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This Is The Meteor

A report from Crain’s New York Business. “The city’s hotel industry is in free fall, as occupancy and room rates have plunged and a growing number of chains have shuttered locations due to the dramatic drop-off in business as a result of the coronavirus crisis. ‘We’re bleeding as far as occupancy goes—all hotels are right now,’ an employee at the glitzy Gramercy Park Hotel told Crain’s. ‘We’re in the single digits in terms of occupancy. I’ve never seen anything like it.'”

“An employee at Midtown’s 426-room, tourist-focused Warwick Hotel said it had stopped taking reservations until May 11. ‘It’s a nightmare,’ the person said. ‘It’s a ghost town.’ Although there was still hope that the virus could be controlled and the economy repaired in the coming months, hotel experts were already predicting that 2020 could be the worst year ever for the city’s hotel industry.”

From Bisnow. “With the economy in flux and stock prices down across the board, the U.S. commercial real estate property outlook looks pretty grim, Green Street Advisors said in a webinar Tuesday. In the three weeks ending Monday, the S&P was down nearly 30% and REITs were down 35%, Green Street Advisors Managing Director of Strategic Research Peter Rothemund said during a conference call. ‘The market is pretty freaked out about the spread of the coronavirus here in the U.S.,’ Rothemund said. ‘And it tells you that we are in a recession right now.'”

“REITs focused on gaming, lodging and healthcare are down 35% during the same time period. Student housing, which some had considered recession-proof, is down 30%. Office, apartments, malls and industrial REITs are down 20%. ‘Some of these moves make sense and some of these moves are overdone,’ he said. ‘It’s like the market is on a death scare … In times of stress like this, there’s a lot of distressed selling going on. You need to use some of these signals with a grain of salt.'”

From Restaurant Business. “Restaurant companies have lost almost half of their value in recent weeks as investors panic over the state of their finances while consumers abandon dine-in eating. And while that only represents a small portion of the industry, the steep declines in valuation show that investors are fearful of the impact of the coronavirus on restaurants. They could well prompt a massive change in how the industry is valued going forward—and how it’s funded.”

“Going into trading Tuesday, with many restaurant stocks down, the median publicly traded restaurant chain had lost more than 60% of its value since its 52-week high, according to an analysis by Nick Mazing, director of research for financial services site Sentieo. That’s more than double the decline of the S&P 500. So while stocks have crashed as the coronavirus spreads, restaurants as a whole have fallen through the basement. ‘This is the meteor,’ Mazing said. ‘The industry as we know it will change dramatically. This is pricing in severe business impairments or worse.'”

“Mazing also believes that financiers will rethink the industry. Again, much of that had already been happening long before anyone heard of COVID-19—cash challenges at restaurant franchisees and the impending bankruptcy of NPC International was likely to take care of that. And, really, that might be one good thing that comes about this in the long term. Maybe restaurants have to change how they finance their capital needs.”

“‘I think the system will see reduced leverage as investors and banks pull back,’ Mazing said. ‘“It will also lead to a major rethink of real estate. A national chain franchisee was in many ways the gold standard for a tenant. This will probably go away. We might see new rent structures emerge, like more variable rents, which means that real estate financing will change, too.'”

From Globe St on Texas. “Heavily favored by developers for years, self-storage construction has ramped up across the country with some markets becoming increasingly competitive and saturated. According to Yardi Matrix’s analysis, DFW is the third most active market and its self-storage supply flood took a serious toll on rents. The total self-storage space inventory in the DFW metro area consists of more than 62.7 million square feet, in excess of 1,084 facilities, or the largest inventory level for any US metro.”

“Even though self-storage construction has slowed dramatically (-34% in 2019 compared to a record 2018), the pace of development is still elevated. The metro area recorded the addition of no less than 2 million square feet in 2019 spread over 24 new facilities. ‘The biggest factor in the decline of the Dallas storage construction sector is most likely oversaturation in the market,’ Francis Chantree, StorageCafe senior researcher, tells GlobeSt.com.”

From Geek Wire. “Redfin announced Wednesday that RedfinNow, an arm of its business that buys homes directly from homeowners and resells them to homebuyers, will temporarily pause making offers on homes. The move comes as the coronavirus outbreak and social distancing have severely cut into home-buying demand across the United States. CEO Glenn Kelman also published a blog post on Wednesday in which he said the housing market had taken a ‘turn for the worse.'”

The Financial Post in Canada. “The coronavirus outbreak, combined with a collapse in oil prices, is fueling recession fears and slowly eroding housing demand in key markets despite the central bank’s 100 basis points of rate cuts this month. ‘Open houses are quickly becoming extinct,’ said Phil Soper, chief executive of brokerage Royal LePage.”

“‘The market was ripping hot’ just last week, said Vancouver-based agent Steve Saretsky, who held open houses but saw a noticeable slowdown in traffic. ‘Almost overnight, things really took a turn,’ he said. ‘Phones are slower, people are nervous. I’ve had a couple of people request to pull out of presale contracts.'”

The Globe and Mail in Canada. “70 Carmichael Ave., Toronto. Asking price: $3,695,000 (Nov. 2019). Previous listing price: $3,795,000 (Sept. 2019). Selling price: $3,480,000. Near the Toronto Cricket Skating and Curling Club, a similar, fairly new residence sold for $3.7-million in 2017, but only fetched $3.5-million last year. Given that outcome, the sellers of this luxury home – which was listed nearby at the same time – dropped their own price, but resisted buyers seeking steep bargains.”

“‘Prices have softened since 2017 – there’s no secret – so it’s up to sellers to be proactive with their pricing to make sure they’re in line with market conditions,’ agent Andre Kutyan said.”

From Mingtandi. “A shop in Hong Kong’s Tsim Sha Tsui shopping district has been sold at a more than 41 percent loss as the city’s virus control measures crimp retail sales and push down commercial rents. A property investment firm believed to be controlled by the chairman of Shenzhen-listed Kaiser China Culture (SZ:2425) this month sold the 766 square foot (71 square metre) shop along Nathan Road for HK$40 million, according to records from Hong Kong’s Land Registry, after having purchased the property for HK$68 million in 2010.”

“The investor’s 41 percent haircut is said to rank as the worst loss on a percentage basis that the Tsim Sha Tsui shopping district has seen in decades.”

From Bloomberg on China. “China home-price growth stalled last month and sales plunged as large swathes of the country were locked down amid the height of the coronavirus outbreak. The coronavirus epidemic ‘dealt a blow’ to the property market, the National Bureau of Statistics said in a separate statement. Home sales had the steepest plunge since at least 2013, down 35% by value in January and February from a year earlier, a separate data set showed. The real picture may be more lackluster than the data show. Nineteen cities, including epidemic epicenter Wuhan, had no transactions last month, so prices there were considered to be unchanged, the statistics bureau said.”

“Moves to discount apartments to keep sales ticking over also helped fuel the slowdown. China Evergrande Group offered discounts of as much as 25% at many of its projects last month, and while sales surged, its average selling price declined 3%. Property bear Larry Hu, head of China economics at Macquarie Securities Ltd., says the market was already weakening before the virus outbreak, and government support measures won’t be enough to turn it around.”

The Australian Financial Review. “Sydney and Melbourne auction clearance rates headed lower at the weekend in signs the coronavirus may be hitting housing demand. Melbourne buyer’s agent David Morrell said he’d acquired three properties prior to auction this month and attended an auction in Toorkak that had lasted just five minutes. ‘There were no bidders, just a vendor bid and it was passed in. I was taken aback, in the past you would have had five bidders. I think its due to the coronavirus,’ said Mr Morrell of Morrell & Koren.”

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This Post Has 131 Comments

  2. ‘a similar, fairly new residence sold for $3.7-million in 2017, but only fetched $3.5-million last year’

    Somebody’s been a lion about the Toronto shack market.

    ‘Prices have softened since 2017 – there’s no secret’

    Wa happened to the red hotness, Toronto UHS?

  3. ‘Going into trading Tuesday, with many restaurant stocks down, the median publicly traded restaurant chain had lost more than 60% of its value since its 52-week high, according to an analysis by Nick Mazing, director of research for financial services site Sentieo. That’s more than double the decline of the S&P 500. So while stocks have crashed as the coronavirus spreads, restaurants as a whole have fallen through the basement’

    Restaurant oversupply worsens
    Blog: Restaurants add 18 new units per day, outpacing supply, and hurting unit economics

    Jonathan Maze | Jun 15, 2017

    ‘Same-store sales are falling because restaurants are opening too many locations. The industry has added about 40,000 new restaurants over the past six years, according to a recent study on the impact of industry supply by Credit Suisse.’

    ‘That’s about 18 new restaurants per day.’

    ‘Unit count growth has outpaced population growth in four of the past five years, leading to an overall increase in the number of restaurants per capita, according to the study. While the total restaurant penetration remains below recessionary levels, chain restaurant penetration is at an all-time high, according to the study. ‘

    ‘The result of all of this is what you’d expect: The influx of new restaurants has outpaced demand, putting a damper on same-store sales. Essentially, the industry is trading unit economics for sales growth.’

    ‘Investment dollars are flooding into the industry, driving new unit growth, while existing concepts are pushing expansionary plans. Some franchises have also revived a recessionary practice of development incentives as they search for unit growth.’

    ‘Even when companies do close locations, they quickly get filled. The buffet chain Golden Corral, for instance, recently bought several shuttered Old Country Buffet locations.’

    ‘Indeed, almost any time I write a story about store closures, I will almost invariably receive emails from a handful of chain site selection specialists, looking to find where the closed units are located. They want access to those sites.’

    ‘When weaker units shut down, the higher volume concept moves in, which makes the market that much more competitive.’

    https://www.nrn.com/finance/restaurant-oversupply-worsens

    1. ‘Investment dollars are flooding into the industry’

      ‘Heavily favored by developers for years, self-storage construction has ramped up across the country with some markets becoming increasingly competitive and saturated. DFW is the third most active market and its self-storage supply flood took a serious toll on rents’

      I think there’s a pattern here!

    2. Just enjoyed our last meal for a while from Miguel’s, a local Mexican restaurant. They were offering 50 percent off on carryout items the last day before they shut down operations.

      Luckily I am capable of preparing my own fajitas.

        1. Yep. They are closed.

          Among my three sons, one of them just had his hours whacked over the next two weeks, and the other two’s employers are in carryout/drivethrough only mode. So far, they all remain employed…

          1. No worrie$, thee U$taxpayer$ / Federal.gubermint, ha$ their back$ … (do they know who “pu$h.over Powell i$?)

    3. “‘Indeed, almost any time I write a story about store closures, I will almost invariably receive emails from a handful of chain site selection specialists, looking to find where the closed units are located. They want access to those sites.’”

      Having worked in restaurants, I find this hilarious. Total insanity.

  4. This should warm some hearts here:

    Loveland City Manager Steve Adams and most members of the Loveland City Council who attended a large national conference last week in Washington, D.C. have since learned that two other Colorado attendees have tested positive for COVID-19, the disease caused by a coronavirus strain.

    As a result, Adams and Council members have voluntarily observed self-quarantine status at their homes through Tuesday, March 24, the two-week period recommended by public health authorities.

    This bunch wants to raise taxes, complaining about budgetary woes, yet there was money for this junket.

    And a nurse, who was the county’s first case, well, it turns out she works in a nursing home and one of the residents has been identified as positive.

  6. MIT Technology Review
    Tech Policy
    We’re not going back to normal
    Social distancing is here to stay for much more than a few weeks. It will upend our way of life, in some ways forever.
    by Gideon Lichfield
    Mar 17, 2020

    To stop coronavirus we will need to radically change almost everything we do: how we work, exercise, socialize, shop, manage our health, educate our kids, take care of family members.

    We all want things to go back to normal quickly. But what most of us have probably not yet realized—yet will soon—is that things won’t go back to normal after a few weeks, or even a few months. Some things never will.
    …

      2. Tinder Has Become A News Service About Coronavirus, Which Is Not What God Intended
        “Setting my tinder to Wuhan so I can get the real scoop on what’s going on,” one user wrote.
        Posted on March 9, 2020, at 11:10 p.m.
        Cameron Wilson
        BuzzFeed News Reporter

        As COVID-19 spreads rapidly around the world, people are eager to keep up with developments at its epicentre in Wuhan, China.

        But government censorship, partisan media and misinformation have led many to feel the public isn’t seeing a full picture of life in a city on lockdown. So some have developed a creative solution to bypass the gatekeepers and go straight to the source: Tinder.

        Most Tinder users use the app to match with people nearby, for obvious reasons. But the world’s most used dating app has a premium feature, Passport, that allows a user with Tinder Plus or Tinder Gold memberships to choose to swipe in any location — like, say, Wuhan — no matter where they are.

        And despite Tinder being banned in China, users say they’re having luck setting their location to Wuhan, allowing them to match with and chat to residents to hear their perspective on the global story.

        US-based Twitter user @drethelin tweeted “Setting my tinder to Wuhan so I can get the real scoop on what’s going on” on Jan. 28 — just before the World Health Organization declared COVID-19 was a public health emergency.
        …

          1. Anyone who’s already reproduced won’t be reproducing more in the next 9 months.

          2. I would bet against you on that. Healthy people of reproductive age are not susceptible to severe cases, and the urge to reproduce is strong.

          3. It has nothing to do with susceptibility. Anyone stuck at home with a kid isn’t looking for more!

          4. I understand your point from a rational standpoint, but love and desire have little basis in rationality.

          5. but love and desire have little basis in rationality

            A lesson learned the hard way.

          6. A lesson learned the hard way.

            A tree under stress casts forth seeds. It’s nature’s way.

          7. “Anyone stuck at home with a kid isn’t looking for more”

            Sounds, kinda, female.ish. … but reckon there is exceptions.

          8. ” …but love and desire have little basis in rationality”

            Exactly, how nature works best!

          9. If anyone stuck home with a kid wasn’t looking for more, then nobody would have more than one kid.

            Are the birth control pills all made in China too?

      4. “…that’s going to put a damper on dating!…”

        Not a problem!

        Along with all the free cheese from the government, FedX will be soon dropping a set of Virtual Reality goggles on your doorstep.

    2. Social distancing is here to stay for much more than a few weeks … verses … “Tinder”?

      My monie$ is on “Tinder”

    3. It’s not going to upend our lives “forever.” 🙄 Is that like calling losing a few pounds a weight loss “journey?” Unless there’s a deadly mutation, this is a 2-3 year problem. All of our wars lasted longer.

      One huge thing I think we’ll see coming out of this is a massive push for full time work at home. Many of us were tossed into it and finding it’s doable, especially if we’re all on call with cameras over Skype or TEAM or Webex or whatever. At the least, this should lead to a realization that you don’t need 15,000 employees in the same building, or even the same state. Watch out, Silly Valley. We don’t need your vibrant SBUX. The cheap houses and empty roads in Peoria is gonna bring you down.

      1. Oxide, this of where we wont have massive daily traffic jams when people realize that millions Dont have work M-F 9-5 and sit in their cars for hours or jam packed subways…….Finally

  7. Two congressmen test positive for coronavirus
    Published: March 18, 2020 at 9:49 p.m. ET
    By Mike Murphy

    Two congressmen said Wednesday that they have tested positive for the coronavirus. Rep. Mario Diaz-Balart, R-Fla., became the first member of Congress to announce he had fallen ill. “I’m feeling much better,” he said in a tweet. “However, it’s important that everyone take this seriously and follow @CDCgov guidelines in order to avoid getting sick & mitigate the spread of this virus. We must continue to work together to emerge stronger as a country during these trying times.” Later Wednesday evening, Utah Democrat Ben McAdams said he, too, tested positive for COVID-19. “I have self-quarantined since first having symptoms and consulted with my doctor,” he said in a tweet. The House is currently in recess, though the Senate is still in session, and senators said Wednesday they intend to keep coming to work, Buzzfeed reported.
    …

    1. Yeah, that’$ their problem. $ad.

      Go “Orange.jesus!” … “we’ve fallen down & can’t get back up”
      “Help.u$!” … “Now!”

  9. NYSE to close trading floor after employee, trader test positive for coronavirus
    Published: March 18, 2020 at 8:18 p.m. ET
    By Claudia Assis
    All-electronic trading to take effect Monday
    An American flag hangs on the front of the New York Stock Exchange.
    Getty Images

    The Intercontinental Exchange, Inc. said late Wednesday that the New York Stock Exchange will temporarily close floor trading and move to fully electronic trading on Monday after a trader and a NYSE employee tested positive for COVID-19.

    “Trading and regulatory oversight of all NYSE-listed securities will continue without interruption,” the exchange operator said.

    The NYSE equities trading floor in New York, the NYSE options trading floor in New York, and the NYSE Arca Options trading floor in San Francisco are to close, Intercontinental Exchange (ICE, -8.73%) said.
    …

      1. I suppose this is flippant, but the median walkers with their cardboard signs must be hurtin’ pretty bad for business.

  11. Hopefully the 33% overnight increase in the number of San Diego cases is unrepresentatively high.

    San Diego COVID-19 Tracker: 80 cases reported
    Posted: 3:30 PM, Mar 17, 2020
    Updated: 5:39 PM, Mar 18, 2020
    By: Mario Sevilla
    CORONAVIRUS CASES BY THE NUMBERS (As of March 18, 5:30 P.M.)
    80 San Diego Cases
    0 Deaths
    — Age 0-17: 0 cases
    — Age 18-64: 63 cases
    — Age 65+: 17 cases
    — Females: 27 cases
    — Males: 53 cases
    CORONAVIRUS CASES BY THE NUMBERS (As of March 17, 5:20 P.M.)
    60 San Diego Cases
    0 Deaths
    — Age 0-17: 0 cases
    — Age 18-64: 47 cases
    — Age 65+: 13 cases
    — Females: 21 cases
    — Males: 39 cases

    SAN DIEGO (KGTV) — While there were no major changes surrounding public health orders by San Diego County officials Tuesday, they did announce an active investigation of two local clusters of coronavirus.

    One cluster includes four individuals who contracted COVID-19 in the community. They are known to each other, some being active duty members. One of those individuals has been hospitalized, the other three are on home isolation.

    One of the infected active duty members was previously identified as being the Navy’s first case of coronavirus.

    A second larger cluster includes seven individuals, also known to each other, who recently traveled to Colorado for a ski trip. One of the seven has been hospitalized while the others are undergoing home isolation.
    …

  12. Market Insider
    Interest rates are rising, a bad sign as the economy slides toward recession
    Published Wed, Mar 18, 2020 5:13 PM EDT
    Updated 2 hours ago
    Patti Domm
    Key Points
    – Rising interest rates are the last thing a weakening economy needs, but Treasury yields continue to rise even though the Fed is using its heavy artillery to drive them lower.
    – Strategists say yields, which move opposite price, are going higher because a big government stimulus package could create $1 trillion or more in new debt on top of the already $1 trillion U.S. deficit.
    – Yields are also moving higher because of a lack of liquidity as investors seek to raise cash.
    – Strategists say the Fed needs to take further action, including more asset purchases, to drive rates lower.
    …

      1. Treasury bill interest rates are not below zero, and I expect that the “math expert” fully knows this.

        1. Thanks for the implied endorsement in those double quotes.

          Having a talent is not enough; one also requires your permission for it–right, my friends?

          Friedrich Nietzsche

          But I’m just parroting what I read in today’s news. Checking the Daily Treasury Yield Curve Rates site, I see short term rates plastered against the zero bound out to six months, reflecting the Fed’s latest emergency rate cut. But they are not yer fully negative as they are in many European countries.

          So I am unclear what those headlines really mean.

    2. I suspect this situation is historically unprecedented, but please share if you know of another example.

      The Financial Times
      US Treasury bonds
      Treasury bill yields turn negative in sign of investor fear
      Analysts say ‘massive’ flight to safety increases demand for cash-like products
      Dollars. us currency. 100 dollar bills
      Yields on short-dated treasury bills fell as yields on longer-dated Treasury bonds rose
      © Masyuk Ivan
      Colby Smith in New York
      6 hours ago

      US Treasury bill yields dipped below zero while longer-dated government debt yields rose on Wednesday in a sign of frightened investors flocking to more easily traded securities during the global market tumult.

      “What you are seeing today is an example of a flight-to-safety on a massive scale,” said Kathy Jones, chief fixed-income strategist at Charles Schwab.

      Ms Jones said Treasury bills — US government debt maturing in one year or less — are seen as more like cash because they are easier to trade than their longer-dated counterparts. She added: “People are desperate for cash.”
      …

      1. Could you help me with this? I have multiple degrees in hard science, but bonds and yields escape me.

        So, an inversion of the yield curve is when the yields on long-term goes lower than yields on short-term. And that inversion signals a coming recession. But now that we’re clearly IN a recession, the yields on short-term are much lower than yields on long-term (because people are selling short-terms for cash to cover margins). Meaning the curve is now uninverted. Does the curve un-invert when the recession hits? Does it univert until everybody runs out of short-term to sell? Or did something go screwy that I don’t understand?

        1. Brief explanation:

          1) Massive central bank intervention coupled with a global financial panic have turned bond market fundamentals upside down.

          2) The Fed’s interim move last weekend to pin the short end of the curve to the mat explains why the short end is up against the zero bound.

          3) The discussion of trillions in fiscal and monetary stimulus creates a fundamental reason for long-term yields to rise, and sales of long-term Treasurys to raise cash exacerbate the effect.

          4) The reinitiation of quantitative easing may help keep a lid on long-term yield increase.

          How all these tumultuous countervailing effects balance out is anyone’s guess, but the bottom line is that the current state of the yield curve is severely distorted by an unprecedented economic dislocation, offset by policy interventions to offset its impact. The standard interpretation of the yield curve is inapplicable.

          1. Further thought:

            So long as that curve is sloping up, well-edumucated investors will “know” that the yield curve is not inverted, and hence we are not going into a recession. This will make them want to purchase moar stocks, houses, and other risk assets.

            Could central bank intervention be used to engineer an upward-sloping yield curve?

        2. ‘now that we’re clearly IN a recession’

          I’ve never seen so many adults act like little screaming girls in my life. Pick any of these imbalances (which I’ve posted on for many years), retail, hotels, luxury apartments, mcmansions – all of them need a good weeding out. So put on your big boy pants people and lets roll up our sleeves and make some gotdam money off this sh$t!

          1. Ben, I hope you’re not referring to us posters here. We all knew we were over-retailed, especially in unnecessary retail. Malls, for example, need to give up the ghost and repurpose their real-estate.

            And this virus will be the mercy shot for Sears and KMart. They’ve been hanging on for so long that they were getting annoying, like a feisty squatting serial refinancer.

            By the way, are gas stations up and running? Tomorrow I might go for a drive just to get out of the house and survey the lay of the land. I have a full tank but I’m just curious.

          2. “Ben, I hope you’re not referring to us posters here.”

            No. I’m sure he’s only referring to DebtDonkeys, DegenerateGamblers and Housing Hens.

          3. Malls, for example, need to give up the ghost and repurpose their real-estate.

            Unfortunately they’re demoing them and replacing them with high rises.

    1. The Financial Times
      Oil
      Oil prices hit lowest level in 17 years as demand plunges
      Market hit by coronavirus lockdowns in world’s biggest economies and continuing price war
      Flames emerge from flare stacks at Nahr Bin Umar oil field, as a worker wears a protective mask, following an outbreak of coronavirus, north of Basra, Iraq March 15, 2020.
      REUTERS/Essam Al-Sudani
      Brent crude lost 9 per cent on Wednesday to hit a low of $25.98 a barrel, a level last seen in 2003
      © Essam Al-Sudani/Reuters
      David Sheppard and Anjli Raval in London, Henry Foy in Moscow 10 hours ago

      Oil prices have fallen to their lowest level in 17 years, dropping below $25 a barrel, as demand for fuel has been hit by work and travel lockdowns introduced in some of the world’s biggest economies as part of efforts to contain the spread of coronavirus.

      Crude has now collapsed by more than half in a little over two weeks, with weak demand exacerbated by a price war between Saudi Arabia and Russia, which are raising supplies just as consumption falls dramatically.
      …
      The kingdom reiterated that it would continue to increase supplies in the coming months, maintaining its commitment to increase them by roughly a quarter to 12.3m barrels a day — even as demand falls in the face of the coronavirus pandemic.

      “The degree of demand destruction has shocked producers and means they are behind the curve,” said Rachel Ziemba at the Center for a New American Security, a think-tank in Washington.

      “Despite the pain of plunging oil prices, neither Russia nor Saudi Arabia seem ready to back down on their plan to boost production and flood the market.”

      Brent crude, the international benchmark, lost 13 per cent on Wednesday to hit a low of $24.72 a barrel, a level last seen in 2003. US benchmark, West Texas Intermediate, fell even more, losing 23 per cent to hit a low of $20.48 a barrel.

      Energy Aspects, a consultancy, warned on Wednesday that Brent prices could drop as low as $10 barrel.
      …

    1. The Financial Times
      Monetary policy
      ECB to launch €750bn bond-buying programme
      Pandemic Emergency Purchase Programme will cover sovereign and corporate debt
      FILE PHOTO: European Central Bank (ECB) President Christine Lagarde gestures during a news conference on the outcome of the meeting of the Governing Council, in Frankfurt, Germany, March 12, 2020. REUTERS/Kai Pfaffenbach/File Photo
      Christine Lagarde, ECB president, believes it is not the job of a central bank to stabilise bond yields
      © Reuters
      Martin Arnold in Frankfurt
      3 hours ago

      The European Central Bank has announced plans to buy an additional €750bn in bonds after holding an emergency call of its rate-setting committee on Wednesday night in response to the worsening economic and financial turmoil caused by the coronavirus pandemic.

      The central bank said all the extra asset purchases would be carried out this year and cover both sovereign bonds and corporate debt. Dubbed the Pandemic Emergency Purchase Programme, it would last until the coronavirus crisis is judged to be over.

      “Extraordinary times require extraordinary action,” ECB president Christine Lagarde said on Twitter after the measures were announced. “There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.”
      …

    2. Is this how capitulation looks?

      U.S. stock futures plunge despite ECB stimulus package
      Published: March 18, 2020 at 10:50 p.m. ET
      By Mike Murphy

      U.S. stock index futures sank late Wednesday despite a brief rally spurred by the European Central Bank announcement it will buy 750 billion euros’ worth of securities and bonds through the end of 2020 to offset the economic impact of the COVID-19 pandemic. After initially falling sharply at the start of the overnight session, Dow Jones Industrial Average futures surged more than 300 points, or 1.5%, after the ECB’s announcement, but then started to freefall. Dow futures (YM00, -3.662%) were last down about 600 points, or 3%. S&P 500 futures (ES00, -3.702%) and Nasdaq-100 futures (NQ00, -2.859%) also gave up early gains and dropped sharply.
      …

  17. The dollar is holding up very strongly against almost every other asset class. The central bankers will have to act quickly to put an end to this situation.

    1. People who mired themselves in debt are not happy about the prospect of repaying it in expensive dollars.

      Market Extra
      How a ‘disorderly’ U.S. dollar is amplifying the stock-market rout and adding to volatility
      Published: March 18, 2020 at 8:28 p.m. ET
      By William Watts
      If there’s one currency ‘aggravating the selloff in global asset markets, it is the U.S. dollar’: strategist
      Getty Images

      The U.S. dollar continued to surge against practically everything on Wednesday, underscoring a desperate global dash for liquidity that was blamed for amplifying a worldwide equity selloff and volatility across financial markets.

      “If cash is king, then dollar cash currently is world president. Everything that could be sold was sold against the dollar,” said Chris Turner, global head of markets at ING, in a note. And that’s not a welcome development right now.

      The ICE U.S. Dollar Index (DXY, 0.320%), a measure of the U.S. currency against a basket of six major rivals, traded at 100.47, up 1.4% and at a three-year high. A trade-weighted measure of the dollar, meanwhile, hit a new record. A 4% move against the British pound (GBPUSD, -1.128%) that drove sterling to its weakest level since 1985, barring the 2016 flash crash, and a 7% jump versus the Norwegian krone (USDNOK, +3.59%) were downright “disorderly,” Turner said.
      …

    2. The Financial Times
      US Dollar
      Dollar surge piles pressure on global currencies
      Traders warn of squeeze as coronavirus prompts companies to hoard greenback
      The dollar jumped against global peers on Thursday due to a funding squeeze
      © AFP
      Hudson Lockett in Hong Kong and Leo Lewis in Tokyo
      24 minutes ago

      The dollar surged against global currencies as traders warned of a squeeze on the greenback due to the pressure piled on banks’ and companies’ financing by the coronavirus outbreak.

      In Asian trading on Thursday the dollar index, which measures the world’s reserve currency against a basket of peers, jumped 0.6 per cent as global investors rushed to obtain dollar funding to help them ride out the pandemic.

      That hit currencies across the region with Japan’s yen falling 1.1 per cent to ¥109.13 per dollar and the Australian dollar to $0.557, its lowest since 2003. The pound dropped as much as 1.1 per cent to $1.1478, its weakest since 1985.

      Mansoor Mohi-uddin, a currency analyst at NatWest Markets, said the economic stress from a “dollar squeeze” was moving across the world. The spread of the virus had exposed the risks created by a more than doubling in dollar-denominated corporate debt to $12tn since the 2008 global financial crisis, he added.

      “That is a huge amount of dollar debt that companies need to fund. The banks are also struggling to find dollars in the wholesale market,” said Mr Mohi-uddin.

      Zach Pandl, currency analyst at Goldman Sachs, said the dollar’s rise “reflects the unique role the currency plays in the global economy and financial system, rather than a view among investors that the US economy is better placed to weather the coronavirus shock”.
      …

      1. The spread of the virus had exposed the risks created by a more than doubling in dollar-denominated corporate debt to $12tn since the 2008 global financial crisis, he added.

        “That is a huge amount of dollar debt that companies need to fund. The banks are also struggling to find dollars in the wholesale market,” said Mr Mohi-uddin.

        Corporate buybacks using borrowed money used to be illegal. Now we’re going to see why. We’re also going to see why having corporate lobbyists for the FIRE sector draft all of our legislation to submit to the corporate whores of the Republicrat duopoly was a recipe for disaster. If anything good comes out of this financial meltdown, it will be the even the dullest of the sheeple will finally understand that crony capitalism has consequences. There needs to be tribunals and swift, severe justice for the captured regulators, enforcers, and policymakers responsible for creating such systemic risks to the financial system. Starting with the gold collar criminals at the Fed.

    3. Dry cleaner effect on steroids?

      The Financial Times
      US Treasury bonds
      Bond and equity slump leaves investors with ‘nowhere to hide’
      Why the virus-driven rush out of haven assets is a worrying sign for the system
      TOPSHOT – Meric Greenbaum, Designated Market Maker IMC financial looks up at the board before the opening bell right before trading halted on the New York Stock Exchange on March 9, 2020 in New York. – Trading on Wall Street was temporarily halted early March 9, 2020 as US stocks joined a global rout on crashing oil prices and mounting worries over the coronavirus.The suspension was triggered after the S&P 500’s losses hit seven percent. Near 1340 GMT, the broad-based index was down more than 200 points at 2,764.21. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via Getty Images)
      Government bonds are typically seen as havens from volatility
      © AFP via Getty Images
      Tommy Stubbington in London and Colby Smith in New York 25 minutes ago

      As fears over the spread of coronavirus intensify, even the safest corner of financial markets has been swept up in the global sell-off.

      Government bonds, typically seen by investors as havens from volatility elsewhere, saw their prices tumble on Wednesday at the same time as fund managers continued to dumped riskier assets like stocks.

      What is going on in bond markets?

      In times of crisis, investors tend to pile into government bonds for their apparent safety. Markets followed this playbook at the start of the coronavirus outbreak, with bond yields around the world hitting record lows as prices soared.

      That pattern has changed in recent days. The selling in bond markets accelerated early on Wednesday, pushing 10-year US Treasury yields above 1.2 per cent, the highest in more than two weeks and far above the record low of less than 0.4 per cent hit on March 9.

      Europe’s benchmark, the 10-year yield on German government debt, touched a two-month high of minus 0.23 per cent, while 10-year UK yields surged to 0.79 per cent by late afternoon in London.

      Why are investors selling?

      They need cash. As the rout in equities and corporate debt continues, clients have been withdrawing money from mutual funds. To meet these redemptions, investors are being forced to dump the assets that are easiest to sell, traders say.

      As some of the world’s most heavily traded assets, government bonds are an obvious candidate. “A lot of people are just trying to sell whatever they can,” said Seema Shah, chief strategist at Principal Global Investors.
      …

      1. So wait. If people are forced to sell mutual funds at a loss, then they must have run out of profitable assets. Like, for example, paper gold, whinch they were selling Monday. So are we expecting the price of gold to rise again against the dollar, even with a strengthening dollar?

        1. Forced liquidations have that effect. It’s hard to HODL when you are desperately short of cash.

    4. Business News
      March 18, 2020 / 5:03 PM / Updated 40 minutes ago
      Cash is king as emergency stimulus fails to stop market panic
      Tom Westbrook

      SINGAPORE (Reuters) – The dollar surged and everything else was blown away on Thursday as emergency central bank measures in Europe, the United States and Australia failed to halt a fresh wave of panic selling.
      FILE PHOTO: Pedestrians wearing facial masks look at an electric board showing stock averages of Japan’s Nikkei and the U.S. Nasdaq outside a brokerage at a business district in Tokyo, Japan January 30, 2020. REUTERS/Kim Kyung-Hoon

      “There’s no buyers, there’s not much liquidity and everyone is just getting out,” said Chris Weston, head of research at Melbourne brokerage Pepperstone. Stocks, bonds, gold and commodities fell as the world struggles to contain coronavirus and investors and businesses scramble for hard cash.

      U.S. stock futures were a hair’s breadth from hitting session down limits. The growth-sensitive Australian dollar was crushed 4% to a more than 17-year low.

      Nearly every stock market in Asia was down and circuit breakers were hit in Seoul, Jakarta and Manila. Traders reported huge strains in bond markets as distressed funds sold any liquid asset to cover losses in stocks and redemptions from investors.

      Benchmark 10-year sovereign bond yields in Australia, New Zealand, Malaysia, Korea and Singapore and Thailand surged as prices tumbled. Gold fell 1% and copper hit its downlimit in Shanghai.

      MSCI’s broadest index of Asia-Pacific shares outside Japan fell 5% to a four-year low, with Korea and Hong Kong leading losses.
      …

      1. ““There’s no buyers, there’s not much liquidity and everyone is just getting out,”

        Remember, for every sale, up or down, there is a buyer.

  18. Given current circumstances, DOW 20,000 right now looks more bubblicious than DOW 29,500 looked pre-COVID-19.

  19. Maybe, just maybe, given the recent sizable increase among so many vulnerable Americans in demand for home delivery service, Amazon should consider screening its warehouse workers for coronavirus.

    1. Health
      Exclusive: Amazon Confirms First Known Coronavirus Case in an American Warehouse
      Workers at the Queens, New York, facility say employees were expected to come in for their night shift after the case was identified. Amazon denies this.
      Olga Khazan
      March 18, 2020
      Carlos Jasso / Reuters

      Workers at an Amazon warehouse in Queens, New York, received a text Wednesday evening that they long feared might come: “We’re writing to let you know that a positive case of the coronavirus (COVID-19) was found at our facility today.”

      This is the realization of a major threat to Amazon’s operations. Millions of people across the nation are cloistered inside their homes, many of them relying on the company to provide basic goods. Amazon is already struggling to meet demand, and some employees feel they’re being unfairly endangered by working in warehouses filled with other workers. It’s unclear how deliveries could continue if the workers who sort, pack, and ship Americans’ goods start getting sick in droves.

      Though two office workers at Amazon’s Seattle headquarters have been diagnosed with COVID-19, this is the first confirmed case of the disease among the company’s hourly warehouse employees in the United States. These workers make up the majority of Amazon’s 600,000-strong workforce.
      …

  20. Parting thought on today’s posts: The selloff in long-term Treasurys might look like a good dip buying opportunity through the lens of the rearview mirror.

    And similarly for gold, but not toilet paper…

      1. “Why are people stockpiling toilet paper”

        I wouldn’t call them “people” but yes We have millions of realtors running around sh!t staining their pants in dire need of TP.

  21. The Financial Times
    Wealth management
    Wealth managers field onslaught of calls from investors spooked by virus
    Clients want reassurance yet remain alive to investment opportunities as markets roil
    © Lucas Jackson/Reuters
    Madison Darbyshire 2 hours ago

    Wealth managers have reported a huge spike in calls as shaken clients in the UK and US seek guidance as the coronavirus crisis causes financial markets to lurch.

    Investment advisers on both sides of the Atlantic told the Financial Times they had experienced sharp rises in the numbers of investors calling for guidance this week.

    The end of the UK tax year in early April is always a busy time for advisers, but some advisers said that call volumes were more than 30 per cent higher than they would expect at this time of year. This is proving harder than usual to manage as more advisers shift to home working, replacing face-to-face meetings with Skype calls.

    Some managers have taken to hosting daily or weekly investor calls to ease communication as they attempt to provide answers to clients’ concerns.

    “When the market is going up your phone doesn’t ring a heck of a lot,” said Scott Wren, senior global market strategist for Wells Fargo Investment Institute in the US. “When there are downturns, that’s when your phone starts ringing.”

    He said the most common questions from clients had been “Where’s the bottom?” and “Are we going to have a recession?”

    “Prior to this, it was all about elections and how much further the market is going to go up,” he added.
    …

    1. “When there are downturns, that’s when your phone starts ringing.”

      I doubt the Wall street psychopaths lose any sleep.

  22. Investors in UK property funds are facing bans on withdrawing their money after managers said the coronavirus crisis had made it impossible to value the buildings that they own.

    Funds worth more than £7bn have been closed this week, and investors have been warned that more are likely to follow.

    https://www.theguardian.com/business/2020/mar/18/some-uk-property-funds-ban-withdrawals-over-coronavirus

    I’d guess the value is a lot less than they claimed it was just one short month ago.

  24. Oil collapses by another 24% to $20. It hasn’t been this low since 2002
    By Matt Egan, CNN Business
    Updated 3:53 PM ET, Wed March 18, 2020
    Oil rig pumpjacks, also known as thirsty birds, extract crude from the Wilmington Field oil deposits area where Tidelands Oil Production Company operates near Long Beach, California July 30, 2013. REUTERS/David McNew (UNITED STATES – Tags: ENERGY BUSINESS)

    New York (CNN Business) The nightmare in the oil industry keeps getting worse. It’s now facing the weakest oil price since the first term of President George W. Bush.
    Intensifying recession fears drove US oil prices down a staggering 24% Wednesday to $20.37 a barrel. That’s the lowest level since February 2002.

    Selling escalated throughout the day, with 9% morning losses more than doubling by the afternoon. The acceleration reflects a growing realization of just how much the coronavirus outbreak is slamming the world economy.

    The relentless selling is being driven by a crushing combination of excess supply and shrinking demand. And it’s dealing a crushing blow to America’s once-booming oil industry.
    …

    1. …
      “Even if global production remains static over the near term, let alone factoring in Saudi Arabia increased supply, inventories will swell as gas and oil demand drops precipitously in the weeks ahead of when physical storage facilities are filled to the brim around the world,” said Stephen Innes, chief market strategist at AxiCorp, in a note to clients.

      “In this situation, it’s unclear if a point of equilibrium even fits into this scenario. As once the swift and savage physical rebalancing takes place, the markets could quickly fall to WTI $15 or even further, which is now becoming the base case for some,” he said.
      …

  26. Are the central bank interventions working yet?

    Market Snapshot
    U.S. stock-index futures lower after ECB rolls out stimulus and Fed backstops money markets
    Published: March 19, 2020 at 7:40 a.m. ET
    By William Watts
    ECB President Christine Lagarde
    Getty Images

    U.S. stock-index futures traded lower Thursday in seesaw price action after the European Central Bank in a late-night move rolled out an expanded asset-purchase program and the Federal Reserve announced a facility to backstop money-market mutual funds.
    …

    1. The Financial Times
      Markets Briefing Equities
      Global stocks fall despite new central bank interventions
      Bonds rally after late-night ECB move but dollar gains and European markets slip
      The dollar jumped against global peers on Thursday due to a funding squeeze
      © AFP
      Philip Georgiadis and Adam Samson in London, Hudson Lockett in Hong Kong and Leo Lewis in Tokyo
      47 minutes ago

      Global stocks slid and the dollar ripped higher on Thursday, as late-night interventions from the European Central Bank and US Federal Reserve failed to have a lasting impact on markets rattled by the coronavirus pandemic.

      Futures trade pointed to declines of around 2.5 per cent for the S&P 500 on Wall Street, while in Europe the composite Stoxx 600 index fell 1.2 per cent in late-morning trading, having opened higher. In London, the FTSE 100 index fell 1.4 per cent.

      The moves came after new measures from central banks to try to calm the economic and financial turmoil stemming from the virus outbreak, which is shutting down activity in large parts of the Western world.
      …

    2. Will Fed bond-buying drive fixed mortgage rates below 3%?
      It’s “certainly possible,” CoreLogic chief economist says
      March 17, 2020, 6:17 pm By Kathleen Howley

      Deep inside the fortresslike headquarters of the Federal Reserve Bank of New York in lower Manhattan, a group of market specialists on Monday re-started the bond-buying program that during the financial crisis was known as quantitative easing, or QE.

      In a surprise announcement on Sunday, the Fed’s rate-setting Federal Open Market Committee said it would buy $500 billion in Treasury bills and $200 billion of agency-backed mortgage securities. In addition, it said it would reinvest run-off from its existing portfolio of mortgage bonds.

      The Fed launched three rounds of a similar bond-buying more than a decade ago aimed at saving the housing market and stimulating economic growth during the financial crisis. The first phase, started in December 2008, helped to drive mortgage rates below 5% for the first time ever.

      The Fed also said on Sunday it was slashing 1% from its benchmark rate, putting it near zero for the first time since the financial crisis, a move that will make business borrowing cheaper and help homeowners with equity loans tied to the prime rate, which moves in tandem with the Fed rate.

      But for the mortgage market, the QE program and the pledge to reinvest MBS runoff was the big news because it will increase competition for agency bonds. When demand goes up, yields go down, and that usually translates into lower mortgage rates.

      “The Fed is creating liquidity and creating demand for mortgage-backed securities, which drives down rates,” said Mark Goldman, a loan officer with C2 Financial in San Diego. “It will take a few weeks for things to settle down, but once that happens we could see rates return to record lows of near 3%, and there’s a chance we could see a sub-3% rate for a 30-year fixed conforming loan.”
      …

    4. The Fed
      Fed moves to satisfy global demand for dollars
      Published: March 19, 2020 at 9:37 a.m. ET
      By Greg Robb
      Fed sets swap lines with 9 more central banks
      Federal Reserve headquarters in Washington. The Fed has taken aggressive steps to smooth dysfunctional financial markets.
      Getty Images

      The Federal Reserve on Thursday moved to quench the business world’s thirst for the U.S. dollar, by announcing it had set up temporary U.S. dollar swap lines with nine central banks in Asia, South America and Europe.

      The new facilities will support $60 billion swap lines with the central banks of Australia, Brazil, South Korea, Mexico, Singapore and Sweden.

      Lines of $30 billion were set for the central banks of Denmark, Norway, and New Zealand. The swap lines will last for 6 months.

      The Fed already has swap lines with major industrial countries and the European Central Bank. There are now 14 separate swap lines with other central banks.

      The dollar had been surging in foreign exchange trading as a result of high demand as the world’s reserve currency is used for most international trade and payments. This desperate dash was being blamed by analysts for amplifying the worldwide equity selloff and volatility across financial markets.
      …

    5. Stocks failing to find traction after central-bank actions; Dow down 700

      Stocks open mostly lower as Dow, S&P 500 continue slide
      Published: March 19, 2020 at 9:36 a.m. ET
      By William L. Watts

      Stocks opened mostly lower then drifted to the downside in early action Thursday, struggling to find traction despite additional central bank measures, including an expanded European Central Bank asset-buying program and the Federal Reserve’s introduction of a backstop for money-market mutual funds and additional dollar swap lines with foreign central banks. The Dow Jones Industrial Average fell 420 points, or 2.1%, while the S&P 500 (SPX, -2.625%) was off around 1.7%. The Nasdaq Composite (COMP, -1.28%) opened in positive territory but was off 0.9% in recent action.
      …

  27. If you are hoping for an oil price rebound any time soon, the fundamentals are not your friend.

    Like with toilet paper, there’s only so much storage space available before you are out of room to store anymore, at which point the marginal value of additional supply goes negative, due to disposal costs.

    Oil Prices Rebound From 18-Year Lows, But Demand Shock, Saudi Production Boost, Keep Bulls At Bay
    With airlines grounding fleets and factories shutting down amid the coronavirus outbreak, global oil prices could test new lows in the weeks ahead.
    Martin Baccardax
    2 hours ago

    Global oil prices bounced from multi-decade lows Thursday, following the steepest single-day decline on record, but deeper travel restrictions, and new manufacturing sector shut-downs, point to even lower prices ahead.
    …

    1. Commodities Corner
      Dismal oil demand outlook, Saudi-Russian price war lead to ‘atomic bomb’-like environment for oil
      Published: March 18, 2020 at 3:05 p.m. ET
      By Myra P. Saefong
      U.S. benchmark oil futures at 18-year low
      Weak oil demand outlook, Saudi-Russian price war lead to “atomic bomb equivalent in the oil markets,” said Louise Dickson of Rystad Energy MarketWatch photo illustration/iStockphoto

      Oil futures trade near their lowest levels in 20 years with the plunge in prices expected to continue, fed by a weak oil demand outlook tied to the spread of COVID-19 and a price war between two of the biggest crude producers in the world.

      “The most recent modern bottom low was about $18 a barrel for West Texas Intermediate crude, on an inflation adjusted basis, and “we could test that now, as long as neither Russia nor Saudi Arabia blinks,” said Michael Lynch, president of Strategic Energy & Economic Research. He referred to the oil market situation as “the worst I’ve ever seen.”

      “The problem is that distressed companies might feel the need to dump at any price, which will create pain throughout the industry unlike anything seen before,” he told MarketWatch.
      …

    2. for at least 60 day’s

      Most likely for longer. Will those who didn’t/couldn’t pay be forgiven their back payments once they resume paying? At this point nothing would surprise me.

  29. Business
    World leaders rush in to shore up panic-hit global financial system
    A woman wearing a mask to prevent contracting the coronavirus adjusts her husband’s mask as they wait to check in at Incheon International Airport in Incheon, South Korea, March 19, 2020. REUTERS/Kim Hong-Ji
    19 Mar 2020 04:08PM

    HONG KONG: World leaders raced to shore up panic-stricken global markets on Thursday (Mar 189, pouring liquidity into the financial system as investors everywhere dumped assets, switching to dollars in cash amid the escalating coronavirus pandemic.

    Policymakers in the United States, Europe and Asia resorted to emergency action as the pandemic left their economies virtually comatose, with quarantined consumers, broken supply chains, paralysed transportation and depleted shops.

    There were almost 219,000 cases of coronavirus reported globally, including over 8,900 deaths linked to the virus. Over 20,000 of those cases were reported in the past 24 hours, a new daily record.

    The European Central Bank launched new bond purchases worth 750 billion euros (709.94 billion pounds) at an emergency meeting late on Wednesday, in a bid to prevent a deep recession that threatened to outdo the 2008-09 global financial crisis.

    “Extraordinary times require extraordinary action,” ECB President Christine Lagarde said, amid concerns that the strains from burgeoning crisis could eventually tear apart the euro zone as a single currency bloc.

    In the United States, the Federal Reserve rolled out its third emergency credit program in two days, aimed at keeping the US$3.8 trillion money market mutual fund industry functioning if investors made rapid withdrawals.
    …

    1. ‘to avoid a depre$$ion,’

      Funny how “old.notion$” crawl back into the language hou$e through the forgotten ba$ement window$. Whilst everyone’$ just a rockin’ & a chit.chattin’ out on the “rece$$ion” front porch.

      1. Some years ago I was visiting with an elderly customer who, it came up, had lived through the Depression. I asked him what it was like. He said he really didn’t know, he was a teenager and didn’t have a job anyway.

        I guess there can’t be a depression here at my house, I don’t have a job either!

    1. They’re just helping some of their buddies get out at a higher price. The FED has offered to be the bagholder.

  33. The Financial Times
    Markets volatility
    Greenback sweeps all before it as companies hoard dollars
    Coronavirus uncertainty drives rush among corporates and investors for US currency
    The coronavirus spread has piled pressure on emerging market currencies such as Indonesia’s rupiah
    © Reuters
    Leo Lewis in Tokyo
    6 hours ago

    Currency traders across Asia invoked the spectre of the 2008 financial crisis on Thursday as acute corporate balance-sheet stress, cash repatriation by global investors, disruption to trade and hidden losses by imploding hedge funds led to a rush on the dollar.

    In a signal that forex dealing rooms said was particularly ominous for the coming days, the closely watched dollar-yen cross currency basis — the cost of borrowing dollars for other currencies in foreign-exchange swap markets, has now hit levels not seen since the global financial crisis.

    In a series of collapses that stunned dealing rooms and prompted speculation of direct intervention by, among others, the Reserve Bank of Australia, the Australian dollar plunged to an 18-year low that put the value of one Aussie dollar at $0.57 — with the currency falling 2.5 cents in the space of just one hour.
    …

  35. Market seems to have the Boeing MCAS system integrated in it, making it dip more and more until things end up at the bottom anyway. MCAS. Market cratering assets system

    1. The new engines of growth were too big for the existing framework, so the nose has always wanted to dip down. They tried to fix it with software, but it was infected by a virus and the pilots couldn’t override. When this plane finally lands, it’s going to leave a big depression.

      1. I thought I had read that it wasn’t the size of the engines but rather their orientation on the wing that was the problem. They were moved forward or something.

    1. 😷🤒🤧 … ⚡🌀🌊 … 🏡📉↘️↘️↘️⬇️🙊🙉🙈 …📰🚫🏧✔ …🥜🐿⁉️

    2. “Demand for housing was especially strong before the coronavirus hit the U.S., thanks to favorable demographics and strong employment.”

      Sure, (low/no) down-payment mortgages combined with rock bottom interest rates had nothing to do with it. Besides, the housing market was already is trouble before the coronavirus arrived.

  38. I’m wondering if the house price crater will be on an expedited schedule just as the stock market crater has been.

    1. It gets down to a question of how the supply side of the market will cope with the absence of demand for an indefinite period of time.

      1. Maybe another wave of refinancing at lower rates will keep the banker boys busy for a while.

      2. “…cope with the absence of demand…”

        Guess all that REIConplex “pent up demand” exploded into the vacuum of outer space.

        Just to illustrate how desperate the REIConplex is getting: I found one of those “JUST SOLD” flyers in my mailbox yesterday. Problem was one of the “JUST SOLD” houses is nextdoor to mine and actually sold in the summer of 2018. Ditto for another address couple of streets over. Of course, the REIConplex would never lie, it must of been an adminstrative error, right?

        1. While it seems to be true that with most products capitalism produced the highest efficiency ,you can’t have monopolies and price fixing for it to work well.

          There is one industry where the profit motive does not work well and that is the health industry.

          We don’t get cures, but rather we get long term medications that create destructive side effects that require more long term drugs to deal with the side effects

          Do Doctor’s even counsel you on life style and healthy habits ever.

          The Medical Cartel told us eggs were bad and the sun was bad, and everbody over 40 had to be on a statiin or a destructive depression pill

          It was all about getting people on long term medications rather than addressing healthy life style.

          Rather than faulty and gouging medical for all, let’s talk cure rates and efficiently and doing no more outrageous harm to the population.

          While life saving emergency measures are part of the medical industry that is good, it should not be confused with the do harm profit motive aspects that is not really sustainable or good.

          The Medical/pharma industry is currently a price fixing monopoly that doesn’t really see cures but rather profit.

          That doesn’t mean I think the government should take over the health industry, because Government is just as corrupt.

          Suffice to say that the Medical Cartel need a overhaul that will take out
          and clean up the evil parts.

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