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People With Proclivity For Greed Continue Counting Their Losses

A report from the Times of London in the UK. “‘For UK corporates, this is their Waterloo,’ said a restructuring expert. ‘What happens over the next few weeks will define what happens over the next few years, and whereas the financial crisis 10 years ago was about balance sheets, this is about access to cash.'”

“An insolvency expert said the coronavirus would kill off companies that had struggled for years despite the low-interest-rate environment. ‘It’ll knock out those zombie companies that shouldn’t be here and in the long, long term it’s possible that won’t be a bad thing, because their turnover will migrate to businesses that really need it,’ he said.”

From CBC News in Canada. “Stock markets in Toronto and New York plunged when they opened Monday morning. Investors are worried about the domino effect that all those related economic shutdowns will have on corporate profits, and by extension their stock prices. ‘If a restaurant owner can no longer pay rent, the property owner might not be able to pay its loan, and the bank that made the loan might end up suffering as well,’ said Odysseas Papadimitriou, the CEO of financial literacy website WalletHub. ‘If a restaurant owner can no longer pay rent, the property owner might not be able to pay its loan, and the bank that made the loan might end up suffering as well.'”

The Globe and Mail in Canada. “Eileen Kelly had already been out of work for several months and scratching around for something – anything – when oil prices fell off a cliff early in the new year. ‘You just don’t even want to hear any more terrible news,’ said Ms. Kelly, 54, who lives in Calgary. ‘It’s just doom and gloom everywhere you look.'”

“Calgary’s real estate market was setting up for another depressed year before this month’s oil price crash. Commercial real estate company Avison Young had predicted office vacancy at 24 per cent in 2020. Some towers, such as the former 37-floor former Nexen building on the west side of downtown, are empty. The biggest hit has been to sub-premium properties outside the downtown core, where vacancies have topped 30 per cent. That was the market served by Strategic Group, whose 56 Alberta buildings were forced into receivership in late 2019, leaving lenders and other creditors out more than $700-million, making it the largest casualty in the province’s property market so far.”

“Gleaming new towers have only recently been completed in the core, adding to available square footage.”

The Conversation in Australia. “It’s one of the most Googled questions since the coronavirus and COVID-19 outbreak: how will coronavirus affect house prices? The bottom line is it will be negative – prices will go down. The market has been getting more difficult for the investor. The market in, for example, Sydney is oversupplied at the moment and there’s already been some downward pressure on rents.”

From Reuters on China. “China’s factory production plunged at the sharpest pace in three decades in the first two months of the year as the fast-spreading coronavirus and strict containment severely disrupted the world’s second-largest economy. The Global Times on Monday quoted Wei Jianguo, vice head of the China Centre for International Economic Exchanges, a think-tank, as saying that China’s 6% growth goal for 2020 remained intact.”

“However, many private-sector economists see that as already well beyond China’s reach. ‘Don’t even think about it,’ said Hao Hong, head of research at BOCOM International. ‘Even though China goes all in with stimulating policies in the property sector and infrastructure, that’s still mission impossible.'”

“China’s jobless rate rose to 6.2% in February, up from 5.2% in December and hitting the highest since official records were published. Pain was also seen in China’s real estate market with property investment falling at its fastest pace on record while home prices stalled for the first time in nearly five years. Analysts expect March figures to be even worse.”

The Hong Kong Standard. “Homebuyers piled into the primary market over the past weekend despite the coronavirus outbreak, but secondary transactions at ten blue-chip estates slumped almost 50 percent week-on-week. In the secondary market, Centaline Property Agency recorded only eight secondary transactions at ten major housing estates over the past weekend, down by 46.7 percent from a week before.”

“Laguna City in Kwun Tong, Whampoa Garden in Hung Hom, City One Shatin in Sha Tin, Taikoo Shing and Kornhill in Quarry Bay saw no secondary transactions. In Tseung Kwan O, a 538-sq-ft flat at The Wings changed hands for HK$9.6 million, after HK$2.4 million, or 20 percent, was slashed from the initial asking price.”

From Standard Media on Kenya. “There has been hullaballoo in the public arena as regards augmentation of real estate projects being advertised for auction in our daily newspapers. Truth is we need to be worried about this trend we seem to have nested ourselves into. However, in our discourse of the possible derivatives to this, we should not be frugal with the truth. Sunlight has to be the best disinfectant if we are to get to the root of this. We cannot play blind to reality.”

“That our economy has been hopelessly struggling isn’t a revelation anymore but a reality nearly every Kenyan is living, or may I say majority of Kenyans. Every sector is feeling the pinch but somehow the public has continually expected the real estate sector to perform as before. No other excuse, amid our glaring economic tumble, can be attributed to the dwindling real estate investment return other than the ‘prophesied’ real estate bubble.”

“In addition, we expect the real estate industry to condone, without recourse, every mediocrity thrown at it. Isn’t it true that nearly everyone expects that every house should be sold regardless of how it was built or that every office building however carelessly conceived and executed, should be fully occupied. Anything contrary to this expectation has been blamed on the real estate market and an apparent bubble. Really? Which is this investment sector, outside real estate, that can accommodate every idea however reckless?”

“We should allow, without blaming the market, people with proclivity for greed and zero respect engraved real estate norm practices to continue counting their losses. And painfully so.”

From Socket Site in California. “The number of homes on the market in San Francisco has jumped 50 percent since the Super Bowl to 750. And in fact, inventory levels are now running 17 percent higher than at the same time last year and just hit a 9-year seasonal high. And the percentage of listings which have undergone at least one official price reduction – which doesn’t include any of the homes which were withdrawn from the market at the end of last year and have recently been relisted with a reduced asking price and a reset ‘days on the market’ count – has ticked up to 19 percent.”

The Washington Post on New York. “Just after it opened to great fanfare in 1931, the Waldorf Astoria hotel suffered through the Great Depression, the economic crash that sent the stock market into free fall. After closing in 2017, its owner, China-based Dajia Insurance Group, is launching condominium sales at the hotel after a $1 billion renovation. The Towers at the Waldorf Astoria is offering 375 hotel rooms and — for the first time — 375 luxury residences for sale.”

“Home sales on the island slipped 1.2 percent year-over-year in the fourth quarter of 2019, according to appraiser Miller Samuel and Douglas Elliman. After years of excess, Manhattan sales have declined in eight of the past nine quarters, reaching the lowest level in the past decade. A glut of new housing and a shrinking foreign-buyer pool are impacting sales, say housing experts. But recession fears have also been growing for months, and the recent stock market gyrations as the coronavirus spreads will probably further depress sales.”

The Los Alamos Reporter in New Mexico. “With Coronavirus grinding travel and much of society to a halt and oil prices having crashed, there is little chance the budget passed during the 2020 Legislature will survive the year without some major revisions. Even prior to the session ending Senate Finance Committee Chairman John Arthur Smith said, ‘I don’t think any of us can walk away from here and say the spending was controlled, we’re skating on very thin ice from a spending standpoint.'”

“They should have seen this coming. Even as the Legislature met the price of a barrel of oil was dropping. On January 6, 2020 oil was $63.27 a barrel. It dropped to $42 a barrel before the Russians and Saudis announced their price war which further reduced oil prices to about $30 a barrel. Since oil and gas comprise 40 percent of New Mexico’s budget a sustained price war makes a special session very likely. The Legislature didn’t learn their lesson of the last decade during which New Mexico experienced stagnant economic growth due to declining oil prices. Price dropped from over $100 a barrel to less than $50 a barrel over a few short weeks in late 2014.”

“While they talked a lot about ‘diversifying’ New Mexico’s economy the Legislature did nothing of the sort. Instead they enacted numerous tax hikes and regulations that make New Mexico even less friendly to business. We are more dependent on the volatile oil and gas industry than before.”

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  1. ‘In addition, we expect the real estate industry to condone, without recourse, every mediocrity thrown at it. Isn’t it true that nearly everyone expects that every house should be sold regardless of how it was built or that every office building however carelessly conceived and executed, should be fully occupied. Anything contrary to this expectation has been blamed on the real estate market and an apparent bubble. Really? Which is this investment sector, outside real estate, that can accommodate every idea however reckless?’

      1. Bahahahaha … instead of posting a “SOLD!” sign on the lawn maybe the house should be circled with crime scene tape.

  4. and watch out for pension funds: state and municipal pension funds and others.

    In searching for yield they have been buying this junk. Let hope that the taxpayers in IL, CA etc understand this.

    ————————
    “An insolvency expert said the coronavirus would kill off companies that had struggled for years despite the low-interest-rate environment. ‘It’ll knock out those zombie companies that shouldn’t be here and in the long, long term it’s possible that won’t be a bad thing, because their turnover will migrate to businesses that really need it,’ he said.”

    1. ‘ Some towers, such as the former 37-floor former Nexen building on the west side of downtown, are empty. The biggest hit has been to sub-premium properties outside the downtown core, where vacancies have topped 30 per cent. That was the market served by Strategic Group, whose 56 Alberta buildings were forced into receivership in late 2019, leaving lenders and other creditors out more than $700-million, making it the largest casualty in the province’s property market so far’

      ‘Gleaming new towers have only recently been completed in the core, adding to available square footage’

      QE and artificially low interest rates are deflationary.

    2. and watch out for pension funds: state and municipal pension funds and others.

      Some retired cops and firefighters might be in for an unpleasant surprise.

      Colorado’s PERA was only 60% funded before the crash. In 2002 it was almost 100% funded. I wonder what it is at this moment, 50%?

        1. In Colorado only voters can approve tax increases, courtesy of the Taxpayer Bill of Rights (TABOR).

  5. ‘The market in, for example, Sydney is oversupplied at the moment and there’s already been some downward pressure on rents’

    The Australian REIC/media have managed to miss this ongoing oversupply for most a year now.

  6. ‘While they talked a lot about ‘diversifying’ New Mexico’s economy the Legislature did nothing of the sort. Instead they enacted numerous tax hikes and regulations that make New Mexico even less friendly to business. We are more dependent on the volatile oil and gas industry than before’

    I’m reminded of the Threat Inflation Complex. Always there with snouts in the trough. Protecting us against multiple dire circumstances, while they really do nothing, except maybe make things worse. We could have nipped this virus in the bud weeks ago by taking steps everybody is taking now.

    1. ‘Coronavirus has slammed the brakes on the Big Apple taxi industry.

      ‘New York City cabbies are suffering a radical drop in ridership amid concerns over the potentially deadly bug, with some only scraping together a few bucks after long shifts behind the wheel. “We don’t make money,” said Queens cabbie Jones Donkoi while trying to land fares on the Upper West Side. “I collected $300 in fares but if you take the taxes and surcharges and lease payment, I make about $40 at the end of a 12-hour shift.” “I support three children,” he said. “I’m going to find another job because I can’t continue like this. I can’t buy anything.”

      ‘Another driver said he took home just $50 one day last week, and at one point drove around two hours without a single fare. “I don’t know what’s going to happen,” said the cabbie, who would only identify himself as Patrick. “I am driving around hoping to get a passenger and there are none. They are too scared.”

      https://nypost.com/2020/03/15/nyc-taxis-struggle-to-make-ends-meet-amid-coronavirus-scare/

      2. ‘SEATTLE — Veronica Weaver was facing a difficult choice back in 2009 and now faces an even bigger one amid the coronavirus outbreak. So, she took out some retirement money and put it all into a hot dog cart, calling it “Charlie’s Dog House,” named after her puppy. And for a decade, business at Charlie’s Buns ‘N Stuff food truck was going great. What she couldn’t expect after surviving the financial crisis would be another crisis presenting another difficult choice for Weaver.’

        “We go from working five days a week to maybe working one to two days or maybe none at all,” she said. That’s because the coronavirus outbreak is causing people to work at home, meaning many offices are empty. Weaver continues to lose money. “We’re down 80 to 90% of our revenue during this time,” she said. “If the business is not there, we can’t survive,” Weaver said.’

        https://komonews.com/news/local/seattle-food-truck-struggles-to-stay-open-as-virus-forces-customers-to-work-from-home

        It’s a good thing the cost of living is so low in Seattle.

        Oh…

        2. This story is instructive because it illustrates how unstable the entire global monetary and financial infrastructure was and is. She is a sort of embodiment of the whole system. The food truck was doing great so nothing bad could happen. But if the food truck was doing so great why doesn’t she have enough savings to weather a few months without income? The palatial debt structure built on top of a modest footprint of real assets requires a 24/7 constant infusion of money injected into the support beams to keep it standing. If the money gets cut off for even 24 hours, the whole edifice crashes to the ground. If the economy were really that healthy, there would be enough savings and flexibility in the system that an interruption like this would be a minor hurdle. It would be comforting to believe we could learn from this event but the more likely outcome is that we double down on the folly that got us here.

          1. But if the food truck was doing so great why doesn’t she have enough savings to weather a few months without income?

            That was my question! But I chalked it up to being an old fart raised by depression era parents. Nowadays you’re supposed to spend everything you have (and then some) as soon as possible.

          2. “why doesn’t she have enough savings to weather a few months without income?”

            REALTOR, I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

          3. The food truck was doing great so nothing bad could happen. But if the food truck was doing so great why doesn’t she have enough savings to weather a few months without income?

            Working class Americans have been conditioned to think of barely surviving as “great”. Having excess to save and invest is unthinkable…and means that the student loan and housing and medical hyenas still have work to do.

          4. Working class Americans have been conditioned to think of barely surviving as “great”. Having excess to save and invest is unthinkable…and means that the student loan and housing and medical hyenas still have work to do.

            The system is fragile, and setup to extract maximum revenue from the people depending on it. I’ve seen a lot of people claw their way into having a few months of savings, only to have it wiped out by some unexpected event – medical, job loss, major repairs, legal issues, etc. much like Sisyphus pushing the rock up slowly only to have it slide back down.

            Hell, my divorce had me “living on the edge” from about 2007 until 2015 or so.

            But if the food truck was doing so great why doesn’t she have enough savings to weather a few months without income?

            Competition perhaps? No seriously. There are sooooo many occupations that are suffering from an over supply of people willing to do it (not to mention outsourcing of production overseas, etc) that they have a ton of competition, causing a race to the bottom effect. Their food truck business probably had to strike a balance as the prices they could charge – prices that let them continue but didn’t give them very much in the way of profit margin to get ahead – otherwise they’d lose business to those willing to sell similar for less. It’s very hard to enjoy secure fat margins without some sort of legal protection / purchase lawmakers / regulations / “extra” connections to your main customers / etc.

            Our modern economic system… designed to take all the excess away from the little guy (and concentrate it at the top).

          5. Their food truck business probably had to strike a balance as the prices they could charge – prices that let them continue but didn’t give them very much in the way of profit margin to get ahead – otherwise they’d lose business to those willing to sell similar for less

            I suspect the high minimum wage around here impacts things as well. People aren’t going to pay so much for just a hot dog, but if every employee costs you $15/hr +payroll taxes, etc…

          1. Don’t count her out yet.

            Schumer proposing halt to payment on all federal loans and ban on foreclosures and evictions.

            https://www.zerohedge.com/political/senate-may-amend-house-coronavirus-package

            I think we have seen that there is no limit to the schemes they will concoct to prop up housing. Waving all credit score, income, and down payment requirements for FHA backed loans as well as providing significant downpayment assistance would not be a surprise at this point.

          2. I think we have seen that there is no limit to the schemes they will concoct to prop up housing. Waving all credit score, income, and down payment requirements for FHA backed loans as well as providing significant downpayment assistance would not be a surprise at this point.

            Doesn’t really matter when you don’t have a job. The payments aren’t going to make themselves insofar as new purchases are concerned.

          3. Doesn’t really matter when you don’t have a job. The payments aren’t going to make themselves insofar as new purchases are concerned.

            Old school thinking, my friend. Universal basic income. They didn’t start trying to acclimate everyone to the idea for nothing. Anything to keep the printing presses going. FHA backed 0% down cash back mortgages for igloos in the desert? No problem.

            https://www.businessinsider.com/mark-zuckerberg-universal-basic-income-alaska-2017-7

          4. Old school thinking, my friend. Universal basic income. They didn’t start trying to acclimate everyone to the idea for nothing. Anything to keep the printing presses going. FHA backed 0% down cash back mortgages for igloos in the desert? No problem.

            Right. Where’s the money coming from? If what you’re trying to suggest is true, things wouldn’t even be melting down right now. Think about it.

          5. I’m just observing the messages coming from the central planners. Working for a living is a concept that is slotted for planned obsolescence. Everything will be based on your social credit score in a cashless society in which you will earn digital credits for food housing and travel based on how compliant you are. They might not succeed but as far as I can tell that is what the plan is. I know it’s a difficult concept for people who grew up believing in freedom and prosperity through hard work.

            “… when the struggle seems to be drifting definitely towards a world social democracy, there may still be very great delays and disappointments before it becomes an efficient and beneficent world system. Countless people … will hate the new world order … and will die protesting against it. When we attempt to evaluate its promise, we have to bear in mind the distress of a generation or so of malcontents, many of them quite gallant and graceful-looking people.”

            ~ H. G. Wells

      3. ‘I do not know exactly when the bond bubble will end or if it already has, but it looks like it will soon, and when it does, the gambling companies that leveraged up the most in order to buy and acquire and beef up their top lines at the expense of the sanity of their balance sheets, they will most likely be destroyed and liquidated. No bailouts this time. They are the canary now. And it looks like that canary is dead. The reckless gambling stocks this time are Eldorado Resorts (ERI), Boyd Gaming (BYD), and Penn National Gaming (PENN).’

        ‘I believe these gambling stocks, which I cover frequently at CalvinAyre, are sniffing out the end of the global debt bubble. Since the selloff in the broader market began, Eldorado has been in complete collapse, down almost 80% from highs. It has not participated in any of the record rallies of this roller coaster and just keeps falling.’

        ‘First, this most recent emergency Fed rate cut was child’s play. Not even $1.5 trillion in repo offerings made a dent in anything. This liquidity is meant to stimulate “aggregate demand” as the Keynesians say. But demand can only be stimulated when production is encouraged, and production cannot be encouraged when it is impossible because of a virus spreading. All that new money will do nothing to push up asset prices. Not with production shut down for external reasons. It will push up consumer prices instead, especially if the bond bubble has burst already.’

        ‘The whole Keynesian argument is twisted anyway at the foundation. Keynesians believe that printing money supports production and asset prices, and therefore the economy. But it’s the exact opposite. Production supports the ability of a central bank to print money, because production and investment into that production keeps the new money away from the consumer sector and keeps price inflation from becoming obvious. Money gets stuck in asset prices. Without production firing on all cylinders and new money being reinvested into that production, the new money can leak directly into commodities instead, producing quick and sudden price inflation.’

        ‘That is what is likely to happen now, which will be even worse for the most indebted gambling companies like Penn, Boyd, and especially Eldorado. As interest rates on this existing debt rise because of impending serious price inflation, these canaries will get obliterated.’

        ‘That is one reason why I believe this bull market is finally over. A double top is remotely possible, but it might not even come. After the bear market becomes obvious, the bond market, the bubble of all bubbles since 1980, the one that has been building for 40 years, will almost certainly encounter panic. Exact timing I cannot say, but leveraged momentum gaming stocks, the canaries, are already dead, just like the MGM canary died in October 2007.’

        https://seekingalpha.com/article/4332187-gambling-stocks-show-this-bear-market-is-just-getting-started

        1. all bubbles since 1980, the one that has been building for 40 years

          My perspective as well. So we’ve already seen the double top.

          1. A month ago I was predicting a double top, depending on the virus behaved in summer. I’m much less optimistic now. I think we’ll see just too many BKs and defaults before then. It’s no good investing in Pets.com at a low price if Pets.com disappears altogether.

        2. Without production firing on all cylinders and new money being reinvested into that production, the new money can leak directly into commodities instead, producing quick and sudden price inflation.’

          I see commodities down today. Maybe this is a longer-term danger? Or am I misunderstanding something?

        3. We will not have honest markets or sound money until the gold collar criminals at the Fed are standing in shackles and orange jumpsuits in front of an honest judge presiding over post-collapse tribunals for the policymakers, regulators, and enforcers who led us down the road to ruin.

        4. Japan says otherwise, and we are not even at the point where the Fed is posting monthly obligation statements on ETF purchases.
          This isn’t going to the moon again, but I’m pretty sure asset prices will spike back up very quickly.
          Romney is advocating $1,000 cash injection into every bank account in the nation. Think it will stop there? We are heading towards full socialism on a global scale, and life will be miserable for rational thinking individuals….but the iPhones, Ford truck purchases, etc. will continue.

          1. We are heading towards full socialism on a global scale, and life will be miserable for rational thinking individuals….but the iPhones, Ford truck purchases, etc. will continue.

            Riiiiight. Because those old soviets were all driving trucks that cost 3 times their yearly income. Are you from CA by chance? Seems a lot of these kind of posts are coming for CA people. Something in the water?

  7. ‘China’s jobless rate rose to 6.2% in February, up from 5.2% in December and hitting the highest since official records were published. Pain was also seen in China’s real estate market with property investment falling at its fastest pace on record while home prices stalled for the first time in nearly five years. Analysts expect March figures to be even worse’

    Irvine CA shack market is fooked.

    1. 6.2% sounds rather high. Even 5.2% sounds high. And aren’t the Chinese often accused of “glossing over” things with their “data”?

    2. Ben, I really hope you are correct about Irvine shacks. Really I do…and it should be fooked. I’m convinced that the Fed will be outright purchasing Irvine townhomes within the year. Not just indirect MBS.
      I have a family member that comments on the “ghost houses” here in Irvine. The lights are on at night (no curtains/shutters) and it’s obvious the shack is empty. I’m pretty sure Powell and Co. prefer to keep it that way.

      Please may I be wrong 😀

    3. “Irvine CA $hack market is fooked” … $ad
      (Eye think Donnie Bren is 88 years old now)

  9. Most airlines could be bankrupt by May. Governments will have to help

    https://www.cnn.com/2020/03/16/business/airlines-bailouts/index.html

    Airlines across the world are grounding planes, laying off workers and scrambling to preserve cash as measures to contain the outbreak prompt flight bans and wipe out global travel demand.

    According to CAPA Centre for Aviation, a consultancy, most airlines in the world will be bankrupt by the end of May.

    The demand for international air travel is essentially non-existent,” Scandinavian Airlines said Sunday.

    1. Oh, geezuz, everybody’s begging for Uncle Sugar to give them a fix. Trickle down doesn’t work. It’s time for a new idea.

    2. Airlines would have been fine had they not borrowed and speculated on stocks and other garbage.

      Airlines are tremendously profitable.

      Lesson Learned? Don’t gamble.

      1. Lesson Learned? Don’t gamble.

        But a system that rewarded gamblers and crowded the prudent out of business was allowed to go on too long. We’re all dependent on gamblers now.

        3. Airlines do have a lot of fixed costs: airplane lease payments, airport gate fees that don’t go away, etc. But to become insolvent so quickly seems odd.

          Of note is that carriers mentioned in the article are foreign carriers, which for the most part lack any kind of domestic market, unlike US carriers which continue to fly inside the US, though they too have been canceling flights.

          But I could see ultra low cost carriers like Ryanair and EasyJet, which rely almost entirely on international travel in Europe, getting shellacked as they ground their entire fleets for weeks or even months.

          Funny though, how Disney isn’t asking for a bail out as their $18B a year theme park business has ground to a halt and is probably losing money due to fixed costs that don’t go away during a shutdown, plus I recall Disney saying there would be no layoffs, though they might be forcing workers to use vacation time.

          1. British Airways says they won’t be asking for a bailout.

            From what I have read, many European flagship carriers have been in dire straights for years. The emergence of ultra low cost carriers has been a factor in that. There are other airlines that have been on the knife’s edge for a while. Expect Norwegian and Iceland Air to bite the dust soon.

            In 2016 I flew Lufthansa to Frankfurt. It was a 747 and was packed. In Frankfurt I had a brief layover and caught another Lufthansa, an A320, to Budapest. There were maybe 30 passengers on that flight, and it felt eerie, as whenever I fly domestically, the planes are always packed. Anyway, Lufthansa must have lost a bundle on that flight. I’m gonna go out on a limb and guess that the EasyJet and Ryanair flights to Budapest were full that day.

          2. Aviation really needs to be regulated as the free-market tends to gnaw-away at credentialed professional’s salaries and safety protocols in the holy pursuit of profits. Regulations don’t hold us back, they hold us up!

          3. “ Funny though, how Disney isn’t asking for a bail out as their $18B a year theme park business has ground to a halt and is probably losing money due to fixed costs that don’t go away during a shutdown”

            They are just as profitable if not more via their media revenues. I suspect an increase in subscribers for the disney plus service as all of our youth is ordered to stay home.

          4. increase in subscribers for the disney plus service

            Got it this weekend but with a promo through Verizon.

        4. Let them be liquidated.

          When the dust settles someone will buy the airplanes and new airlines will be formed.

          I know a guy who flies for United. I wonder if he’s been furloughed.

          1. “Companies, shame on them, but they have borrowed too much,” Bair said, added that’s a consequence of having 10 years of ultra-low rates. “For BBB-rated companies, if those bond markets start collapsing, they’re not going to have access to credit, and if they get downgraded [to junk credit status],” that’s when it likely hurts the real economy,” Bair told MarketWatch.’

            https://www.marketwatch.com/story/exclusive-fed-is-throwing-money-in-the-wrong-place-says-sheila-bair-former-top-banking-regulator-2020-03-15?siteid=yhoof2&yptr=yahoo

      3. “Airlines would have been fine had they not borrowed and speculated on stocks and other garbage.”

        That’s caused by Wall street. For example, airlines now have to buy derivatives in the Jet-A fuel market to smooth the price gyrations caused by politics, e.g., a Palestinian teenager with a slingshot being cut-down by an IDF sniper.

      4. “Le$$on Learned? Don’t gamble”

        What do you call a farmer buying a Deere $800,000 tractor whilst call NOAA scientists “fake.newsers”?

        Flood? Naw, just more rain waters than last.year.

        1. “Flood? Naw, just more rain waters than last year.”

          Apparently you’ve never been Carp fishing with a pitchfork?

  10. It’s like the Titanic. Wall Street want the federal government to cash in what’s left of the future to save the first class passengers, while leaving those in steerage to drown (again).

    Meanwhile the S&P 500 is still 25 percent higher than it was when Donald Trump said (correctly) that it was in a bubble.

    Business needs help? Real estate needs help? It’s already on the books. It’s called Chapter 11 — without the massive executive pay Wall Street got after the 2008 bailout.

      1. An analogy that will last for ages as the juxtaposition of “haves vs have-nots” could not have better clarity.

    1. New car sales drop ‘worse than GFC’
      ‘After 23 consecutive months of decline — and the demise of a local hero — automotive executives are asking for government handouts.’

      ‘Prime Minister Scott Morrison was expected to release details of an economic stimulus plan on Tuesday, but stopped short of giving specific information. Federal Chamber of Automotive Industries chief executive Tony Weber says the industry is in the midst of “a prolonged downturn”.

      “Sales of new cars have contracted for 23 straight months representing a sustained recession and a situation significantly worse than the GFC, which saw 15 months of decline,” he said. “The 2019 calendar year saw new car sales down 7.8 per cent, the largest annual reduction in sales since recordkeeping started nearly 30 years ago.”

      ‘Australian Automotive Dealer Association chief executive James Voortman says the car industry is “in urgent need of assistance”. “Many dealerships are at breaking point and if the situation persists, there will be severe consequences for these businesses and the people they employ,” he says.’

      https://www.news.com.au/technology/innovation/motoring/motoring-news/new-car-sales-drop-worse-than-gfc/news-story/a9f52e68803c5f2179b520464d58c7a5

    2. Will new cars and trucks be available for hefty discounts

      A quick looksie at cars . com says not yet, but stay tuned. I can see carmaker execs in their boardrooms wondering what to do. They could shut down assembly lines, with the excuse that the global supply chain is broken.

      1. Didn’t GM do this all the time back in the old union days when cars weren’t selling? That’s what a “layoff” originally was. A temporary job loss. (I guess nowadays it’s called “unpaid leave.”) They called you back when demand picked up again. Why can’t the Aussies do this?

        1. Why can’t the Aussies do this?

          The Aussies don’t make cars anymore. Global automakers have shuttered all factories in Oz.

          I’m sure the dealerships over there will either fire people or close. Not sure how easy or hard it is to lay people off in Oz, but I suspect that it’s harder and costlier (as in mandatory severance) than in the US

      2. “Will new cars and trucks be available for hefty discounts”

        If they were to have a “fire sale”, the current suckers would simply stop paying their inflated loans. That’s another side-effect of bubbles; they’re difficult to deflate.

          1. I seem to recall last time the poop hit the fan that people stopped making their mortgage payments, but paid the car and credit cards.

  12. Silver prices plummeted to $13.00. Coin dealers jacked the bid/ask spread even more, with sell premiums at $5 per silver eagle. RIDICULOUS. They’re citing “shortage.” If that’s the case, then they’d want to buy as many silver eagles as they could get their hands on, right? Wrong. They don’t want your silver eagles, which is why they are only paying spot still! These guys are fawking crooks.

    1. If things haven’t changed, dealers have to order Eagles in advance. Once the mint run is done, it’s over for that year. Hence, their cost is fixed and doesn’t follow day to day spot price. Do they have “junk coins” (old US Silver coins)?

      1. The gold bug I listen to says that the silver price is dropping because people are dumping PAPER silver contracts, not the physical. So the demand for silver is still high, hence the higher premium.

        1. People aren’t dumping paper gold and silver. The Fed’s bullion bank accomplices are. They’ve been using derivatives and naked shorting to artificially suppress and manipulate the prices of PMs to make the dollar look stronger, while regulators and enforcers turn a blind eye (naked shorting and market-rigging used to be illegal, back when we had free markets and regulators hadn’t been captured.) But if people are scared enough to be buying guns and ammo on a huge scale, trust me, they’re also going to be buying physical precious metals, which is eventually going to overwhelm and crush the bullion banks’ efforts to control the price.

    2. These guys are fawking crooks.’

      yea sounds like it . I don’t think they pay as much for Canadian maples as they pay for gold eagles both same amount of Gold. I got a flyer in the mail a few months ago with prices paid and prices to buy.

    3. Bitcoin is a “steal” at just over $5K. That’s close to the cost of electricity to mine. For someone with money to burn it might be worth buying a few. Even if BTC goes back up to $7-8K it would be a good trade.

      1. Nobody cares what it cost to “mine” your bitcoin.

        Among all these great investment advices you’re coming up with, consider getting out of debt. Be a gambler or a debtor if you must, but don’t do them both at the same time.

          2. It doesn’t.

            If you want a visit from the FBI, US Treasury, Homeland Security…. dabble in ButtCoin.

          1. Ha!

            OK, try this. Oxy, focus on retiring your debt as early as possible. Don’t get caught trying to pick up nickles in front of the steam roller.

          4. “Be a gambler or a debtor if you must, but don’t do them both at the same time.”

            But Teh Prof told me to diversify! And you can’t really be diversified in assets and not be diversified in types of debts.

            I’ve never bought crypto, not so much as a satoshi. But what I’m saying is that for those who do want to dabble, AND have the money to burn, it might be a good pure speculative play. That is, buy at $4500 and wait for $7-8K, which is where it seemed to be comfortable for a long time. That is, as long as BtC doesn’t disappear entirely.

        3. As a noted economist said so eloquently, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable.”

          He’s right.

      2. ??? The electricity is a sunk cost. It won’t set a floor on price. It only sets a floor for whether anybody bothers with mining or not.

        1. Here’s my logic: Let’s assume $4K is the cost to mine. If the price drops below $4K, then mining will stop. With no new coins, the supply of remaining bitcoins will be fixed. With steady (or even incrementally increasing) demand and no new supply, the price of each bitcoin would increase again to where the price goes above $4K. At that point, mining becomes profitable again, and restarts, causing the price to stabilize. However, I don’t expect prices to fall purely on higher supply, because miners are slower than demand. (Prices could fall for other reasons such an sentiment or events such as the current crisis.)

          So the electricity cost is a sort of self-correcting floor. As long as there is demand and a relatively free supply/demand market, BtC won’t fall below its electricity cost, or stay below for long. But if this current crash destroys the demand for bitcoin, then the price can drop below the electricity cost down to zero and nobody will care.

          2. With steady (or even incrementally increasing) demand

            Where does this assumption in your equation come from? I think your last thought was more likely once the speculators are badly burned.

          3. My assumption doesn’t come from anywhere. That’s what “assumption” means. And yes, if everybody decides that they don’t want bitcoin, of course the price will drop to next to nothing.

            Why do think I keep saying “people who have money to burn?” This kind of game isn’t for someone who actually needs the money. This is for someone with money, in the game, betting that bitcoin will survive.

          4. I assume that demand for Bitcoin is going away once the crypto space gets a little larger. There’s nothing special about Bitcoin, and no barriers to entry in the crytosphere.

          5. My assumption doesn’t come from anywhere. That’s what “assumption” means.

            Really? I think all assumptions come from somewhere. I suspect yours comes from “everybody else thinks that demand for this will rise forever and everybody else can’t be wrong”. I think that’s a bad assumption.

      3. My opinion is that Bitcoin would be the worst possible place to put money, but hey, have at it oxy!

        1. Cash at negative interest? Surely you’re not putting money to work in equities or bonds. Goldbug…..rocks to the moon? RE?

      4. Bitcoin is a “steal” at just over $5K.

        Sounds like someone’s stuck with a bunch of Bitcoin now that the Greater Fool supply dried up. Intrinsic value of this scam currency: zero.

      5. I confess I’ve considered buying one BTC if it keeps going down. But by the time it gets down to a level where I’d consider gambling on it, I’d now be afraid it was simply on its way down to zero.

    4. The bid/ask spread on silver is now $9. So, the dealers want a 70% premium per silver eagle. If this continues, what I am going to do is liquidate all my silver to somebody willing to pay me a premium of maybe $7 per coin. I will undercut all the dealers and sell all of my silver eagles at one time.

          1. I don’t know, it’s spewing out the top of the carb and running out of the exhaust pipe…doesn’t seem like a lack of fuel. I’d say it’s flooded almost to the point of hydrolock now.

  15. It’s been days since I’ve seen the “bring out your dead” cart.

    The onion/potato thing shows the general public has gone full costco.

    If you can keep your head when all about you
    Are losing theirs and blaming it on you;
    If you can trust yourself when all men doubt you,
    But make allowance for their doubting too;
    If you can wait and not be tired by waiting,
    Or, being lied about, don’t deal in lies,
    Or, being hated, don’t give way to hating,
    And yet don’t look too good, nor talk too wise;

    If you can dream—and not make dreams your master;
    If you can think—and not make thoughts your aim;
    If you can meet with triumph and disaster
    And treat those two impostors just the same;
    If you can bear to hear the truth you’ve spoken
    Twisted by knaves to make a trap for fools,
    Or watch the things you gave your life to broken,
    And stoop and build ’em up with wornout tools;

    If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
    And lose, and start again at your beginnings
    And never breathe a word about your loss;
    If you can force your heart and nerve and sinew
    To serve your turn long after they are gone,
    And so hold on when there is nothing in you
    Except the Will which says to them: “Hold on”;

    If you can talk with crowds and keep your virtue,
    Or walk with kings—nor lose the common touch;
    If neither foes nor loving friends can hurt you;
    If all men count with you, but none too much;
    If you can fill the unforgiving minute
    With sixty seconds’ worth of distance run—
    Yours is the Earth and everything that’s in it,
    And—which is more—you’ll be a Man, my son!

    https://poets.org/poem/if

    2. The onion/potato thing shows the general public has gone full costco.

      I could see the potato thing, though you have to use them in a timely manner or they get ugly. Rice and pasta seem like a better thing to store.

      Onions? That I just don’t get.

        1. Updated 1 hour ago – Politics & Policy
          States order bars and restaurants to close due to coronavirus

          Ohio Gov. Mike DeWine announced Sunday afternoon that the state government will issue an order closing all bars and restaurants in Ohio beginning at 9pm ET.

          Shortly after, Illinois Gov. J.B. Pritzker ordered all bars and restaurants in his state to be closed from Monday evening through March 30.

          Massachusetts Gov. Charlie Baker banned gatherings of over 25 people on Sunday and ordered restaurants to be takeout only from Tuesday through April 17.

          California Gov. Gavin Newsom called on all bars, nightclubs and wineries in his state to be closed in an official guidance, adding: “We have the capacity to enforce if necessary.” He also called for all Californians above the age of 65 and those with chronic conditions to self-isolate.

          Washington announced Sunday the temporary shutdown of restaurants, bars and entertainment and recreational facilities statewide. Restaurants can continue take-out and delivery service.

          Michigan Lt. Gov. Garlin Gilchrist announced Monday that the state would temporarily shut down “bars, restaurants and other establishments.”

          https://www.axios.com/ohio-governor-bars-restaurants-coronavirus-26e4b6e3-7f65-4f6a-abf9-f3940220cc6f.html

          4. All restaurants in Denver are ordered closed for seated dining. Takeout and delivery are still allowed. Not sure what the suburbs are doing. So far, no such order in my little burg.

  16. Debt, debt, debt, debt, debt…

    The common thread with every analyst commenting today, explicitly or implicitly, is how companies and economies need to address debt. Bunch o’ junkies and their bailout enablers.

  17. The statement that the economic crisis is largely a result of debts and inequality and imbalanced that built up prior to the coronavirus is all over the internet, on every financial site. I had expected it to be only found here.

    One example…

    https://www.marketwatch.com/story/a-feckless-fed-huge-deficits-and-poisonous-politics-bring-us-to-a-crisis-2020-03-16?mod=mw_latestnews

    Another

    https://www.nytimes.com/2020/03/16/opinion/coronavirus-economy-debt.html

    Another

    https://www.wsj.com/articles/u-s-economy-slides-into-the-monetary-black-hole-11584364910

    The Fed tried to kick the can again, and it turned out to be filled with lead.

    1. ‘Fiscal irresponsibility, toxic politics and a Fed that was too afraid to offend stock investors have combined with the coronavirus, a black swan if there ever was one, to create the current crisis whose resolution right now looks murky. One crisis after another, plus the persistence of the “Greenspan put,” kept the Fed from raising the federal-funds rate anywhere close to the 5.25% it hit before the financial crisis. It took three years for the FOMC to raise fed funds from 0%-0.25% to a mere 2.25%-2.5%, but only a year to do a round trip back to zero.’

      https://www.wired.co.uk/article/manhattan-project-robert-oppenheimer

      ‘The Bhagavad-Gita is 700-verse Hindu scripture, written in Sanskrit, that centres on a dialogue between a great warrior prince called Arjuna and his charioteer Lord Krishna, an incarnation of Vishnu. Facing an opposing army containing his friends and relatives, Arjuna is torn. But Krishna teaches him about a higher philosophy that will enable him to carry out his duties as a warrior irrespective of his personal concerns. This is known as the dharma, or holy duty. It is one of the four key lessons of the Bhagavad-Gita: desire or lust; wealth; the desire for righteousness or dharma; and the final state of total liberation, or moksha.’

      ‘In Hinduism, which has a non-linear concept of time, the great god is not only involved in the creation, but also the dissolution. In verse thirty-two, Krishna speaks the line brought to global attention by Oppenheimer. “The quotation ‘Now I am become death, the destroyer of worlds’, is literally the world-destroying time,” explains Thompson, adding that Oppenheimer’s Sanskrit teacher chose to translate “world-destroying time” as “death”, a common interpretation. Its meaning is simple: irrespective of what Arjuna does, everything is in the hands of the divine.’

      “And ultimately the most important thing is he should be devoted to Krishna. His faith will save Arjuna’s soul.” But Oppenheimer, seemingly, was never able to achieve this peace. “In some sort of crude sense which no vulgarity, no humour, no overstatements can quite extinguish,” he said two years after the Trinity explosion, “the physicists have known sin; and this is a knowledge which they cannot lose.”

      ‘For Arjuna, it may have been comparatively easy for Arjuna to be indifferent to war because he believed the souls of his opponents would live on regardless. But Oppenheimer felt the consequences of the atomic bomb acutely. “He hadn’t got that confidence that the destruction, ultimately, was an illusion,” says Thompson. Oppenheimer’s apparent inability to accept the idea of an immortal soul would always weigh heavy on his mind.’

      1. ‘the central bankers have known sin; and this is a knowledge which they cannot lose’

        -Ben Jones, March 16, 2020.

        16 New Foreclosure Listings in COCONINO County, AZ

    2. Just said the same thing above. I’ve been listening to some of Yahoo Finance. Same there too.

      The solution seems to be? More debt.

      Paraphrased: “Let’s make sure we keep these companies afloat during this time by opening credit lines, with government stepping in to have creditors’ back.”

      1. The Federal Reserve cue card:

        Step 1: Create fake money stealing value from everyone

        Step 2: Loan the fake money to people with interest

        Step 3: Take people’s stuff when they can’t repay the debt

        Step 4: Get government to enforce our fraud

        Step 5: Plunder humanity

    4. Maybe turning over our money issuance to a criminal private banking cartel wasn’t such a hot idea.

  18. “Gleaming new towers have only recently been completed in the core, adding to available square footage.”

    Monuments to the hubris of the central banks.

  19. “China’s jobless rate rose to 6.2% in February, up from 5.2% in December and hitting the highest since official records were published.

    If this is what the cooked official numbers look like, the real picture must be a lot more dire.

  20. “It’s one of the most Googled questions since the coronavirus and COVID-19 outbreak: how will coronavirus affect house prices? The bottom line is it will be negative – prices will go down.

    Au contraire. The bottom line is positive – the financial house of cards created by the Keynesian fraudsters at the central banks is collapsing under the weight of its own debt, hubris, and fraud, as true price discovery, long deferred, reasserts itself. It’s going to be a bloodbath for speculators, but the end result will be a return to affordable median rents and home prices. Die, speculator scum!

    1. Is the question will housing values go down in real dollars, or nominal dollars?

      Japan? Or Argentina.

  21. “We should allow, without blaming the market, people with proclivity for greed and zero respect engraved real estate norm practices to continue counting their losses. And painfully so.”

    Not only that, but we should feel pure schadenfreude when these speculator scum who made housing unaffordable for the prudent and fiscally responsible get their heads handed to them.

    1. get their heads handed to them

      BK’s will be filed. Their net worth will be decimated. They will retreat into the shadows to lick their wounds, and not re-emerge until the next bubble begins.

      1. BK’s will be filed. Their net worth will be decimated. They will retreat into the shadows to lick their wounds, and not re-emerge until the next bubble begins.

        Make it so!

      2. until the next bubble begins.

        Their ranks will be thinned. Most who get crushed will have a aversion to housing debt for the rest of their lives.

        It’s like bouncing down a flight of stairs.

        1. Their ranks will be thinned. Most who get crushed will have a aversion to housing debt for the rest of their lives.

          Didn’t they all rush back in after the previous crash? I remember discussions here about people getting a new mortgage just 2-3 years after a foreclosure.

          1. Didn’t they all rush back in after the previous crash?

            Yes, because they were saved prematurely last time. Nobody got the chance to learn anything but buy the dip. By design.

  22. “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

  23. A song dedication for the retail investor muppets staring in shock at the smoking crater that was their stock portfolio, wondering how those relentlessly upbeat CNBC permabulls could have led them so badly astray:

    John Lennon – Nobody Told Me (There’d Be Days Like This)

    https://www.youtube.com/watch?v=cuuhsqA95iA

  24. A report from the Times of London in the UK.
    “An insolvency expert said the coronavirus would kill off companies that had struggled for years despite the low-interest-rate environment. ‘It’ll knock out those zombie companies that shouldn’t be here and in the long, long term it’s possible that won’t be a bad thing, because their turnover will migrate to businesses that really need it,’ he said.”

    – What we have had for more than 10 years since the GFC is ultra-low rates/cheap money/credit keeping the zombie Co’s. alive, albeit on life support. There has never been the necessary “creative destruction” or clearing of the failed Co’s. that would have gone BK in a nominally functioning free market economy. They were kept alive by increasing debt; postponing the inevitable.

    Kicking the can works until it doesn’t. Extend and pretend isn’t prevent. Chickens coming home to roost now. Command and control, centrally-planned economics (aka central banks and governments meddling in the global economy for the advantage of the elites/oligarchs/1%) created this mess for the third time this century by blowing the massive “everything bubble” in order to try to keep the game going (forever). However, the real world has finite limits and exponential functions only work in mathematical models. “Trees don’t grow to the sky.” We were already past the peak when the coronavirus hit; it’s only accelerating the decline, although TPTB will certainly try to blame this mess that they created on it. Central banks need to be eliminated and the bankers need to go to jail. Right now the wrong people (the 99%) are suffering the consequences of centrally-planned economics, while those responsible are, so far, getting away Scot-free.

    “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” – Milton Friedman

    – The greatest external threat to the U.S. is China. The greatest internal threat to the U.S. is The Federal Reserve System, and our do-nothing Congress for allowing them exist.

    – “Free markets I hardly knew ye.”

    1. The greatest internal threat to the U.S. is The Federal Reserve System, and our do-nothing Congress for allowing them exist.

      Don’t confuse the monkey with the organ grinder. The greatest internal threat is the “moneyed interests” Thomas Jefferson warned about, aka the oligarchy. The Fed, aka The Creature from Jekyll Island, was created for the sole purpose of serving as the oligarchy’s chief instrument of plunder against the 99%. The oligarchy, not the Fed, is the greatest internal threat and cause of the subversion of our institutions of governance.

      1. Good point. I complain about the Fed, but the problem is really the owners of the Fed. The Fed is just the tool they use to go about their business.

    1. Amusing headline perhaps, but the pictures show a different story. That’s not what it looks like when a ship sinks at the dock. This ship is being careened for bottom work. The article mentions anti-fouling which is a coating below the water line.

      A ship sinking at the dock leans out the other way, because of the dock lines, which are not present in the picture.

      1. i guess it must be very watertight to lean that much and not get flooded or damaged….thanks for the info

        1. That was my thought too. All those windows must be watertight or else they would be flooding carpets and furniture inside the cabin.

    2. Hmm, I wonder if any of those poor Saudi princes will have to sell their superyachts due to the oil price crash? 🙁

    3. “Careening is the act of beaching your boat in shallow water at high tide so that when the tide goes out, the hull is exposed and dry. This allows repairs and bottom work to take place in locations where dry docking is not viable or available”

      I don’t think that pic in the Sun article depicts a careening!!

      1. Maybe that explains how the Sun can publish such ridiculous BS.

        The boat is under control. The lines attached to the boat are not at all as they would be if the boat was being held close to the dock. The boat is in a marine yard to have it’s hull paint renewed. It is not sitting low in the water. Sinking boats tied to the dock lean away from the dock because of the dock lines, and the high side of the deck isn’t way up in the air.

        You can do this by shifting loads in the hull, fuel, water and such. I have done this, to a much less dramatic extent, to do a dry repair on a thru-hull fitting that was below the water line. I have also assisted a sailboat in doing this to get it’s keel off a mud bank. Yes, a sailboat in the south sea islands might do this with the tide and the beach. In any case, it’s cheaper than an actual drydock.

  28. CNBC headline: “Airline stocks jump after Trump pledges 100% backstop”

    No details yet.

    Jeebus.

    1. I specifically kept an eye on the Dow as he was saying this. Went from -2800 to -2400 in a matter of about 30 seconds. Then sh@t itself again.

  29. The PPT was paid to work at home, but it spent most of the day playing Game of Thrones instead.

  30. DOW down 3,000 points despite massive, coordinated central bank liquidity pumping. In 2008 Ron Paul tried to warn the sheeple about what would happen if we failed to rein in the Keynesian fraudsters at the Fed. He was our last, best chance to bring REAL hope and change, unlike the Goldman Sachs puppet plucked from the most corrupt Democrat political machine in the entire country. Now the chickens are coming home to roost as the Mother of All Ponzi schemes, aka the stock market, is imploding under the weight of its own debt, fraud, and mark-to-fantasy accounting. Good riddance to all who are getting their heads handed to them as their illusory “wealth” goes up in smoke. Investing in a Ponzi was never going to end well.

  31. Black Monday 2.0 !!

    CNBC headline: “Dow closes down 2,999 points, as coronavirus collapse continues; worst day since ’87”

    1. Wall Street’s ‘fear index’ surges to highest level in history as Dow plunges 3,000 points amid growing coronavirus panic
      Published: March 16, 2020 at 5:03 p.m. ET
      By Mark DeCambre

      A measure of implied volatility on Wall Street touched its highest level in history as all three stock benchmarks plunged by at least 12% Monday, marking one of the worst declines for equities in a generation, as fears about a long, hard slog with COVID-19, the infectious disease that originated in China last year, slammed assets considered risky. The CBOE Volatility Index (VIX, +42.98%) jumped by about 44% in a single session, to close above 82, marking its highest finish in history, surpassing two readings of 80 that it registered during the 2008 financial crisis, if the index holds at that level. The index, also known as the VIX, for its ticker symbol, has become well known as Wall Street’s “fear gauge,” since it was created in the early 1990s. The VIX is a gauge of investor expectations for stock-market turbulence in the coming 30-day period,…

  32. Kitco shows bullion prices down sharply, but if you go to the online bullion dealers, it looks like just about everything is sold out, or at least nothing is available at the notional spot (plus premium) prices. Looks to me like the Fed’s bullion banker accomplices are massively dumping paper precious metals that exist only in derivatives contracts.

    http://www.kitco.com/market/

    1. Ammo outlets are mostly sold out too. Looks like the panic buying is well underway. Had I not lost my AR-15 and ammo stockpile in that tragic boating accident, I would feel more prepared for come what may.

      2. If we get nothing else out of this, I will at least have learned that the Germans have a word for panic-hoarding. “Hamsterkauf” joins “schadenfreude” and “backpfeifengesicht” as useful additions to my lexicon.

      3. They think the local golden horde — i.e. the neighbors — will come for their onions and toilet paper. I can’t say I blame them. There is no way everyone has a month of food hanging around. And days and days of rice and beans will make someone stir crazy.

        1. If I don’t restock anything, and don’t significantly change consumption, We’ll start seeing issues around the 60-70 day mark. Rice & Beans and the like are kept to a minimum based on recipes/dishes that we do eat normally – Homemade chili, curry dishes, etc…

          1. Rice and beans are the quickest way to get fat. Yes, people in the past ate rice and beans but they spent 8 hours doing physical labor too. But rice beans and Netflix… hoo boy.

          2. Rice and beans are the quickest way to get fat.

            If certain things that we have come to take for granted are suspended, we might have to actually do some physical work. In that case, calories = survival.

            Until that time, what would pair well with Netflix binging?

      4. “We’re not alone in noticing that usually anti-gun people are suddenly very interested in having guns.”

        A Lot of People Are Finding Out You Can’t Just Buy a Gun Online

        Posted March 14, 2020 in Gun News
        by Andrew Tuohy

        First came the panic buying of hand sanitizer. Then, people panic bought toilet paper. Now, food shelves are emptying and firearm and ammunition sales are through the roof. The COVID19 outbreak might be bad for the stock market, but it’s certainly been a boon for very specific sectors of the economy. The gun industry, used to such boom/bust cycles, knows how to respond – but other sectors might not be so acclimated.

        Here at Omaha Outdoors, we’ve been inundated with inquiries from out-of-state folks – many from California – asking if we can ship them a gun directly. The answer is, of course, no. Despite what politicians and many in popular media claim, you can’t buy a gun online and have it shipped to your house. Well, you could, if you were a federally licensed firearm dealer (or federally licensed curio and relic collector) and your home was your place of business. Other than that, no, you can’t buy a gun online and have it shipped, especially across state lines, to your home.

        What you’ll need to do to buy a gun from us is order it on our online store and select an FFL, a federally licensed firearm dealer, during the online checkout process. We ship the gun to the dealer near you – presuming the firearm and its accessories are legal in your area – and you visit the dealer to fill out the required ATF Form 4473 and undergo the federal and any applicable state background checks. Some states might require a waiting period – sure to be a sore point at a time when people feel the need for a gun to protect themselves NOW. Only then can you take your new firearm home.

        We’re not alone in noticing that usually anti-gun people are suddenly very interested in having guns. On Twitter, Robert Evans wrote, “The sheer number of normally anti-gun people who have reached out to me about buying a firearm in the last week is wild.”

        We’ve all been told to practice “social distancing” in the coming months. Firearms are, in a way, the ultimate method of enforcing social distancing. I just hope all these new gun owners learn how to safely use their guns – and that they never need them for their intended purpose.

        https://www.omahaoutdoors.com/blog/a-lot-of-people-are-finding-out-you-cant-just-buy-a-gun-online/

        1. Bought more VSTO at the open yesterday. The public mood is going to shift decisively against the oligarch-funded gun grabbers.

          1. I don’t know. It appears to me that Californians, even in this situation, are much more afraid of others being able to have guns than they are of not being able to get one themselves. They figure they’ll find a way but still want it to be as difficult as possible for everyone else.

    2. It’s more of the same scam – you’re not allowed to buy at low prices. Artificial shortage.

  33. From Socket Site in California. “The number of homes on the market in San Francisco has jumped 50 percent since the Super Bowl to 750. And in fact, inventory levels are now running 17 percent higher than at the same time last year and just hit a 9-year seasonal high. And the percentage of listings which have undergone at least one official price reduction – which doesn’t include any of the homes which were withdrawn from the market at the end of last year and have recently been relisted with a reduced asking price and a reset ‘days on the market’ count – has ticked up to 19 percent.”

    With the coronavirus pandemic rapidly spreading throughout communities around the nation, city leaders are taking the unprecedented step of placing San Francisco on lockdown for three weeks beginning Tuesday at midnight. – Good luck with those open houses. Might be a tad quiet.

  34. Imagine somebody who thought they were going to retire this summer looking at their 401k now. They just lost 32% of their entire retirement in a little more than 2 weeks. And that could increase markedly.

    1. One would think that if they were that close to retirement, they wouldn’t be in stocks anymore.

      1. Lots of gamblers and greedheads out there, trying to “maximize” their retirement. Then things like this happen. Next, they’ll HODL and then sell at the bottom to guarantee the least comfortable retirement they could have had.

      2. Not necessarily. When I started thinking about retirement, I realized that the 30 years between 65 and 95 are the same 30 years as between 35 and 65. So yes, why not have some stocks when you’re 65? Theoretically, you could buy a stock the day you retire, let it grow for 30 years, and sell the last share on your deathbed. Or, if there’s a crash at age 65, you technically “have time to recover.”

        One financial guy on the radio said retirement mistakes are mistakes are made during the withdrawal phase than during the contribution phase, which is why he designs bucket strategies (usually three buckets) for his clients. Sure, he’s selling services, but it’s still something to think about.

        1. the 30 years between 65 and 95

          Actually, it’s more like 20 years on average.

          The members of my family that have passed the 95 milestone wouldn’t have benefited at all from having more money. Take a flier and put it in the grandkid’s name maybe. For me return of capital is the primary concern.

      3. The next forty-five days should be a great time to buy an S&P 500 index fund at 1,750? and down the road maybe some ETFs following energy given petroleum’s race to the bottom. Of course you’ll need some money. I have a serious pile in Treasurys right now, and the after tax yield wouldn’t buy me breakfast every morning at McDonald’s unless I skipped the Sausage and Egg McMuffin a couple of times each week.

    2. A coworker on this mornings conference call (so happy I work from home) said she was glad she has 10 years left to work and make up for this decline. She’s older than I am by probably 5 years. I wanted to ask – ever heard of bonds? The market has been a joke for years, I tell people if we ever go back to traditional valuations that existed for 97% of the last century it would feel like a depression to most people. She’s in florida and spent 5 minutes talking about the local grocery store being completely cleaned out.

      Don’t see anything about the virus getting into the massive homeless populations throughout the liberal city paradises. Me thinks ignorance equals bliss.

      1. Don’t see anything about the virus getting into the massive homeless populations throughout the liberal city paradises. Me thinks ignorance equals bliss.

        I’ve not seen anything about this in Seattle…. it is surprising

        1. May have to do with the lack of test kits and the priority to test the ones living below the poverty line. These stats could change rather quickly in the upcoming weeks

  37. What a difference a couple of weeks can make!

    Opinion: Buy these stocks and sectors now because coronavirus won’t lead to recession
    Published: Feb. 29, 2020 at 11:45 a.m. ET
    By Michael Brush
    ‘The market is daring you to buy value today’
    Workers in China sew hazardous material suits, AFP/Getty Images

    Investing lore has it that bond investors are the “smart money” since they know their way around financial statements.

    I’m not sure this is true. But if it is, bond guru Mark Vaselkiv may qualify as one of the smarter investors around. He’s the chief investment officer for fixed income at T. Rowe Price, which manages an impressive $148 billion in bond fund assets.

    Vaselkiv, 62, has been in the business for nearly 35 years (31 at T. Rowe Price). So he’s battle-tested by several crises — a few of which were so bad they make coronavirus look like child’s play. He also has a decent record. His $8 billion T. Rowe Price High Yield Fund, which he managed from 1996 to 2019, was a top 10% fund in its Lipper category during his tenure, returning an annualized 7.16%. That’s less than the 9% for the S&P 500 index over the same time. But Vaselkiv did it with half the volatility.

    During these trouble times in the markets, it makes sense to check in with this seasoned “bond whisperer” to see what the smart money in fixed income is telling us about coronavirus, the risk of recession and other issues that will impact your portfolio.
    …

    1. Looks like we are already in a recession. High yield bonds is not where I would want to be, or REITS, no way. I was 40-60 stocks bonds before this meltdown maybe 30-70 now IDK ? I’ll re balance later. Close to retirement maybe 5 years or who knows maybe tomorrow if I get laid off ?

  38. Three thoughts

    1. If coronavirus rages around the world will China allow its people out to buy houses, do the tourist thing or attend universities; rather doubt it.
    2. Will unicorns like Airbnb, Uber, Wework make it to the end of the crisis, rather doubt it.
    3. Who was the debts of the soon to be impoverished, no idea who picks up that tab.

  39. How come no one thought this was a problem when stock prices soared from an already overvalued 2,000 on the S&P in 2016 to a peak of 3,400?

    https://www.wsj.com/articles/why-are-markets-so-volatile-its-not-just-the-coronavirus-11584393165

    “The stock market has been plunging as investors struggle to judge the impact of the coronavirus, a price war in oil and their impact on the global economy. Monday’s fall of nearly 3,000 points in the Dow Jones Industrial Average, or more than 12%, marked the second-worst day in its 124-year history. But those reasons don’t fully explain the remarkable volatility.”

    “In a dramatic shift since the financial crisis, the market today is dominated by computer-driven investors whose machines react to a series of technical and other factors, as well as by more-traditional investors who rely on reams of fast-flowing data. On many days, forces such as the market’s volatility and momentum, derivatives activity and the market’s liquidity—how easy or difficult it is to get in and out of trades—can help drive trading.”

    “In earlier times, when trading was dominated by fundamental investors who scoured balance sheets, studied goods prices and tried to reckon a company’s future profits, market volatility figured in to some extent, but not in any defined way. Now, for many traders a stock is simply a thing that moves, whether the company makes shoes or airplanes or frozen pizza. And how much a stock moves—how sudden and sharp are its swings—is a factor as important as any other in whether to buy or sell it.”

    By earlier times, do they mean prior to 1985?

    1. “By earlier times, do they mean prior to 1985?”

      Likely since during the 1990s globalism and off-shoring of manufacturing industries occurred changing the economic landscape on a similar scale to the industrial age supplanting labor farming. Unskilled service sector jobs barely provide subsistence level income for a huge swath of workers today. They don’t even count unless we’re talking about government programs.

      1. Great song brings back great memories.

        Hey, what’s the matter, man?
        We’re goingna come around at twelve
        With some Puerto Rican girls thats just dying to meet you

  41. “Le$$on Learned? Don’t gamble”

    What do you call a farmer buying a Deere $800,000 tractor whilst call NOAA scientists “fake.newsers”?

    Flood? Naw, just more rain waters than last.year.

  44. Opinion: This bear market in stocks is only two steps away from turning into a monster
    Published: March 16, 2020 at 4:50 p.m. ET
    By Simon Maierhofer
    It’s difficult to find any real precedents to this stock market meltdown

    The stock market has been trading “out of the box” and has delivered an ominous variety of “first evers.”

    For the first time ever:

    • The S&P 500 Index (SPX, -11.98%) fell from a 52-week high to a 52-week low in less than three weeks.

    • The Bloomberg Barclays U.S. Corporate Bond Index lost more than 7% in a week.

    • The New York Stock Exchange suffered its most intense cluster of 90% down days (where 90% or more of NYSE-traded stocks closed lower for the day).

    • S&P 500 (cash and futures) hit the circuit breaker and triggered a trading halt four times.

    • The Nasdaq Composite Index (COMP, -12.32%)
    suffered its largest one-day percentage decline ever.

    • Toilet paper is worth more than a Kardashian autograph.

    1. “Toilet paper is worth more than a Kardashian autograph.”

      Progre$$! + hope breed$ eternal.

  45. The Financial Times
    Opinion Inside Business
    ‘Bazookas’ cannot stop coronavirus becoming a financial crisis
    Despite policymakers’ efforts there are growing signs that investor confidence is cracking
    Patrick Jenkins
    A traders at the Necton brokerage company in Sao Paulo, Brazil wearing a face mask
    There are plenty of reasons the apparently panicked selling of bank equities might be logical after all
    © AFP
    Patrick Jenkins yesterday

    A big question looms. We know that the coronavirus will spread, possibly infecting the majority of the global population in time. We know that the economic disruption it may cause has spooked every stock market in the world. And we know that in an effort to conquer the panic, the world’s most powerful policymakers have fired off “bazookas” by the bucketload.

    What no one knows — after one of the worst ever weeks in financial markets — is whether Covid-19 will move from a health emergency and resultant market slump into a full-blown financial meltdown.

    The last time there was this level of mayhem in the markets, banks such as Northern Rock and Bear Stearns were teetering on the brink of collapse. They turned out to be 2007’s harbingers of a far bigger disaster: by 2008 the global banking system had to be rescued, at a cost of hundreds of billions of dollars. The repercussions for politics and the economy can still be felt around the world.

    The good news is that banks today are objectively in far better shape than they were going into the crisis 12 years ago. The regulatory safeguards put in place in the wake of 2008 — far higher capital requirements, big liquid funding buffers and sharper supervision regimes — have given investors confidence in banks’ solidity.

    But there were signs last week that this confidence was cracking. On Thursday, amid the worst UK and US trading day since Black Monday in 1987, the Stoxx Europe 600 Banks index fell 14 per cent to a level not seen since the late 1990s. The slump was significantly bigger than the 11 per cent fall in the European market overall.

    Given the safeguards in the system, this looks irrational. But there are plenty of reasons why the apparently panicked selling of bank equities might be logical after all.
    …

    1. The good news is that banks today are objectively in far better shape than they were going into the crisis 12 years ago.

      Methinks that is a blatant lie.

  46. The Financial Times
    Coronavirus
    Investors call for Fed help in ‘frozen’ commercial paper market
    Short-term funding system used by companies comes under strain from coronavirus
    (FILES) In this file photo US Federal Reserve Chairman Jerome Powell gives a press briefing after the surprise announcement the FED will cut interest rates on March 3, 2020 in Washington,DC. – US President Donald Trump on March 10, 2020 called the Federal Reserve “pathetic, slow moving” and reiterated his demand that the central bank lower its key lending rate and stimulate the economy. “Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations,” Trump tweeted. Adding the bank should “stimulate!” the president continued: “The Federal Reserve must be a leader, not a very late follower, which it has been!” (Photo by Eric BARADAT / AFP) (Photo by ERIC BARADAT/AFP via Getty Images)
    US Federal Reserve chairman Jay Powell
    © AFP via Getty Images
    Joe Rennison in London and Colby Smith in New York 13 hours ago

    The US Federal Reserve is coming under pressure to unblock a vital short-term funding market used by companies, as borrowing costs soar to the highest levels since the Lehman crisis.

    The US commercial paper market, where companies raise cash by issuing short-term debt, has seized up since the coronavirus outbreak tore into the financial system. Banks have stepped back, anticipating that issuers will rush to secure cash just as money-market funds — a big buyer of CP — sell assets to brace themselves for redemptions, according to Bank of America analysts.

    “It’s a big deal. The CP market is essentially frozen,” said Mark Cabana, an interest rate strategist at BofA. “Everyone wants to shore up cash. Coronavirus is a big concern and it is creating big one-way flows in markets that banks are struggling to deal with. The Fed needs to come in and be the buyer.”
    …

  47. Goldman Sachs warns US stocks could plunge another 16% before rapidly recovering Rapid recovery?? Rapid?? HAHAHA

    1. I have four young adult kids, which provides a convenience sample for observing the economic impact of the coronavirus response.

      Three of them work in local food establishments. Dining in is out; all of the places where they work are going to all carryout / drive through / delivery service models of operation, which seems like a good compromise for staying in business while increasing social distance.
      My daughter filed for unemployment today. She’s a gig economy worker, and her gig opportunities just dried up overnight.

      2. My sample population is two (2) draft age kids, and this past weekend were their last working shifts until further notice.

    4. The global coronavirus recession is beginning
      By Julia Horowitz, CNN Business
      Updated 3:23 PM ET, Mon March 16, 2020
      US economy added 273,000 jobs in February

      London (CNN Business) As restaurants, shops, airlines and factories shut down around the world, from New York to Paris and Madrid, economists are warning that a global recession is no longer a looming threat. It’s here.

      Dire economic data released by China on Monday showed that the country was pummeled by the coronavirus outbreak in January and February. The world’s second biggest economy looks unlikely to recover any time soon.

      Now, with governments and central banks in Europe and North America pursuing drastic measures to try to control the pandemic, Asia still on high alert, and financial markets in meltdown, a growing number of experts say that a global contraction is beginning.
      “Whereas 10 days ago there was some legitimate uncertainty about whether the global economy was in the process of going into recession — 10 days later, there’s no question that it is,” David Wilcox, former head of research and statistics at the Federal Reserve Board, told CNN Business.
      …

    5. Ker Plunk

      The Motley Fool
      Why Real Estate Stocks Got Rocked Today
      The COVID-19 pandemic could lead to a major downturn in the U.S. housing market.
      Joe Tenebruso
      (TMFGuardian)
      Mar 16, 2020 at 5:01PM

      What happened

      Many housing-related stocks plunged on Monday as investors grew more fearful that COVID-19 — the disease caused by the novel coronavirus — and its related economic fallout would result in a sharp decline in home sales.

      Shares of Zillow (NASDAQ:Z) (NASDAQ:ZG), Redfin (NASDAQ:RDFN), Meritage Homes (NYSE:MTH), PulteGroup (NYSE:PHM), Lennar (NYSE:LEN), and Home Depot (NYSE:HD) all fell approximately 20% or more.

      So what

      Despite massive stimulus measures by the Federal Reserve, it’s looking increasingly likely that the U.S. economy will fall into a recession in the coming months. As the number of confirmed cases of COVID-19 surge, the federal government has enacted travel bans, while state and local governments have ordered many businesses to close. Many people will see their income reduced as a result, and some will even lose their jobs. Financial markets have plunged in response, further reducing many Americans’ wealth.

      Amid this difficult economic backdrop, home sales are likely to fall in the key spring selling season, and perhaps throughout the remainder of the year.

      Now what

      With millions of Americans worried about getting sick, losing their jobs, and seeing their investments plunge in value, there’s no doubt that many people will choose to forgo purchasing a home in 2020. As such, investors should brace for a potentially significant decline in sales of new homes and housing-related products this year.

      This will likely dent the sales and profits of real estate brokerages like Redfin; housing-related lead-generation sites like Zillow; homebuilders such as Meritage Homes, PulteGroup, and Lennar; and home improvement retailers like Home Depot. Less demand for new homes could also depress housing prices, thereby furthering the coronavirus-induced negative wealth cycle for many Americans.
      …

      1. Whatever became of that dumbshit who lectured us a few weeks ago about how the coronavirus pandemic would have no effect on the housing market?

    6. The Financial Times
      Markets
      Stocks gain after biggest Wall Street sell-off since 1987
      Hopes of economic support to fight impact of the coronavirus epidemic boost equities
      Hudson Lockett and Daniel Shane in Hong Kong and Leo Lewis in Tokyo 3 hours ago

      Asia-Pacific stocks rose following the biggest sell-off on Wall Street in more than 30 years as investors looked to the US for stronger economic support measures to fight the impact of the coronavirus.

      S&P 500 futures pointed to gains of as much as 3.8 per cent when Wall Street reopened later in the day following a report that the Trump administration had privately urged Senate Republicans to approve a bill to help the US deal with the economic fallout of the pandemic.

      However, investors warned that any rebound would be shortlived without firmer indications Europe and the US were bringing the outbreak under control.

      “The knife is still falling,” said John Woods, Asia-Pacific chief investment officer at Credit Suisse, who described the overnight fall on Wall Street as “capitulation”. He said he was not recommending to his clients to re-enter equity markets without signs of stronger fiscal measures to support economies hit by the outbreak.
      …

  51. Sweeping restrictions take effect in coronavirus response as health officials warn US is at a tipping point
    By Christina Maxouris, CNN
    Updated 3:34 AM ET, Tue March 17, 2020

    (CNN) Two weeks ago, keeping at a distance from other Americans was merely a suggestion. Now, after US coronavirus cases jumped by more than 3,000 over six days, at least a dozen city and state leaders have turned those suggestions into orders.

    Public health officials say the US has reached a tipping point — warning that if residents don’t take the call to action seriously, the country may be faced with a scenario similar to the one facing Italy. The European country went on total lockdown last week and has been hit harder than any other country in the region, with at least 24,747 cases of coronavirus and 1,809 deaths.

    “We have the same number of cases that Italy had two weeks ago. We have a choice to make,” US Surgeon General Dr. Jerome Adams said. “Do we want to really lean into social distancing and mitigation strategies and flatten the curve or do we just want to keep going on with business as usual and end up being Italy?”
    …

  52. “Half Of America Will Get Sick”: Here Is What Goldman Told 1,500 Clients In Its Emergency Sunday Conference Call | Zero Hedge
    https://www.zerohedge.com/markets/half-america-will-get-sick-here-what-goldman-told-1500-clients-its-sunday-conference-call

    (snip)

    “50% of Americans will contract the virus (150m people) as it’s very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.
    70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be effected.
    Peak-virus is expected over the next eight weeks, declining thereafter.
    The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather. The coming summer in the northern hemisphere should help. This is to say that the virus is likely seasonal.
    Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly.
    Mortality rate on average of up to 2%, heavily weight towards the elderly and immunocompromised; meaning up to 3m people (150m*.02). In the US about 3m/yr die mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3m new deaths from the virus, it means elderly people dying sooner due to respiratory issues. This may however stress the healthcare system.”

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