday as she is walking down the hallway in between seeing patients. The boss informs her, without any prior notice, that the higher-ups are giving her a promotion. She is then shown some paper work which she needs to sign.

            After a quick review of the documents she asked the boss if this promotion will result in some sort of pay increase. She is told that yes, this will move her up to a higher pay grade. After some further review she informs the manager that she is already at this particular pay grade.

            “Ohhh, exclaims the manager, that means that you won’t get a wage increase. However, the good news is that in taking the new title you will be able to keep your current wage instead of the 12% pay cut that you would have gotten if you had chosen to not take the new position!”

            The new position will, of course, require extra job duties and more hours in an already busy, salaried job.

      1. Burton Malkiel devotes a whole chapter to it in “A Random Walk Down Wall Street,” it’s a fun read.

      2. Perhaps it becomes a self fulfilling prophecy when enough people believe in it. It may be hocus pocus but there are enough people trading off this stuff that one has to give it some attention.

      3. Paid into pensions and paid into Social Security is neutral.

        The question becomes which camp will try to steal the retirements .

        Also, I just found out that 90% of our Pharma is manufactured in Red China.
        Who thought that was a good idea.

        1. “The question becomes which camp will try to steal the retirements.”

          I vote for whomever controls the electronic printing press.

  10. Affordable gasoline prices are on the way!

    Energy
    Barron’s Live
    Oil Prices Slip as Coronavirus Spread Dashes Hopes of a Demand Rebound
    By Callum Keown
    Feb. 21, 2020 9:11 am ET

    Oil prices slipped 1.5% on Friday, as fears over the spread of the coronavirus outside of China mounted and economic data began to show the extent of the epidemic’s impact.

    China reported 889 new cases of the novel coronavirus COVID-19, a sharp jump from the 394 fresh cases it reported on Thursday. South Korea has implemented emergency measures after it confirmed 100 new cases on Friday and a second death, while cases in Japan have now risen to 727.

    1. I have no idea why oil went up $5 per barrel over the course of the past few weeks on cratering demand.

    2. Fuel for those thoughts dear Professor:

      AIRLINE$:

      Coronavirus flight cancellations top 200,000, sending jet fuel price$ to more than 2-year lows

      PUBLISHED FRI, FEB 21 2020 | By Leslie Josephs

      KEY POINT$:

      Jet fuel price$ have dropped sharply due to the coronavirus.I

      Airlines have canceled more than 200,000 flights, mostly within China as the government steps up measures to curb the spread of the virus.

      Airlines are starting to assess the financial damage.

      Airlines around the world, including the three U.S. carriers that serve China — Delta, United and American — have halted service to the mainland and Hong Kong because of the virus. In February alone, the number of flights that were scheduled to fly to, from and within China are down 80% from a year ago, according to aviation consulting firm Cirium.

      From Jan. 23 to Feb. 18, 99,254 scheduled flights didn’t fly, close to 90% of them domestic China trips, the firm added.

      That’s sending jet fuel prices, generally airlines’ second-biggest expense after labor, down sharply.

      Normally, lower costs would be welcome news for airlines, but weaker demand is expected to hit revenue and profits this year

  11. A reader sent this in:

    ’36-Year-Old Woman Arrested For Calling 911 After Parents Shut Off Cellphone’

    ‘Ohio police said she repeatedly called emergency dispatchers and became “belligerent.”

    ‘The Smoking Gun noted that Khetarpal is a licensed realtor, and that authorities have not said why her parents shut off her phone service in the first place.’

    https://www.huffpost.com/entry/ohio-woman-911-cellphone-complaint_n_5e4ef157c5b6b82aa6502ef3

    1. “…Khetarpal is a licensed realtor…”

      She’s a realtor and can’t afford her own cell phone?

      Barriers to entry to the REIC are hitting new lows.

    2. This guy was a local morning TV anchor with co anchor Suzanne Boyd but he quit a little over a year ago to become a…

      Eric Roby @Eric_Roby Aug 14, 2018
      I am now selling real estate with illustrated Properties. Check out my website: http://ericroby.ipre.com

      https://twitter.com/Eric_Roby/status/1029447050860085248

      a little over a year later…

      Popular TV Personalities Suzanne Boyd and Eric Roby Return to CBS12 with New Local Talk Show

      Jan 6, 2020

      http://www.bocaratontribune.com/bocaratonnews/2020/01/popular-tv-personalities-suzanne-boyd-eric-roby-return-cbs12-new-local-talk-show/

  12. Opinion: Macros$cope by Gary Biddle

    If $lowing growth, un$ound financial $ystems and the coronaviru$ don’t trigger a market meltdown, central banks will.

    Both China and the US chose the wrong remedies for ailing economie$ in wake of the global financial crisi$. Financial risk$ abound today, as they did in 2007,

    A decade of easy money has only compounded the problems. Central bankers know this, and may seek to mitigate the distorting effects of low interest rates

    By Gary Biddle|Published: 20 Feb, 2020

    In July 2007, the Post published my article with the headline “Get ready for stock market collapse”. Three months later, share prices slid into the abyss of the global financial crisis. I haven’t predicted a market collapse since. I am predicting one now.

    Back in 2007, signs of a market collapse were evident in overpriced shares, investor complacency, and fast-sprouting hedge funds and brokerage accounts. China was then an emerging economic power with ample debt capacity to cushion the world’s fall.

    But both China and US got their responses to the global financial crisis wrong. Rather than stimulating consumption that still lags, China stimulated investment despite its industrial overcapacity. The US stimulated consumption (remember “cash for clunkers”?) rather than investing in new technologies, worker retraining and still creaking infrastructure.

    Each wasted US$4 trillion in fiscal stimulus doing what the other should have done. Central bankers came to the rescue with now long-in-the-tooth monetary stimulus that is setting the stage for our next downturn.

    Rounds of quantitative easing later, the US M2 money supply has doubled. Likewise for the European Union. China’s M2 has increased fivefold and other central bankers have tagged along.

    With so much money circulating, it’s no surprise that real asset values denominated in diluted currencies have soared, with real estate, commodity and share prices setting historic highs.

    Equally eye-popping is the US$600 trillion$ worth of derivative$ – over six times global GDP – that appear in financial statement footnotes but not on balance sheets due to “netting” that assumes counterclaim matching and liquidity that won’t exist during the next financial crisis, as for the last.

    Derivative$ of such magnitude mean that even $mall mi$matches will cause in$tant in$olvency for many firm$, among them some big banks

    Already, the highly contagious 2019-nCov is circulating widely, portending a profound global impact on public health, consumer spending, logistics supply chains, capital investments, country politics and markets.

    Also apparent is financial market complacency fuelled by a bet that central banks will keep interest rates low as long as economies are weak. A daring dance, you might say, with many investors thinking they’ll dash from the dance floor when the music stops.

    If we learned anything from the global financial crisis, it is that trading strategies used by everybody don’t work when everybody uses them. Add trade wars, global warming effects and fair value accounting that will pass resulting losses through earnings, and it’s easy to panic.

    While triggers for dips are difficult to predict, one thing is certain: central bankers face a dilemma.

    They need to raise near-zero interest rates to equip themselves for the next downturn and mitigate distorting effects of low interest rates on real asset values, investments, savings and income equality. Yet, by doing so, they risk causing a downturn, as they have done before.

    🔮☕ 🌎🌏🌍🎨🔜💣💥📉:

    So my prediction is that, unless one of the candidates above triggers a market collapse before they do, central bankers will. As I said in 2007, consider selling soon.

    (Gary Biddle is professor of financial accounting at the University of Melbourne and teaches at Columbia University, London Business School and the University of Hong Kong)

    1. It certainly is a good day to be invested in safe haven assets.

      ‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist
      Published: Feb 21, 2020 9:52 a.m. ET
      Critical information for the U.S. trading day
      AFP via Getty Images
      Overprotected investors?
      By Barbara Kollmeyer
      Markets reporter

      Rattled by rising non-China coronavirus cases — notably in South Korea — investors appear unwilling to load up on stocks heading into the weekend.

      That is as they head for perceived safe-haven assets, bonds (TMUBMUSD10Y, -3.84%) and gold (GCJ20, +1.67%) this morning.

  13. You needn’t worry about the article linked below, as our resident expert has offered his personal assurances that it’s all contained, and all is well.

    Coronavirus cases hit new high in US, with numbers expected to rise
    By Joseph Guzman
    Story at a glance
    — More infections are expected among American evacuees who were aboard the Diamond Princess cruise ship in Japan.
    — A majority of U.S. cases are in people who were evacuated home by the State Department.
    — Health officials called it a “tremendous public threat.”

      1. Whoever made this decision needs to be fired. This put not only the entire plane in danger, but the entire nation.

        1. the entire plane in danger

          No doubt, but nobody was safe on that cruise ship. I read that by the time the plane got to the US, 5 of the “OK” passengers had developed a fever.

          1. Plastic walls are useless if the air is being circulated. Didn’t we already figure this out from the cruise ship? Is a separate plane so expensive?

            Then again, the incubation and transmission method are STILL black holes to me. For all we know, the “healthy” passengers could already be infected and nobody knows yet.

          2. Then again, the incubation and transmission method are STILL black holes to me. For all we know, the “healthy” passengers could already be infected and nobody knows yet.

            I’m betting they are. I don’t think there’s any way to contain this virus. The only hope is treatment and a vaccination, IMO.

          1. Just rescheduled our trip to Disneyland AKA international Petri dish. Expected rain factored in too.

          2. My wife and a son just returned from a three day trip there with no coronavirus symptoms in evidence.

            She actually brought back some nasty respiratory virus from Utah where she visited family two weeks ago. We all caught it…

          3. She actually brought back some nasty respiratory virus from Utah where she visited family two weeks ago. We all caught it…

            “Thanks, honey….”

          4. Just rescheduled our trip to Disneyland

            A good choice, though I think that Disneyworld is even higher risk.

          5. Disneyworld caters to out of town visitors, both domestic and international, while Disneyland primarily caters to people in metro LA. Either way, both are bad places to visit during a potential pandemic. The Hong Kong and Shanghai Disney parks are still closed until further notice. If corona starts spreading in the US, expect both the Anaheim and Orlando parks to close.

            BothUS “resorts” are huge money makers for Disney, to the tune of $4B profit per year. Closing them will have a huge impact on Disney’s bottom line. I can only imagine what the fixed costs are for those theme parks, even when closed. They can’t lay everyone off. Sure, sweepers and burger flippers are easily replaced, but a lot of employees have know how that would not be easily replaced when the parks reopen. Disney could use the shutdown time to perform deferred maintenance or even enhancements.

            A Disney shutdown could send the Orlando economy into a tailspin. Universal and other Orlando based tourist attractions would also close, impacting hotels, restaurants, airlines and other businesses.

            This could get very interesting.

          6. Disneyland primarily caters to people in metro LA

            Not in my experience the last four years. It’s pretty international.

          7. Not in my experience the last four years. It’s pretty international.

            I have read that on any given day that well over half of those in attendance are annual pass holders, who are mostly locals. It’s one of the reasons Disneyland no longer has a “slow season”, is is estimated that there are over 1 million annual passholders.

            Also keep in mind that foreign looking people who don’t talk in English could be “locals”.

            Sure, there are visitors. People who visit LA are apt to spend a day in Disneyland. But having visited both parks recently here are my observations about Disneyworld:
            1) More Europeans, especially Brits.
            2) Lots of middle eastern people. Emirates has daily flights to Orlando.
            3) South Americans, especially Brazilians, who come in large tour groups
            4) Some Chinese, also in tour groups.

            The tour groups really stand out in Orlando. Sure, you see them in Anaheim too, but they are legion in Orlando.

      1. Sounds like there could be a serious under count, though the HBB’s resident expert (aka Mr. 2% CFR) offers his assurances that is not the case.

    1. PB, You love to put words I did not say to cover up for the fact you were predicting a 30 to 40 percent death rate when I was thinking in the 2 to 4 percent range. You ready to man up and admit you were wrong?

      1. Do not know why that Chino continues to populate. It has done it every since I responded to him once and accidentally typed it into my name.

  14. “‘[Zillow’s] entire Homes division is losing tens of millions of dollars each month,’ he said. ‘It’s a bloodbath. They have plenty of cash to burn to withstand the massive losses. It’s pretty staggering.’”

    Tesla: Hold my beer

    1. Goldman Sachs warns of imminent risk for stocks due to complacency on coronavirus
      By Barbara Kollmeyer
      Published: Feb 21, 2020 1:38 a.m. ET
      Critical information for the U.S. trading day
      Getty Images
      Beware of complacency dangers.

      While investors may be tired of hearing how virus-complacent they are, as stocks keep busting records, our call of the day from Goldman Sachs is saying exactly that.

      “In the nearer term…we believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high,” chief global equity strategist Peter Oppenheimer told clients.

      The virus history books — SARS in 2003 — reveal that setbacks for markets are often temporary. But China’s economy is “six times bigger now than it was then,” with Chinese tourism a 0.4% chunk of global GDP and missed work days in China equal to an two-month unplanned break for the entire U.S., he notes.

      Oppenheimer points to Apple’s (AAPL, -2.26%) latest warning that Wall Street largely shrugged off, noting that the company has been driving better-than-expected fourth-quarter earnings results.

      “During the fourth quarter, the five largest stocks in the S&P 500 (Facebook (FB, -2.05%), Amazon (AMZN, -2.65%), Apple (AAPL, -2.26%), Microsoft (MSFT, -3.16%), Google owner Alphabet (GOOGL, -2.21%) ) posted an average earnings surprise of +20%, compared with just 4% for the average S&P 500 company. Any weakness to these and other companies would likely push earnings estimates lower,” cautions Oppenheimer.

      Don’t look to stretched valuations in bond markets versus stocks to immunize against an equity pullback, he said. Not a sustained bear market, but don’t hit the snooze button is the message.

    2. Beware of the known unknowns.

      Opinion Commentary
      Why Does the U.S. Have So Few Confirmed Coronavirus Cases?
      How officials can prepare for a disease that’s likely more widespread than CDC numbers show.
      By Luciana Borio and
      Scott Gottlieb
      Feb. 20, 2020 6:25 pm ET

      A mere 15 cases of the Wuhan coronavirus have been diagnosed in the U.S., according to the Centers for Disease Control and Prevention, and that number hasn’t budged in a week. But the true number of cases is unknown, because the U.S. is testing only those who recently arrived from China or have been in close contact with confirmed patients. Public-health authorities need to be prepared for a wider outbreak.

  15. The Financial Times
    Coronavirus
    Virus fears push yields on long-dated US Treasuries to new low
    Flight to safety on impact of outbreak on growth and as S Korea imposes restrictions on city
    updated 6 minutes ago

    US Treasury bonds
    BlackRock trims 30-year Treasuries after rally
    Exclusive: Fixed income chief says long-dated bond yields ‘not anywhere close’ to correct
    2 hours ago

    Coronavirus
    Coronavirus latest: 16 people test positive for coronavirus in Northern Italy

    1. There’s more…

      Coronavirus outbreak
      Coronavirus
      How a cruise turned into a coronavirus nightmare
      The Diamond Princess proved to be the perfect incubator for the deadly infection

      Megan Greene
      Coronavirus may be worse than Wall St is wagering
      If the outbreak turns out to be disruptive, here’s how to immunise your portfolio

      Analysis
      Luxury goods
      Coronavirus wreaks havoc on luxury and fashion groups
      Fashion shows streamed online to isolated customers, but fears remain for supplies and sales in key market

      Coronavirus
      Coronavirus mapped: the latest figures as the outbreak spreads

      Airlines
      Coronavirus outbreak to cost global airlines $29bn

  16. Anyone else noticing that Movoto stats don’t add up. There’s been an explosion of inventory in Georgetown, Tx. Movoto shows 1,200 listings for sale. But on their graph for Georgetown Statistics they say there’s a decrease of inventory and show 472 properties for sale. Down from 600.

    https://www.movoto.com/georgetown-tx/

      1. So they throw in a little lie and obfuscation here and there, making themselves look totally stupid? Sound about right…

  17. Glendale, CA Housing Prices Crater 17% YOY As One LA Broker Conceded, “We Ripped Off A Whole Bunch Of People”

    https://www.zillow.com/glendale-ca-91205/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist said so eloquently, “A house is a rapidly depreciating asset that empties your wallet every day you own it. Rent a house for half the monthly cost of buying it.”

  18. It’s EVERYWHERE.

    Top News
    Health officials worry as untraceable coronavirus clusters emerge
    By Associated Press Today
    ASSOCIATED PRESS
    This photo released by Xinhua News Agency shows a part of a temporary hospital with 1,100 beds converted from the Wuhan Sports Center in Wuhan in central China’s Hubei Province. Citizens have been ordered to stay in their homes for weeks in the coronavirus outbreak’s epicenter of Wuhan.

    In South Korea, Singapore and Iran, clusters of infections are leading to a jump in cases of the new viral illness outside China. But it’s not the numbers that are worrying experts: It’s that increasingly they can’t trace where the clusters started.

    World Health Organization officials said China’s crackdown on parts of the country bought time for the rest of the world to prepare for the new virus. But as hot spots emerge around the globe, trouble finding each source — the first patient who sparks every new cluster — might signal the disease has begun spreading too widely for tried-and-true public health steps to stamp it out.

    “A number of spot fires, occurring around the world is a sign that things are ticking along, and what we are going to have here is probably a pandemic,” said Ian Mackay, who studies viruses at Australia’s University of Queensland.

    1. Technology
      Coronavirus May Be the ‘Disease X’ Health Agency Warned About
      By Jason Gale
      February 21, 2020, 5:58 PM PST
      — Picture is emerging of an unpredictable, enigmatic pathogen
      — SARS-like lung inflammation seen in severe Covid-19 cases

      The World Health Organization cautioned years ago that a mysterious “disease X” could spark an international contagion. The new coronavirus, with its ability to quickly morph from mild to deadly, is emerging as a contender.

      From recent reports about the stealthy ways the so-called Covid-19 virus spreads and maims, a picture is emerging of an enigmatic pathogen whose effects are mainly mild, but which occasionally — and unpredictably — turns deadly in the second week.

  19. An interesting read …

    Coronavirus and the Blindness of Authoritarianism – The Atlantic
    https://www.theatlantic.com/technology/archive/2020/02/coronavirus-and-blindness-authoritarianism/606922/

    (a snip)

    How did Xi Jinping—the general secretary of the Communist Party of China, who has been consolidating his power since taking over the post in 2012—let things get to this point?

    It might be that he didn’t fully know what was happening in his own country until it was too late.

    Xi would be far from the first authoritarian to have been blindsided. Ironically, for all the talk of the technological side of Chinese authoritarianism, China’s use of technology to ratchet up surveillance and censorship may have made things worse, by making it less likely that Xi would even know what was going on in his own country.

    Authoritarian blindness is a perennial problem, especially in large countries like China with centralized, top-down administration. Indeed, Xi would not even be the first Chinese ruler to fall victim to the totality of his own power. On August 4, 1958, buoyed by reports pouring in from around the country of record grain, rice, and peanut production, an exuberant Chairman Mao Zedong wondered how to get rid of the excess, and advised people to eat “five meals a day.” Many did, gorging themselves in the new regime canteens and even dumping massive amounts of “leftovers” down gutters and toilets. Export agreements were made to send tons of food abroad in return for machinery or currency. Just months later, perhaps the greatest famine in recorded history began, in which tens of millions would die because, in fact, there was no such surplus. Quite the opposite: The misguided agricultural policies of the Great Leap Forward had caused a collapse in food production. Yet instead of reporting the massive failures, the apparatchiks in various provinces had engaged in competitive exaggeration, reporting ever-increasing surpluses both because they were afraid of reporting bad news and because they wanted to please their superiors.

    Mao didn’t know famine was at hand, because he had set up a system that ensured he would hear lies.

      1. “Those who don’t know history are destined to repeat it.” – Edmond Burke

        Yet people somehow think it’ll be different this time.

  20. Fairfax, VA Housing Prices Crater 10% YOY As Northern Virginia/Washington DC Emerges As Ground Zero For Mortgage Fraud Epidemic

    https://www.zillow.com/fairfax-va-22031/home-values/

    *Select price from dropdown menu on first chart

    A distinguished economist quipped, “Why buy a house when you can rent one for half the monthly cost. Buy it later after prices crater for 70% less.”

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