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There Was A Lot Of Easy Financing And Everything Worked Towards An Easy Purchase Even If You Had No Money

A report from CTV News in Canada. “Still out of reach for most Canadians, high-end houses and apartments in both Western Canadian cities saw drops in their median prices over a recent 12-month period, according to Royal LePage. ‘The last couple years have been trending in a pretty dramatic reduction of value across the board,’ said Jason Soprovich, a Royal LePage Sussex realtor in Vancouver. Soprovich has been seeing more luxury homes sell at what he called ‘anomaly drops,’ sale prices as much as 40 per cent under the listing price.”

“Sellers who can’t afford to wait could be taking major losses. ‘When they have to suck it up, they suck it up big,’ said realtor John Hripko. Recently, he knows of a seller who bought their home for $3.7 million and sold it for $2.9 million.”

From Teesside Live in the UK. “Residents of a luxury Nunthorpe development say a housebuilder’s plan for extra homes is ‘madness’ and a traffic ‘accident waiting to happen.’ ‘Furious’ residents are worried their homes will be de-valued by the new additions and they would ‘not have bought’ if they’d known about the changes. One resident, who preferred not to be named, claims the extra houses will cause ‘massive’ traffic problems. ‘It’s quite a big-build estate,’ he said. ‘It’s the last little bits on the estate and they want to cram these houses in. ‘We have paid £400,000 for a new house. They’re still putting things through the door saying exclusive four to five bedroom homes, knowing fine well they’ve applied for planning permission.'”

The South China Morning Post. “Hong Kong’s commercial banks are cutting their valuations of mortgaged homes as they bow to the double whammy impact of a viral epidemic with months of anti-government protests, in a move that could drive even more borrowers into negative equity and provoke panic selling. ‘Some owners, who may not be as liquid as others, are becoming nervous, and are keen to offer deeper discounts to get rid of their property before it turns into a negative asset,’ said Derek Chan, head of research at Ricacorp Properties.”

From Bloomberg on Thailand. “Bangkok’s condominium market, once a favourite of Chinese investors, faces a bleak year as the Covid-19 outbreak keeps buyers away. ‘The demand from foreigners may disappear in the first half following the outbreak,’ said Sopon Pornchokchai, the consultancy’s president, adding that there are 100,000 vacant condominiums in and around Bangkok. ‘We will need to rely on local buyers, but that won’t be easy.'”

“Even before the virus spread from China, foreign interest was flagging as the outlook for an economy reliant on trade and tourism deteriorated amid currency strength in 2019 and the US-China trade war. Land & Houses does not plan to open any new condominium projects this year. Another developer, Singha Estate, is ‘very cautious’ about buying land for residential offerings because of concerns about an oversupply of property in certain locations, its head of investor relations Maysenee Ratnavijarn said.”

The Asia Times on Cambodia. “Has Cambodia’s property bubble finally burst and is a sudden exodus of Chinese nationals to blame? Cambodian house prices have fallen by as much as 33% in some areas since the government announced last August a ban on mainly Chinese-run online gambling operations. Chinese investments drove an almost ten-fold spike in rental, lease and sale prices between 2017 and 2019, buoyed by cash-rich Chinese who often paid well above then-prevailing market rates.”

“Because online gambling accounted for the lion’s share of profits in the city’s gaming sector – up to 80%, according to some estimates – the ban has since brought the city to a veritable standstill. Construction projects in the once-frenzied city have stalled, with many sites lying half-finished, while many roads remain ripped up from all the building. Land prices in Sihanoukville have fallen by as much as 30% since the ban was implemented, while rental prices have also slipped. Houses that were fetching $800 per month last year are now getting just $200, according to industry reports.”

“‘The construction sector in Sihanoukville is a bubble. It rose too quickly,’ Vongsey Vissoth, permanent secretary of state of the Ministry of Economy and Finance, told local media. ‘Therefore, when something happens like banning online gaming, it drops quickly.'”

The Edge Malaysia. “Rahim & Co International Sdn Bhd CEO of real estate agency Siva Shanker anticipates a rental price war. ‘You’re going to find thousands of these properties available for rent as more stock will come into the market now. [Many] will start off by asking for high rents that were promised by their investor clubs, but that won’t happen and they’ll have to drop the price further. The huge rental price war, which has been happening in the last year or so, will just escalate and become even more vicious in the next one to two years when more units are completed and get thrown into the market.'”

“Affordability and oversupply issues in the property market are predisposing many first-time homebuyers in the Klang Valley to rent, a shift from the current tendency to buy. Siva notes that many of these units were bought by speculators who were, to some extent, sold the idea by investor clubs or property gurus, based on speculation that once the properties were completed, the rent would far surpass mortgage repayments or the properties could fetch a gain of 20% to 40%.”

“‘There was a lot of easy financing and everything worked towards an easy purchase even if you had no money. A lot of people bought properties all over the place, which is why the market was booming in 2011 to 2014. Now the [buying] has stopped, but the building cannot stop, which is why we’ve got an overhang of 50,000 overhang units,’ he says.”

The Times of India. “A tycoon puts an 8,000 sq ft, sea-facing penthouse in a south Mumbai highrise on sale, expecting at least Rs 120 crore. With no takers two years later, he has reduced the price to Rs 50 crore. A developer said this is one of the major reasons for the oversupply in Mumbai. ‘It was good when prices were appreciating and flats were selling. Now, the chickens have come home to roost,’ said a developer.”

“‘In the past 15 years, extensive money poured into real estate through FDI and private equity,’ said Pankaj Kapoor of Liases Foras. ‘In order to improve their cash flow, builders are compelled to launch projects even in the current stagnant market just to recover the cost of land. They are not getting any additional money by building. There are no buyers for the land they bought at phenomenal rates,’ he added.”

The Herald Sun in Australia. “The novel coronavirus is beginning to infect Melbourne’s property market, with Toorak’s top end its first victim. Real estate experts have warned there will be short-term pain for apartment developments with exposure to offshore investors, as well as for landlords relying on foreign students to fill vacancies. There’s also a possibility of cheaper rents for the city’s most affordable apartments if international students are unable to leave quarantine zones overseas.”

“But the most pronounced effect so far has been in Toorak, which top-end buyer’s advocate David Morrell said was looking listless. ‘Coronavirus has smashed the top end,’ Mr Morrell said. ‘Nobody wants to put their house on the market if they (Chinese buyers) aren’t buying.'”

The Wall Street Journal on New York. “In its latest report on investment sales, the Real Estate Board of New York for the first time provided a breakout of data on rent-regulated buildings. It found that the number of transactions for such buildings fell by more than half since the law took effect in June. The value of sales for buildings with at least one rent-regulated apartment dropped by more than $4.1 billion in the second half of 2019 compared with the same period the year before, the report said.”

“It found that for larger regulated buildings, those with 11 or more apartments, the value of all sales fell by 78% in the second half of last year across the city compared with the same period in 2018. The number of transactions declined from 231 to 88. The total value of transactions in these larger rent-regulated buildings fell by 81% in Manhattan. In Queens, they fell an astonishing 96%, from $979 million in sales in 18 transactions in the second half of 2018 to $39 million in sales in seven transactions in the same period last year, the report said.”

“Behind the scenes, building owners tell of dramatic cuts in property prices, which are down about 30% to 50% from the peak a year or two ago, with few buyers stepping up to bid.”

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This Post Has 265 Comments

  1. ‘owners tell of dramatic cuts in property prices, which are down about 30% to 50% from the peak a year or two ago’

    Is that a lot?

    NYC peak was 2015-16. The crater overfloweth…

    1. ‘he knows of a seller who bought their home for $3.7 million and sold it for $2.9 million’

      ‘A tycoon puts an 8,000 sq ft, sea-facing penthouse in a south Mumbai highrise on sale, expecting at least Rs 120 crore. With no takers two years later, he has reduced the price to Rs 50 crore’

      ‘Land prices in Sihanoukville have fallen by as much as 30%’

      ‘could drive even more borrowers into negative equity and provoke panic selling. ‘Some owners, who may not be as liquid as others, are becoming nervous, and are keen to offer deeper discounts to get rid of their property before it turns into a negative asset’

      Wa happened to my fear of missing out?

      1. ‘Vinh Phuc, Vietnam’s worst hit locality by the novel coronavirus epidemic so far, feels the full brunt as people leave and businesses close down. On February 18 Lu received a call from a customer saying they wanted to cancel a wedding feast with hundreds of tables she was to have prepared, citing an “unexpected emergency.” Lu told them to call her whenever they want to book again, though she knew that day would not come anytime soon.’

        ‘Lu, who lives in Binh Xuyen District in Vinh Phuc Province, a hotspot of the ongoing Covid-19 epidemic with 11 of the nation’s 16 diagnosed cases, has become used to cancelations. That call was the second that week alone. She has not bothered to count how many times customers have canceled bookings since the epidemic broke out at the end of January.’

        https://e.vnexpress.net/news/news/province-at-center-of-coronavirus-epidemic-hit-hard-as-people-keep-away-4058668.html

        1. Virus Drives Office Vacancy in HK’s Central District to Highest Level Since 2014

          ‘The fresh evidence of a downturn comes after rents in the district that hosts the APAC headquarters of some of the world’s largest banks plunged more than six percent in the second half of 2019. The leasing slide prompted JLL to forecast at the end of last year that capital values and rents in Hong Kong’s traditional business district would fall by up to 20 percent this year – even before the COVID-19 scare.’

          https://www.mingtiandi.com/real-estate/china-real-estate-research-policy/office-vacancy-in-hong-kongs-central-reaches-5-year-high/

          Notice they’ll say, “oh the VIRUS’ (but BTW it was sinking like a turd in a well before the virus). Right Leslie Appleton-Young?

      2. ‘Some owners, who may not be as liquid as others, are becoming nervous, and are keen to offer deeper discounts to get rid of their property before it turns into a negative asset’

        Owners need to borrow more so they can make their payments.

        1. ‘keen to offer deeper discounts to get rid of their property before it turns into a negative asset’

          A remarkable sensitivity to what they can sell it for. Does it still have the same square footage, the same number of windows to look through?

    2. Imagine a 50% haircut on the single most expensive purchase of your life – in a year’s time. The monthly losses are staggering.

  2. ‘‘Furious’ residents are worried their homes will be de-valued by the new additions and they would ‘not have bought’ if they’d known about the changes. One resident, who preferred not to be named, claims the extra houses will cause ‘massive’ traffic problems. ‘It’s quite a big-build estate,’ he said. ‘It’s the last little bits on the estate and they want to cram these houses in. ‘We have paid £400,000 for a new house. They’re still putting things through the door saying exclusive four to five bedroom homes, knowing fine well they’ve applied for planning permission’

    Well, it was cheaper than renting. Stamp em’!

  4. “…said Jason Soprovich, a Royal LePage Sussex realtor in Vancouver. Soprovich has been seeing more luxury homes sell at what he called ‘anomaly drops,’ sale prices as much as 40 per cent under the listing price….”

    An “anomaly drop” ????

    Gotta add that one to my REIConplex Realtor excuses list:

    – holiday season
    – weather too cold (winter season)
    – weather too hot (summer season)
    – weather too nice (people go on picnic instead of looking for a house)
    – too rainy
    – Super Bowl weekend
    – Oscar weekend
    – Emmy/Grammy/Sammy/Tammy/whatever weekend
    – Government spending is sinking home sales
    – We are only in a soft spot.
    – The Killer Bees are moving Northward
    – Anomaly drop

    1. Anomaly drop

      We were being told that about the drops in NYC a couple of years ago. Then they got contagious.

  6. This really feels like the end of something.

    The Financial Times
    Coronavirus
    Stocks tumble in US and Europe as coronavirus fears grip markets
    Treasuries rally anew as investors dash towards havens

    Live
    More on this topic
    How dangerous is the coronavirus and how does it spread?

    Japan shuts all schools to combat coronavirus

    Expat bankers head for exits to flee coronavirus

    Capital markets
    Markets shake-out spurs bets on interest rate cuts
    Spread of coronavirus shakes stocks and boosts hopes for policy responses
    …

    2. What’s happening with Treasurys? It’s getting kind of crazy.

      10-year Treasury yield pushes below 1.30%, falling further into record territory
      By Sunny Oh
      Published: Feb 27, 2020 8:21 a.m. ET
      Treasury yields fall to new record lows as more new cases of coronavirus reported outside China than inside

      Treasury yields extended their drop into record territory on Thursday as jitters around COVID-19 spreading within the U.S., drew investors away from stocks to the benefit of bonds, with more new cases of the virus reported outside China than inside.

      What are Treasurys doing?

      The 10-year Treasury note yield (TMUBMUSD10Y, -5.66%) was down 2.1 basis points to 1.289%, setting an all-time low, while the 2-year note rate (TMUBMUSD02Y, -10.46%) slipped 4.2 basis points to 1.103%. The 30-year bond yield (TMUBMUSD30Y, -3.48%) edged 2.3 basis points lower to 1.775%, also a new record low. Bond prices move in the opposite direction of yields.
      …

  7. ‘Sellers who can’t afford to wait could be taking major losses. ‘When they have to suck it up, they suck it up big,’ said realtor John Hripko. Recently, he knows of a seller who bought their home for $3.7 million and sold it for $2.9 million.”’

    If prices are falling, then doesn’t trying to wait it out eventually result in even bigger losses than if you sell quickly?

    1. If you are drinking the Kool-Aid, then you think it’s just a temporary blip. An anomaly. And things will resume their upward trajectory very soon.

    2. Sort of like letting the pied-à-terre go at a loss when your arm-candy mistress moves in with your wealthiest client, and you have to ask your ex-wife if you can stay at her place that you bought until you can get back on your feet.

  9. Land prices in Sihanoukville have fallen by as much as 30% since the ban was implemented, while rental prices have also slipped. Houses that were fetching $800 per month last year are now getting just $200, according to industry reports.

    WA WAA WAAA

  10. Going on the record here: I shorted Zillow the other day. Never shorted anything before in my life prior to a couple weeks ago, but I felt very strongly Coronavirus would sow panic. I’m doing very small (as a portion of net worth) bets, for fun and hopefully some profit. My idea with Zillow is that they will get stuck with all the ibuyer houses when foot traffic falls off a cliff in March. At a best, they are gonna be stuck with excessive holding costs. At worst…

    1. Remember in 2008 when U.S. markets banned the short selling of financial stocks? I do.

      Pigmen gonna pig.

      2. Pigmen gonna pig.

        The same pigs who are feeding at the Fed’s discount window and “not QE” repo market, are shorting stock stocks and exacting delicious profits.

    2. Risky bet, but I hope it works out for you. This drop off in mortgage rates is going to cause one last blow off top before the panic sets in.

      1. To add, I think we are going to see one last absolutely insane spring. Seems to already be underway. I guess it depends on how fast the beer virus keeps spreading.

        1. Yeah, you’ve got a good point. And yes, the idea is that the fear of virus pushes down foot traffic more than the love of cheap money increases it. We shall see!

          1. I think that the mileage may vary. I’m hearing stories of people hitting CostCo to horde, but I’m not seeing it in my little burg.

            What I have seen is that N-95 masks are sold out everywhere. Of course, if the normal demand is minuscule, it wouldn’t take much to clear the shelves.

          2. “What I have seen is that N-95 masks are sold out everywhere.”

            I just saw about 20 hooks, each one full, at Walmart this morning at $4.95 for each blister pack.

          3. N-95 masks are sold out everywhere.

            N-95 masks are not such a great thing in my opinion. Filters out 95% sound good to you? If I’m doing wood or metal work I use a P100 cartridge mask. 99.97% efficient. These are still very available. They look more funny though.

          4. I think that the mileage may vary. I’m hearing stories of people hitting CostCo to horde, but I’m not seeing it in my little burg.

            Just starting to wake up around here. Doesn’t help that we keep getting confirmed cases right here.

          6. Just got home from ours. Crazy busy!

            not sure which one your referring to but ive been to one close to the vista area on a weekday and there was a line around the building before it even opened. this was prior to any beer virus / food shortage possibility scare.. SD is a bit over crowded IMO

          8. Gang busters on the coast in So Cal as rates keep dropping. My coworker said he got a 2.9% today for a 15 year. We scheduled to go look at a home in San Clemente, cash offer, and close to our boat, but already sold today. Everything is flying off the market in the sub 800k market. Million plus languishes. Going to be bidding wars until interest rates go back to 4-5% may take another year or two.

    3. when foot traffic falls off a cliff

      Probably just open houses but how many serious buyers wait for open houses? Not me and not my friend who just sold and bought although we’re just two data points.

    4. I certainly agree with the sentiment but the recent article said they only bought 6500 homes in 2019 and sold 4300 or so. Their inventory at any given time may be pretty small. Something like 200k+ people requested and Ibid but very few actually pull the trigger.

      How far out did you go?

    5. I have been following Zillow purchases in Atlanta and they are losing their ass … over paying and selling at a loss ..

  11. My itinerary for next month had a total of 5 flights and AirBnB stays in Phoenix, LA and SF over 2 weeks.

    Now I just just got off our team Skype call – The company whose engine we are using has pulled out the conference in SF, and the company we are contracting with overseas has also cancelled all travel.

    So we’re looking at the option of cancelling all team travel, and just eating the costs as the Expedia travel insurance is turning out to be worthless.

    “And so it goes…”

    1. “…as the Expedia travel insurance is turning out to be worthless.”

      Please leave your name and telephone number, and a claims representative will return your call. [beep…click]

      1. Expedia and their subsidiary Hotwire have the worst customer support I’ve ever dealt with in my entire life.

        I will never to business with either one ever again.

        1. You can pretty much say that about any company these days. Expedia, HP, Amazon….and the list goes on…

        2. Actually, Expedia came through for us one time. It was the day in 2017 when British Airway’s IT system crashed and all international BA flights were cancelled that day. We were in London and our son was scheduled to fly out that day. Calling BA was an exercise in futility. So we contacted Expedia (who we bought the tickets from) and they had him on a flight the next day within an hour.

          As far as the travel insurance goes, unless there is a solid reason you can’t travel (say like being too ill to travel), no refund.

          1. Actually, Expedia came through for us one time

            I had to escalate to a VP to get expedia to do anything. Luckily one was active on social media so I had an email address to reach out to. Got a call/email from their office the next day.

            Email/phone support were useless prior to that, of course!

  12. $o $ad … $audi need$ to cut more, Russia al$o. T$k, T$k

    Oil Price$ In Freefall As Pandemic Fears Grow

    By Tsvetana Paraskova – Feb 27, 2020,

    At 9:27 a.m. EST on Thursday, WTI Crude was plummeting by 4.74 percent at $46.35

    The ma$$ive $ell-off in oil extend$ to equity market$ amid fear$ that a pandemic would $everely damage global economic growth. Major Asian and European stock markets were deep in the red on Thursday and the Dow was set to open 450 points lower in what has been so far the worst week since the financial crisis.

    Oil prices continued plunging for a fifth consecutive trading session, dipping by more than 4 percent early on Thursday as the market fears a coronavirus pandemic that could destroy more oil demand in the coming months.

    Oil prices are now more than 10 percent lower than the levels seen just last week, before fears of a global coronavirus outbreak started slamming riskier assets and equities and sent market participants heavily selling oil. The market largely ignored a relatively bullish EIA inventory report on Wednesday, and it continues to ignore a massive 1-million-bpd supply disruption from restive Libya.

    By Tsvetana Paraskova for Oilprice.com

    1. Look$ like the $ad $audi’$ are gonna have to reduce touri$t visit$ too. $ad.

      $audi Arabia halt$ travel to Islam’s holiest site over viru$

      AP News | By JON GAMBRELL

      While millions attend the 10-day hajj, this year set for late July into early August, millions more come during the rest of the year to the holy sites in the kingdom.

      “It is unprecedented, at least in recent times, but given the worldwide spread of the virus and the global nature of the umrah, it makes sense from a public health and safety point of view,” said Kristian Ulrichsen, a research fellow at the James A. Baker III Institute for Public Policy at Rice University. “Especially since the Iranian example illustrates how a religious crossroads can so quickly amplify the spread and reach of the virus.”

      The hardest-hit nation in the Mideast is Iran, where Health Ministry spokesman Kianoush Jahanpour said 19 people have died among 139 confirmed cases.

      Experts are concerned Iran may be underreporting cases and deaths, given the illness’s rapid spread from Iran across the Persian Gulf. For example, Iran still has not confirmed any cases in Mashhad, even though a number of cases reported in Kuwait are linked to the Iranian city.

      In Bahrain, which confirmed 33 cases as of Thursday morning, authorities halted all flights to Iraq and Lebanon. It separately extended a 48-hour ban over flights from Dubai and Sharjah in the United Arab Emirates, through which infected travelers reached the island kingdom off the coast of Saudi Arabia.

      Health |Middle East |Epidemics |Persian Gulf tensions | Travel |Islam| Virus Outbreak | Religion | General News | International News

      1. It would be a good call to cancel any number of other traditional religious pilgrimages for the remainder of the coronavirus outbreak.

        1. It would be a good call to cancel any number of other traditional religious pilgrimages for the remainder of the coronavirus outbreak.

          Burning Man? 🙂

  13. Gently, DOWn, DOWn, DOWn, the $tream equitie$ go = $oft.Landing$!

    29,333.29 – 25,997.25 = (- 3,336.04)

    Ouch!

    3. They’re gonna need$ all the “Tailwind$” aqdanny.boy can huff&puff & $end their way.

      Boeing |1 Year (-32.25%) < $295.00

    4. Rumor is the Saleforce guy is going to Oracle.

      The Disney CEO might not wish to watch over a meltdown in Disney’s lucrative theme park business, which has already begun in Asia. Iger’s been the CEO for a long time, so maybe he was thinking of retiring anyway/

        1. Shanghai and HK Disneyland have been closed for over a month, IIRC. If they have to close Anaheim and Orlando that will be a serious hit to Disney’s bottom line.

          1. My wife and a son have been fighting the flu ever since a visit to The Happiest Place on Earth a couple of weeks ago. I caught it as well.

            However, so far as I am aware, there have not been any coronavirus cases linked to Disney attractions.

  15. 7% – (-7%) = (0%) … a$.in.Zero Earning$ … T$k, T$k.

    MARKET$
    Goldman sees zero earning$ growth for U$ companie$ this year because of coronaviru$

    CNBC | PUBLISHED THU, FEB 27 202 | Maggie Fitzgerald News Associate

    “US companies will generate no earnings growth in 2020,” Goldman’s chief U.S. equity strategist, David Kostin, said in a note to clients Thursday. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”

    “Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,” said Kostin.

    KEY POINT$:

    Goldman Sachs revised its earnings estimate for the year for U.S. companies to $165 per share, representing 0% growth in 2020.

    This is a dramatic break from the consensus forecast of Wall Street, which still calls for earnings to climb 7% this year.

    “Our reduced profit forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, disruption to the supply chain for many US firms, a slowdown in US economic activity, and elevated business uncertainty,”

  16. A friend of mine, against my advice and his own better judgment, just bought a new house at his wife’s behest. They own two more houses, one of which is free and clear and the other that has a small mortgage under $100k. The new house is in the $550k range, the other houses are in the $300k range.

    The smart move was to not buy the new house, and if anything sell one or both of the other houses and just rent for a few years. They could have had over $500k cash. I project a minimum crash of 50%. When that happens, they will lose almost all of their equity, because they will be upside down in the new purchase, and the other houses will have halved. They would still be able to get out of it all, but with less than $100k as opposed to over $500k.

    They make good money so they won’t be destitute, but I don’t see it as a good move financially.

      1. He’s also been speculating in the stock market and crypto, so this week looks to be a very, very expensive one for him. That being said, they are not hurting financially.

      1. They have to do SOMETHING. Everyone knows that it’s the central bankers’ job to keep asset prices propped up on a permanently high plateau.

    4. I wonder how those CEOs feel about all the money that they borrowed to buy back their shares at all-time highs.

        1. that has always baffled me

          Is it possible that those people who make the decision for the company to buy back stock with borrowed money are also people getting juicy big stock options?

          When they walk away, the debt isn’t on them. What’s not to like?

  18. I was reading a comment on an article yesterday about that workplace shooting in Wisconsin, and a guy said he was fired from his job in the 80s, went to Applebees and had a beer, spent a week licking his wounds, then got a new job the next week.

    What was interesting was not that comment, but a reply to him that said “How boomer of you. I bet that was really tough with your $200 mortgage.”

    2. It must have been the late 1980s, because Applebee’s was founded only in 1980 with one location in Georgia, and didn’t start franchising until around 1985.

      Anyway, it was the availability of quick jobs which boomers enjoyed, more than low mortgages.

      1. quick jobs

        Perhaps, at some times and places and for some skills. For many of us it was the age of moving across the country to find that job.

        Did we mention high interest rates? Mine was 17%. If you had a fair job and brought home close to $1000 per month, paying $400 or so on the house didn’t feel exactly “low”.

        1. Interest rates were high, but prices were correspondingly low. PITI as a ratio of income wasn’t all that different. But at the high interest rates, people made a killing on refis, making a 13th payment, and MID.

  19. How do traders even begin to tally the magnitude of the impacts of the coronavirus on the future economic outlook?

    The Financial Times
    Markets Briefing
    US and European stocks fall into correction on coronavirus
    Wall Street equities post worst week since depths of the financial crisis in 2008
    updated 14 minutes ago
    More on this topic
    How dangerous is the coronavirus and how does it spread?

    Wall Street banks cut forecasts for global growth and US corporate earnings

    Lagarde says virus yet to cause ‘long-lasting shock’
    …

    1. The CNBC headline updater guy is really busy today.

      “Dow drops 500 drops 900drops only 350 drops 700 drops 800 points as market swings wildly…”

    2. If COVID fades with warm weather and sunlight, then I expect one last temporary hurrah around August, with the real plunge holding off until after the election. But if this virus doesn’t let up, then forget about any temporary bump. May as well sit tight and wait for DOW 13000.

      1. Waiting for Dow 17,000 (40% off the top) here but I wouldn’t be mad at it if it decided to take a dump down to 13,000.

  20. Crude oil down to $46.65. A plunge to the high $20s doesn’t seem outside of the realm of possibilities in a global depression, which we’re now entering.

    1. The banks that extended financing for money-losing shale plays, and the investors who bought the low-yield junk bonds that kept those operations afloat, would’ve likely bought derivatives to hedge their massive risk. When those derivatives fail to pay out, then it’s Game Over for the house of cards the Fed built, and the global financial system.

    2. $ynchronized.Global.$lowing is a $ocial.Media Digital.Di$informational myth! … “Long.live.$helter.$hack.High.Price$!”

    3. A plunge to the high $20s doesn’t seem outside of the realm of possibilities in a global depression, which we’re now entering.

      Definitely possible. The weird thing last time it happened was how fast they were able to force it back up. I think it was about 10 years ago that I filled up in Casper, WY for $1.8x/gallon but not for long.

      1. I’m looking forward to the affordable gasoline prices. And to AlbuquerqueDan‘s bold forecast of how soon oil will be back up to $80/bbl.

        1. aqdanny.boy is bu$y doing everything po$$ible to keep Libya from being able to open their oil.$ands $pigot$.

      3. “The weird thing last time it happened was how fast they were able to force it back up.”

        +1 The free market isn’t free.

  22. Soprovich has been seeing more luxury homes sell at what he called ‘anomaly drops,’ sale prices as much as 40 per cent under the listing price.”

    You calling plunging shack prices an ‘anomaly’ doesn’t make it so, Realtor Boy. This is the new normal, and the real cratering hasn’t even started yet.

  23. ‘Coronavirus has smashed the top end,’ Mr Morrell said. ‘Nobody wants to put their house on the market if they (Chinese buyers) aren’t buying.’”

    Gosh, I sure hope no investors levered up on debt to buy massively overpriced shacks in the mistaken belief that an endless stream of stupid, rich Chinese Greater Fools would fund their retirement.

  24. Am I reading the numbers wrong, or are the stock market losses accelerating?

    Stocks try to claw back from depths after coronavirus fear drives benchmarks into correction
    By William Watts and Andrea Riquier
    Published: Feb 27, 2020 1:21 p.m. ET

    U.S stocks head to sixth straight day of losses as investors flee equities on spread of COVID-19 epidemic outside China
    Associated Press
    President Donald Trump speaks Wednesday night at the White House, along with Health and Human Services Secretary Alex Azar, right.

    U.S. stocks on Thursday pare morning losses but held sharply lower after the major benchmarks tumbled into correction territory intraday, amid elevated worries over the rapid, global spread of the COVID-19.
    What are major indexes doing?

    The Dow Jones Industrial Average (DJIA, -2.50%) traded about 302 points, 1.2%, lower early afternoon, near 26,640. The S&P 500 (SPX, -2.39%) shed 33 points or 1.1% to trade near 3,083. The Nasdaq Composite (COMP, -2.65%) slumped 124 points, 1.4%, to trade near 8,853.

    All three benchmarks fell into correction territory, defined as a decline of at least 10%, but no more than 20%, from a recent peak. However, some market experts say a fall into correction isn’t consummated until after an asset closes at those levels.
    …

    1. The whipsaw action is quite telling. Massive amounts of people and institutions unloading while the FED buys them out.

    3. “Am I reading the numbers wrong, or are the stock market losses accelerating?”

      Looks like the DJIA just drove off the trestle! -1.140.28 @ 1300 PST

        1. You can tell by their forced smiles and facial contortions that the people featured in that interview were losing a boatload of money while facing the camera.

  25. “Behind the scenes, building owners tell of dramatic cuts in property prices, which are down about 30% to 50% from the peak a year or two ago, with few buyers stepping up to bid.”

    Imagine what the carnage is going to look like after the Fed’s Everything Bubble implodes.

    1. Do you think the coronavirus outbreak is the spark that lit the fuse for the Everything Bubble implosion?

      3. Do you think the coronavirus outbreak is the spark that lit the fuse for the Everything Bubble implosion?”

        Yes . The Interconnected world not as robust as it seemed a few months ago. re-set

  27. Imagine having bought Tesla just a few short weeks ago at $917.

    Tesla – $693.83/$917 = .7566 or a 24% LOSS.

    1. The real question is will Tesla be able to continue raising cash to keep the doors open, given the current circumstances?

      What happens to your pricey electric car if Tesla ceases operations? Will you be able to get parts for it or get it repaired?

      1. I’ve got cash, and I’ll be looking for one or two nice low mileage Honda or Toyota vehicles this Spring or Summer as the Coronavirus takes its toll on the consumer economy.

        1. I am looking for a few big ticket items but I’d be surprised if this spring/summer bring any great bargains. Prices seem very stubborn on everything right now. If we see cascading job losses in the US, then that’s when prices on cars, trucks, RVs and everything else will plummet.

    2. Well, @ lea$t Elong has $tacked order$ in his unprofitable pipeline$.

      Boeing. …1 Year (-34.59%) + ( $25 Billion$ fix.me.quick loan$ placed on the ledger$ )

      Eye’$ imagine$ that the Deere Caterpillar’$ are rai$in’ cane too.

      1. I can’t imagine new airplanes, especially those built to crash upon take-off, are a hot commodity in a coronavirus world where nobody wants to fly anymore and airlines wither on the vine.

        1. On the + po$tive $ide, anyone needing aviation ga$ for their $treet.muscle$.motor$ (non.elon) might be in for a plea$ant $urprise!

    4. Actually, TSLA hit $968.99 on Feb. 4th. I was watching and it collapsed over $130 within a matter of minutes to close at $833. I knew I had seen the all time high happen. The next day it hit $704 and then rallied back to $944.78 just 6 trading days ago!

      It will round trip back to where it was just 6 months ago (Under $200).

      1. (Under $200)

        I’m not one of those people who know what the price of anything will be in the future, but it sure seems like there are deep ditches alongside that company road. Based on a fantasy that only rich and deluded people embrace. Money loser. Monster debtor. Startup in China while cars sales are dropping off a cliff. Startup in Germany while their economy is stumbling and they ought to be rather tired of what all the green deal projects have done to them.

        Maybe the stock is worth less.

  28. Hey now, give those Pangolins some credit & respect!

    Science & Tech
    9 Helpful Facts About the Coronavirus

    Thenerdist | by Matthew Hart • Feb 26 2020

    “The Coronavirus” has become a household phrase over the past couple of months, as COVID-19, the disease currently spreading across the globe—although mostly in mainland China—continues to cause panic, sickness, and, in very rare cases, death. But even though COVID-19 is constantly in the news, there are a few key facts that seem to be lost in the broad internet conversation. Here are nine of those facts, which will hopefully help to protect you from the metaphorical disease of misinformation.

    2. Bats and Pangolins Are the Likely Culprits
    There is substantial evidence that COVID-19 originated in bats and then spread to humans via pangolins, although epidemiologists are still not certain this is the case. According to DW Akademie, “Researchers from the South China Agricultural University have found that a genetic sequence of the virus from pangolins is 99% identical to the coronavirus currently infecting… people.” Pangolins also happen to be the most illegally traded animal in the world. (They are traded because their scales are used in traditional Chinese medicine, and they are also eaten as a luxury food.)

    3. SARS, MERS, and the Common Cold Are All Coronaviruses
    COVID-19 is only one type of coronavirus. Coronaviruses are a family of viruses (the family name is Coronaviridae) that cause disease in mammals and birds. SARS, MERS, and even the common cold, are all Coronaviruses.

    9. COVID-19 Has a 2.3% Death Rate, but Mainly Affects the Elderly
    If you do somehow become infected with COVID-19, your odds of dying from it are only about 2.3%. And even that figure is misleading, as the overwhelming amount of deaths have occurred in the elderly population. According to a paper by the Chinese CCDC released on February 17 and published in the Chinese Journal of Epidemiology (via worldometer), the death rate of COVID-19 is 14% amongst those 80 years old and older, 8% amongst those 70-79, 3.6% amongst those 60-69, and 1.3% amongst those 50-59. For all other age ranges, the odds of death are less than

    1. Pangolins also happen to be the most illegally traded animal in the world. (They are traded because their scales are used in traditional Chinese medicine, and they are also eaten as a luxury food.)

      “And all that have not fins and scales in the seas, and in the rivers, of all that move in the waters, and of any living thing which is in the waters, they shall be an abomination unto you.” — Leviticus 11:10

      2. “…used in traditional Chinese medicine…”

        Woe to any animal species that fits this description.

    1. If the world was fair and just, this woman would be living under a bridge eating rat kabobs for the rest of her life.

      1. If the world was fair and just, this woman would be living under a bridge eating rat kabobs for the rest of her life have been eaten by rats underneath a bridge

        FTFY 🙂

  32. Don’t let my next post worry you too much. Note there was no coronavirus in play during the Great Depression.

      1. I like to give my bovine friends a gentle warning, for fear of spooking the herd. Stampedes can be quite dangerous.

    2. The Financial Times
      fastFT Equities
      S&P 500 racing to quickest correction since the Great Depression
      Benchmark index has taken six sessions to trade more than 10% below its recent peak
      Peter Wells in New York 2 hours ago

      Wall Street’s benchmark stock index is on track to stage its quickest correction since the Great Depression as concerns about the impact of the coronavirus on economic growth grip global markets.

      The S&P 500 dropped as much as 3.5 per cent in morning trade on Thursday, leaving it down 11.2 per cent from its record closing high of 3,386.15 on February 19.

      If the index closes more than 10 per cent below that peak, it would have taken just six sessions to breach the threshold that defines a market correction. That would rank as the fastest time to correction since July 1933 — when the S&P 500 dropped 13.3 per cent in two sessions — according to calculations by the Financial Times.
      …

      1. Gently, DOWn, DOWn, DOWn, the $tream equitie$ go = $oft.Landing$!

        29,333.29 – 25,766.64 = (- 3,566.65)

        👀 forward to TGIF! (They’ll need the weekend to a$$emble the eCONomic Cheerleader$ & all the “$hock&Awe” good new$ they mu$ter! …

        1$t quarter$ 2020, $tocks roared in like a lion, went out like a $laughtered.$heep

  33. Not to worry…it’s only California!

    California governor: 8,400 people from commercial flights being monitored for COVID-19
    Published: Feb 27, 2020 3:14 p.m. ET

    By Jaimy Lee
    Reporter

    California Governor Gavin Newsom said the state is currently monitoring an estimated 8,400 people who arrived in California on commercial flights from Asia over COVID-19 concerns. The state currently has 28 confirmed cases of the novel coronavirus, including people who were repatriated from China and the Diamond Princess cruise ship in Yokohama, Japan, as well as recent travelers to mainland China, and one of their spouses. Five additional individuals who had been repatriated to California had positive tests and were quarantined but have since recovered and returned to their home states, Newsom said Thursday during a news conference.
    …

  34. It’s pretty easy to understand the flood of money into Treasurys. The Fed has committed to fighting the next recession with as large a quantitative easing as necessary. This would naturally drive Treasury yields ever closer, if not beyond, the zero bound, and prices skyward. The market is simply frontrunning the Fed’s forward guidance.

    1. The Financial Times
      Markets Briefing
      US stocks close at low for day on coronavirus correction
      S&P 500 loses 4.4% as pressure grows on Federal Reserve to cut interest rates
      updated 5 minutes ago

    2. Whistling whilst strolling past the graveyard will not save you from the ghouls that lie beneath.

      The Wall Street Journal
      Heard on the Street
      Don’t Be Scared of Record-Low Treasury Yields
      Ultralow yields say more about the changing attitudes of central bankers than the outlook for economic growth
      By Jon Sindreu
      Feb. 25, 2020 3:54 pm ET

      Ultralow bond yields tend to spark dark thoughts of “Japanification” and economic stagnation. They may say much more about the desire of central bankers to preserve their reputations.

      On Tuesday, yields on 10-year Treasurys hit their lowest level ever, falling to 1.325% on the back of fears that the economic impact of the Chinese coronavirus will be much worse than that of previous epidemics. Stocks have been in free fall since the start of the week.
      …

    3. I guess these policies are going to get trotted out again, despite the global financial system’s failure to ever recover from round one of their implementation.

      The Fed
      All-star economists urge Fed to use QE and ‘new tools’ to fight next recession — just move sooner and go bigger than crisis
      By Greg Robb
      Published: Feb 21, 2020 10:16 a.m. ET
      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.

      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.

      • 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.
      …

      1. Some day, won’t people notice that US pesos are being created out of thin air by the trillions? And decide that maybe, just maybe, they aren’t really worth much? And that the US$ shouldn’t be the global reserve currency?

        Perhaps the only saving grace is that all the other major players are doing the same thing with their fiat currency?

    4. The Fed has committed to fighting the next recession with as large a quantitative easing as necessary.

      Since it’s never worked, why not keep doing it, huh?

    5. Finance
      Coronavirus could send 10-year Treasury yield crashing below 1% — Here’s how
      Brian Sozzi
      Yahoo Finance
      February 27, 2020, 7:59 AM PST

      And you thought the record-low yield on the 10-year Treasury note couldn’t go any lower thanks to rising investor fear of a coronavirus pandemic.

      Silly, silly.

      Wells Fargo Investment Institute president Darrell Cronk said on Yahoo Finance’s The First Trade yields on the 10-year could reach 1% sooner rather than later if uncertainties on coronavirus ratchet up. In fact, Cronk’s 12-month model suggests if the coronavirus sends the U.S. into recession, the 10-year Treasury yield could nosedive to 0.4%.
      …

  35. Wee, like the S&p, the Dow also lost 4.4% today. Dropped 1190.95 points to 25,766.64. I wonder what tomorrow will bring?

    Awaiting DJT hissy fit. 🙂

    1. I’m starting to wonder if Orange Jesus* is going to stroke out from watching the stock market CR8ER.

      *I got a kick out of this nickname used by some triggered, skinny-pants-wearing, TDS afflicted, student loan debt saddled millennnial, so I thought I’d use it once. I voted for him so it’s all in good fun.

      2. I am waiting for Orange Haysoos to announce an emergency payroll tax cut or tax rebate to stimulate the economy. Hail Mary schemes like that will probably happen if this continues.

    2. American Coronaviru$ i$$ue$ $ovled!!! Cheerleader$ & $cape.goat$ being a$$embled A$AP!

      Politic$
      Pence Says He’s in Charge of U.$. Viru$ Respon$e, Not HHS’s Azar

      “We’re ready,” he said. “We’re ready for anything.”

      Bloomberg |By Jennifer Jacobs, Jordan Fabian, and Ryan Beene
      February 27, 2020

      Pence and Azar announced earlier Thursday that Treasury Secretary Steven Mnuchin, U.S. Surgeon General Jerome Adams and Trump’s top economic adviser, Larry Kudlow, would join the administration’s coronavirus task force.

      Former Obama Official:

      Pence added another layer to the government’s management of the virus response on Thursday by appointing the State Department’s top AIDS official, Deborah Birx, to temporarily join his team.

      Birx is a career government official who was nominated by former President Barack Obama in 2014 as the U.S. global AIDS coordinator responsible for overseeing humanitarian aid programs combating the epidemic. She also served as head of the global HIV/AIDS division at the Centers for Disease Control and Prevention and was a top research official at Walter Reed Army Medical Center

      Trump, who in the past has called for budget cuts at the CDC and other health agencies, said Wednesday he would bring in officials from within the government to help with the virus response

      Pence’s selection of Birx comes at a time when Trump has focused on rooting out political appointees from government whom he considers disloyal in the aftermath of his impeachment acquittal. Trump allies outside the administration have called for a purge of so-called “deep state” career national security officials.

        1. He’$ $elf.eda.caten him$elf for the mini.Pha$e ll v7.6a face.to.face Trade.Tariff$ $howdown in Beijing, … Coming. $oon!

          3. She’s beautiful…AND she’s his wife.

            But people in high places will always have their detractors…

    3. I sleep well at night having moved to mostly cash in October 2019.

      I have zero debt, it feels nice.

        1. It wasn’t a planned strategic move. After my dad died in September I just wanted to preserve what money he had left (alot of it in stocks despite being 89 years old) and move most of it out of stocks and keep the powder dry until the 2020 election.

          Coronavirus is a total surprise. I am loosing money in my 401k but not crying about the loss, yet.

  36. Three questions:

    1) When do the computers panic?

    2) When do the Baby Boomers panic?

    3) How far does the stock market have to drop to get back to where it was, before The Donald was elected, when he said (correctly, thus showing a stopped clock is right twice day) that it was inflated and heading for a crash?

    Because until then, this really isn’t much.

    1. The companies that produce goods for the consumer economy, that is the 70% that we buy, but don’t really need, will be in dire straits…especially if they’re in debt, which is the new normal.

      2. The companies that produce goods for the consumer economy, that is the 70% that we buy, but don’t really need

        Aren’t those all Chinese companies?

  37. Filed under: $ilencing.of.thee.lamb$

    (Sure seems like there is a lot of gub.ermint $urplus whistle’$ floatin’ around the U$A.)

    U.S. workers without protective gear assisted coronavirus$ evacuees, HHS whistleblower says

    Washington Post via MSN | By Lena Sun, Yasmeen Abutaleb

    Officials at the Department of Health and Human Services sent more than a dozen workers to receive the first Americans evacuated from Wuhan, China, the epicenter of the coronavirus outbreak, without proper training for infection control or appropriate protective gear, according to a whistleblower complaint.
    The complaint alleges HHS staff were “improperly deployed” and were “not properly trained or equipped to operate in a public health emergency situation.” The complaint also alleges the workers were potentially exposed to coronavirus because appropriate steps were not taken to protect them and staffers were not trained in wearing personal protective equipment, even though they had face-to-face contact with returning passengers. The workers were in contact with passengers in an airplane hangar where evacuees were received and on two other occasions: when they helped distribute keys for room assignments and hand out colored ribbons for identification purposes.

    In some instances, the teams were working alongside personnel from the Centers for Disease Control and Prevention in “full gown, gloves and hazmat attire,” the complaint said.

    The whistleblower, in her complaint, states that “appropriate steps were not taken to quarantine, monitor, or test [the workers] during their deployment and upon their return home.” The repatriated Americans were among those evacuated from Wuhan and quarantined on military bases in California and Texas because they were considered at high risk for contracting the flu-like illness.

    About 14 personnel from the Administration for Children and Families, or ACF, were sent to March Air Force base in Riverside County, Calif., and another team of about 13 ACF personnel were sent to Travis Air Force in Solano County, Calif., according to the complaint and the whistleblower’s lawyer, Ari Wilkenfeld. In Solano County this week, the first U.S. patient was confirmed to be infected with coronavirus who did not travel to a region where it is spreading or have known contact with someone diagnosed with the disease.

    Several people within HHS voiced objection to sending the ACF personnel to receive passengers

    The deployments took place Jan. 28 to 31, around the time when the first planeload of evacuees arrived at March, and Feb. 2 to Feb. 7, during the time when additional flights were arriving at Travis. The planes each carried about 200 Americans who were repatriated from Wuhan.

    After their deployments, the workers returned to their normal duties, some taking commercial airline flights to return to their offices around the country, the lawyers said.

    “Our client was concerned that ACF staff — who were potentially exposed to the coronavirus — were allowed to leave quarantined areas and return to their communities, where they may have spread the coronavirus to others,”

    “She was involuntarily assigned to a position in a subject matter where she has no expertise,” Wilkenfeld, her lawyer, said in an interview Thursday. The agency said the reason for the reassignment was “necessary to meet the needs of the department,” according to a memo she received. “If I did not accept involuntary reassignment, I would be terminated from federal service through adverse personnel action,” according to her complaint.

    Amy Goldstein contributed to this report.

  38. Fed-Driven Asset Price Inflation Means You Can Now Buy Less House Than You Could Before

    4 HOURS AGOThorsten Polleit

    The late receivers of the new money can only buy at already elevated prices. That said, the income and wealth of the early receivers of the new money go up at the expense of the late receivers, not to mention all those people who do not gain anything from the increase in the money supply. The issuance of fiat money creates winners and losers.

    https://mises.org/wire/fed-driven-asset-price-inflation-means-you-can-now-buy-less-house-you-could

  39. Does anyone have a clue what ‘whatever it takes’ is?

    The Financial Times
    Tumbling markets reintroduce ‘whatever it takes’ option

      1. So the goal is to send sovereign bond yields as far below zero as possible?

        Doesn’t that make it difficult for bankers to make money by lending it out?

  40. Coronavirus cases surge to 400 in Italy
    26 February 2020

    The number of coronavirus cases in Italy has jumped to 400, amid international efforts to contain the spread of the deadly outbreak.

    The rise in Italy, the main focus of infection in Europe, represents a 25% surge in 24 hours.

    Several European countries announced new cases traced to Italy.

    Also on Wednesday, the World Health Organization said that for the first time the virus was spreading faster outside China, where it originated.
    …

    Globally, more than 80,000 people in about 40 countries have been infected with the new coronavirus, which emerged in December. The vast majority remain in China.

  41. The U.S. has only tested 445 people so far?!

    I guess if a case isn’t tested, then it doesn’t exist, at least according to the Housing Bubble Blog’s resident expert in absentia.

    Why South Korea may have more coronavirus cases than the US
    South Korea had tested 66,652 people as of Thursday afternoon.
    By Joohee Cho
    February 27, 2020, 2:09 AM
    10 min read

    SEOUL, South Korea — Global health experts say the speed and scope of South Korea’s novel coronavirus diagnostic capability exhibit impressive and significant lab capabilities that no other countries, including the U.S., can match at the moment.

    South Korea had tested a total of 66,652 people for the COVID-19 coronavirus virus as of 4 p.m. local time Thursday, whereas Japan had reported administering roughly 1,890 tests and the U.S. only 445. The huge discrepancy compared to other countries reflects how quickly South Korea’s numbers have been rising, experts say.

    The total number of confirmed cases so far in South Korea is 1,766, up 505 from the day before. Of the 66,00 people who have been tested, more than 25,000 are still awaiting lab results.

    More than 10,000 people a day are being tested around the clock, propelled by a sense of concern that the virus may spread outside of Daegu area, where around 80 percent of all confirmed cases have been found.

    “This week is crucial for us in determining whether we have successfully dealt with COVID-19,” South Korea Prime Minister Chung Sye-Kyun said.
    …

  42. Australia’s coronavirus pandemic plan: mass vaccinations and stadium quarantine
    A pandemic could last up to 10 months with 40% of the workforce sidelined by illness or caring for family in worst-case scenario
    Coronavirus live blog: latest news and updates
    — Australia declares coronavirus will become a pandemic as it extends China travel ban
    — Trump says US coronavirus risk ‘very low’ as Australian PM warns pandemic is ‘upon us’
    …

  43. Coronavirus: Outbreak spreads in Europe from Italy
    26 February 2020
    Cases have emerged for the first time in countries such as Austria following the Italian outbreak

    Several European countries have announced their first coronavirus cases, all apparently linked to the growing outbreak in Italy.

    Austria, Croatia, Greece and Switzerland said the cases involved people who had been to Italy, as did Algeria in Africa.

    The first positive virus test has been recorded in Latin America – a Brazilian resident just returned from Italy.

    Italy has in recent days become Europe’s worst-affected country.

    Authorities have confirmed more than 300 cases and 12 deaths there, the most recent a 70-year-old resident of Lombardy who died after being taken to intensive care in Parma. The country has also seen four children infected.
    …

  44. All of my company’s travel has been cancelled.

    Costco seemed about normal when I was there on Monday, but thinking of making another trip tomorrow. The QFC on the south end of the Island was awful busy for 2 in the afternoon – As I went to pick up some more distilled water (only have 33 gallons on hand) I had to wait as a lady filled up her cart with water. I joked and she mentioned “annual restocking of our emergency supplies”… people are getting a little nervous.

    My original prepping plan was a slow one.. wouldn’t be fully done until end of next year or so. Mrs Spiffy is looking over what we would need to tighten it up before the weekend.

    I have to wonder about delivery drivers and mail carriers as a vector to spread the virus.

    1. Concur. Up in Snohomish Co, I think a lot of people are “quietly” preparing. Kinda like during the great financial crisis people were doing electronic redemptions online (ie, moving money, withdrawing money, selling stocks etc).

      Elderly mom said their facility tried to get masks and couldn’t. Home Depot and Lowe’s (locally) sold out.

      1. Friend is over at the Kirkland Costco right now. Doesn’t appear busier than normal but “a whole lot of bottled water and tissues are being bought”

          1. A gallon of Clorox goes a long way.

            Does that dissolve snot? 🙂

            (I go the bleach + tap water route as well)

          2. At the north end QFC I saw individual containers of Clorox wipes (75 count) set out on display at the ends of multiple isles — only $6 each… To be fair, at the south end QFC, they weren’t out on display and just $4.

            Rather than focus on the price gouging, I think it’s more telling that they were put out in the high traffic areas as a special item.

            It’s sort of a way to gauge the general alarm level.

      2. I think a lot of people are “quietly” preparing.

        Was at Sam’s Club yesterday. Saw a big package of Top Ramen. Made me think of this blog.

  45. This dude pretty much nailed the prediction.

    Baltic dry, copper, oil, tech and China continue to call for market crash soon…
    Clive Maund Monday February 24, 2020 17:33
    Kitco Commentaries | Opinions, Ideas and Markets Talk
    Featuring views and opinions written by market professionals, not staff journalists.

    Commentaries & Views

    In this update we are going to review a small but important range of commodities / lead indicators which strongly suggest that the seemingly endless bullmarket in US equities is living on borrowed time and will end sooner rather than later, and given how long it has lasted and how extremely overvalued it has become, the downturn will likely start with a crash phase.

    Regardless of what the eventual impact of the Coronavirus epidemic is, US stockmarkets in particular seem to be in a state of denial about the actual real-world consequences of the Chinese shutdown and impact on the global supply chain and corporate profitability everywhere, and some elements even seem to be gloating about China’s misfortune and predicament, completely oblivious to the fact that this is going to have a negative impact on almost everyone.

    The following points were made by a reader and while I don’t necessarily concur with all he has written, I am open to the possibility that all or much of this may be correct, and if it is, we are looking at serious problems emerging before much longer…

    I am getting reports from friends in SE Asia of the precipitous collapse of global freight as the full impact of China’s colossal shutdown impacts across its economy and now, unsurprisingly, the global economy. Port ship handling in Malaysia, Singapore and Japan is down 50% already; i.e. shipping freight.

    Supply chains across all sorts of industries are collapsing as all components made in China dry up for all sorts of products from cars to i-phones and computers. There has never been a Global economic disruption on this scale in history as nCoV’s contagion rate is 4 x as fast as SAR’s and 5 to 8 x as virulent. The Chinese have been economical with the truth concerning deaths, infection rates and the numbers of those now under full quarantine. The real numbers have been variably estimated at being 5 to 10 times the official figures. All attempts at real reporting on the scale of this pandemic are being heavily censored but what I have seen emerging on youtube is very scary / harrowing.

    International air and sea travel is in virtual freefall as people are now reluctant to travel or simply can’t travel on so many air and sea routes due to these now being closed down by States protecting their populations from infection. Holidays to SE Asia are in a state of collapse in Australia and Europe.
    …

    1. (snip)

      “It is very hard to believe that these stocks are at these levels, especially given Apple’s presence in China, and the fact that they are is viewed as an indication of a staggering complacency rooted in dire ignorance.

      “When you read and understand what is written in the articles Cognitive Dissonance and China is Disintegrating you should be able to comprehend that these stocks are very likely to crash and burn as the whole market goes down like the Titanic.

      “Looking at the charts above, especially those for the Tech stocks Apple and Microsoft, it should be obvious that the vast majority of investors are now living in ‘cloud cuckoo land’ oblivious to the catastrophic fallout that a dead stop of the Chinese economy will lead to, especially as the global debt situation was precarious before all these latest problems.”

    2. Could this spawn a rebirth of manufacturing and automation in the US?

      One of my customers is looking into this as we speak as their production builds keep getting pushed out.

  47. I guess junk ain’t all that anymore…

    The Financial Times
    High yield bonds
    Junk bond funds suffer worst outflows in more than a year
    Investors dump high-yield ETFs on concern over financial impact of the coronavirus
    an hour ago
    …

  48. So, China is now reporting essentially no new cases of the virus. Meanwhile, it’s exploding in other places. How could China go from an exploding infection rate to apparently no new cases? This does not pass the smell test.

    1. Here are 5 reasons the stock market is having its worst decline since 2008, and only one of them is the coronavirus
      By Mark DeCambre
      Published: Feb 27, 2020 10:02 p.m. ET
      Why is the stock market falling? Here are a few opinions that experts have floated
      AFP/Getty Images
      Coronavirus has unmasked other problems in the stock market.

      The U.S. stock-market rally has unraveled, with a period of historic gains coming to a screeching halt, as fear that the coronavirus epidemic may reach America rattles Wall Street.

      The Dow Jones Industrial Average (DJIA, -4.42%) fell into correction on Thursday, widely defined as a drop of at least 10%, but no more than 20%, from a recent peak. The S&P 500 index and the Nasdaq Composite indexes all joined the blue chips in correction territory.

      However, it is the speed at which the indexes fell into these conditions that has surprised investors and some experts on Wall Street. It was the fastest decline into correction for the Dow, 10 sessions, since the nine-session slump into correction on Feb. 8, 2018.

      For both the S&P 500 (SPX, -4.42%) and the Nasdaq (COMP, -4.61%), it was the fastest retreat on record from a record high, six sessions ago, to correction.

      Thursday’s declines also put all three equity indexes on pace for their worst weeks since the 2008 financial crisis.

      Here’s are 5 reasons that the market is falling:
      …

  51. Given a sizable Chinese immigrant population, it could prove difficult for officials to keep the novel coronavirus out of The OC.

    1. California
      Orange County declares emergency over coronavirus
      A coronavirus health advisory is posted in the emergency department at St. Joseph Medical Center in Orange.
      (Irfan Khan / Los Angeles Times)
      By Colleen Shalby Staff Writer
      Feb. 26, 2020
      5:40 PM

      Orange County has declared a local health emergency in response to the novel coronavirus, which has killed thousands globally, officials announced Wednesday.

      The move is largely in response to a proposal to move coronavirus patients to a facility in Costa Mesa, which has sparked a bitter court battle, Board of Supervisors Chairwoman Michelle Steel and Vice Chairman Andrew Do said at a news conference. At the center of the dispute is a proposal to use the Fairview Developmental Center as a coronavirus quarantine site, an idea that drew swift and fierce condemnation from city, county, state and federal officials representing the area.

      “The county of Orange continues to support Costa Mesa in opposition of state and federal government’s decision to move COVID-19 patients to the Fairview Center,” Do said.

      He and other officials say the transportation of patients into Orange County does not “preserve the health of our community,” which has a population of more than 3 million.

      The city of Costa Mesa requested a temporary restraining order from a federal judge on Friday that blocked possible plans to send the affected individuals to the center.

      On Monday, U.S. District Judge Josephine Staton ordered federal and state officials to meet with local officials from the county and Costa Mesa to answer specific questions about how the Fairview center was chosen. According to Steel, the status of the restraining order will be decided on March 2.

      “We will do whatever we can do keep Orange County coronavirus-free,” she said.
      …

      1. “We will do whatever we can do keep Orange County coronavirus-free,” she said.

        LMFAO! Doesn’t the Orange County believe in “self-quarantine?”

    3. ” …difficult for officials to keep the novel coronavirus out of The OC. ”

      Bugs: “eh, you could bee on to something Doc!”

      People can get the coronavirus more than once, experts warn — recovering does not necessarily make you immune

      Business Insider| By (Holly Secon) |February 27, 2020

      People who have gotten the new coronavirus and recovered can get it again in the future, health authorities say — the body does not become immune after infection.

      But in the case of the new coronavirus, according to Zhan, doctors don’t think the antibodies patients develop are strong or long-lasting enough to keep them from contracting the disease again.

      “Once you have the infection, it could remain dormant and with minimal symptoms, and then you can get an exacerbation if it finds its way into the lungs,” Philip Tierno, a professor at the NYU School of Medicine, told Reuters.

      On Wednesday, Japanese authorities reported the first confirmed case of reinfection. A tour guide in Osaka first tested positive for the coronavirus in late January, then was discharged from the hospital three weeks ago after showing signs of recovery. But she returned to the hospital after developing a sore throat and chest pain and tested positive for the coronavirus once again.

      Zhan Qingyuan, director of pneumonia prevention and treatment at the China-Japan Friendship Hospital, warned last month that this could happen.

      “For those patients who have been cured, there is a likelihood of a relapse,” Zhan said in a briefing on January 31. “The antibody will be generated; however, in certain individuals, the antibody cannot last that long.”

      Reinfections among patients in China have been reported as well.

    1. The Financial Times
      Drones
      US considers how to open skies to drones and flying cars
      Start-ups work with regulators on system to identify and track unmanned aerial vehicles
      Using Airmap in a helicopter over California: the FAA is working with the Los Angeles-based start-up to develop a new unmanned traffic management system ©
      Patrick McGee in San Francisco 3 hours ago

      Three challenges stand in the way of filling the sky with drones and flying cars.

      The first two — money and technology — are being tackled with zeal. Huge sums are flowing into aerial vehicle start-ups; Joby Aviation, for example, raised a staggering $590m for its vision of flying taxis in December. Meanwhile, almost 70 prototypes are in development, with backing from the likes of Toyota, Hyundai and Daimler.

      Mark Groden, chief executive of SkyRyse, whose system can fully automate helicopter flights, said it was “entirely possible” to offer low-cost taxi flights “with technology that already exists today”.
      …

    2. Dear Gawd, Puhleaze let Silicon Valley’s current bubble collapse before this comes to pass.

      I agree, And add to the list the 10Ks of satellites Musk and others want to fill the sky with (to provide satellite internet).

  53. Northern Italy seems a long ways from Wuhan City, but not so much with our highly integrated global economy.

    1. Coronavirus
      Italy under lockdown: ‘shocked and scared’
      Residents of northern towns describe life under quarantine
      Military officers wearing face masks stand outside Duomo cathedral, closed by authorities due to a coronavirus outbreak, in Milan, Italy February 24, 2020.
      REUTERS/Flavio Lo Scalzo TPX IMAGES OF THE DAY
      The military stand guard outside Milan’s Duomo cathedral © Reuters
      Miles Johnson and Davide Ghiglione in Rome 2 hours ago

      Moira Biasio runs a busy tailoring shop in the centre of Vò, a small town just 70km west of Venice, but her life has been upended by the spread of coronavirus to northern Italy.

      An unnamed resident in the Veneto town of 4,000 people last week became the first Italian and one of the first Europeans to die from the virus, prompting the government to put the town under quarantine for 14 days.

      About 50,000 residents in 11 towns in the industrialised and wealthy north have now been told they cannot leave a cordoned area until March 6 — if they do, they face fines or up to three months imprisonment. The 400 police at the 35 checkpoints in a so-called “red zone” of 10 Lombardy towns are reported to have stopped five attempted escapes so far. Essential supplies of food and medicine are allowed in but no one else is allowed to visit the affected towns. While individuals can leave their homes, they are not to go to school or work. Public gatherings are banned.
      …

      1. Meawhile, Dr. Anthony Fauci, who is the director of the National Institute of Allergy and Infectious Diseases, has been instructed to, “not say anything without prior approval.”

  54. Opinion: Retiree warning: History suggests we’re overdue for a bear market
    By Paul Brandus
    Published: Feb 27, 2020 12:45 p.m. ET
    Here’s what to do
    Getty Images

    A few weeks ago, I wrote that “Looking back at the last 11 years, you might think that stocks can only go up.” After all, since the recession low of March 2009, the S&P 500 (SPX, -4.42%) has risen from a devilish 666 to 3,390—a spectacular run of 409%. Returns like that have fattened tens of millions of portfolios, hopefully yours.

    But then I added the following, which, painfully, is worth another look:

    But like trees, stocks don’t grow to the sky. At some point this party will end. In fact, you might not know that since 2009, the market has suffered plenty of setbacks. Data compiled by Yardeni Research Inc. shows that over the past decade there have been six drops of more than 10% (these are called corrections), including two drops of nearly 20% (these are called bear markets).
    …

        1. Professor Bear said: “…but the alternative is to eventually get your savings trampled by the next tsunami flood of quantitative easing.”

  55. Oh the humanity…

    U.S. stock futures point to further sharp declines as Asia follows Wall Street plunge
    By Barbara Kollmeyer
    Published: Feb 28, 2020 2:42 a.m. ET
    Nikkei enters correction territory
    Reuters
    People wearing masks after the coronavirus outbreak wait in a line to buy masks as it rains in front of a department store in Seoul, South Korea, February 28, 2020.

    U.S. stock futures fell sharply on Friday, a day after major benchmarks pushed into correction territory as investor fears heightened over just how much damage the fast-spreading coronavirus will wreak on the global economy.
    …

    1. Watching the ticker this morning reminds me of that scene in, “The Hunt for Red October,” where the politburo official opens the letter, and shocked, drops his cup of tea.

      1. No joke. It’s painful, but the alternative is to eventually get your savings trampled by the next tsunami flood of quantitative easing.

  56. Some will celebrate the falling mortgage rates as a reason to buy a home or refinance a mortgage. I’m not sure how this will play out against wherever the coronavirus outbreak goes from here.

    1. Note that mortgage rates are about 99 percent correlated with long-term Treasury yields.

      Government bonds see huge rally as investors look to safety
      By Steve Goldstein
      Published: Feb 28, 2020 4:30 a.m. ET

      Government bonds drew a huge bid on Friday, sending yields further into record-setting lows. The yield on the U.S. 2-year Treasury note (TMUBMUSD02Y, -14.10%) dropped 13 basis points to 0.97%, while the yield on the 10-year Treasury bond (TMUBMUSD10Y, -4.07%) dropped 13 basis points to 1.17%. The yield on the German 10-year bund dropped 9 basis points and the yield on the 10-year U.K. gilt fell 6 basis points. Yields move in the opposite direction to prices. The U.S. dollar (USDJPY, -0.85%) meanwhile dropped sharply against the Japanese yen as it also fell vs. the euro (EURUSD, -0.1091%).
      …

  57. Wow, stocks down, bonds down, oil down, PM’s down. ATM, the only thing green is the VIX!

    1. How can everything drop at the same time?

      Wall Street’s ‘fear gauge’ jumps to highest level in 2 years, on pace for biggest weekly gain in its history as stocks tumble
      By Mark DeCambre
      Published: Feb 28, 2020
      9:55 a.m. ET

      A closely watched gauge of expected stock-market volatility is at its highest level in more than two years as stocks extended a brutal selloff that has been at least partly promoted by growing fears of the economic impact of COVID-19. The Chicago Board Options Exchange Volatility Index, or VIX (VIX, +24.87%) was trading up at around 42 on Friday, marking its highest level since early February of 2018, according to FactSet data. The weekly slide for the index, up 144%, would represent its firmest weekly advance since the gauge was created in 1993. The VIX, often referred to as Wall Street’s fear gauge, tends to rise when stocks fall.
      …

      1. “How can everything drop at the same time?”

        Haven’t heard about Paris Hilton’s panties for some time; musta [sic] settled down? 🙂

    2. PS It’s not quite correct to say “bonds down.” In this flight-to-quality move, junk is getting dumped and Treasurys are following the VIX skyward.

      1. PS It’s not quite correct to say “bonds down.” In this flight-to-quality move, junk is getting dumped and Treasurys are following the VIX skyward

        Fine, but I would expect PM’s, certainly gold, to be benefiting from the stampede out of stawks.

        1. gold, to be benefiting from the stampede out of stawks.

          One shouldn’t own gold when they are in debt. Besides, it’s a haven from the opposite of what’s happening right now.

        2. Not necessarily. Gold is normally an inflation hedge. The coronavirus supply shock is negative and deflationary, favoring high quality sovereign bonds.

  58. The Financial Times
    Coronavirus
    Wall Street joins global sell-off in worst week since 2008 crisis
    Global stock barometer has tumbled 11 per cent this week in flight to safety
    updated 45 minutes ago
    More on this topic

    Coronavirus latest: Fed’s Bullard says ‘pandemic’ could lead to rate cuts

    FT View: the global struggle to contain coronavirus
    Coronavirus: Doubts cast on Fed’s ability to handle a pandemic
    …

    1. Looks like someone is trying to build a floor at 25k, but the air compressor will “toss a rod” if run at full throttle too long.

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