Although Sellers Do Not Love The Buyer’s Market, They Accept What Is
A report from the Daily Independent in Arizona. “In the southeast corner of Avondale Boulevard and Thomas Road, the Oak Park subdivision has been a part of the Avondale community for over 10 years. But its population is 0. No one lives there. As of March 6, only four unoccupied houses are within the subdivision. The rest is dirt or paved roads. According to Maricopa County Assessor records, the land is owned by Avondale Recovery Acquisition LLC, a subsidiary of Raintree Investment Corporation in Carlsbad, California.”
“According to records, the four single-family residences were constructed in 2009 with 2020 Full Cash Values between $231,000 and $284,000. Records appear to indicate the subdivision has the capacity for over 50 homes. ‘This sounds extremely unusual as we have a desperate shortage of homes to meet demand at the moment,’ said Mike Orr with The Cromford Report, a group that analyzes the housing market in Arizona.”
“‘The last deed dates for the homes are in September 2008, around the time of the national recession. They bought it at a knockdown price ($4 million) at a foreclosure auction during the housing crash and are presumably holding out for the highest possible return on their investment,’ Mr. Orr said about the investment company. ‘The completed homes are not available for sale or rent.'”
The Coeur d’Alene Press in Idaho. “Hayden Anderl of Coldwell Banker Schneidmiller Realty said there has been a 40% increase in resale home prices since 2016, going to $299,000 from $215,000. The price difference in resale homes and new construction last year was about 10 percent, down from 17 percent in 2018 and 16 percent in 2018. Grey Rowley on the luxury market: ‘Supply of luxury homes will continue to outweigh demand, listings will linger, and in some cases, sellers will make big price cuts to move the inventory.'”
From Forbes. “In just a few short weeks, the coronavirus outbreak has impacted many aspects of everyday life. It’s important to keep in mind that New York City and the surrounding areas were already buyer’s markets prior to the coronavirus outbreak. So, sellers were well aware they didn’t have the upper hand to begin with.”
“According to Noemi Bitterman of Warburg Realty, the sellers experiencing frustration have either already sold at less than they wanted or taken their properties off the market. So it’s safe to assume that the majority of sellers are extra motivated right now. ‘The properties that are on the market right now are priced to sell. Although sellers do not love the buyer’s market, they accept what is and have priced their properties accordingly,’ she explains.”
From Patch California. “This 1101 square foot home in Alameda is in foreclosure and just became available. It has 2 bedrooms, and 2 bathrooms. Address: 2518 Encinal Ave, Alameda, California. Price: $668,000.”
The Wall Street Journal. “It is perhaps fitting that the stock market plunged last month as we approached the 20th anniversary of the top of the internet-stock bubble. On March 10, 2000, the Nasdaq Composite Index hit an intraday high of 5132.52. We all know what happened next. By October 2002, the index had fallen 78.4%—to 1108.49.”
“And that was only half the agony. The other half was the index’s anemic recovery from that low. It took until November 2014 for the index to battle back to its March 2000 level, even after taking dividends into account. If you adjust for inflation, the index didn’t recover until August 2017, more than 17 years later.”
“The Nasdaq’s snail like recovery after the dot-com crash doesn’t appear to have been unprecedented, at first blush. For example, it wasn’t until 1954 that the Dow Jones Industrial Average clawed its way back to where it stood, on a point-for-point basis, before the 1929 crash—a recovery time of 25 years. Taking into account all U.S. bear markets since the mid-1920s, I calculate it took an average of just 3.1 years for the broad market on a dividend- and inflation-adjusted basis to make its way back to where it stood before the bear market began. So, the Nasdaq’s plunge in 2000, and subsequent slow recovery, is an outlier. No other bear-market recovery in U.S. history took as long.”
“And let there be no doubt that the Nasdaq market was poorly diversified 20 years ago. Cisco Systems, the internet hardware and software company, had the largest market cap of any stock in March 2000, and represented the largest share of any in the Nasdaq Composite, which is a cap-weighted index. Over the two years subsequent to the bursting of the internet bubble, the stock dropped more than 90%.”
“The overall stock market today has become increasingly concentrated, making it more difficult to achieve the level of diversification that would otherwise ease bear-market losses. For example, the five companies in the S&P 500 with the largest market cap now make up more than 18% of the combined market cap of all component companies. That is the most in U.S. history, according to Morgan Stanley Research—higher even than at the top of the internet-stock bubble.”
“In contrast to the 18% of combined market cap that the five largest companies in the S&P represent, the comparable proportion for Nasdaq was more than 40%.”
“The other investment lesson is that valuations matter, even though they don’t seem to when things are humming and some investors are convinced that the rules have changed. At the top of the internet bubble, for example, Nasdaq had a price/earnings ratio of more than 100 when calculated on trailing 12 months’ earnings—and still 75 when based on estimates of subsequent 12-month earnings. Both were many orders of magnitude higher than the broad market’s long-term P/E average of below 20.”
“In hindsight, the P/E ratio was a good indicator of the market’s overvaluation, and of weaker returns ahead: Since its March 2000 high, the Nasdaq Composite, on an inflation- and dividend-adjusted basis, has produced a return of just 1.3% annualized. The comparable return for the S&P is 4.1% annualized, which is itself lower than the 6.8% average annualized return for the past two centuries.”
recession is here
lets vote in:
higher cap gains- there won’t be any
unions 0x40$ an hour
I know this isn’t your thang, but you could expand on “unions 0x40$ an hour”? Like, with a complete sentence?
0 = hours (no job / no hours)
40$ = hourly wage
In the UK they have something they call a “0 hour contract”, which basically means you’re part time and you have no guaranteed hours, meaning they can call you and say “don’t come in next week”.
In ussa, they say that to “full time employees.”
Back around 1980 I moved north of Pittsburgh because of a new job. Pullman Standard was on strike. The workers were demanding something like $18/hr wages. What they got was zero hours. The place never reopened.
It’s like that for musicians, too. I’ve been in the union since 1982 or so. Get about one or two union gigs a year. Pay is good, but there’s almost no work to go around the freelance pool.
Similar story for a friend of mine in the early 2000s. He did maintenance for factory. They went on strike. Company asked for 30 days to negotiate. At the end of 30 days, the company said, “We just moved the factory to China; you’re all fired.”
That’s how globalism just shafts workers. You’re competing against some Chinese man who’s making a few pennies an hour and isn’t even allowed to use the restroom.
free market capitalism…can i has more?
free market capitalism
If you’re at the other end of the spectrum, there is no strike, a few troublemakers are never heard from again, wages are lowered to China level.
union wages only exist for a few and mostly in the past. $40 for alomst no one ,but joe will offer it endlessly.
Tarrytown, NY Housing Prices Crater 25% YOY As US Single Family Vacancy Rate Skyrockets
The longshoremen are still doing well.
I recall there was once talk of shipping stuff through Mexican ports, loading it on trains and shipping it into the US that way. I guess that never happened.
“recession is here”
Remember…. as a noted economist said, “Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.”
Charlotte, NC Housing Prices Crater 14% YOY On Surging Crime And Mortgage Defaults
*Select price from dropdown menu on first chart
$ynchronized.Global.$lowing is a $ocial.Media Digital.Di$informational myth!
Coming $oon: “$oft.Landing$”
Boy are the masses jumpy! Personally I like lower gas prices, but whatevah!
I’d like to point out some very popular absurdity. MSM is full of accounts that shutting down this or that is gonna cause “loss of income” and maybe even the dreaded “recessions!”
OK. But isn’t one political party running on a plan to eliminate combustion engines? No jets for you! All that green new deal nonsense would pretty much destroy the economy, as this virus thing has exposed. So we’re supposed to believe we’re gonna cut our economic throats, even though no one else on the planet would join us?
Fact of the matter is it ain’t gonna happen. That’s right, the politics dominating right now is just horse-sh%t ideas from a 20 something bartender. So it’s hard for me to take anything the media says at face value and it’s been that way for years.
Eye was per$onally hoping that “mal.inve$tment$” in “over.priced.$helter.$hacks.&.$ilicone.equite$” was gonna create premonition$ of what was likely to “De$troy.Thee.eCONomy!” …
($ometimes, eye’m just “dead.wrong” about what eye$ see$ in that $wirling mi$ty Crystal.ball, … $till, nothing ventured, nothing gained. Darn!)
‘shutting down this or that is gonna cause “loss of income”’
Yet not a peep from the media about the very real loss of income that has resulted from a decade plus of suppressed interest rates.
Indian Wells ATP Tennis Tournament … has been cancelled.
Up next: No free $ee’$ samples in Omaha, NE on May 2 … (no refund on my ticket$, eye hope the weather is good for wandering around downtown.)
Eye’$ wonder$ iffin’ Warren & Charlie are aware$ of what’$ happening this.day.
Probably not as Charlie and Warren don’t actually live in Omaha. Omaha is just a photo-op.
‘Cisco Systems, the internet hardware and software company, had the largest market cap of any stock in March 2000, and represented the largest share of any in the Nasdaq Composite, which is a cap-weighted index. Over the two years subsequent to the bursting of the internet bubble, the stock dropped more than 90%’
Time does things huh? A little drop like 90% is just a discussion point. I was in this dot-bomb thing and saw people get their face ripped off.
So you silly people with your toilet scrubbing or flying cars, and making no money or relying on sub-minimum wages like robber barons, you guys can kiss my grits. I remember when losing money was thrown off like these were the only people with “vision.” I was an accountant, and I had to pay the bills and make payroll.
When Worldcom was really flying high, they were our #2 customer. Man the media was full of stories about their new-era greatness! But I did wonder why I couldn’t get them to pay us.
It’s a scam now and it was then.
“Time does things huh? A little drop like 90% is just a discussion point. I was in this dot-bomb thing and saw people get their face ripped off.“
“It’s not different this time.”
Many will get their face ripped off again thanks to continuing MMT.
Maximum moral hazard.
“Embrace the suck!”
These stock market bubbles are a scam. They’re based on nothing but hype. When we’re told “earnings and losses don’t matter,” it’s a warning that the system is very sick.
And how about these “unicorns”? Now they don’t even bring some of them to the market to dump, just keep those many billion$ ties up in VC fairy land. Puddle watching fools with more money than sense.
They’re scams all the same. The question is where does all the money to fund these scams come from? A lot of it is excess from said stock market bubble, but also from the FED’s outrageously irresponsible low rate BS. The “search for yield” has guaranteed these Ponzi schemes.
I think there’s too little emphasis on the damage that real estate bubbles (and everything bubbles) do. They make it too expensive to start legitimate businesses because of high rents and property prices, so more and more you see ventures which are steeped in fantasy rather than reality – new paradigm thinking sort of stuff.
We need all property prices to fall greatly so that businesses can start up with a much lower cost basis. All of that vacant commercial real estate you talk about is due to the extreme prices. Cut those by 2/3 and you would see the store fronts filling up.
“too little emphasis on the damage that real estate bubbles do”
This is a great point. Society has lost out on tremendous innovation, talent, products, employment – just progress in general – for years because of these bubbles. On the one hand it’s tragic because of the lost potential. On the other, think what the country will be able to achieve when these bubbles finally pop.
‘It’s important to keep in mind that New York City and the surrounding areas were already buyer’s markets prior to the coronavirus outbreak’
Lots of situations were in place before this virus: China headed down and their RE buying in the US seized up 3 years ago. Oversupply all over the place. Not just too much, but the wrong stuff – luxury!
Apartment/student/senior foreclosures are common now. We’ve seen the guberment loan guarantee biz exposed as sub-prime by the guberment no less. We’re seeing tens of thousands of shacks go up for auction while at the same time the REIC says there aren’t any foreclosures!
We got half finished, defaulted towers in New York City, Miami, and Los Angeles. Even if finished there aren’t any buyers: they are:
RRE & CRE are just two components of the central bank MMT-induced everything bubble.
Add stocks and corp. bonds…
Drawn and quartered would be too good for them.
Me: “We are so screwed!”
MSM: a) “Everything is awesome!”, b) Stimulus – “Please sir, can I have some more?”
How ugly will the NYC luxury condo market be in the second quarter? So ugly Rodney Dangerfield wouldn’t be able to describe it.
I think he once described such a scenario as a “two bagger”. One paper bag to cover his wife’s head, and one for him in case hers fell off.
Ireland May Cancel $t. Patrick’$ Day
Bloomberg | By Peter Flanagan | March 9, 2020,
Ireland’s national day, which takes place on March 17, sees parades and celebrations across the country and is a key week for the Irish tourist industry. About half a million people attended last year, with thousands traveling from overseas.
The virus is already having an impact. On Monday, Irish hotel operator Dalata said it had seen a “significant reduction in bookings” and “a significant increase in cancellations” since last month.
One parade in the south of the country was canceled last week, while the government has faced calls to halt all mass gatherings in the face of the coronavirus. Ireland has 21 confirmed cases.
“Whatever our public health experts guide us on in terms of St Patrick’s Day is what the government will go with,”
Today is a “Lehman Brothers” moment.
I dumped most of my stocks in October 2019, because I can see the future…
$ome folk$ are gonna look pretty $tupid, when this Corona.Viru$ “A$ian.airborne.death.germ$” $care turn$ out to bee a $illy: “Hoax!” … $ad.
Hotel Owner$ Face Reality of the $preading Coronaviru$ Outbreak$
By Patrick Clark |Bloomberg |March 9, 2020
The hotel industry is waking up to the adver$e effect$ of the coronaviru$.
After weeks of conference cancellations, corporate travel restrictions and cratering stock values, lodging owners are pulling guidance and cutting expenses while the spread of the virus socks hotel demand. The shift in tone comes after the largest companies in the industry initially pushed the idea that the impact from the outbreak would mainly be confined to operations in Asia.
Ryman Hospitality Properties Inc. — which owns large conference hotels as well as the famous country music showcase Grand Ole Opry — pulled its forecast for 2020 on Sunday evening under a deluge of cancellations that make past shocks to the hospitality industry look tame. Pebblebrook Hotel Trust followed suit on Monday, saying that escalating cancellations from groups and business travelers have made it unlikely that the company will achieve its first-quarter and full-year projections.
“I’m very surprised at this point that others have not,” said Patrick Scholes, an analyst at Suntrust Robinson Humphrey Inc. “Historically, this has been an industry that has been highly reluctant to take down their numbers or talk negatively about trends unless their feet have been held to the fire and it’s painfully obvious they have no choice.”
“We would expect this will be me$$y for the next few week$, if not maybe the next few month$,” Marriott International Inc. Chief Executive Officer Arne Sorenson said on a Feb. 27 earnings call. He added that when the outbreak ends, consumers will regain confidence and “travel will come back and it will probably come back fairly quickly.”
Inve$tor$ were not a$$uaged.
Im thinking the same thing TDS has morphed into CVS corona virus syndrome. and its going to look stupid next month
Senator Ted Cruz apparently doe$ knot $hare yer $entiments.
3 May 2017
Which US hotel markets are on the bubble?
As the hotel industry continues on the path toward a downturn, it’s time to begin looking at warning signs for which markets are poised to experience a large drop.
‘At a recent gathering, I was involved in a group conversation with hotel property investors who agreed that they have been “choking on the numbers” in certain U.S. hotel markets. Stated differently, their spreadsheet models explode once either acquisition prices or development costs are entered to evaluate hotel opportunities, especially in red-hot markets.’
Red hot = an ass-pounding this way comes.
Remember…. as a noted economist said, “Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.”
Centreville, VA Housing Prices Crater 29% YOY As One Fairfax County Broker Conceded, “There Is Fraud In Every Transaction”/strong>
Remember…. as a noted economist said, “Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.”
Centreville, VA Housing Prices Crater 29% YOY As One Fairfax County Broker Conceded, “There Is Fraud In Every Transaction”
Reckon thi$ will have effect$ on their grain$ export$?
Brazil Meltdown $ends Currency to New Low as $tocks Halted
Bloomberg |By Vinicius Andrade and Aline Oyamada |March 9, 2020
The Brazilian real, already the world’s worst performer this year, weakened 3.6% to a record low 4.79 per dollar shortly after open.
Assets in Latin America’s largest economy mirrored turbulence across the globe. Volatility has reigned as the coronavirus outbreak has infected more than 108,000 people. Adding to the carnage, Saudi Arabia triggered an all-out oil price war, causing crude to crash more than 30% at one point.
“Markets seem to be pricing a global rece$$ion,” said James Gulbrandsen, chief investment officer for Latin America at NCH Capital.
“Trade.War$ Are ea$y!” … mini.Pha$e l v7.6 $tifled = (no one$ talking & no “face.to.face” meeting$ are $cheduled.)
U.$. Show$ China Patience on Purcha$es If Trade Gap Does$n’t Grow
Bloomberg News |March 8, 2020
The U.S. is willing to show China some flexibility on its pledges to boost American imports as long as Beijing ensures exports don’t surge when production returns to full strength and widen the trade imbalance between the world’s two largest economies, people familiar with the discussions said.
China agreed to increase its imports of U.S. goods and services by $76.7 billion over the level in 2017 in the first year of the deal, and then by $123.3 billion in the second year, increasing imports by a total $200 billion over two years.
A more detailed annex of the agreement that lays out specific commodities and their target numbers was cla$$ified.
The document also set up regular meeting$ to discu$$ the progre$$ and implementation$ of the agreement. The two sides are currently preparing for talks, according to one of the people familiar with their preparations.
Trump acknowledged last week that the buying spree might not fully be in effect before November.
“They’re going to start kicking in fairly soon. Unfortunately, by the time we get to the election they’ll just be partially kicked in,” the president said about his China deal and other trade agreements in an interview with Fox News host Sean Hannity last Wednesday.
— With assistance by Jenny Leonard, Steven Yang, and James Mayger
Energy stocks are really taking it on the chin today. As I write this XLE, the energy sector SPDR, is down about 17% since the open and down about 40% YTD.
At some point the energy sector has got to become a deeply discounted value buy. We’re going to be driving cars and heating homes with fossil fuels for the next 20 years.
‘Brent crude prices collapsed, falling by as much as 31% on Sunday evening in what was the largest single-day drop since the U.S. invaded Iraq in 1991.’
“There’s always winners and losers in any market, but right now the idea that lower gasoline prices is going to put more cash in workers’ pockets and give consumer spending and the economy a boost doesn’t seem to cushion the blow for stock market investors,” wrote Chris Rupkey, MUFG’s chief financial economist, in an email on Sunday evening.’
“They want out. Big time. The sky is falling,” he said.’
I’m not being insensitive, but this is a bit comical. So some market manipulators are unable to manipulate oil prices and it’s run for the hills! Maybe we should tell OPEC to pound sand? How are they relevant anymore? There’s plenty of oil and gas.
Come on yahoo, can we have some more “setting hair on fire”?
Dr. Peter Venkman: This city is headed for a disaster of biblical proportions.
Mayor: What do you mean, “biblical”?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath-of-God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies. Rivers and seas boiling.
Dr. Egon Spengler: Forty years of darkness. Earthquakes, volcanoes…
Winston Zeddemore: The dead rising from the grave.
Dr. Peter Venkman: Human sacrifice, dogs and cats living together – mass hysteria.
When the wealthy oligarchs start to lose big money, they launch an all out propaganda war to convince the masses how bad it is for prices to go down, and how intervention is the only solution.
Where are the articles which tell these swindlers and the FED to go pound some f**king sand?
Here’s the kind of garbage they’re putting out daily. FED this, FED that. F**k the FED. Since when is it their job to not only blow stock market bubbles, but to try to maintain them?
It seems like the emergency half point cut last week lit a fire under the @$$es of people who were thinking about selling their stocks, and also drove Treasury yields down towards the zero bound.
Is this what they had in mind?
And right on cue, here was an article about “helicopter money” from the FED yesterday. This is all by design.
“And right on cue”
Saw a quick blurb on Bloomberg Markets this morning that suggested the Fed would also buy mortgages.
that suggested the Fed would also buy mortgages.
Also right on cue. Although I doubt they will bail out J6P directly with a max-price-purchase-and-rent-it-back to him scheme. If the past is any guide they would let the banks repossess and then buy it from them at full price and make sure the banks make money off the deal.
the articles which tell these swindlers
I think that at the moment they are getting the news directly by special courier.
Right. I’m sitting here yawning. 7 more days like today and we’re finally getting somewhere.
I don’t think we’ll see that yet. Too many people buying the effing dip for that much of a drop. Wait until after the election, when the printing presses run out of ink and the second COVID wave hits. That’s the time to have cash and pm.
Just wondering, if cash will be so great to have, what would you be doing with the PM?
Well you can’t do too much with the physical pm during a quarantine. But if there’s an economic crash due to the repo/debt/not-qe, presumably the dollar would fall and PM would skyrocket. If you lose your job, or the currency inflates faster than your salary (ie. Venezuela) you could sell the PM to live on or to pay off debt.
‘presumably…PM would skyrocket’
When has that ever happened?
And aren’t PM prices just as manipulated as our currency?
To wit: https://www.justice.gov/opa/pr/current-and-former-precious-metals-traders-charged-multi-year-market-manipulation
What’s your thought on timing? Seems like this could merely be the OPEC supply-glut leg down, with more coronavirus demand-collapse legs down to come.
PB (Professor Bear or my favorite Peanut Butter)
I think that Saudi thinks that they can take down Russia – and are willing to invest 3 years of low $ oil.
Independent of what Russia leaked today – they cannot last with sub $50 oil beyond this year. Superpainful for everyone (including Permian Basin) – but that is their goal.
Watch for Norway, NorthSea/Scotland, Ghana, Nigeria, and Mexico amongst being hurt very badly
Last I heard Mexico isn’t exporting much oil these days. Gasoline is also more expensive in Mexico than the US, about $4 USD a gallon.
Dumb question of the day: What happens to all that debt that was used to pump up stock prices through buying back companies’ own shares in the event of a stock market selloff?
What happens to all that debt
The corporate assets sold off after bankruptcy will satisfy some of it.
Stock-Buyback Plans Shrink
The new coronavirus may threaten companies’ buyback plans—though a down market could also create a buying opportunity
Planned buyback authorizations are at the lowest level in three years
Source: Birinyi Associates, Inc.
By Sebastian Pellejero
March 9, 2020 11:00 am ET
U.S. corporations are signaling a reduced appetite for stock buybacks this year, undermining a pillar of support for stocks at a time of heightened volatility.
Companies authorized around $122 billion in future buybacks through February, according to data compiled by equity research firm Birinyi Associates, marking a nearly 50% drop from the same period a year ago and representing the slowest pace in three years. Meanwhile, S&P Dow Jones Indices projects that the total amount of buybacks in the final three months of 2019 was down 18% compared with a year earlier, totaling around $183 billion.
Companies repurchased around $730 billion of their own stock during 2019—one of the biggest sources of money flowing into the stock market. Analysts are still projecting around $800 billion in buybacks this year, according to S&P Dow Jones Indices, but that figure may be threatened by the uncertainty surrounding the new coronavirus’s effect on the global economy.
Stock buybacks reduce a company’s shares outstanding, which boosts its earnings per share, though not its overall profit. Companies enjoy the flexibility of buyback programs, which can be adjusted easily, whereas dividend payments—another common way for companies to return value to shareholders—are typically expected to be regular and, often, to rise over time.
What a f***ing waste.
$730B could had been used for so much R&D or capital expenditure —- but was wasted on stock buy backs that are now lost with an 19% downturn in the last 3 weeks.
Everything worth investing in was already bought, and mountains of things not worth investing in. Massive stimulus is going to go to waste by definition.
We still haven’t had Infrastructure Week. $730 billion could fix up a lot of schools and fill a lot of potholes. Of course, nobody seems to care about THINGS anymore. It’s all about pensions and unions and kickbacks. Meanwhile our ACTUAL STUFF is still standing only because the engineers of 70 years ago, lacking computers, built in yuuge safety margins. But sooner or later, everything must fail.
“We still haven’t had Infrastructure Week.”
I’d love to listen to you after a couple of shots of some quality Bourbon whiskey. You go girl!
‘its population is 0. No one lives there. As of March 6, only four unoccupied houses are within the subdivision. The rest is dirt or paved roads…According to records, the four single-family residences were constructed in 2009 with 2020 Full Cash Values between $231,000 and $284,000. Records appear to indicate the subdivision has the capacity for over 50 homes’
This stuff is all around Phoenix. I made videos of it years ago. BTW, shacks go to hell in a hand-basket when left empty in that climate.
‘Canada’s economic outlook has notably darkened after discord among major oil producers has led to an all-out price war that’s sent crude tumbling.’
‘The Canadian economy nearly ground to a halt in the final quarter of 2019, although a rebound was expected this year as temporary disruptions faded. But with the emergence of COVID-19 and its rapid spread throughout the world, the economic outlook has worsened both at home and abroad, and lower crude prices deliver another headwind to growth prospects.’
‘Alberta Premier Jason Kenney recently said a virus-related economic downturn could dash his government’s plans to balance the provincial budget within two years. In the recent budget, the Alberta government projected WTI would average US$58 a barrel in the coming year – a forecast that many observers said was overly optimistic, given recent price struggles.’
‘The budget also noted that, for every US$1 its oil-price assumptions were off, revenue would swing by roughly $355-million.’
‘For policy makers, it’s a challenge unlike anything before. The global financial crisis in 2008 prompted historic rate cuts by the Fed and Bank of Canada to provide a lifeline for ailing banks amid a widespread freeze of the credit system. Governments spent hundreds of billions of dollars to bail out systemically important companies.’
‘One problem now, however, is that central banks are nearly out of ammunition.’
‘Ever since the crisis, central bankers have served as the prime caregivers for sickly economies. They have repeatedly chopped interest rates to resuscitate activity.’
‘This week, both the Fed and the Bank of Canada chopped their policy rates by half a percentage point in a single go – something they had not done since the 2008-09 debacle.’
‘Both Canadian households and the corporate sector have taken on high levels of debt over the past decade. Excluding the big banks and other financial companies, Canada’s ratio of total debt to annual gross domestic product (GDP) is now 119 per cent. Not only is that a record high, it’s also among the highest in the developed world.’
‘By contrast, Canada’s non-financial debt to GDP was about 80 per cent going into the Great Recession of 2008-09, according to the Bank of International Settlements. “Corporate balance sheets have never been this vulnerable to a recession before. Not even close,” said David Rosenberg, head of Rosenberg Research and Associates.’
‘To be sure, many growing companies have deliberately added debt knowing that prevailing low interest rates provide an attractive way to finance expansion without undue balance-sheet pressure.’
‘The growth of corporate debt in the years since the global financial crisis has been a worldwide phenomenon. Between December, 2008, and December, 2019, the global stock of non-financial corporate bonds doubled, according to a recent OECD report. Credit quality has broadly deteriorated over that time, as lenders have readily supplied riskier borrowers with financing.’
‘According to the International Monetary Fund’s latest report on global financial stability, a global economic shock only half as severe as the one in 2009 would put nearly 40 per cent of corporate debt in major economies “at risk.” That means companies carrying US$19-trillion in debt would not have enough profits to cover their interest payments.’
‘An escalating outbreak could scare lenders away from the energy sector’s marginal borrowers. Despite a wave of debt reduction, cost cutting and consolidation in the oil patch over the past five years, there are still companies in the sector just treading water.’
“There are a number of zombie companies out there who have managed to keep the lights on for a lot longer than I would have been expected,” said Robert Mark, a portfolio manager at Raymond James and former energy analyst. “I’m surprised there haven’t been more bankruptcies.”
‘Central banks in Europe and Japan have taken their policy rates into negative territory, but such drastic action appears unlikely in Canada and the U.S. “I’m dubious about negative rates,” says Eric Lascelles, chief economist at RBC Global Asset Management. “There is a big debate about whether they actually work.”
‘Saudi Aramco shares fell by as much as 10% on Monday, dropping below their December listing price after Saudi Arabia and Russia said they would raise oil production in a battle for market share, sending crude prices down by a third.’
“The Saudi reaction to the breakdown (with Russia) was to revert to the 2014 playbook. By precipitating an oil price collapse, they are looking to end their subsidy of higher cost producers,” Akber Khan, head of asset management at Al Rayan Investment, said. “This is a painful strategy that requires time to play out and failed on the previous attempt.”
‘The cost of insuring against a potential debt default by Saudi Arabia also spiked by nearly 70% on Monday, IHS Markit data showed after oil prices plunged.’
‘A regional fund manager, who asked not to be named, said it was difficult to estimate the extent of the price fall (in Gulf government bonds) following the tension between OPEC, led by Saudi Arabia, and Russia.’
“(Saudi Arabia) has got reserves for the time being, but at $30 a barrel, it’s going to be running a significant fiscal deficit in 2020 and going forward. It doesn’t have a lot of financial flexibility in terms of adjusting its budget,” he said.’
‘If Saudi Arabia tapped the debt markets, he said it would likely pay around 60 basis points higher in interest as credit default swaps rose by that level on Monday.’
It’s a double-edged sword. They can only sustain a price war for so long. Certain that Putin knows it, too.
“The cost of insuring against a potential debt default by Saudi Arabia also spiked by nearly 70% on Monday, IHS Markit data showed after oil prices plunged.”
Even though Saudi Arabia was able to suck out trillions of dollars worth of oil out of the ground there is some worry about them defaulting on their debts. What a bunch of dummys.
Saudi Aramco shares fell by as much as 10% on Monday
Did Aramco ever get that IPO done? Last I recall they were frantically trying to cash out before…now.
Only <2% I think.
“I’m dubious about negative rates,” says Eric Lascelles, chief economist at RBC Global Asset Management. “There is a big debate about whether they actually work.”
Define “work”. Just because they don’t do what you want or expect doesn’t mean nobody benefits. Follow the money.
‘The budget also noted that, for every US$1 its oil-price assumptions were off, revenue would swing by roughly $355-million.’
I hope they didn’t enlist AlbuquerqueDan to help with their oil price forecast.
Aw, don’t be so hard on ol’ Dan! 😉
Also so fortunate that we’re not seeing gas rationing as forecast.
Corvallis, OR Housing Prices Crater 28% YOY As Broke Sellers Bray And Blubber Uncontrollably
As a noted economist stated, “You’d have to have rocks in your head to buy a house in the last 15 years.”
TSLA is still at 625.
Oh man there’s still A LOT to drop! 90% drop for TSLA, 70% drop in NASDAQ, 60% in S&P and 50% in DOW.
And Housing drop by 55.9%.
That will be super..still high, but it within reach of normalcy.
Dow is down almost 2000 points. Aren’t there circuit breakers to prevent daily selloffs of such devastating magnitude? And whatever became of the Plunge Protection Team?
I’ve been saying in here for a very long time now that the bursting of the Everything Bubble was going to be a thing of terrible beauty. And so it is. At long last, the Keynesian fraudsters at the Fed are going to be exposed to millions of pauperized retail investors as the charlatans that they are. No one said that red pill goes down easy, sheeple.
At long last, the Keynesian fraudsters at the Fed are going to be exposed to millions of pauperized retail investors as the charlatans that they are.
Yet somehow I think that they won’t suffer any real consequences, while millions will see their pensions and savings demolished.
> the bursting of the Everything Bubble was going to be a thing of terrible beauty.
Indeed. Pass the popcorn.
> Yet somehow I think that they won’t suffer any real consequences, while millions will see their pensions and savings demolished.
I think we can take that to the bank…
Annddd ITS GONE!
The man who did everything in his power to boost the stock market price loses election as a result of this ‘correction.’
Oh, that’s some sweet irony.
Trumpy is your President until 2024.
That’$ knot what yer “unnamed” female eCONomi$t i$ $ignaling.
Don’t worry, the Ds are masters of finding a way to lose anyway. Joe is on deck and ready to do his part to throw the game. Seems like the perfect election to lose if you think about it. Thanks to Trump taking full credit for the bubble, might as well let him own it all the way down.
“Thanks to Trump taking full credit for the bubble, might as well let him own it all the way down.”
What a buffoon
Ironically, all the things he wanted, and that we elected him for, now seem like really good ideas.
I could stomach a Dem, except for the flood of illegals that will walk right in within a week of the Inauguration. But they will be walking into a deep recession. Good luck mowing lawns and cleaning hotel rooms.
Biden could very well be the next Hoover. FDR was elected because Hoover refused to print money. This time, we’ve been doing nothing BUT printing money for the last five years or more.
IMO, nobody in their right mind would blame him for this, so I think the irony exists in that he could be a hero right now and win handily in November. Instead, the choice has been to downplay that which was the catalyst for the market downturn.
“I like the numbers being where they are. I don’t need to have the numbers double because of one ship that wasn’t our fault,” Trump said in a Fox News interview.
He’s done some bad interviews on this virus. He should not say anything.
+1 Public health is the electrified 3rd rail.
When permabulls throw in the towel, it’s game over.
The collapse in yields and oil is signalling an imminent recession…I think we need to parse everything and remember that while most stocks aren’t buyable, they will get to be that soon enough at this pace..
6:22 PM – Mar 8, 2020
What does he mean by buyable?
You won’t catch yourself a falling knife if you buy stocks.
I bet he would still say “buy, buy, buy” if the market wasn’t tanking. He never had a regard for valuation…just propaganda.
Doe$ It matter$ whether a World.Wide Equite$.Collap$e happen$ 8 month$ into yer term, or 8 month$ from the end of yer term?
The $tock market cra$hed on Thursday, October 24, 1929, less than eight months into Herbert Hoover’s presidency.
Since the crash, Hoover had worked ceaselessly trying to fix the economy. He founded government agencies, encouraged labor harmony, supported local aid for public works, fostered cooperation between government and business in order to stabilize prices, and struggled to balance the budget. His work focused on indirect relief from individual states and the private sector, as reflected in this letter’s emphasis on “support[ing] each state committee more effectively” and volunteerism—”appeal[ing] for funds” from outside the government.
As the Depression became worse, however, calls grew for increased federal intervention and spending. But Hoover refused to involve the federal government in forcing fixed prices, controlling businesses, or manipulating the value of the currency, all of which he felt were steps towards socialism. He was inclined to give indirect aid to bank$ or local public works projects, but he refused to use federal money for direct aid to citizens, believing the dole would weaken public morale. Instead, he focused on volunteeri$m to raise money. Hoover’s opponents painted him as uncaring toward the common citizen, even though he was in fact a philanthropi$t and a progre$$ive before becoming president. During his reelection campaign, Hoover tried to convince Americans that the measures they were calling for might seem to help in the short term, but would be ruinous in the long run. He asserted that he cared for common Americans too much to destroy the country’$ foundation$ with deficit$ and $ocialist institution$.
He was soundly defeated by Franklin D. Roosevelt in 1932.
By THE GILDER LEHRMAN INSTITUTE OF AMERICAN HISTORY
Opinion: The stock market’s ‘wall of worry’ still isn’t high enough to signal a buying opportunity
Published: March 9, 2020 at 1:38 p.m. ET
By Mark Hulbert
A contrarian analysis of the stock market’s plunge
CHAPEL HILL, N.C. — The bloodletting still has further to go.
This bad news come from a contrarian analysis of short-term market timers, who on balance have not yet exhibited the utter despair and pessimism that is the hallmark of a tradable bottom.
The good news, however, is that we’re getting closer.
The chirping birds on Yahoo Finance and people I work with are still saying the underlying economy is sound so this won’t last.
I keep bringing up record levels of corporate/personal debt and the preponderance of stock buybacks to no avail.
It is possible, I guess, that C-19 and the oil market get the ball rolling such that the crater from the realization of the existence of the debt bubble won’t be as bad. Then again, maybe it’s additive.
You had me @: “$econd quarter$ Earning$ report$”
The supply shock has already happened. The tsunami of debt defaults has yet to arrive. It’s a great time to be on high ground.
Right. Coworker was trying to convince me that our sales decline will be due to a supply chain issue but demand will remain. No dude. Maybe a few savers will buy a new phone. Maybe. But likely few others will.
I certainly do not think people will be eager to spend money (they don’t have) if our economy is rocked some by what happens in China.
The real danger isn’t people too poor to buy a phone. The real danger is that people will have to use the phone they already have, only to find — lo and behold — it still works. So they’ll think “Maybe I don’t really need a new phone for another year or so.” And there go your sales. Ditto for cars. And houses.
I remember well the economic meltdown of 2007/2008. I watched as shop after shop just closed their doors. I saw a WaMu bank run in real time. The line stretched from the front door all the way out the parking lot and around the corner.
Right now, economic activity is bustling. This feels more like a stock market blow-off top. Valuations got to stupid levels. I’m watching for job losses. If those begin in earnest, then all bets are off.
A liquidity crunch was what took down Bear Stearns, then Lehman Bros, then the global financial system in 2008.
“Liquidity” means “the ability to sell financial assets at any time for what you have them priced at on your books.”
When you’ve got toxic-waste garbage that your non-GAAP financial statements value at $1B, and you need to sell, you’ve got a big “liquidity problem”. And despite the Fed announcing it’s bumping up its repo liquidity injections to $150 billion A DAY into the financial system, eventually all that decaying collateral means interbank transactions are going to lock up, if they haven’t already. And when that happens, it’s Game Over for the Fed’s asset bubbles and Ponzi markets, if not the entire global financial system.
its repo liquidity injections to $150 billion A DAY
Not to dispute your overall point, but how much of the Repo gets withdrawn every day? Pretty much all of it?
“economic activity is bustling”
I just bought a new pair of Patagonia ski pants off the clearance rack at REI.
FWIW, it’s March now, and you are below 40° N latitude, so yeah, the clearance rack probably makes sense. We are still below freezing every night, but the days are finally shaping up. Chalk up another 5-month winter courtesy of the fed.gov housing bubble.
I haven’t been to the local JAX lately, but I suspect they’re starting to display the summer stuff.
The underlying economy is not everywhere sound. People I know who sell stuff to China are hurting bigtime.
Jib$ & Jab$:
Thee Repubican$ are ceasele$$ in their “Alernative.fact$” manipulation$. Thee Democrapt$ are $o wi$hy.wa$hy in their attempt$ @ ketchup!
TECHNOLOGY NEW$ |MARCH 8, 2020
Twitter debuts ‘manipulated media’ label on clip of Biden retweeted by Trump
Reuters|By Elizabeth Culliford
SAN FRANCISCO (Reuters) – Twitter Inc has used its new “manipulated media” label for the first time on a video clip of U.S. Democratic presidential candidate Joe Biden that was retweeted by President Donald Trump.
Twitter rolled out its new policy, which labels tweets with altered or synthetic media such as so-called deepfakes or more manually edited videos, on March 5.
A Facebook spokesman said on Monday the company’s third-party fact-checkers had now rated the video as “partly false.”
“We are reducing its distribution and showing warning labels with more context for people who see it, try to share it, or already have,” he said.
Then Twitter needs to wipe out al those “quotes” where Trump “said” c-virus will be over by April. Trump never made that assertion. He was relating what people had said TO him. Or are you still counting that as one of Trump’s 16842 “lies?”
Relax, “it$ contained!, or con$trained?” … matter$ knot.
“Then Twitter needs to wipe out al those “quotes” where Trump “said” c-virus will be over by April. Trump never made that assertion.”
With cheerleaders like Hwy posting everywhere it doesn’t really matter.
And like Joe Biden said about “the $pread of coronaviru$,”
I would like to introduce you to the sister I married.
$eems like you & all thee “eddie.haskell’$” i$ a.gettin’ kinda nervou$ Jeff.er.referee.
“It$ contained!” 😷🤒🤧 🛌☠… corona.No! 🙈🙉🙊
Twitter is the manipulator.
The video was NOT manipulated.
“Disinformation” is the new disinformation.
We’re seeing an intentional and coordinated effort by established gatekeepers to equate political speech they don’t like with the entirely separate categories of doctored deep fakes, illegal content, and deceptive cheap fakes.
National Enquirer “Truth.$layer$!”
Dow down 2,000 points and headed lower. Trillions in Yellen Bux “wealth” being wiped away.
Holding cash on the sidelines and waiting.
My sense of urgency to buy stocks now is slightly above that to buy housing, the latter of course being non-existent.
I’m with you. I’m not buying this effing dip, except for the usual dollar cost averaging. I’m waiting for DOW less than 20,000 or even 18,000 to even think about inching in.
Meanwhile, in other news, gold is up 0.5%. BtC is down 15%. I hope that shuts up the hipster techies who thought BtC was going to bring about world peace.
Got some colleagues who BTFD today. One of them daytraded volatility and made a tidy sum ($1200 I believe).
Another colleague told me she bought a few select beaten down stocks. But she added that she is sitting on a large cash horde (she has lots of cash money because she rents instead of owning an overpriced home). She eventually plans to buy some energy shares, but not until some more cratering has transpired.
Why bother with either when prices of both are falling?
Denver, CO Housing Prices Crater 17% YOY As On Broker Concedes, “Housing Is Becoming More Worthless With Each Passing Day”
*Select price from dropdown menu on first chart
Go ahead….. Stamp those feet…. Do it!🤣
“Where there is blood on the streets, buy property” —Baron de Rothschild
S&P down 7.4%
I will probably start dipping in at S&P 2400 (we are at 60% case equivalent)
The issues will be the banks – already heard on CNBC that they might invite more banks to the lending window.
Also overnight – the JCB released majority Japan owned banks to participate to the NY Fed Lending window.
“It’$ Contained!!!” … Bibi seems to knot concur.
WORLD NEW $| MARCH 9, 2020 / UPDATED 28 MINUTES AGO
Israel to require quarantine all citizens returning from abroad: Netanyahu
JERUSALEM (Reuters) – Israel will require all citizens who return from abroad to self-quarantine for 14 days as a precaution against the $pread of coronaviru$, Prime Minister Benjamin Netanyahu said on Monday.
It will admit foreigners only if they can prove they have the means to self-quarantine, Israeli media said, adding that this measure would go into effect on Thursday.
Writing by Dan Williams
In a country where 66 million people voted for one of the most corrupt, evil candidates to ever run for the presidency, expecting people to “self-quarantine” for the public good is a non-starter.
Cheer up. She lost.
And still living in your head rent free 3 years later…LOL…
… and I in yours…. Since 2005.
Carnage, riot$ ?… $mells like trouble$ i$ $preading, keep.back you infected varmint$! … Corona.NO! 👐😷🙅
WORLD NEW$| MARCH 9, 2020 / A MINUTE AGO
EU seeks to tackle coronavirus$ as Italy locks down north, prisoners riot
By Giulia Segreti, Elvira Pollina
A METER APART:
With Italy’s economy already on the brink of recession, bars and restaurants in Lombardy were ordered to close or to restrict entry and maintain a distance of at least a meter between people on their premises.
At the weekend, people had queued outside supermarkets to buy food and there was widespread confusion about what exceptions might apply to rules saying people could travel only for proven work reasons or emergencies.
The rules do not stop people going to and from work or prevent goods deliveries, and Switzerland left its border open for the thousands of Italians who commute from Lombardy into the neighboring Swiss canton of Ticino every day.
Stocks have fallen worldwide as the virus has spread, cutting global supply lines and crippling industry.
Iran, with 7,161 cases and 237 deaths, the third highest confirmed toll after China and Italy, temporarily released about 70,000 prisoners because of the coronavirus, judiciary chief Ebrahim Raisi said.
“The release of the prisoners … where it doesn’t create insecurity in society … will continue,” he said, according to Mizan, the judiciary’s news site.
(Additional reporting by Leigh Thomas in Paris; Francesco Guarascio and Philip Blenkinsop in Brussels; Hyonhee Shin and Joyce Lee in Seoul; Babak Dehghanpisheh in Dubai; Writing by Nick Macfie; Editing by Kevin Liffey
Italy is now quarantining the entire country…
Larimer County has its first confirmed case.
Trumpy’s gonna take out the trash this time.
Keep huffin’ & puffin’ … comin’ up next: 2nd.quarter$ earning$ … $ad.
( -2,018.43) -7.80%
New lingo, for the new $ales $logan$!:
$hort, $harp, qua$i.rece$$ion = $oft.landing$!
A ‘$hort, $harp’ global rece$$ion is starting to like inevitable.
Analysis by Julia Horowitz, CNN Business | Mon March 9, 2020
Neil Shearing, group chief economist at Capital Economics, a research firm, said Monday that he sees a “$harp but probably $hort rece$$ion” as the wor$t ca$e $cenario for now. That could change rapidly.
“As the virus spreads, there’s a good chance that that ‘worst case’ scenario quickly becomes the most likely scenario,” he said in a research note.
Morgan Stanley’s chief economist Chetan Ahya told clients Sunday that the investment bank thinks global growth will receive a “$izable $hock” in the first half of 2020.
“The outlook is unusually uncertain but our sense at this stage is that this is most likely to be a $hort, $harp $hock,” Shearing said.
Joachim Fels, global economic advisor at PIMCO, told clients on Sunday that he now sees a “distinct possibility” of a recession in the United States and Europe during the first half of the year, followed by a recovery in the second half. Japan, he said, “is very likely already in recession.”
“In our view, the worst for the economy is still to come over the next several months,” Fels said.
‘This sounds extremely unusual as we have a desperate shortage of homes to meet demand at the moment,’ said Mike Orr with The Cromford Report, a group that analyzes the housing market in Arizona.”
They bought it at a knockdown price ($4 million) at a foreclosure auction during the housing crash and are presumably holding out for the highest possible return on their investment,’ Mr. Orr said about the investment company. ‘The completed homes are not available for sale or rent.’”
One of these things is not like the other. When are ‘Muricans going to throw out the bought and paid for FIRE sector stooges in both parties, and replace them with politicians who will actually represent and fight for their constituents and their districts against the speculators and predatory financier oligarchy?
How can you look at a curve like this (and that of countless other stocks) and not think to yourself, “we need a correction.”
Guy on Yahoo now calling for S&P at 3400 at year’s end. C’mon man.
Edit: select Max on the chart
Just when you thought it was $afe to di$embark the plane$ & $hips, a train.hater pipe$ out fear$!:
Big effort$ to keep traveler$ safe from coronaviru$
Commuting in the time of coronaviru$ in the nation’s large$t $ubway $ystem
By Ray Sanchez, CNN
A way into the body for the coronaviru$, whose spread has unleashed anxiety across the nation’s large$t tran$it sy$tem — which has never shut down due to health concerns.
Crowded trains each weekday carry more than 5 million people hardened by terror threats and track-dwelling rats, daylight assaults and diluvial water main breaks. COVID-19 is their latest worry.
“I do think they are potentially at risk because you’re in close quarters and sometimes you can’t escape if somebody is really near you and the train is packed,” said Gershon, a native New Yorker.
Tran$it $ystem undergoes a deep cleaning$:
The Metropolitan Transportation Authority, the state agency that runs the subway, buses and commuter rails, last week announced it was using bleach and other disinfectants recommended by the US Centers for Disease Control and Prevention to scour all equipment in the system every 72 hours.
The major cleaning includes 472 subway stations, 21 stations on Staten Island Railway, 124 stations and terminals on the Long Island Rail Road and 101 Metro-North stations.
“Your safety is our highest priority and, as such, we’re going above and beyond recommendations from health experts to disinfect the system,” said Pat Foye, MTA chairman and CEO.
Still, densely packed trains and buses — where it’s often hard to stand inches away from others when the CDC recommends six feet to avoid infection — can be fertile ground for the spread of the virus.
aqdanny.boy, $till awaitin’ yer Dec 2019 “tailwind$” … any.day.now!
Boeing, $230.88 ( -$31.45 …-11.99%)
… and down through the ground goes ah’ craterin’ crude….
Crude Oil Craters 52% YTD As Long Term Demand Plummets
“… and down through the ground goes ah’ craterin’ crude….”
Dang it! I just filled up my tank yesterday. I never time the markets right.
Hey the good new$ is, he now has time to take up 🎻 le$$on$!
Head of the New York/New Jersey port authority has coronaviru$, governor says
By Sheena Jones and Eliott C. McLaughlin, CNN, Mon March 09, 2020
(CNN)The head of the Port Authority of New York and New Jersey has tested positive for coronavirus, New York Gov. Andrew Cuomo said Monday.
Executive Director Rick Cotton is under self-quarantine working from home, and his senior team will be tested and placed in quarantine as well, the governor said.
Commuting in NYC in the age of coronavirus
It’s possible Cotton contracted the virus while working in and around the airports, Cuomo said.
The port authority oversees New York City’s John F. Kennedy International and LaGuardia airports, as well as Newark Liberty International and Teterboro airports in New Jersey and Stewart International Airport in Orange County, New York
The state hopes to have pri$oner$ at Great Meadow Correctional Facility in Comstock produce about 100,000 gallons of hand sanitizer per week, to combat price gouging, Cuomo said. The sanitizer will be used in schools and other city and state properties.
CNN’s Taylor Romine contributed to this report.
Now you’re just cheering for people to suffer.
The FED needs to sit back and shut up. Do nothing. Let this stock market figure itself out. Don’t cut rates again. Get the f*** out of the way and let the economy stand on its own two feet. The FED has caused this.
MarketWatch revives the Realtorbabble narrative with an updated version of a February 7th article retitled: As recession fears mount, here’s why home prices may not plunge alongside the stock market.
Realtors are liars.
1. If you plan to sell within the next few years, get it sold within the next month, before the novelty of record-low mortgage rates is overshadowed by Lombardy-style quarantines becoming prevalent in the U.S. and completely eliminating demand.
2. If you are planning to buy within the next few years, at least wait a few months for the coronavirus panic to take hold of the housing market. It’s much easier to buy a place if you are one of a very small handful of prospective buyers in the market.
“… at least wait a few months for the coronavirus panic to take hold of the housing market”
Do u.h.$ellers have to di$close iffin’ the owner/$eller or any of their recent visiting relatives & friends have been recently quarantined?
I have posted lots of figures about the 2009 flu pandemic or swine flu that killed between 284,500 and 579,000 world wide and not remembering panic in the Media or posts about it on Blogs like this one.
What there damn sure weren’t were cheerleaders like we have now.
Come on Hwy
Gimmie a C!!!
‘What there damn sure weren’t were cheerleaders like we have now’
Lots of people very happy about the virus and chance of a recession. I was reading about the lay-offs coming to the airline industry. Union jobs, unpaid leave. Profit margins there are slim to start with, so bankruptcies almost guaranteed.
I was reading about the lay-offs coming to the airline industry.
FlyBe, a UK based airline, bit the dust on March 5th.
Flybe (pronounced /ˈflaɪˌbiː/), styled as flybe, was a British airline based in Exeter, England. Until its sale to Connect Airways in 2019, it was the largest independent regional airline in Europe. Flybe provided more than half of UK domestic flights outside London.
In many cases they were the only carrier for some communities. My son flew with them from Newquay to Gatwick a few years ago. He said the airplane, an Embraer regional jet, was half empty. FlyBe has been teetering with insolvency for a while. I’m sure other carriers, like ultrabudget RyanAir and EasyJet, could soon be in trouble, as well as similar US carriers such as Spirit and Frontier.
It’s in the WSJ. The bigs are in trouble too. Some of them – surprise! – took on a lot of debt.
I would bet tourism in far flung places is getting hammered. Imagine sitting in a plane for 19 hours each way to Australia. No thanks.
“Lots of people very happy about the virus and chance of a recession.”
Now why would that be?
Imagine sitting in a plane for 19 hours each way to Australia. No thanks
It’s about 13 hours or so from LA to the Oz east coast. Last year, I flew from LAX to Brisbane. The flight was scheduled to last 13:45 but somehow we got there an hour early.
Imagine sitting in a plane for 19 hours each way to Australia. No thanks.
Just saw a news clip that QANTAS is grounding most of its A380 superjumbos. I expect that other long haul carriers, like Emirates, are staring at empty super jumbos as well. I guess Boeing will be getting some extra time to fix the MAX.
I was considering a trip to Cancun in May. That’s been scrubbed. There are some fantastic deals, but the prospect of getting quarantined there isn’t appealing at all. And for all I know, I might be sick at the time.
I have posted lots of figures about the 2009 flu
Here’s the problem Jethro. We have lots of data about 2009. We have practically none about this 2019 virus. This is a panic based on lack of information. The talking heads are mocking any kind of calm or stoic optimism, they’re pushing panic. Panic is not an appropriate response, just about ever, it’s illogical.
So, you’re expecting the illogical to respond to logic. You can’t win that one. Expect to be badgered and ridiculed as long as you persist.
I’ve been evaluating missing items in my “always prepared” pantry. Pretty much ready for Shopageddon. I’ll add a case of pretty good scotch and then I’m good to go. I’m sure I could barter for fresh food with the local Mennonites with that. Or sit back and enjoy it. Anyway, my DYI is acceptable.
“they’re pushing panic.”
I disagree. Pushing for information, yes.
It’s kinda like the “war on Christmas.” It largely doesn’t exist.
Italy extends coronavirus quarantine to entire country
Published: March 9, 2020 at 5:05 p.m. ET
By Robert Schroeder
Italy is extending its coronavirus quarantine measures to the entire country, according to reports Monday. Prime Minister Giuseppe Conte said people would only be permitted to travel for work or family emergencies, the BBC said. The Dow Jones Industrial Average (DJIA, -7.78%) ended more than 2,000 points lower Monday on coronavirus fears and a plunge in oil prices.
Yup, just read this within the past hour and replied to an above comment about it.
Italy was also the point of initial infection in Europe with the bubonic plague in the 14th century.
Would an upper-decker in an open house infect all of the look-y-loos?
There aren’t gonna be many open houses in the near future. Quarantined Realtors should spend that time at home productively and #LearnToCode and go get a real job.
Regarding point 2. For me, we are still missing the “housing bubble” diagnosis splashed all over the media and we are probably not going to get it as this is all going to be blamed on the stock market bloodbath and covid19, as if all was perfectly fine until this double whammy turned everything topsy turvy.
This also leads me for a second turning point I have been waiting for in order to start testing the waters for my family, which is an increase in inventory. I am thinking that maybe, ironically, this could lead to an even smaller number of houses on the market either because sellers decide to wait it out or because banks suddenly go all lenient with distressed owners (thanks to some kind of bailout), allowing them to postpone the inevitable sale. In my area of West LA, houses have been sitting longer and they do get incremental price cuts, for sure. But there is not a whole lot of inventory, at least not on Realtor, Zillow, etc., which means sellers still have the upper hand. My guess for now is if you want to be on the market six months from now you need a really good realtor with his/her ear on the ground for listings that don’t make it to Zillow. I know, they are liars but there must be a good one out there…
For rentals, same story. There has not been a significant jump in inventory in the areas I check.
Every closing is a crime scene.
If you plan to sell within the next few years, get it sold within the next month…
I sure wish my friend and his brother would heed this advice. Their dad passed away last summer. And the house is still sitting there, pretty much as it was the day he died. Except that the kids have taken home a few things.
I’ve been telling my friend since last year to get that thing sold ASAP. But AFAIK, they haven’t listed it yet.
I like what Andy Serwer said about this today in response to (a) the suggestion that the Fed should “do something” and (b) FDIC urging banks to help those affected by COVID-19.
Paraphrased: Why are you sending the fire department to help in response to a burglary? Let the market do what it will do. Why are we not focusing on health care instead of once again expecting the world of finance solve this problem?
The repo man cometh.
The Financial Times
Fed pumps extra liquidity into overnight lending markets
Move seen as effort to stop funding markets from seizing up amid coronavirus crisis
Colby Smith in New York and Brendan Greeley in Washington 8 hours ago
The Federal Reserve said on Monday that it will increase the amount of money it is pumping into short-term borrowing markets during the current turmoil, reversing an attempt to wean investors off financing it has been providing since September.
The move comes as nerves grow that market gyrations caused by coronavirus are harming funding conditions for banks and investors. It marks the next phase of the US central bank’s efforts to contain the fallout, following an emergency interest rate cut last week.
The New York arm of the Fed said it would boost the size of its overnight and short-term operations in the repo market “to support smooth functioning of funding markets as market participants implement business resiliency plans in response to the coronavirus”.
Socialism for the bankers.
Star money manager says ‘global recession appears’ inevitable and 10-year Treasury rate will go negative, amid coronavirus fueled stock rout
Published: March 9, 2020 at 2:44 p.m. ET
By Mark DeCambre
‘Amazingly, the market is finally waking up to the prospects of not just viral contagion but also to financial contagion’, Scott Minerd says
Scott Minerd of Guggenheim Partners says the panic that has gripped the markets lately reflects the impact of coronavirus on assets that were already fragile.
In a research report dated Sunday, Minerd says the market is only now waking up to the effects of the COVID-19 outbreak, which was first identified in Wuhan, China in December and has infected more than 111,000 so far and claimed around 3,900 lives, according to data compiled by Johns Hopkins.
Yes, it was the largest point drop on the Dow, ever.
$ad. … “it’$ con$trained!” … “now get.back.to.work” 🎻
As I posted this morning, today was a Lehman Brothers moment.
I’m trying to remember the timing from the Lehman collapse until the bottom of the crater. Was it around six months? (September 2008 through March 2009)
With similar timing, the stock market should be rising right into election day, crushing Democrat hopes for retaking the WH by blaming the coronavirus crisis on Trump.
the stock market should be rising right into election day
The distillation of the American spirit?
The distillation of the American spirit?
Ugh. What a day to wake up to no internet connection. Cable tech can’t come out until tomorrow. (Spiffy is on his phone.. all 1 bar of Verizon)
Watching the fiscal bloodshed on a 4-inch screen.
My gut is telling me we are going to see a lot more unwinding over the next 2 weeks (at least). So add me to the list of people holding cash wondering how to gauge when to step back in (seems like it might be a while).
Do “people holding cash” really have anything at all when they got a big fat ugly mortgage payment and likely deep underwater?
In a declining market, I’d be paying off debt rather than gambling with it, but that’s just me.
Too low to get out, too high to get back in, to volatile to time anything anyway. Sit tight. If it makes you feel better, get a Krug and a couple Ag breakables.
holding cash wondering how to gauge when to step back in
Holding cash at the table which is dwarfed by your markers at the other club. It’s The Tale of Two Casinos.
Would dtRumpsis tantrumosis chaostica use Trump Hotel D.C. to ho$t self.quarantined congre$$.critter$? … What would bee the billing$ co$t$ for U$ taxpayer$ to make amend$?
(Have ya noticed, they never say WHO they self-quarantined with?)
Gaetz, who traveled with Trump on Monday, becomes fifth member of Congress to self-quarantine
MarketWatch | Published: March 9, 2020 |By Robert Schroeder
Rep. Matt Gaetz was told Monday he came into contact with a conservative political-conference attendee 11 days ago who tested positive for COVID-19, the Florida Republican’s office announced.
Gaetz, who traveled aboard Air Force One on Monday with President Donald Trump, is not experiencing symptoms, his office said, and expects test results soon. Gaetz will self-quarantine, following the same decision by Sen. Ted Cruz and three other lawmakers.
Come on Hwy
Gimme a C!!!
Gimme an O!!!
Gimme an O!!!
Gimme an H!!!
Q: How do you know someone went to Ohio State?
A: Just wait five minutes; they’ll tell you.
Bartender, another shot of Bourbon whisky for oxide!
People I know are feeling major negative coronavirus impacts on sales. This will be ugly for a while.
‘Coronavirus’ has been heard at least 9,000 times in earnings updates
Published: March 9, 2020 at 4:29 p.m. ET
By Rachel Koning Beals
Apple and others, citing “coronavirus,” have warned that revenue for the current quarter would be below existing forecasts.
More than 1,400 company executives preparing investors and suppliers for the fallout of coronavirus — Apple, Microsoft and Walmart among them — have mentioned the outbreak at least 9,000 times collectively across earnings-report conference calls, according to call transcripts.
Walmart should be up big on people stocking up.
“figures for swine flu, reporting that, in total, 57 million Americans had been sickened, 257,000 had been hospitalised and 11,690 people had died (including 1,180 children)”
For the life of me I can’t remember the Real Journalists whipping up a frenzy that caused a shortage of anything.
The US has reported 26 coronavirus deaths among more than 600 cases. Here’s what we know about the US patients.
Aria Bendix, Rosie Perper and Lauren Frias
1 hour ago
On February 12, 2010, the CDC released updated estimate figures for swine flu, reporting that, in total, 57 million Americans had been sickened, 257,000 had been hospitalised and 11,690 people had died (including 1,180 children) due to swine flu from April through to mid-January.
“Trump had contact with congressmen Collins and Gaetz before they self-quarantined over coronavirus concerns”
Oh my, wouldn’t it be ironic if Trump got it after seemingly being rather dismissive of it.
Well that post tells it all.
ironic if Trump got it
Aren’t you the sweetie. I’ll give you odds that if our President were to fall ill, he would still encourage all of us to go forward with confidence of a great future.
“Aren’t you the sweetie”
I simply made an observation that it would be ironic. I did not say anything negative about him at all.
Oh my, wouldn’t it be ironic if Trump got it after seemingly being rather dismissive of it.
I’m sure many are praying to Baphomet for that to happen.
It seems like lots of folks were caught gambling on high oil prices forever.
The Financial Times
Bank investors confront a new fear: oil company defaults
‘Unmitigated selling’ of small lenders with energy exposure and double-digit falls for big groups
Stephen Morris and Robert Smith in London and Robert Armstrong in New York 3 hours ago
After weeks of worrying that lower interest rates will squeeze bank profits, investors confronted a still more alarming possibility on Monday: that a collapse in oil prices could trigger a wave of defaults by borrowers.
By the end of the day, US bank shares had chalked up their worst single-session performance since 2009 and the industry was a big contributor to a global stock market rout.
The four biggest US banks, JPMorgan Chase, Bank of America, Citibank and Wells Fargo all fell between 12 and 16 per cent, destroying some $120bn of market value. The industry has now erased all of its stock market gains dating back to October 2016.
Banks’ shares had fallen steadily since late-February on fears that lower long-term interest rates would depress loan yields. Deposit costs are already near zero for many big lenders and can fall little further, robbing the industry of what traditionally would be an offsetting benefit at a time of falling rates.
The crash in oil prices has added worries that loan defaults, which have been hovering at historically low levels, may be set to rise. While the direct exposure of US banks to the oil industry is just 2 per cent, according to Autonomous Research, the indirect exposure to adjacent regions and sectors could be significant.
“…destroying some $120bn of market value.”
Is that a lot? 🙂
It turns out that viral disease outbreaks are good for home sales. Who knew!?
As recession fears mount, here’s why home prices may not plunge alongside the stock market
Published: March 9, 2020 at 11:23 a.m. ET
By Jacob Passy
The last recession was largely fueled by the foreclosure crisis and the downturn in the housing market
The housing market could provide a cushion to the national economy in the next recession, some economists say.
Markets have declined sharply in recent weeks thanks to the global coronavirus outbreak, and now the threat of an oil price war has investors even more concerned. But even with the specter of a recession mounting, homeowners may not need to worry much about their home values falling in line with the stock market, a recent report argues.
Researchers at First American Financial Services (FAF, -10.61%), a title insurance company, recently examined how the country’s housing market has fared historically during recessionary periods. Based on what’s happened in past recessions First American’s report argues that the next recession is unlikely to prompt a major downturn in housing.
“The housing market could provide a cushion to the national economy in the next recession, some economists say.”
My previous California recession experiences were that while great deals for condos and houses were abound it was next to impossible to obtain a mortgage unless you had a hefty down payment and 5-yrs of steady paycheck stubs.
That’s how it was when we bought in 1996. Qualifying for a mortgage felt remarkably similar to undergoing a colorectal cancer screening exam. And we put 20% down.
When we left California in 1998 for E. Washington’s Columbia Basin we rented while waiting for the .com bubble to burst. When it was clear that we couldn’t return due to Greenspan’s interference in the housing equity extraction game we bought a new 1-yr old spec home for $125k with $50k down, on-line with Countrywide, who only requested a title search for outstanding liens; no appraisal needed. Start to finish was less than two weeks, weekend included. This was in 2003 as the bottom was clear, and the dead cat was on the rebound.
Not for me. When I bought in 2012, banks were suffering no fools. They wanted 2 years of pay stubs, specific investment statements (in Fannie-approved PDF format), checking account statements (signed by a bank VP), FICO reports, appraisal, inspection, and a host of other requirements I forgot. I’m a pretty organized person, and I was running around for six weeks assembling that package.
“we bought a new 1-yr old spec home for $125k with $50k down”
Much more than $125k and you’d be overpaying.
I was running around for six weeks
I take it this was all about getting a loan. When I bought a shack in 2013 I waked to the bank to get a certified check, then dropped it off at my attorney’s office.
“Much more than $125k and you’d be overpaying.”
Indeed. Our neighbors in a slightly smaller place a few houses down from us bought theirs for $80k about 3-yrs earlier. Easy credit had arrived before we did.
This one goes out to the coronavirus cheerleaders.
Goodbye to Rosie, the queen of Corona
Paul Simon – Me & Julio Down By The Schoolyard
Well I’m on my way, I don’t know where I’m going
I’m on my way, I’m taking my time, but I don’t know where
Goodbye to Rosie, the queen of Corona
Seein’ me and Julio down by the schoolyard
I don’t know about self-quarantine on the honor system.
Missouri man breaks coronavirus self-quarantine to attend father-daughter dance. Now, the school is canceling classes
Ryan W. Miller , Jordan Culver | USA TODAY 8:58 p.m. PDT Mar. 9, 2020
A Missouri man ignored health officials’ directions to self-quarantine when he and his daughter attended a school dance after his other daughter tested positive for coronavirus.
The Oxycontin crisis laid bare the honor system.
Here comes the wave of university closures.
USC, UC Berkeley, Stanford among schools canceling classes due to coronavirus
by: CNN Wire
Posted: Mar 9, 2020 / 05:58 PM PDT / Updated: Mar 9, 2020 / 05:58 PM PDT
LOS ANGELES (CNN) — Universities from California to New York have closed campus classrooms as the novel coronavirus has affected more than 100,000 people worldwide and its spread has transformed into what is being called a pandemic.
The cancellations have been focused in states and areas hardest hit by the virus, including the Seattle area, California and New York.
Coronavirus: UC San Diego will move to online teaching
UC San Diego also said that in the last week of winter quarter, instructors would no longer use attendance-based points in their grading.
CORONAVIRUS 16 seconds ago
Author: CBS News 8 Team
Published: 8:36 PM PDT March 9, 2020
Updated: 11:07 PM PDT March 9, 2020
SAN DIEGO COUNTY, Calif. — UC San Diego on Monday night informed students that starting spring quarter, all lecture and discussion courses would be delivered remotely as the coronavirus continues to spread across the country.
The university said it would mainly involve offering conventional courses via online teaching and learning tools.
conventional courses via online teaching
A leap forward in affordable education. Horse, barn door.
“A leap forward in affordable education.”
+1 How are they going to spin this down the road?
Stock and oil futures are up …
Fairfax, VA Housing Prices Crater 10% YOY As Northern Virginia/Washington DC Emerges As Ground Zero For Mortgage Fraud Epidemic
*Select price from dropdown menu on first chart
A distinguished economist quipped, “Why buy a house when you can rent one for half the monthly cost. Buy it later after prices crater for 70% less.”
Back in my window cleaning days I used rappelling equipment from a company called, Descent Control, Inc., which would be a great name for the PPT. Think about it: DescentControl.gov
They don’t call you a descent guy for nothing.
It’s not 100 Dr Drew it’s 26
DR DREW SLAMS MEDIA FOR ‘HURTING PEOPLE’ WITH CORONAVIRUS PANIC
Steve Watson | Infowars.com – MARCH 10, 2020
“A bad flu season is 80,000 dead, we’ve got about 18,000 dead from influenza this year, we have a hundred from corona,” Dr. Drew said in an interview with CBS.
Dr Drew Slams Media For ‘Hurting People’ With Coronavirus Panic
Dr Drew has once again spoken out regarding the media’s handling of the coronavirus outbreak, urging that the panic being generated is ‘hurting people’ and that those spreading it should be ‘held accountable’.
“Which should you be worried about, influenza or Corona? A hundred versus 18,000? It’s not a trick question.” Drew noted.
“And look, everything that’s going on with the New York cleaning the subways and everyone using Clorox wipes and get your flu shot, which should be the other message, that’s good. That’s a good thing, so I have no problem with the behaviors.” he added.
“What I have a problem with is the panic and the fact that businesses are getting destroyed that people’s lives are being upended, not by the virus, but by the panic.” the physician continued.
“The panic must stop. And the press, they really somehow need to be held accountable because they are hurting people.” he asserted.
Of the virus, Dr Drew added that “There are probably several people in this building that probably have it and don’t know it.”
“I think there was it was a concerted effort by the press to capture your eyes and in doing so they did it by inducing panic.” he added.
“When I saw this one coming, the corona, I thought I know how this is gonna go, I see kind of what it is and then I saw the excessive reaction the press, so I have to respond and then people, the weird part on social media towards me as people are angry with me, angry with me for trying to get them to see reality and calm down.” he further explained.
“The press should not be reporting medical stories as though they know how to report it,” he said.
“And the press, they really somehow need to be held accountable”
This is an important point. Its equivalent would be yelling ‘fire’ in a building when one doesn’t exist.
So who is it we should report for this behavior? Who is saying everyone panic? Hoard TP? Hoard masks?
MSM. They sow division and fear. Turn it off.
“division and fear”
Granted, but those aren’t the words used. The word being repeatedly used is “panic.” Anyone promoting panic should probably be arrested.
Fear leads to panic.
Fear leads to panic
As they say: A distinction without a difference.
Name names. Seriously.
Been watching a fair amount of coverage the past week (much more than I normally do, mainly due to the markets) and it’s been pretty even keeled with plenty of input from medical professionals.
You even said it yesterday, Blue. Not a lot is known about this one so of course it’s leading to heightened interest. I wouldn’t classify that as inciting fear or panic.
I have that. I make better decisions without panic.
Dow was up 945 points. Now it’s in the red again.
Comments are closed.