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The People Who Put Up The Money At Times Just Want Out

A report from the Real Estate Journal. “When the housing bubble burst in 2007/2008, it created an environment in which residents were more inclined to rent rather than own, leading to the multifamily sector’s boon during this cycle. But many worry that we are nearing the end of this expansion. Though that has been a concern for a couple of years now, a downturn or a plateau is imminent. The question is, how will multifamily investors fare during this inevitable turn of events? ‘We’re already feeling the effects of a slowdown,’ said Lee Kiser, managing broker of Kiser Group. Kiser points to a dynamic unique to Chicago, the changeover in the Cook County assessor’s office. The prospect of higher assessments may leave a lot of investors unwilling to gamble until they see how the situation will actually play out.”

“‘I think the market was already slowing somewhat. But with the assessor’s office as a factor on top of that, there isn’t as much trading right now,’ said Kiser. ‘In general, it’s just not a good time to be aggressive on price.'”

From Press Connects in New York. “For the third time in 12 years, residents in the Vestal hills are bracing for a fight on a proposed multi-unit apartment complex in their rural neighborhood. Landmark Properties, which characterizes itself as a ‘top contractor of student housing,’ submitted updated plans for a residential housing project on a 43-acre land parcel. While a 2017 Broome County Industrial Agency housing study said there is demand for ‘market rate’ housing for professionals, authors noted the off-campus student market has been met.”

“‘Over-supply and high rental rates, as compared to on-campus rates, are resulting in a volatile market,’ the study said. ‘An indication of the over-supply was the open competition and aggressive promotions offered by several properties between May-August 2017 in anticipation of the fall semester.'”

The George-Anne in Georgia. “Two years since its approval, the project to transform the old University Plaza into a state-of-the-art apartment complex has made no further developments. Unfortunately, University Place faces more difficulties than a money shortage. Even if the complex could be completed, some are worried the property could do more damage than help. With a new apartment comes new housing opportunities for students in a market that is already oversaturated. With numerous apartment complexes across the city, many are worried the new complex will only dig the hole deeper.”

From 48 Hills in California. “For years, as community leaders fought for affordable housing instead of luxury condos as 16thand Mission, the developer who owned the site said that was just impossible. At meeting after meeting, representatives of Maximus Real Estate Partners said neither the city nor any nonprofit could get a chance to build housing at the edge of the BART plaza; the site, they said, ‘is not for sale.’ Well, according to the Business Times today, the site is for sale.”

“Laura Waxman at The BizTimes reports that the investors in the project ‘forced the hand” of Maximus because of the intense community opposition to the Monster in the Mission. In other words, if the city isn’t going to allow several hundred high-end condos on the site, the investors could demand that Maximus unload it at the price the developer paid or less. Real-estate deals are driven these days by speculative capital, and the people who put up the money at times just want out.”

The Wall Street Journal. “San Francisco will put to vote next Tuesday a punitive new approach to ending the blight of empty storefronts. On the ballot is a tax on property owners or leaseholders whose storefronts stay vacant for six months or more. If two-thirds of voters approve the measure, San Francisco would become one of the first big U.S. cities to tax landlords for store vacancies when it goes into effect next year. Washington, D.C., imposed a similar tax in 2011, though it was on residential and commercial property vacancies, not just retail.”

“The issue of urban storefronts lingering vacant for many months or even years has plagued downtowns and residential neighborhoods from New York City and Boston to Berkeley, Calif., while city officials have struggled to find workable solutions. Even getting the tax on the ballot may be already having the desired effect, said Daniel Macchiarini, president of the North Beach Business Association. At least 18 new North Beach tenants have signed leases since the tax was proposed early last year, he said. Of the neighborhood’s 30 remaining vacancies, landlords at 20 of them are now marketing the space, he said.”

“‘Suddenly, for-rent signs started going up on all these buildings,’ said Mr. Macchiarini.”

From Houston Public Media in Texas. “Houston commercial spaces are going through growing pains as oil and gas prices slump. And that comes just as landlords and big developers have overbuilt rental spaces. Energy companies account for 30 percent of office space, so as the market tightens the real estate market feels the pinch.”

The South Florida Business Journal. “Apeiron Miami, a condominium project that was slated for the Jockey Club near North Miami, is the target of an $8.6 million foreclosure lawsuit. The litigation from the lender came a month after the developer filed a lawsuit against the mortgage holder, alleging a ‘loan to own’ scheme. The project, at 11119 and 11121 Biscayne Blvd., plus 1580 N.E. 111th St., is unable to move forward amid a host of lawsuits, including a case that has placed the developer into receivership.”

“There are also four pending lawsuits against Apeiron Miami LLC from vendors that claim they weren’t paid in recent months. If the land is seized in foreclosure, those vendors wouldn’t be able to go after the property to collect.”

The Miami Herald. “For two years federal investigators in Miami have patiently waited for reams of Swiss bank records to be turned over so they could bring a monumental money-laundering case against a wealthy circle of Venezuelan businessmen and ex-government officials. Finally, those secret bank records have arrived, due to a major decision to release them by Switzerland’s highest court.”

“With that critical evidence in hand, U.S. prosecutors can now move forward and decide on filing a long-planned indictment charging four members of Venezuela’s young business elite — known as ‘boliburgueses’ — and two former high-ranking officials in the government’s oil sector, along with a Swiss banker at the center of the alleged international money-laundering racket.”

“The latest U.S. investigation, led by Homeland Security Investigations, has zeroed in on a half-dozen ‘targets’ suspected of transferring embezzled Venezuelan government funds into bank accounts, real estate and other assets in Miami and New York, according to U.S. authorities.”

This Post Has 122 Comments
  1. Toll Brothers Misses on Earnings, Revenue for Fiscal Q1
    Company says closings slipped into Q2.

    ‘In FY 2020, first quarter-end backlog was $5.45 billion and 6,461 units, compared to FY 2019’s first quarter-end backlog of $5.37 billion and 5,954 units. The average price of homes in backlog was $843,500, compared to $901,400 at FY 2019’s first-quarter end.’

    https://www.builderonline.com/money/profits/toll-brothers-misses-on-earnings-revenue-for-fiscal-q1_o

  2. ‘The Department of Housing and Urban Development asked mortgage servicers and other stakeholders to respond quickly to a proposed set of foreclosure-sale policy improvements so it can finalize them soon.’

    “We’d like the feedback in two weeks,” Dror Oppenheimer, senior adviser to the assistant secretary for housing-federal housing commissioner at HUD, told attendees at the Mortgage Bankers Association’s national servicing conference. Comments on the policy draft will be accepted through March 9.’

    ‘The industry has long pressed for improvements to the “claims without conveyance of title” process that servicers of Federal Housing Administration-insured loans often use to sell distressed properties, and the FHA now aims to deliver it in line with modernization efforts in the government’s housing reform proposal.’

    ‘Among other things, the proposal aims to address a concern related to appraisal policies used to set pricing parameters used in foreclosure sales of properties.’

    ‘Currently, a preforeclosure appraisal based only on the exterior of an occupied home can be used in calculations that determine when a foreclosure sale bid is high enough to sell to a buyer other than the servicer, but that appraisal can’t be updated if the property is vacated later.’

    ‘Under the proposed changes, if a home becomes vacant prior to a sale, servicers would be able to get a second appraisal based on both an exterior and interior evaluation of the property, and use that in conjunction with calculations related to setting the bar for acceptable sale prices.’

    https://www.nationalmortgagenews.com/news/fha-seeks-fast-action-on-foreclosure-sale-proposal

    1. From Yesterday:

      “Experts predict that increases in foreclosure and REO inflow will come from government-insured loans, according to the Auction.com 2020 Default Servicing Industry Insights. The majority of servicers Auction.com surveyed expect foreclosure and REO inflow to increase in five of seven U.S. regions. According to the report, 89% said they expect government-insured foreclosure and REO inflow to increase in 2020, the highest among four product types provided as options in the survey.”

      “The majority of survey respondents said they expect foreclosure and REO inflow to increase in 2020 in five of seven U.S. regions provided as options in the survey. ‘Most in the default servicing industry expect government-insured loans to be the primary source of increased foreclosure inflow in 2020, even in the absence of a widespread recession or housing downturn,’ said Jesse Roth, SVP of Strategic Partnerships and Business Development with Auction.com. ‘That’s a rational conclusion given the rising risk profile of FHA-backed loans originated in the last five years.’

      http://housingbubble.blog/?p=2963

  3. Virus fears? Sell-off has more to do with high valuations, overdue market correction

    ‘Investors should be worried about the economic impact of the coronavirus. But they should be equally concerned about the psychological impact of the outbreak.’

    ‘For at least some people, the virus appears to be crystallizing a wider set of anxieties around stock prices. If you are convinced the market is due for a correction because of excessively high valuations, or think the global economy rests on an artificially engineered low interest rate bubble, the outbreak offers a ready-made focus for your anxieties. The danger is that these fears will become a self-fulfilling prophecy.’

    https://www.theglobeandmail.com/investing/markets/inside-the-market/article-virus-fears-market-sell-off-has-more-to-do-with-political-uncertainty/

    1. ” …become a $elf-fulfilling prophecy”

      Ye$, eye’m welcoming my own such 🔮:

      HB.B 1+1, again!

      “re$tin’ & awaitin’ the colo$$al capitulation’$ of over.priced $helter.$hack$ to compliment the colo$$al panic$ of over.priced Equitie$ …”

      Knot anxiou$, just a curiou$ pilgrim $pectator wandering amongst the ma$$ive parade of “True.Believer’$” … Oh, 👀 here comes clown$ on crazy bicycles & a marching band!🎶🎺

      Music is the space between the notes: Debussy

    2. I guess they’re not willing to acknowledge that corporate profits per share are unchanged since 2014, yet markets are up more than 50%.

    3. There’s always something to blame it on, isn’t there? It was the weather.. It was the elections… It was the coronavirus..

          1. Cheetos with chopsticks. Give it a try. You end up eating one at at time instead of handfuls. Great for watching an hour long tv show. Or surfing the web.

    4. Speaking of the virus, anybody else notice that China is now reporting almost NO new cases? This seems fishy.

      1. NO new cases?

        The problem with being deeply in debt is that you cannot just stop and take care of yourself. Get back to work.

  4. Good thing the Brazilians party ends today!

    Rio Carnival:
    The Carnival in Rio de Janeiro (Portuguese: Carnaval do Rio de Janeiro) is a festival held every year before Lent and considered the biggest carnival in the world with two million people per day on the streets.

    HEALTH AND SCIENCE:
    Coronavirus live updates: Brazil confirms first case in Latin America, Italy cases triple over two days

    CNBC |PUBLISHED WED, FEB 26 2020 | UPDATED 19 MIN AGO
    By Berkeley Lovelace Jr. | William Feuer | Dawn Kopecki

    The Brazilian government confirmed the first case of a fast-spreading new coronavirus in Latin America, officials from the Brazil Health Ministry said, after a Sao Paulo hospital flagged the possible infection of a 61-year-old who had visited Italy. The diagnosis comes during Brazil’s carnival holiday, a peak time for domestic travel when millions of revelers throng to major cities for raucous street celebrations.

    Brazil is tracking 20 suspected cases of the virus in the country, health officials told reporters at a news briefing. —Reuters

    France reports second death from coronavirus, Greece confirms first case
    Europe reported new coronavirus cases with France seeing its second death and Italy reporting its 12th death. Greece confirmed its first coronavirus case, a 38-year-old Greek woman who had traveled from an area of northern Italy, according to Sotiris Tsiodras, a representative of the Ministry of Health, Reuters reported. Meanwhile, Italy has now reported that four children in the country have also contracted the flu-like illness.

    CNBC’s Kevin Breuninger Evelyn Cheng, Christine Wang, Eustance Huang, Holly Ellyatt, Weizhen Tan and Reuters contributed to this report.

    1. Well now I guess we get to test what warm weather and sunlight does to this virus. With any luck, perhaps maybe the transmission will be reduced to close contact only, instead of surface transmission. And who knows what this virus does in sewer systems. Let’s just hope it’s not mutating.

      1. Let’s just hope it’s not mutating. Be advised not all mutations are for the worse. From the virus’s point of view, becoming less lethal would prolong its activity in its sphere.

        1. In the meantime, there’s a lot of names in the phone book.

          If the virus is normally living in bats, for example, it has no self interest in keeping humans around.

  5. “…the project to transform the old University Plaza into a state-of-the-art apartment complex..”

    “state of the art” – New REIConplex code word for “luxury student housing”

    “…With a new apartment comes new housing opportunities for students in a market that is already over-saturated….”

    Of course, the REIConplex will scream “We need more luxury student housing. There’s a shortage out there…”

    1. ‘The Better Housing Foundation jumped into the Chicago region’s housing market claiming it wanted to do good, but only a few years later it is under federal investigation. The Securities and Exchange Commission launched a probe into the nonprofit after it defaulted on $170M in bonds issued by the Illinois Finance Authority, Bloomberg reports. The bond proceeds helped BHF buy about 1,900 affordable apartments scattered across Chicago’s South Side and several suburbs starting in 2016, including the 11-story 7250 South South Shore Drive and the 30-unit 6752 South Michigan Ave. Its leaders secured tax benefits for their buildings after telling city and state officials they would keep units affordable and provide residents with social services.’

      https://www.bisnow.com/chicago/news/multifamily/nonprofit-with-a-mission-instead-melts-down-and-finds-itself-under-investigation-103134

    2. Gez Z and their Gen X parents are not going to fall for this crap like the Millenials did. They know that living expenses are borrowed money and lux apartments are the first thing to get cut.

      From the Broome County article: county residents are suspicious about the need for rental housing for professionals. 4-5 bedroom homes, multi-room floor plans, and 700 planned parking spaces points to the developer trying to sneak in student housing in disguise.

      As a fallback plan: nobody loves multi-bedroom housing and 700 parking spaces more than illegal immigrants.

      1. LOL@ I would never live somewhere without my own kitchen and full-size fridge. Cooking for yourself and not eating out saves alot of money. Alot of money. I like money.

        1. The best things in life are free
          But you can keep them for the birds and bees
          Now give me money
          (That’s what I want)

    1. The New York Times does not have a sterling track record of predicting San Francisco and Silicon Valley business patterns, as evidenced just ten months ago when their prediction that “San Francisco will drown in millionaires” was not borne out by said drowning in said millionaires (at least, not any more than it ever has been in the last decade or so.) But their latest analysis of our high-flying tech economy has hard numbers, and sobering ones at that for any company relying on the disruptive funding/corporate welfare that we call venture capital. Simply said, that shit is drying up fast, and Silicon Valley is experiencing startup layoffs at volumes not seen since the Kozmo.com bomb days.

      Tears in my eyes.

    2. Silly-con Valley start-ups are just trying to grab some of those Yellen bucks. Innovation is the last thing on their minds.

        1. Remember when Apple said people didn’t want bigger phones, then turned around and biggered every phone they had?

          1. It’s always interesting to watch when a company figures out that their existing customers are different than their potential customers.

          2. It would be annoying to have to talk on a phone that large, but I guess the average iPhone user doesn’t use it to make actual phone calls very often.

          3. biggered every phone It was so bad I had to buy all new shirts, with the goal of getting the biggest pockets possible.

        2. “Innovation is wider screen and extra camera.”

          A screen not so wide and a little bit taller; easier to hold, dual-app view or rotate 90-deg to view full width web pages. And how about a notification rgb-led on the back next to the camera flash led?

          1. Microsoft Surface phone (running Android) with two screens will be optimized to run different apps on the different screens (instead of just treating the dual screens as one large screen).

          2. I just upgraded to a barely used Note10+ w/512Gb from eBay a couple of weeks ago. It’s wide enough to stretch the tendons in my hand and wrist, and I have big hands; never ached before. It has awesome battery life!

          3. Hands down, Samsung has the best hardware, and the “Unlocked by Samsung” version comes without AT&T or Verizon bloatware. I bought Nova Prime launcher and set it up very similar to the Pixel launcher, e.g., swipe up for apps, swipe down for settings. I use only paid apps, no ads.

      1. If these dumb bunnies were really interested in innovating, they would innovate full-time w@h so people could work from a cabin in the woods in BF nowhere, instead of shoveling poo in the Tenderloin.

        1. The virus might be the boot to the head for workers to demand flexibility in job location. We already “do school” online with regular physical check ins every week or two. Work is too often no different from high school. Somebody tells you what to do, and you do it as slowly and poorly as you can get away with.

    1. Some really strange action. Straight up, straight down, straight up. I think the FED is carpet bombing the market with liquidity.

      1. Progre$$: On $ept 19th 2019 it was @ 26,743.15

        Knot much further to $lide

        Feb 25th 2020 … DAY low :

        26,890.97

        (- 1 year + 6 month$ = back.to.the.pa$t … $ad)

  6. Find $olution$!, Knot fault$! … Coming to America & American$ $oon!

    eCONomic$:
    Every Adult in Hong Kong to Get Ca$h Handout of $1,284

    Bloomberg |By Eric Lam and Enda Curran |February 25, 2020

    Budget Problem$:
    Hong Kong has first budget deficit since 2004, sees it increasing to record in 2021

    Financial Secretary Paul Chan projects record budget deficit
    Annual budget includes HK$120 billion relief

    Hong Kong’s government unveiled a budget packed with giveaways including a one-time cash handout that economists said isn’t likely to spur growth, as the city struggles to stabilize an economy battered by political unrest and the coronavirus.

    The main feature of the annual budget announced Wednesday is a payment of HK$10,000 ($1,284) to each permanent resident of the city 18 or older, aiding a population “overwhelmed by a heavy atmosphere,” Financial Secretary Paul Chan said. Chan estimated the deficit will reach a record HK$139.1 billion in the coming fiscal year.

    Ahead of the budget, accounting firm KPMG LLP pushed for handout$ yet in the form of electronic voucher$ to encourage direct $pending, rather than saving or moving the cash abroad.

          1. Yeah, I’m sure there’s no way the guy who “helped” him set up the account might have actually ended up with them…

    1. Bad boy Trump!!!!!

      “Toll has been under pressure from President Donald Trump’s trade war, which has kept affluent Chinese from buying homes in California.”

      These houses should be for speculation by corrupted Chinese officials.

  7. On the ballot is a tax on property owners or leaseholders whose storefronts stay vacant for six months or more. If two-thirds of voters approve the measure, San Francisco would become one of the first big U.S. cities to tax landlords for store vacancies when it goes into effect next year.

    It’s about time greedy landlords started getting penalized for making rents unaffordable. Now let’s take things a step further and start taxing vacant investor-owned properties and bank-owned foreclosures. That’ll really get this party started.

    1. whose storefronts stay vacant for six months or more

      Doesn’t seem difficult to find a workaround to that.

      1. Heh, all you need is some outfit to put in a popup St. Patrick’s day store in Feb/March and a Halloween store in Sept/Oct and bob’s your uncle. Or just have a friend pop-up a massage/tanning place for one month every six months. One massage salon could cover six storefronts (for a fee of course, happy endings extra).

  8. “Houston commercial spaces are going through growing pains as oil and gas prices slump.

    What do you call an oilman in Houston? Waiter.

    1. Waiter!
      I worked in Houston back in the early 80’s and the mid80’s the Joke was
      Where do most geologists in Houston work?
      Answer; Brown’s shoes!

      Not sure Brown’s is the correct Shoe store name But that was essentially the joke.

    1. I have absolutely no hard evidence or proof, but my suspicion is that most AirBnb listings are money losers. For kicks, every once in a while I’ll pull up all the listings in a given area, then start clicking on individuals ones and typing in dates. I’ve never encountered one that wasn’t available, which tells me the vacancies are through the roof. A bunch of fawkin’ greedheads waiting with baited breath for some sucker to come along and pay their monthly note for a 5 day stay.

  9. Auto loan delinquencies are hitting record highs, but desperate auto dealerships are still financing anyone who can fog a mirror.

    https://www.marketwatch.com/story/outstanding-auto-loan-balances-just-hit-a-new-record-and-delinquencies-are-on-the-rise-should-you-be-concerned-2020-02-21

    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.

    In the fourth quarter of 2019, the outstanding balance on automobile loans and leases hit a record high of $1.33 trillion, according to data from the New York Federal Reserve, up nearly 5% from the year-earlier period.

    Some $66 billion, or 5% of the outstanding loans, are over 90 days delinquent, up from $57 billion for the same period last year and $35 billion a decade ago.

    1. 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.

      How high must the losses go until they stop lending?

  10. phew! I sold my condo on the west coast of FL! Closing on April 9
    Than I will be officially out of Florida and good riddance!

    1. “…and good riddance!”

      No more confederate flags, toothless poachers and mulatto porch climbing thieves?

      1. “mulatto porch climbing thieves?”

        Several people I work with have the Ring app and front door camera and get periodic notifications on their phones that they have to check immediately.

        Living in a secured building = no randoms coming to the door, packages get delivered to the office or require signature, and you can leave town for days at a time with no concern of your place appearing vacant.

        Denver has so many tweakers and junkies roaming the streets that buying a house here just isn’t worth it.

        1. I think we’re going to see a lot more use of Amazon and/or UPS lockers. Or “pickup-in-store” type stuff. Or you could play games with the post office, like requiring a signature. Or, if you know something small is coming, you could arrange for the p-o to hold your mail, and then pick up everything.

        2. Denver Edmonton what’s the difference?

          The arresting officers sound like Bob and Doug McKenzie.

          Put your hands up eh.

          Not your average porch pirate video: Thief caught by police within seconds

          Alex Antoneshyn
          Published Tuesday, February 25, 2020 2:42PM MST

          But before she sets foot on the street, three unmarked police vehicles pull up behind her.

          “Police. Put your hands up. Right now,” ununiformed officers identify themselves on the video. “Get down on the ground.”

          https://edmonton.ctvnews.ca/not-your-average-porch-pirate-video-thief-caught-by-police-within-seconds-1.4827341

          1. Almost as much fun for the cops as decoy cars with hidden cameras & remote controls. When the cars are hotwired & driven off, suddenly the motor dies, doors are locked and windows rolled up. Before the perps can break the windows, cops are on scene.

  11. Pakistan is a bad place for this to spread.

    The Financial Times
    Markets Briefing
    Stocks whipsaw amid mounting coronavirus concerns
    Wall Street extends losses as outbreak spreads to Norway and Pakistan
    updated 53 minutes ago

    1. “Pakistan is a bad place for this to spread.”

      Hardly any term or whole life policies written there, so MetLife and New York Life shares won’t suffer.

    2. Woe$er & Woe$er …

      MARKET$
      Dow set to drop around 450 point$ following report of first US coronaviru$ case of unknown origin

      CNBC |PUBLISHED WED, FEB 26 2020 |By Fred Imbert, Markets Reporter

      Futures slipped after the CDC confirmed the first U.S. coronavirus case of unknown origin in Northern California, indicating possible “community spread” of the disease. The CDC doesn’t know exactly how the patient, a California resident, contracted the virus.
      Worries over how the coronavirus will impact corporate profits and global economic growth have roiled the U.S. stock market this week as the number of confirmed cases increases. South Korea has confirmed a total of more than 1,200 cases. About 400 people have contracted the virus in Italy.

      Microsoft warned it will not meet its revenue guidance for a key segment. In a statement its supply chain is “returning to normal operations at a slower pace than anticipated,” which led the tech giant to cut its forecast for its personal computing division. Personal computing accounted for 36% of Microsoft’s overall revenue during the previous quarter.
      . Through Wednesday’s close, the Dow has lost more than 2,000 points this week. The 30-stock average is also on pace for its worst percentage-point weekly performance since 2008, down 7% over that time.

      The Dow has also fallen more than 8% from its record high set earlier this month.

      “As this week’s selling has progressed, we have seen some evidence of increased caution on the part of investors,” said Willie Delwiche, investment strategist at Baird. “Investors are shifting away from excessive optimism but there is still little evidence of fear overwhelming complacency. Bottoms are typically processes punctuated by climactic events and seeing breadth indicators stabilize would be an encouraging sign that such a process is underway.”

      Bond prices, in turn, have surged this week.

      The benchmark 10-year Treasury yield fell to 1.3% on Wednesday, a record low. The 30-year bond rate is also trading at an all-time low. Yields move inversely to prices.

      “We’ve hit a pocket of fear,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “This is a big deal … If this flows into the U.S., we could be in trouble because, let’s face it, the U.S. consumer is what’s holding this thing together.”

    1. That’s a great place to buy a house if you want to get your car broken into and your house burglarized.

    1. The Financial Times
      Opinion Markets Insight
      Markets are too complacent about coronavirus despite sell-off
      Assumption after assumption about the impact of the outbreak has been proven wrong
      Nouriel Roubini
      The spread of the coronavirus beyond China and the disruption to supply chains could severely damage the economy
      © FT montage; AP; Getty Images
      Nouriel Roubini yesterday

      Investors are deluding themselves about how severe the coronavirus outbreak will be. Despite this week’s big sell-off in equity markets, the worst is yet to come.

      Until this week, the market reaction to the virus had been mild — after a dip in late January, US and global equities rallied to new highs. This complacency was based on a number of flawed assumptions.

      First, that the epidemic would be limited mostly to China, rather than becoming a global pandemic. Second, that it would be contained and peak before the end of the first quarter, thus limiting the economic damage to China and the global economy. Third, that the growth path would be V-shaped, with a strong rebound in the second quarter and beyond. Fourth, that policymakers — both monetary and fiscal — would take strong early actions to support economies and markets, if things were to weaken significantly.

      It is becoming clear that this is a global pandemic rather than a China-focused epidemic. And we do not know yet how many other countries in Asia and other parts of the world will experience a severe outbreak — most likely many more.

    2. The Financial Times
      Markets Briefing Equities
      Asian stocks fall again as US confirms coronavirus transmission
      Shares follow Wall Street lower on concerns of community spread
      Japanese stocks have plunged on the spread of the coronavirus
      © AFP
      Hudson Lockett in Hong Kong 3 hours ago

      Asian stocks and Wall Street futures fell after US health authorities confirmed the first likely case of community transmission of the deadly coronavirus on American soil, prompting fresh fears over the epidemic’s spread.

      In Thursday trading, Japan’s benchmark Topix dropped 2.1 per cent, extending the index’s losing streak to four days.

    3. The Financial Times
      Coronavirus
      Expat bankers head for the exits to flee coronavirus
      Frustrations grow as business in mainland China and Hong Kong grinds to a halt
      A man wears protective mask as he walks at a tourist spot, following the outbreak of the new coronavirus, at Tsim Sha Tsui district in Hong Kong, China February 24, 2020.
      REUTERS/Tyrone Siu
      Businesspeople’s movements have been greatly restricted © Reuters
      Don Weinland in Beijing and Primrose Riordan in Hong Kong 2 hours ago

      When Beijing-based banker Peter Ling-Vannerus landed in Hong Kong this month, he was given a stark choice: spend 14 days in quarantine or hop straight back on a flight and leave the city.

      He opted to spend time in Thailand rather than be confined in Hong Kong. Mr Ling-Vannerus’ experience is typical of the thousands of international bankers, investors and lawyers who live in what is normally one of the world’s busiest regions for dealmaking and business travel.

      Since the deadly coronavirus erupted in January, scores of bankers and their families have fled mainland China and Hong Kong to work in offices elsewhere in Asia. In the process, their often luxurious expatriate lives have been disrupted, with international schools shut and domestic helpers unable to follow them to third countries.

    4. More new coronavirus cases outside China than inside; WHO chief calls spread ‘deeply concerning’
      By Associated Press
      Published: Feb 26, 2020 11:03 p.m. ET
      Signs that the virus is spreading further in South Korea
      Yonhap via Reuters
      A driver gets a coronavirus test at a drive-through clinic at a hospital in Daegu, South Korea, on Thursday.

      BEIJING — South Korea and China each reported hundreds more virus cases Thursday as the new illness persists in the worst-hit areas and spreads beyond borders.

      South Korea reported 334 more cases, bringing its total to 1,595. Most of the new cases were in the country’s fourth-biggest city, Daegu, where the outbreak has hit hardest and the national government has mobilized public health tools to assist the region’s overwhelmed medical system.

      But there are signs the virus is spreading further in South Korea with 55 cases reported so far in the capital, Seoul, and 58 in the second-largest city, Busan. The country also confirmed its 13th death Thursday, with most still in and near Daegu.

      China reported 433 new cases along with 29 additional deaths. Thursday’s updates bring mainland China’s totals to 78,497 cases, and 2,744 deaths.

      Of the new cases, 383 were in the epicenter of the city of Wuhan, where the virus first emerged in December. Wuhan also accounted for 19 of the new deaths.

      Global worries about the COVID-19 illness were multiplying, as the epidemic expanded geographically and for the first time caused more new cases outside China than inside the country. With Brazil on Wednesday confirming Latin America’s first case, the virus has reached every continent but Antarctica.

    5. CDC issues beard and mustache guide for coronavirus pandemic
      By Brett Arends
      Published: Feb 26, 2020 9:14 p.m. ET
      Some facial-hair styles will interfere with your face mask
      CDC
      The “good beard guide” for the pandemic from the CDC and the National Institute for Occupational Safety and Health.

      As face masks fly off the shelves amid rising fears over the COVID-19 illness, the federal Centers for Disease Control and Prevention and the National Institute for Occupation Safety and Health have just issued a helpful guide about which types of beards and mustaches will make those masks less effective, and which will be OK.

      Bottom line: Most beards, and a few mustaches, prevent the mask from making a complete seal against the skin.

      Full beards are out, of course, along with any kinds of stubble.

      So too are those “mutton chop” whiskers that were all the rage in the Victorian era, along with the so-called “Imperial” mini-beard — a kind of “soul patch” in the days of the Russian czars — and the Three Musketeers-style “French Fork” beard.

      The long, droopy “Fu Manchu” mustache is a no-no as well.

      1. I had to look up all those beard styles. Quite the education spectrum here on HBB!!

        The school psychologist who wanted to designate my son with an intellectual disability had a white fu manchu mustache, the likes of which I’d never seen. My son was probably thinking “who is strange man and why should I answer his questions.”

          1. They’re the ones that need help?

            That’s definitely been the case with them women I’ve dated who were pursuing that path!

          2. Women I’ve married. You are lucky!

            Absolutely. Esp. when you consider the one that had $100k+ of student loan debt! So glad I dodged that bullet!

  12. I’m starting to grasp why Uncle Warren said to stand clear of this dip.

    A stock-market bounce will give way to ‘drop’ and retest of the low, says Wall Street analyst
    By William Watts
    Published: Feb 26, 2020 4:53 p.m. ET
    Same pattern prevailed in August 2015 and February 2018: Canaccord’s Dwyer
    AFP/Getty Images

    Investors looking to get back into the stock market once the selling stampede finally subsides might not want to chase the initial bounce, said a prominent Wall Street analyst.

    The Dow Jones Industrial Average (DJIA, -0.46%) turned lower Wednesday after jumping more than 460 points in early trade, while the S&P 500 (SPX, -0.38%) also turned south. Both gauges dropped more than 6% over the course of Monday and Tuesday — the S&P 500’s biggest two-day loss since 2015 — as worries rose over the spread of COVID-19 outside of China.

    1. By now everyone should know a few of the things that matter. The top two are Israel and the Stock Market, in that order.

  13. Stock market tanking will soon be followed by a significant collapse in the housing market. Much of America is 20% or more worse off than one week ago. Those over priced home offers are not looking good.

  14. Is it the coronavirus or Bernie’s ascent that’s given Mr Market a bad case of the flu?

    ‘Bond King’ says we’re experiencing the ‘dark side of momentum investing’ — and it’s not because of the coronavirus
    By Shawn Langlois
    Published: Feb 26, 2020 1:38 p.m. ET
    Getty Images
    Jeffrey Gundlach

    ‘If this stock market reversal is due exclusively to the virus, then why is United Healthcare down far more than SPX? Why is healthcare as a sector broadly not outperforming? Answer to these questions: the market is digesting a better than 50% chance of Bernie getting the nomination.’

    That’s DoubleLine Capital Jeffrey Gundlach explaining in an email to CNBC why he believes the stock market has taken such a bruising this week.

    The S&P 500 dropped more than 6% over the course of Monday and Tuesday before mounting a slight comeback in Wednesday’s trading session.

    “Maybe this is the dark side of momentum investing,” Gundlach wrote. “The market goes down in a knee jerk way on the Bernie rise, but the market going down makes Bernie’s polls go up on his rejection of a market based economy. Which makes the market go down another leg. Rinse and repeat.”

    This isn’t the first time that Gundlach has warned of what a Sanders presidency could ultimately do to the stock market.

    “If people get more worried about Bernie Sanders and they start to price in his spending programs, then you could really start to see trouble in both bonds and stocks, which could really be on a rough ride,” he said earlier this year.

  15. What are the poor central bankers supposed to do now? Reduce interest rates further into negative territory off a historic low base that they never unwound after 2009? Or just jawbone vigilance and hope for the best?

    Stock market slammed by fears coronavirus will deliver a ‘supply shock’ that central bankers can’t fix
    By William Watts
    Published: Feb 27, 2020 6:30 a.m. ET
    It’s ‘much more complicated, if at all possible,’ to offset supply shocks: economist
    AFP/Getty Images
    Employees wearing protective face masks work at a Shanghai factory where medical equipment is assembled.

    There’s something different about the threat COVID-19 poses to the global economy. And that’s what has investors worried.

    Big, negative supply shocks are rare, Nielsen noted, with the oil shocks of the early and late 1970s offering perhaps the most well-known examples. Other examples of supply shocks include storms, tsunamis, earthquakes, wars, and strikes. The problem is that there’s little that looser monetary policy or additional fiscal stimulus can do to offset the impact because those stimulus measures work by boosting demand.

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