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People Familiar With The Matter Say The Problems Predate The Spread Of The Virus

A report from the Wall Street Journal. “As the novel coronavirus causes turmoil in property markets, some of the most risk-hungry real-estate lenders are starting to come under pressure. Funding debt investments with bank loans has allowed REITs and debt funds to juice up their profits, but it puts them at risk at a time when real-estate lending markets are freezing up. The first warning signs are already emerging. In downtown Brooklyn, developer RedSky Capital planned to replace an entire block of low-rise buildings with a mixed-use skyscraper.”

“But on March 1, RedSky stopped making payments on its $154.6 million mortgage, its lender, Apollo Commercial Real Estate Finance Inc., a mortgage REIT sponsored by private-equity firm Apollo Global Management, said in a public filing. People familiar with the matter say the project’s problems predate the spread of the virus. Residential mortgage REITs, which primarily buy bonds backed by residential home loans and finance these investments with short-term debt, have faced a surge in margin calls from their lenders.”

“Commercial mortgage REITs generally borrow $2.50 to $3 for every dollar of their own money that they invest, said Steven DeLaney, an analyst at JMP Securities. Mr. DeLaney said most mortgage REITs are well equipped to make it through the crisis. Still, he said, they should rethink their business models and consider using less debt and shift to unsecured loans. ‘Those things you don’t think about in good times,’ he said.”

From The Hill. “A flood of missed home-loan payments caused by the coronavirus outbreak is threatening to bankrupt U.S. mortgage lenders and deepen the economic toll of the pandemic. The nonbank mortgage industry dramatically expanded while low interest rates and a rebounding economy helped drive housing prices to new heights and fuel a reemergence of mortgage-backed securities.”

“‘There was definitely a shift where the banks decided it wasn’t as economical for them because it’s a low-margin, high-volume business in the best of times,’ said Graham Steele, former chief Democratic counsel on the Senate Banking Committee. ‘And it just felt like the economics didn’t work well for the banks, and so you had nonbank servicers step in because it’s a little more economical for them.'”

“The sudden collapse of the economy is a particularly daunting first test for many firms who’ve only known the boom of the post-recession recovery. ‘The level of potential non-payment in April due to the pandemic (and potentially beyond) could quickly exhaust their cash reserves and send them into bankruptcy. This could produce a tsunami of illiquidity,’ wrote Beacon Policy Advisors, a Washington research consultancy.”

The Times of London. “Banks in Britain could face losses of more than £15 billion on loans that backed leveraged buyouts and other highly geared transactions, research suggests. These loans risk going sour as an economic slump affects the cashflow of companies with heavy debts. Fideres, a specialist finance consultancy based in London, expects direct losses worldwide from leveraged loans to top $100 billion, with losses in collateralised loan obligations of another $100 billion, based on information known so far.”

“Collateralised loan obligations are packaged-up pools of leveraged loans, which are then divided into different tranches of risk to suit different investors. They are similar to the sub-prime collateralised debt obligations — packaged pools of higher-risk mortgages — that went badly wrong in the 2007-09 financial crisis. Alberto Thomas, co-founder of Fideres, predicted: ‘It is going to be two to three times worse than in the global financial crisis.'”

“Lenders today are much more exposed than they were in the aftermath of the banking crisis, Mr Thomas said. So-called covenant-lite loans accounted for only 14 per cent of leveraged loans in 2008, but that proportion has grown to 76 per cent today. Covenants are conditions attached to loans that give lenders much more protection in difficult times.”

“Struggling borrowers are also more likely to default than they were in the last crisis, he said, because central bankers then were able to slash interest rates, dramatically lessening interest bills on loans linked to benchmark rates, such as Libor. This time official interest rates are at or close to zero.”

The Buffalo News in New York. “After years of bustling sales and rising prices, Buffalo’s housing market has ground to an abrupt halt. Meanwhile, most real estate agents are trying to do whatever they can for clients. But without new deals, they can’t make money. ‘I’m not working and this is my busy time,’ said Stephanie Morgan, co-owner of JRS Morgan Realty. ‘This is where I really start to build the income for the rest of the year.'”

The Daytona Beach News Journal. “Ormond Beach investor Ty Lohman saw the writing on the wall and acted accordingly a few months ago to avoid what he believed could be an oncoming disaster. No, not the coronavirus pandemic. The anticipated glut in apartment properties in the Daytona Beach area. Lohman and his wife Tovah, a real estate broker, sold several of their apartment complexes last year. They reinvested the some of the proceeds by purchasing commercial properties. In normal times, those retail properties would be a safe investment with a guaranteed steady flow of revenue. But these past few weeks have been anything but normal.”

“‘There’s no retail tenant who hasn’t contacted their landlord already,’ Colliers International Vice Chairman Bradley Mendelson told the Wall Street Journal. Many landlords, he said, will have no choice but to let their tenants know they’re in the same boat: ‘If you don’t pay your rent, I can’t pay my mortgage.’ That could trigger an onslaught of commercial mortgage loan defaults, Mendelson warned.”

From Morningstar on Canada. “John Pasalis, President of Realosophy, is here today to talk about what could potentially happen to Canadian real estate. Saldanha: So, let’s talk about people who are forced to sell right now. A lot of investors in real estate in Canada rely on either rental income or income from things like Airbnbs. Now, with demand falling across especially Airbnbs, what are some of the options, especially for people who are forced to sell?”

“Pasalis: It’s going to be very – so, people who are forced to sell now, I mean, of course, are listing their properties on the market as soon as possible, aren’t delaying. The challenge is going to be for the investors, and I think that’s kind of what everyone has been talking about. I mean, if you have two or three rental condos, there’s a lot of talk now in the press about tenants going on a rental strike and not paying their rents. And legitimately, I mean, if their incomes have been cut, they can’t pay their rent, and the province are basically saying tenants are not going to get evicted during this short period. So, if you’re an investor and you’re not collecting rents, it’s of course going to be hard for those investors.”

From Domain News in Australia. “Australia’s rental market has been flooded with new listings. New data from Domain revealed 39,252 more properties have been listed over the past two weeks alone. Domain economist Trent Wiltshire said people who had lost their jobs were looking for ways to save money by moving back in with their parents or partners and vacating properties.”

“There were also more short-term rentals coming onto the full-time rental market, he said. ‘It does seem like there’s an Airbnb effect,’ Mr Wiltshire said. ‘We’re likely to see the rental vacancy rate rise and downward pressure on rents because there is more choice in properties.'”

“Business development manager with Place Residential rentals Rebecca Russell said landlords were quickly dropping the rent prices for these particular properties in order to fill them. ‘You used to be able to get $500 [for these properties], now it’s $400 per week,’ she said.”

From Good Returns New Zealand. “The unprecedented covid-19 outbreak has many economists predicting a short, sharp downturn in the housing market. Tony Alexander weighs up the negatives for homeowners in a post-coronavirus environment. ‘Absence of income means inability to raise a deposit, get a mortgage, and perhaps even continue to keep the house one already owns. The complete absence of tourism this year and the much lower numbers of inbound travellers for years to come will bring Airbnb dwellings back to the market. Reduced employment, visa holders leaving, students not arriving, suggest rent assumptions will need to be redone. Over the past four years, investors have switched their focus from Auckland out to the regions. We’ve seen this before; it often does not end well with over-supplies revealed in some locations.”

From Bloomberg on the UK. “Short-term rental properties offered on websites like Airbnb Inc are being dumped on London’s normal letting market as the coronavirus outbreak shuts out tourists, pushing down the capital’s rents. Most inner London areas saw an increase in the number of properties with asking-price cuts of more than 10 per cent in the two weeks from March 9 compared with a year earlier, according to property website Zoopla. The amount of cuts was more pronounced in the richest boroughs.”

“‘Some markets where short-term rentals have been a big factor, we could possibly see some financial stress there’ as a result of the pandemic, said Neal Hudson, a residential property analyst. Landlords no longer being able to pay their mortgage ‘could contribute to excess selling in the market, pushing prices down.'”

The Wall Street Journal. “Janet Yellen, the former Federal Reserve chairwoman, said Monday bad choices by broad swaths of the financial industry and companies, abetted in part by low rates and regulatory shortcomings, are likely to make it harder for the economy to recover from the coronavirus crisis. While the banking and financial sector was in ‘generally in good shape’ ahead of the crisis, problems were already taking shape, Ms. Yellen said.”

“‘Non-financial corporations entered this crisis with enormous debt loads, and that is a vulnerability. They had borrowed excessively’ and they did it not so much for productive purposes like investment, but for buying back stocks and paying dividends to shareholders, Ms. Yellen said. And while these firms borrowed, investors also let their guards down in their hunt for high yields, the former central bank official said.”

“All of this took place because low interest rates made it easier to borrow and regulators didn’t have the right powers to stop it. Regulators could only step in if this borrowing threatened the bank making loans, and for the most part it didn’t, Ms. Yellen said.”

“The corporate borrowing binge ‘creates risk to the economy. And I’m afraid we’ll see that in spades in the coming months, because it may trigger a wave of corporate defaults. Even where a company avoids default, highly indebted firms usually cut back a lot on investment and hiring, and that will make the recovery more difficult,’ the former central banker said.”

“The Fed has long been dogged by complaints that the low rates it put in place during the financial crisis allowed financial market excess to build. Some Fed officials warned ahead of the coronavirus pandemic that high levels of corporate borrowing were not themselves a systemic risk, but could amplify trouble if it arrived.”

This Post Has 350 Comments
  1. ‘All of this took place because low interest rates made it easier to borrow and regulators didn’t have the right powers to stop it. Regulators could only step in if this borrowing threatened the bank making loans, and for the most part it didn’t, Ms. Yellen said’

    But you couldn’t propose new regulations Janet? What we have here is a dishonest, pathetic system.

    ‘The corporate borrowing binge ‘creates risk to the economy. And I’m afraid we’ll see that in spades in the coming months, because it may trigger a wave of corporate defaults’

    You are an a$$hat Janet.

    1. As if she has no idea how interest rates got so low in the first place. Magic, right Ms. Yellen? Definitely not trillions in QE and the Fed buying up every crap mbs in sight. Nothing to do with the BoJ, the PBOC or the ECB either. Italy and Spain issuing bonds with an interest rate indicating they were lower risk than the US was totally a natural phenomenon due to… um, secular stagnation. Yeah.

      1. Maybe entrusting our money issuance to a criminal private banking cartel wasn’t such a hot idea after all.

      2. Lest you’ve forgotten, trump appointee Jerome Powell has been head of Federal Reserve for over 2 years, during the “booming economy.” trump badgered Powell into lowerIng interest rates severest times. These are facts. Look it up.

        1. badgered Powell into

          I’m going to take a wild guess that you don’t know this. Other president’s have yelled at the Fed to no avail.

          1. More closely to the topic, if the President wanted to use guberment policy to boost shack prices, he wouldn’t have pushed and sign SALT refor. He wouldn’t be trying to get Fannie and Freddie off the guberment teat. And he wouldn’t have replaced Mel Watt with a guy who is polar opposite of Watts, and in congressional testimony revealed how insanely over-leveraged the GSE’s are and that they will fail.

          2. The changes at FHFA offer hope that the subprimization of our federal mortgage lending system may finally be ending.

          3. Matter$ knot … Thee .🍊.jesus demanded (0%) a$ in Zero, & like a “miracle$!” % zero i$ what$ is being i$$ued.

    2. Bubbles and Hot Potatoes
      https://www.hussmanfunds.com/comment/mc181128/
      John P. Hussman, Ph.D.
      President, Hussman Investment Trust
      December 2018

      Over the completion of this cycle, you’re going to hear a lot of misinformation about monetary policy, along with a great deal of misplaced blame. The initial blame will be directed at whatever immediately accompanies the downturn. If a market collapse happens to fall on the same day that an organ grinder’s monkey throws a coconut at the bronze bull on Wall Street, they’re going to blame the crash on the monkey.

      Additional rounds of blame will be directed at whatever advances the agenda of the person talking. Republicans will blame Democrats. Democrats will blame Republicans. Dogs will blame cats. Cats will blame mice. Everyone on financial TV will blame Jay Powell at the Fed for the “policy mistake” of even trying to normalize interest rates. But the true object deserving of blame will be the thing that made a financial collapse inevitable in the first place: the yield- seeking carnival of speculation engineered by the Bernanke-Yellen Fed.

    3. You have f’ing got to be kidding me. Janet who was responsible for keeping those rates down?

      They literally piled on more debt and risk post 2008 and are blaming everybody else but themselves. The Fed owns this as well as the Media and any gov riechsmarshals responsible for shutting down businesses. Even Faucci has backed off on the sawing off of the patient’s leg to treat the flu. https://www.lewrockwell.com/2020/03/no_author/americans-will-have-to-cure-the-coronavirus-epidemic-on-their-own/

      1. ‘Fear will be played to the hilt now to coerce the population into forced vaccination and 100% monitoring of our whereabouts, which was the objective of the plannedemic from the beginning. Because fear trumps information and logic. But just in case you value logic, you might want to watch this short YouTube about a new malady called SKIDMARKS disease.’

        The Town of Allopath Gets Skid Marks Disease!

        https://www.youtube.com/watch?v=YUbaUPOqGe8

        1. and 100% monitoring of our whereabouts

          Given that almost everyone carries a mobile phone, that’s already a done deal.

          1. “You can turn the tracking off.”

            Disabling the GPS only denies that data to the apps. The phone’s position in relation to accessible cell towers is still active and that data is collected by each tower.

          2. In addition, any WIFI access signal you come in contact with collects all handshake data in logs regardless of access permissions.

          3. I love the “they’re gonna make us all wear an RFID chip” paranoia when we all willingly carry a homing beacon in our pockets. We even throw away perfectly good ones to buy the latest model as a fashion statement.

    4. “regulators didn’t have the right powers to stop it.”

      You don’t need any powers to stop it. You just have to let them die instead of bailing them out, and toss the executives in jail for insider trading, like you did for Martha Stewart. It will stop by itself.

    5. Janet Yellen hasn’t been head of the Federal Reserve since Feb. 3, 2018. That’s 2 years ago. meanwhile, your take-no-responsibility pal, trump, has badgered his Federal Reserve appointee Jerome Powell for past two years to lower interest rates to help goose the “booming economy.”

      1. ‘lower interest rates to help goose the “booming economy.’

        Not true. He wanted lower rates to help fight the currency war other countries were waging in the larger trade war.

  2. ‘After years of bustling sales and rising prices, Buffalo’s housing market has ground to an abrupt halt. Meanwhile, most real estate agents are trying to do whatever they can for clients. But without new deals, they can’t make money. ‘I’m not working and this is my busy time’

    First of all Stephanie, one of these things is not like the other.

    Second, could no one see “years of rising prices” in Buffalo was insane?

    1. Eat yer crows Stephanie!

      No I mean it literally, they’re delicious. Put on salt and pepper, a little bit of butter and throw them on the grill. They taste great with your ramen noodles LOL

  3. ‘Collateralised loan obligations are packaged-up pools of leveraged loans, which are then divided into different tranches of risk to suit different investors. They are similar to the sub-prime collateralised debt obligations — packaged pools of higher-risk mortgages — that went badly wrong in the 2007-09 financial crisis’

    So nobody knew this was going on? It was out in the open. The entire structure of the shack loan biz is pretty much what it was last decade. Oh except we got non-bank clowns making most of the loans, therefore:

    ‘It is going to be two to three times worse than in the global financial crisis’

    1. Also from the WSJ piece: “Funding debt investments with bank loans has allowed REITs and debt funds to juice up their profits, but it puts them at risk at a time when real-estate lending markets are freezing up. The danger is that developers stop making payments on their loans while banks demand more cash collateral for credit facilities, squeezing REITs and debt funds from two sides, analysts say.”

      What did they think would happen?

  4. Denver, CO Housing Prices Crater 17% YOY As On Broker Concedes, “Housing Is Becoming More Worthless With Each Passing Day”

    https://www.zillow.com/denver-co-80202/home-values/

    *Select price from dropdown menu on first chart

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

    1. Denver craigslist is gonna be a treasure trove of cheap toys soon. I don’t *need* a new pair of skis, but I’ll gladly pay $20 for a gently used pair that some underwater debt donkey paid $600 for.

      P.S. Debt is slavery.

      1. I’m not getting my hopes up, because I’m seeing a lot of horrifically overpriced toys that say “selling for what I owe.” These donkeys ain’t catching a bid, if you catch my drift.

          1. Porsches

            🤣🤣🤣 oh man, I really funked up that one, didn’t I. 🤪 I was wondering if it was a brand name of jetskis or something…

        1. nice Porches for under 10K.

          Or as Scotty Kilmer calls them (Porsches): endless money pits.

          1. Re that Craigslist link, sorted from highest to lowest price… I think some of those prices have typos in them, LOL.

            “2006 Chevy express cargo van 1500 $680095106” 😀

      2. “…craigslist is gonna be a treasure trove of cheap toys soon…”

        Ditto for Ebay, except its happening right now.

        Here is an example of someone who I think is hurting big time for some cash. (Probably to pay his bloated mortgage, fancy car payment or alimony, but who knows?)

        I was looking at an interesting piece of photo gear about 3 weeks ago, but the seller wanted $350. A week later, price dropped to $250. Seller emailed that “he couldn’t go below $250 because that’s what he paid for it”.. Price as of a few minutes ago? $100.

        With a skilled eye and a little bit of cash, some major bargains are coming your way on either Ebay or Craigslist.

        1. ‘he couldn’t go below $250 because that’s what he paid for it’

          This concept is the basis for technical market analysis.

        2. “With a skilled eye and a little bit of cash, some major bargains are coming your way on either Ebay or Craigslist.”

          There are lots of expensive “tough guy” toys on eBay right now, but the only deals are the occasional “low feedback” seller who is desperate. You can “Watch” their auction for a few days to see if they lower their asking price, and then hit ’em with an even lower “Best offer.” You just know that they “cuss you out” and maybe do some shadow boxing, but if they need that baby formula, they’ll “Accept.”

  5. ‘Now, with demand falling across especially Airbnbs, what are some of the options, especially for people who are forced to sell?’

    ‘Pasalis: It’s going to be very – so, people who are forced to sell now, I mean, of course…’

    Saldanha: Let’s turn to Ben Jones, of The Housing Bubble Blog. What could potentially happen to Canadian real estate?

    You guys are fooked Saldanha.

    Thank you Mr Jones.

        1. That’s a good question. Does anybody here know anybody that has it? I don’t.

          Celebrations premature? Apparently, Airbnb got themselves inserted into the bail out bill and hosts will be eligible for unemployment benefits as well as loans, presumably forgivable, from the SBA. Can anyone conform this?

          1. Two people. One 50s in New Orleans – thinks he got it at Mardi Gras and one 30s in Los Angeles – got it from someone at work. Both relatively fit. Both said it was horrible, full blown symptoms for 2.5 weeks before they started feeling better. Both said it’s been brutal.

          2. Maybe our resident biotech patent lawyer can comment on this. Are any of the CV tests specific for CV19 or are these just general CV assays? At any given time, a significant percentage of the population will test positive for CV.

          3. Apparently, Airbnb got themselves inserted into the bail out bill and hosts will be eligible for unemployment benefits as well as loans, presumably forgivable, from the SBA. Can anyone conform this?

            Are you effing kidding me?

          4. Are any of the CV tests specific for CV19 or are these just general CV assays?

            It is my understand that they are specific for C19.

          5. “Can a body even survive a fever for over two weeks?”

            Interesting question, the likes of which eye pursed in my medical genetics graduate studies @UCSF:

            (extended high internal body heat does interesting damage to some organisms in mammals. Unfortunately, the damages can also occur in vital organs.)

            “Different formulations made by different laboratories had differing levels of potency. As well, Coley found that he needed to carefully tailor the injection schedule to each patient in order to induce and sustain a fever, which he believed was an important part of the mechanism of operation of the toxins. Few other physicians likely took the same careful and painstaking approach as he did.”

            https://www.cancerresearch.org/blog/april-2015/what-ever-happened-to-coleys-toxins

          6. Yes, the bailout hand wringing. It’s their money, how is it a bail out?

            But we shall see again, the words bail out mean everybody is a “poor me!”, who now have license to sit on their ass and do nothing but complain cuz “life just ain’t fair dammit!” Not me.

          7. Right on cue:

            James Howard Kunstler: As the money boys nail down their bailout, the rest of us will lose EVERYTHING
            When Ben Bernanke declared the housing bubble “contained?” By James Howard Kunstler.

            At the bottom:

            ‘James Howard Kunstler has been writing about peak oil and the destruction of American civil society since the 1990s.’

            Yeah, I’ve heard that peak oil hooey all my life. Oh but he’s gonna lose EVERYTHING!

            What have you done to take advantage of these foreclosures? I’ve been working actively for a couple years. It’s there for anyone to participate, right out in the open. You do have to get off your ass and act though.

          8. Abbot’s 5-minute test would be a game-changer if they can deploy it widely. Every essential business would be clamoring for such a test, so they could test workers as they clock in, ensuring a COVID-free workplace.

          9. Abbot’s 5-minute test

            Abbott’s marketing literature for the ID-NOW system says:

            “Early detection – positive results in as few as 5 minutes, with 95% detected within 7 minutes
            Negative results in 13 minutes
            Detects up to 42% more true positives than RADTs”

            I guess it’s a nervous time between 7 and 13 minutes!

            RADT = = rapid antigen detection test

            Just for conversation sake, say the RADT gives true results 90% of the time. What does 42% more than that even mean? Keep in mind that marketing literature is not written by actual expert technical people.

            I think this sort of test will be of great help at the hospital for giving most people (not all) the right treatment. At work safety, not so much, since it will let a few breeders through. Flatten the curve though…

          10. What does 42% more than that even mean?

            It matters when you’re the one taking a pregnancy test!

        2. “Men judge generally more by the eye than by the hand, because it belongs to everybody to see you, to few to come in touch with you.”

          Niccolò Machiavelli

          1. Said another way, keep your eyes on the magician’s hands, not the helper’s bodacious ta-tas.

          2. ‘James Howard Kunstler has been writing about peak oil and the destruction of American civil society since the 1990s.’

            That is one very patient man!

            Of course one shouldn’t take today’s headlines too seriously, as it is April 1. For instance, how often in the entire history of oil extraction have crude prices literally turned negative?

            Oil
            Oil prices could soon turn negative as the world runs out of places to store crude, analysts warn
            Published Wed, Apr 1 2020 7:13 AM EDT
            Sam Meredith
            Key Points
            – The coronavirus pandemic has meant countries have effectively had to shut down, with many governments imposing draconian measures on the daily lives of billions of people.
            – It has created an unprecedented demand shock in energy markets, with storage space – both onshore and offshore – quickly running out.
            – Analysts at Goldman Sachs have warned the coronavirus shock is “extremely negative for oil prices and is sending landlocked crude prices into negative territory.”

        3. MF Spiffy’s wife here on HBB is believed to have it. He may have contracted it himself. But that’s the point behind all of us staying home. If you do everything right, it will look like you’re crying wolf and did it all for nothing.

          1. believed to have it. He may have contracted it himself.

            Believed by whom? He posted that he is working to a deadline on a project, not that he was sick.

          2. Ms. Spiffy wasn’t feeling well. Her daughter worked/interned for a preschool, I think, where one of the parents had it.

          3. Mrs Spiffy is doing better – she had mild cold/flu symptoms for a few days, but did not progress into full blown flu/fever/etc. The only symptoms I’ve display can be explained by a crap-ton of pollen in the air.

            We have no way of knowing for sure if we have been exposed and just fall into the 80% who won’t get it bad or we haven’t been exposed, because we haven’t been tested for it (and getting tested still means jumping though a bunch of hurdles).

            That said, the “Kevin Bacon distance” from us to confirmed cases isn’t huge. As RR mentioned, one of the parents of the young kids at the place her oldest daughter was volunteering at (shut down now obviously) for college credit was confirmed. There are multiple confirmed cases in families of students at the high school where the middle boy goes to as well.

            Also, the CTO at Mrs. Spiffy company, who was traveling a bunch, then came back and attended a team function just before everything hit the fan got sick and was tested – he had “regular” Influenza, not COVID 19 and get this — he also had a heart attack – the ‘widowmaker’ artery (don’t know my anatomy well enough to remember which it is and too lazy to google) was 95% blocked as well.

            We just have no freaking idea if we’ve been exposed or not, and who around us may be exposed/carriers/spreaders. The King County tracking website shows official stats of 219 tested, 39 positive and 1 death here in my zipcode. So we can be sure the actual numbers are higher … but what does it mean for us??

          4. getting tested still means jumping though a bunch of hurdles).

            I imagine that in months/years to come there will be followup antibody testing (blood tests, most likely) for epidemiologists to survey the population to see how many / who / what kind of / people got COVID-19 but were never sick enough to see a physician or who didn’t know they had it at all. This has been done for previous epidemics.

  6. This is an example of CRE insanity and the media:

    ‘North Glendale residents and shoppers may have noticed three glaring vacant storefronts: Sears in the Arrowhead Towne Center, which closed in July, Toys R Us and Staples, which have each been closed since 2018.’

    ‘Passers-by might infer doom and gloom from these vacancies, coupled with increasing headlines of big box stores closing nationwide as many major retailers struggle to keep up with online retail. But the Glendale staffers who assist property owners in securing new tenants are not worried. Director of Economic Development Brian Friedman noted that these three retail vacancies are the largest in all of Glendale and says any national trends of declining retail are not touching Glendale.’

    “I think that’s been proven, the fact that they’re all full. And Sears was not a Glendale thing, Sears was a national thing. And we have all the faith in Macerich (which owns Arrowhead Towne Center) and in our marketplace to shortly correct that, not just with something, because I think they’ve had five or six different somethings they could have immediately done. I think they are being selective.”

    ‘Both Toys R Us and Sears have had temporary tenants. Toys R Us was occupied the costume and decoration store Halloween City and the Arrowhead mall displayed an animatronic dinosaur exhibit in the Sears location around New Year’s.’

    ‘Mr. Friedman noted that both of these centers have little to no vacancy or turnover aside from Sears and Staples. “I think they’re at the point where their market, their level of occupancy and the gross sales per square foot for those centers are significant and wants maintenance of the right kind of tenant and they have the ability to wait for that right kind of tenant,” he said.’

    “It’s reversing the trend. It’s not on the decline; it’s rapidly increasing,” Mr. Friedman said, noting the malls sales numbers have increased in recent years. “…They are absolutely an economic engine for our community and for the region.”

    ‘Tabitha Perry, Glendale’s special projects executive officer, mentioned hypothetical options she’d seen at other malls, including offices or apartment housing on the mall property. She said she’d researched malls that had apartments on the second floor and restaurants on the first and some malls that included roller coasters. Though she said, roller coasters were not the plan, Ms. Perry said the city was looking to cast a wide net with possible land uses for the mall.’

    ‘While the departure of an anchor business like Sears leaves a glaring vacancy at the mall, it also allows for broad possibilities of new businesses. “Just to give an example, the Sears location could potentially turn over into a hotel,” Ms. Perry said.’

    ‘Malls across the U.S. have also occupied their empty storefronts with health clinics. Some universities and colleges have also opened research facilities in malls.’

    ‘Sears isn’t the first anchor to close at Arrowhead Towne Center. Forever 21 was formerly Mervyns, and Sears was preceded by a Montgomery Ward. Both of those retail chains are now defunct. The mall’s Macy’s was a Robinsons-May before Macy’s bought the company.’

    https://www.yourvalley.net/glendale-independent/stories/well-be-right-back-local-market-outperforms-national-market,150106

    When I moved to Glendale a few years ago there was a 45% CRE vacancy, and they were building everywhere.

    1. ‘I think that’s been proven, the fact that they’re all full’

      Click!

      ‘Both Toys R Us and Sears have had temporary tenants. Toys R Us was occupied the costume and decoration store Halloween City and the Arrowhead mall displayed an animatronic dinosaur exhibit in the Sears location around New Year’s’

      Jeebus…

      1. “an animatronic dinosaur exhibit”

        Is this classified as an “essential” business?

        While I fear that indoor axe-throwing venues, that seem to be all over the place now, may go the same sad fate as the pirate shops and candle shops that died in the last bubble, I advocate that Rage Rooms be not only kept open as an essential business, but receive direct government subsidy in the form of gift cards mailed to every underwater loanowner.

        1. “..Rage Rooms be not only kept open as an essential business..”

          No need to keep the Rage Rooms open, as each and every underwater loan owner is now living in one.

    2. I don’t understand all this nonsense about re-purposing malls. If you’re going to have living units instead of stores, there needs to be some serious plumbing and wiring changes made. I think it would be easier to just tear it down.

      1. Not really. Partition walls perform the same function in a mall as they do in any single family shack.

  7. “People Familiar With The Matter Say The Problems Predate The Spread Of The Virus”

    Exactly correct.

    Exhibit A:

    L.A.’s $1 Billion Trophy Tower Halted as China Pulls Back
    By Edvard Pettersson
    October 29, 2019, 9:00 PM PDT Updated on October 30, 2019, 11:10 AM PDT

    https://www.bloomberg.com/news/articles/2019-10-30/l-a-s-1-billion-trophy-tower-halted-as-china-pulls-back-cash

    We have discussed this one on the HBB at least 6 months ago, if not longer.

    Location: Across from Staples Center, and a mere leisurely walk of 6 blocks or so to LA Skid Row.

    Buy now before they run out of skyscrapers!

    1. Could be that these people knew virus was coming? That would make it virus related.

      1. Could be that these people knew virus was coming?

        A great many professionals have been predicting the current pandemic for over 20 years. They were like Cassandra.

    2. Location: Across from Staples Center, and a mere leisurely walk of 6 blocks or so to LA Skid Row.

      Pretty sure Skid Row in LA will soon encompass the entire downtown.

      1. Has there been a single report on how those homeless are doing? I’ve only seen one report of three positive cases.

        And for that matter, this is going t sound morbid, but I think it would help for news crews to take the cameras inside the ERs and ICUs and actually record some of the patients and ventilator shortages and general chaos. Undercover cell phone video isn’t doing it. Just interviewing survivors and health care workers isn’t doing it. From where I sit, all I see is this invisible enemy and Trump-bashing.

        (I’m going to lay all this at the feet of the CDC and the WHO. They really dropped the ball here. They doing about as well as they did against the Walking Dead.)

        1. I think it would help for news crews to take the cameras inside the ERs and ICUs and actually record some of the patients and ventilator shortages and general chaos

          Ever hear of HIPAA?

          1. https://www.hhs.gov/hipaa/for-professionals/faq/2023/film-and-media/index.html

            Can health care providers invite or arrange for members of the media, including film crews, to enter treatment areas of their facilities without prior written authorization?

            Answer:
            Health care providers cannot invite or allow media personnel, including film crews, into treatment or other areas of their facilities where patients’ PHI will be accessible in written, electronic, oral, or other visual or audio form, or otherwise make PHI accessible to the media, without prior written authorization from each individual who is or will be in the area or whose PHI otherwise will be accessible to the media. Only in very limited circumstances, as set forth below, does the HIPAA Privacy Rule permit health care providers to disclose protected health information to members of the media without a prior authorization signed by the individual.

            (emphasis added)

      1. actually they need massive lines of credit (that they can hide and deny) and routed through 3 difference countries) Swiss and Cayman and some misc Asian country.

        I hate the GS masters of the universe

  8. “the problems predate the spread of the virus”

    That’s unpossible!

    “This is far and away the strongest global economy I’ve seen in my business lifetime.” — Treasury Secretary Henry Paulson, July 12, 2007

    We’ve been hearing similar lies up until a month ago. It’s almost as if the media (real journalists, cough) are incapable of telling anything but lies. And sadly, many of the American sheeple are too stupid to think beyond #RealtorMath.

    Guess what, you believed REALTOR, and now you’re gonna suffer.

      1. those who should’ve ensured we were much better prepared

        Don’t worry. People will be angry. Mostly at the wrong suspects.

        You’re talking to a group though that will probably not be in a panic if they don’t resupply the grocery store within three days or if the check doesn’t arrive at the end of the week.

  9. “People familiar with the matter say the project’s problems predate the spread of the virus. Residential mortgage REITs, which primarily buy bonds backed by residential home loans and finance these investments with short-term debt, have faced a surge in margin calls from their lenders.”

    Yet the virus will provide a convenient excuse to bail out those who once again lost their shirts gambling on risky subprime loans.

    1. Sopapillas! I hope they continue to exist after this. What other restaurant has a 3-story waterfall?

      1. I’ve been there twice over the years, both times attending a birthday party.

        Casa Bonita has to have the worst Mexican food I have ever tasted.

    2. Most of the microbrew pubs in Dumver shouldn’t reopen. Just because someone can make beer doesn’t mean that it’s good beer, or that it’s worth paying $6 a pint for.

      Not that that mattered to their millennial clientele anyway, they were more interested in making an InstaGram post about getting a new stamp in their beer passport, not in how the beer actually tastes.

      1. Their equipment will be resold for pennies on the dollar and another bad micropub will replace them.

        1. “…equipment will be resold for pennies on the dollar…”

          Vats and holding tanks could always be re-purposed to make hand sanitizer.

          1. “…Requires a still…”

            BlueSkye, your right.. My bad.

            Uses for stale beer

            1) Restore the luster to wood furniture.
            2) Add shine to hair
            3) Ward off bugs

    3. Did you see the local meme on FB a while back saying “I didn’t survive decades of Casa Bonita food to get taken out by a virus named after a light beer”?

      1. That is so true. Their food is awful. Makes Taco Bell and Taco John’s taste gourmet by comparison.

  10. No flooding of North San Diego County Coastal inventory in the last week.

    JtR: “Last week we had 59 new listings, and this week we had 63 when we should have been hitting 100 or more – so new listings are down about 40%.”

    1. I would guess that the market will remain mostly shut down during the outbreak. Who wants to try to either sell or buy while under a Stay at Home quarantine?

        1. The situation brings to mind stories about chickens that somehow manage to run around the barnyard after their heads are chopped off. It’s a headless chicken market, for sure.

    2. Same thing in my zip code. Inventory about 50% of normal. Median sales price ~700k last month up ~50k from same time last year. But it does seem like houses are sitting longer. At least the ones I see when I am out walking around. My neighborhood is ok but nothing fancy. Every block has a few houses with weeds up to your knees and a broken down 1983 el Camino with flat tires in the driveway. As insane as the last bubble was, this is just at another level entirely. Sometimes I think I must have been abducted by aliens and transported to an alternate universe in which all the economic principles that have governed human civilization since its inception have never even existed.

      1. “Sometimes I think I must have been abducted by aliens and transported to an alternate universe in which all the economic principles that have governed human civilization since its inception have never even existed.”

        +1 At some point you realize that being productive where you would like to live isn’t in your best interest. I had that epiphany and decided to move nearly 1,000-miles north to a small town where I could thrive in retirement rather than survive.

      2. Subprime made an unheralded comeback since 2009, and now it’s reimploding.

        You can expect to be able to read about this in the MSM several months down the road, once the story becomes plainly visible through the lens of the rearview mirror.

          1. Are toxic mortgage REITs a suitable addition to the Fed’s balance sheet?

            Mortgage REITs Take A Savage Beating From Margin Calls National Capital Markets
            March 29, 2020
            Dees Stribling, Bisnow
            National Mortgage REITs that borrowed money in recent years to augment their returns have been sucker-punched by pandemic-inspired economic turmoil, with margin calls putting intense pressure on borrowers. Now, their valuations have also tumbled.
            Burning house burning money Flickr/Images

            Money
            The Federal Reserve is supporting agency mortgage-backed securities, but banks have not been as accommodating for non-agency MBS, Seeking Alpha reports. Lenders are demanding more collateral, forcing REITs to sell their non-agency MBS holdings, which is driving prices down for non-agency MBS, sparking a vicious downward spiral for mortgage REITs. New York Mortgage Trust, for example, said on March 23 that it had received margin calls because of the pandemic-inspired economic turmoil, and had met all of them as of the Friday before. The company didn’t expect to be able to pay further margin calls, however, and said it has asked for forbearance from its leaders. In its statement, the company was unwilling to predict the outcome of negotiations for forbearance, and hasn’t commented on the matter since then. In the case of that REIT, investors have voted with their feet. On the last trading day of February, New York Mortgage Trust had traded at $5.70/share. By Friday, the company was trading at $1.91/share. On the same day, AG Mortgage Investment Trust reported a high number of margin calls from financing counterparties, and said it would be unable to meet future margin calls and was asking for forbearance. At the end of February, AG Mortgage had traded at just shy of $15/share. As of Friday, it traded at just under $4/share. Likewise, MFA Financial, as well as Investco Mortgage Capital and TPG RE Finance Trust, all investors in non-agency MBS, have recently said that they either couldn’t make future margin calls, or that they might not be able to. Share prices for all of them have dropped precipitously in the last month. By contrast, the Fed’s decision to buy unlimited agency MBS seems to have kept mortgage REITs that specialize in that kind of investment from complete collapse, Barron’s reports.

            Read more at: https://www.bisnow.com/national/news/capital-markets/mortgage-reits-on-the-edge-of-collapse-103630?utm_source=CopyShare&utm_medium=Browser

      3. Sometimes I think I must have been abducted by aliens and transported to an alternate universe in which all the economic principles that have governed human civilization since its inception have never even existed.

        I’m right there with you. 🙁

  11. I’ve read one article after another saying the coronavirus is merely the trigger that has caused something that was going to happen anyway, and that this is really a financial crisis. It is absolutely the consensus.

    There are lots of people who will want to use the virus as an excuse, but it may not work this time. This video is one of the best examples so far.

    https://wealthtrack.com/this-is-bigger-than-the-financial-crisis-its-wise-to-raise-cash-says-t-bond-guru-robert-kessler/

    The truth is, total U.S. debts aren’t really higher than 2007 as a percent of GDP, but they aren’t really lower either. And it is 13 years closer to the demographic hurricane of the richest generations in U.S. history leaving the work force and cashing in, leaving poorer generations behind them. Things started going downhill for those born after 1957 or so. So the better off generations are all ages 62 to 90, with most ages 62 to 72.

    1. leaving poorer generations behind them

      I hate to break it to you, but whatever actual wealth these geezers have will be left to the next generation. It ain’t much!

      1. The national debt will be left to them. The underfunded pensions will be left. The deteriorated infrastructure will be left. The abandoned McMansions will be left.

        The loss of the dollar’s standing as a reserve currency is another legacy.

        1. abandoned McMansions

          Maybe the mirage of wealth that these geezers hold will be shown to be worthless before the generation passes.

        2. “The deteriorated infrastructure will be left.”

          And that’s a real problem. The Greatest Generation built all of our infrastructure before the days of computers, and so they all had a huge safety margin. Almost everything — from bridges to nuclear power plants — are lasting 40-50 years longer than their design life. The Boomers enjoyed this extra time of sound infrastructure, allowing the structures to be overwhelmed with population and only doing maintenance when absolutely necessary.

          But even the well-built stuff from years past won’t last forever. Maryland has to repave 1 lane of the 5-lane bridge crossing Chesapeake Bay, and that’s enough to cause 5-hour beach traffic backups. I read one article a couple years ago saying that the DC Beltway, built in the 1950s, needs a total overhaul. Good luck closing down parts of that. And don’t get me started on what happened to Metro.

        3. …. at dramatically lower prices.

          Harbor Bluffs, FL Housing Prices Crater 14% YOY As Gulf Coast Housing Prices Drop Like A Rock

          https://www.zillow.com/harbor-bluffs-fl/home-values/

          *Select price from dropdown menu on first chart

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

  12. I think it’s kinda weird that CNN’s Don Lemon is calling for people not to watch the daily briefings from Donald Trump.

    I guess Lemon wants people to watch the ramblings of Biden and Nancy Pelosi and the New York Governor instead.

    I have never seen a call to not watch the President in charge to watch Biden that holds no government post at all.

    The fact that CNN doesn’t want to cover the daily briefings, that include the CDC announcments, is a true colors moment.

    CNN is the resistance party cheerleaders for the DNC.

    CNN is so political they have become dangerous in a emergency. Nobody cares what the heckler Joe Biden has to say at this time.

    1. CNN pays airports to put them on the screens. With airports practically empty, viewership has to be at an all time low.

      1. CNN is advertising for a research analyst. Should I apply? I was considering it, but you have to set up an account with them directly. I’d be concerned that they’d end up asking ME for money.

        1. I’d be concerned that they’d end up asking ME for money.

          Hey, don’t be stingy! You wouldn’t want darkness or something to happen, do you?

    2. White House is using the daily briefings as de facto campaign rallies. We want to hear from scientists, not MyPillow sycophants.

      1. not MyPillow

        Oh poor poor Salad. The horror of an optimistic pitch from an American. Supportive of his neighbors and even the Commander in Chief! Ghastly. I know he mentioned the Bible, so that must mean he is Evil. It’s only getting started. You are going to get really triggered going forward by people helping each other, talking about how great America is…poor poor you.

      2. SaladSD, keep it in per$pective.

        It ain’t about a re.election rally, it’$ ’bout “True.Believers” re$urrection & 2nd coming rating$ for thee 👑

        Thee.🍊.jesus … versus … 👾😷☠

      3. de facto campaign rallies

        MSM talking point

        quote scientists endqoute

        Proven HRC sycophants

        MyPillow

        Don’t like/care for his style but at least stands for American principles

  13. Did you guys apply for your $10k grant from the SBA yet? Prolly gonna be a first come first served basis until uncle sugar runs out of money so you’re gonna want to get on that!

    1. Two of my kids have filed for unemployment. We’ll see if they get anything out of the effort.

      1. I thought your kids were working part time while going to college. Do part timers get equal unemployment benefits as full time employees?

        1. A lot of times things work in reverse. You can collect while going to school, but you can’t collect if you start school after you got laid off you have to be available for work and apply for jobs weekly.

  14. $1200 on the mail.

    Spend on iphone 12 or
    Pay the rent or
    Pay the debt or
    Stock up on some food or
    Send Grandma a gift
    …..

    Decision….decision….Iphone it is!

      1. I may use it to tip my eye surgeon when he fixes my last cataract. I know Medicare didn’t pay him much.

        1. My wife had hers done last year. The insurance paid the surgeon $751 per eye. This does not include other costs (another $1200).

          He spent about 5 minutes in the OR with her. A nurse told me that he performed 26 lens replacements that day.

          I’m sure that even at Medicare rates he made a ton of money that day.

        2. fixes my last cataract. I know Medicare didn’t pay him much.”

          I had mine done much younger Kaiser did it I paid about 200 bucks each plus maybe another 100 for various kaiser appointments. So far so good I have weird shinny eyes now freaks people out . Fixed focal length one long range the other medium range. Its a pretty quick surgery they played disco during my last one a year ago.

  15. “Ormond Beach investor Ty Lohman saw the writing on the wall and acted accordingly a few months ago to avoid what he believed could be an oncoming disaster. No, not the coronavirus pandemic. The anticipated glut in apartment properties in the Daytona Beach area. Lohman and his wife Tovah, a real estate broker, sold several of their apartment complexes last year. They reinvested the some of the proceeds by purchasing commercial properties. In normal times, those retail properties would be a safe investment with a guaranteed steady flow of revenue. But these past few weeks have been anything but normal.”

    “‘There’s no retail tenant who hasn’t contacted their landlord already,’ Colliers International Vice Chairman Bradley Mendelson told the Wall Street Journal. Many landlords, he said, will have no choice but to let their tenants know they’re in the same boat: ‘If you don’t pay your rent, I can’t pay my mortgage.’ That could trigger an onslaught of commercial mortgage loan defaults, Mendelson warned.”

    Talking about jumping out of the pan and into the fire.

  16. Housing prices were cratering long before Corona.

    Coeur d’Alene, ID Housing Prices Crater 16% YOY As Sellers Flood Market And Slash Prices Double Digits

    http://www.zillow.com/coeur-dalene-id-83814/home-values/

    *Select price from dropdown menu on first chart

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

  17. Doe$ end$ ju$tify the mean$?

    👾

    Mania #2 ( 👾 Viru$ Hy$teria) … i$ feeding & devouring another:
    Mania #1 (Bubble$ Everything$)

  18. “For the first time in four years, the national average for a gallon of gas is below $2, AAA said in a statement Tuesday.

    At $1.99, the current average price for a gallon is 18.4%, or 45 cents, lower than one month ago, and down 70 cents, or 25.8%, year-over-year.”

    https://www.cnbc.com/2020/03/31/us-gasoline-prices-are-below-2-per-gallon-on-average-for-first-time-in-four-years.html

    We need to start another war in the Middle East to get gas prices back up. Voting Trump out of office and restoring the Deep State is the best way to make this happen.

    1. Think of all the monie$ you can $ave driving 1 way to New Orleans! … 👾 … howdy!, join the party! 🎉 🎷🎺🎙..🤧🤒😷🛌☠

  19. $1.49 at Costco in Fort Collins.

    I filled up two weeks ago. The needle is still close to ‘F’. I suppose I could just go out for a drive, maybe to Estes Park and back but a nice long walk would be better for me.

    1. maybe to Estes Park and back but a nice long walk would be better for me.
      I tip my hat to anyone who can walk from Ft. Collins to Estes Park and back.

      1. Given enough time, I’m sure I could do it. 🙂

        But no, I just took a 40 minute walk in the neighborhood. Saw 3 house for sale and 2 for rent signs. I wouldn’t be surprised if more for sale signs pop up in the next few weeks. The Denver lock down has been extended to April 30 and I expect the statewide one will also be extended.

  20. “A flood of missed home-loan payments caused by the coronavirus outbreak is threatening to bankrupt U.S. mortgage lenders and deepen the economic toll of the pandemic.

    The full magnitude of the fraud of our “greatest economy ever” built on debt-fueled consumption using Fed funny money is about to be exposed for all to see.

  21. “Banks in Britain could face losses of more than £15 billion on loans that backed leveraged buyouts and other highly geared transactions, research suggests.

    Not to worry. The BoE and middle class taxpayers have their back.

  22. A report from the Wall Street Journal.
    Funding debt investments with bank loans has allowed REITs and debt funds to juice up their profits, but it puts them at risk at a time when real-estate lending markets are freezing up. The first warning signs are already emerging. In downtown Brooklyn, developer RedSky Capital planned to replace an entire block of low-rise buildings with a mixed-use skyscraper.”

    “But on March 1, RedSky stopped making payments on its $154.6 million mortgage, its lender, Apollo Commercial Real Estate Finance Inc., a mortgage REIT sponsored by private-equity firm Apollo Global Management, said in a public filing. People familiar with the matter say the project’s problems predate the spread of the virus.”

    – “RedSky in the morning, sailor take warning.”

    – The FIRE industry has taken financialization to the next level, aided and abetted by easy credit, low rates, and maximum moral hazard from the Fed. For more than ten years. How does anybody think that this ends well?

    – “Party on, Garth!” Oh, wait.

    “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” – Chuck Prince, former chairman and CEO of Citigroup (told to the Financial Times on July 10, 2007).

    “When you combine ignorance and leverage, you get some pretty interesting results.” – Warren Buffett

    “In the business world, the rearview mirror is always clearer than the windshield.” – Warren Buffett

    “You never know who’s swimming naked until the tide goes out.” – Warren Buffett

    “An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” – Benjamin Graham

    Confronted with the challenge to distil the secret of sound investment into three words, we venture the motto, Margin of Safety. – Benjamin Graham

    “The individual investor should act consistently as an investor and not as a speculator.” – Benjamin Graham

    “The essence of investment management is the management of risks, not the management of returns.” – Benjamin Graham

  23. 👾 … Fast spreading news: Behind.thee.Orange.Curtain!

    (There trend, is knot yer friend!)

    Orange County coronaviru$ numbers parallel Italy, professors say

    OF Register | By Theresa Walker | PUBLISHED: March 30, 2020

    Local coronavirus$ data reported in coming days will be crucial in determining if Orange County is on the same path as Italy in the spread of the virus and its impact on local hospitals, according to two UC Irvine professors studying confirmed cases of COVID-19.

    In their analysis, based on the number of case counts per 1 million people, colleagues Dominik Wodarz, who studies the dynamics of infectious diseases, and Natalia Komarova, a math professor, put Orange County about 20 days behind the date when Italy’s hospital system became overwhelmed by the number of COVID-19 cases in that country.

    That means if current trends hold, sometime in the next two weeks Orange County could be looking at a worst-case scenario similar to what has unfolded in Italy, Wodarz and Komarova said in an interview Monday, March 30. The U.S., only 15 days behind Italy in their projection, could be looking at swamped hospitals as soon as Wednesday, April 1.

    “We just wondered, ‘How does this initial growth compare to other well-documented cases?”

    They determined that a per capita analysis would provide a better perspective on the risk of infection than raw numbers, given that Orange County’s case load as of Monday was 464 and Italy’s had topped 101,000. (The US. is the world leader now, at more than 161,000 cases.)

    Wodarz and Komarova developed an algorithm that allowed them to shift Orange County’s COVID-19 growth curve so that it synchronizes in time on their chart with the growth curve of Italy. A graph first posted March 27 on Twitter shows the projection of Orange County’s per capita case count for its population of about 3.2 million nearly exactly tracking Italy, which has a population of about 60 million.

    Mostly, Wodarz and Komarova hope their analysis helps people take the pandemic seriously and change behavior. Recent crowded public gatherings, in Orange County and elsewhere, led officials to close some beaches, beach parking lots, regional parks and hiking trails.

    “This is good for the public to see,” Wodarz said of the Italy-Orange County pattern.

    “We know what is happening in Italy. Maybe that would make them think twice.”

    1. The OC has come a long way from “keep your stinking COVID-19 victims out of here” in a matter of weeks.

  24. ‘If you don’t pay your rent, I can’t pay my mortgage.’ That could trigger an onslaught of commercial mortgage loan defaults, Mendelson warned.”

    And this, friends and neighbors, is what falling dominoes look like.

  25. So, if you’re an investor and you’re not collecting rents, it’s of course going to be hard for those investors.”

    Suffer, bitchez.

  26. ‘Absence of income means inability to raise a deposit, get a mortgage, and perhaps even continue to keep the house one already owns.

    Tony just earned his big bucks with that one concise sentence.

  27. “Janet Yellen, the former Federal Reserve chairwoman, said Monday bad choices by broad swaths of the financial industry and companies, abetted in part by low rates and regulatory shortcomings, are likely to make it harder for the economy to recover from the coronavirus crisis.

    Yellen the Felon has a lot of damn gall to blame “bad choices” that the Keynesian fraudsters at the Fed enabled through their “No Billionaire Left Behind” monetary policies.

    1. Why is this stupid bitch not in jail? Not a crisis in our lifetime you lying POS? Her and the other accomplice Ben “The Butcher of the Middle Class” Bernanke

      1. If we were a nation of laws instead of a crony capitalist kleptocracy, TurboTax Timmy Geithner and Zimbabwe Ben Bernanke would be playing nightly games of “The Escaped Convict Meets the Warden’s Wife” with cellmates and fellow lifers Lloyd Blankfein and Jamie Dimon.

  28. 👾 … ⚓🚩 … Uh oh.

    HEALTH NEWS| MARCH 31, 2020

    ‘Sailors do not need to die,’ warns captain of coronavirus-hit U.S. aircraft carrier

    Reuters | By Idrees Ali, Phil Stewar

    WASHINGTON (Reuters) – The captain of the U.S. aircraft carrier Theodore Roosevelt, in a blunt letter, has called on Navy leadership for stronger measures to save the lives of his sailors and stop the spread of the coronavirus aboard the huge ship.

    The four-page letter, the contents of which were confirmed by U.S. officials to Reuters on Tuesday, described a bleak situation on board the nuclear-powered carrier as more and more sailors test positive for the virus.

    The Navy puts the ship’s complement at 5,000, the equivalent of a small American town.

    Captain Brett Crozier, the ship’s commanding officer, wrote that the carrier lacked enough quarantine and isolation facilities and warned the current strategy would slow but fail to eradicate the virus.

    In the letter dated Monday, he called for “decisive action” and removing over 4,000 sailors from the ship and isolating them. Along with the ship’s crew, naval aviator and others serve aboard the Roosevelt.

    “We are not at war. Sailors do not need to die. If we do not act now, we are failing to properly take care of our most trusted asset – our sailors,” Crozier wrote.

    The carrier was in the Pacific when the Navy reported its first coronavirus case a week ago. It has since pulled into port in Guam, a U.S. island territory in the western Pacific.

    U.S. officials, also speaking on condition of anonymity, told Reuters that nearly 80 people aboard the ship had tested positive for the virus, a number likely to increase as all personnel on the ship are tested.

    the Navy has been working for several days to get the sailors off ship in Guam. Modly said Guam did not have enough beds, and the Navy was in talks with the local government to use hotels and set up tents.

    1. Ships seem to be a hotbed for spread of the virus.

      What is really impressive is the Navy medical ship called COMFORT that rolled into New York .

      The Navy is going to take the stress off New York hospitals by taking on regular patients.

      This is the real kicker, the ship with a thousand beds is going to give the health care for free, no charge to the patient,( bail out to insurance companies).

      It was impressive seeing that Navy Ship coming to the rescue for ground zero of C19 cases .

      I can see that they will make a movie one day about the military helping with the battle against the bug, along with the front line hospital workers .

      1. Cruise ship industry might not recover.

        https://www.economist.com/business/2020/03/31/the-coronavirus-may-sink-the-cruise-ship-business

        Give that so many cruise ship passengers are seniors, those born after 1957 are much poorer on average, and theses poorer generations are tomorrow’s seniors, I had expected that the boom in the cruise ship industry would die with the Boomers down the road. But now, the seniors may abandon the industry right now! Another example of the virus accelerating change.

        Those things are so high they are like the SUVs of the seas, they look like a Poseidon Adventure wave would roll them no problem. Real ocean liners might find a new audience of people actually traveling and wanting to have lower carbon emissions. But the cruise ships? Given the number of homeless people in coastal cities, if they are going to be sold for scrap maybe NY, LA, SEA and SF should pick a couple up.

        1. Poseidon Adventure wave

          That movie scared the crap out of me as a kid. That and Towering Inferno. Saw both at the drive in with my parents. But the bigger the ship the more they can ignore the waves…I wonder if that one would go run under a modern cruise ship and hardly be noticed?

        2. Given the number of homeless people in coastal cities, if they are going to be sold for scrap maybe NY, LA, SEA and SF should pick a couple up.

          Interesting idea.

          As for the stability of these ridiculously tall modern cruise ships, google “Anthem of the Seas storm.” 😉

          1. Sure. Me not being a boat person I hadn’t really thought about how the wind might be coming at you from a different direction than the waves. I was still thinking about the Poseidon Adventure :-).

  29. Are we still running out of dollars?

    Fed steps in once again to try to smooth out lending markets
    By CHRISTOPHER RUGABER today

    WASHINGTON (AP) — The Federal Reserve is intervening once again to try to smooth out the world’s lending markets, this time by lending dollars to other central banks in exchange for Treasurys.

    The Fed’s move Tuesday marks its latest aggressive effort to keep borrowing rates down and ensure that financial markets can still function in the face of the coronavirus outbreak. The virus has caused a near-shutdown of economic activity in the United States and abroad and made it harder for some banks and companies to borrow. The Fed is trying to facilitate lending and boost confidence that it will do all it can to support the global financial system.

    The new lending program will allow other central banks to access dollars without having to sell Treasury securities. Excessive selling of Treasurys typically causes their interest rates, or yields, to rise, and that makes borrowing more expensive. The Fed is trying to prevent this.

    “This facility should help support the smooth functioning of the U.S. Treasury market by providing an alternative temporary source of U.S. dollars other than sales of securities in the open market,” it said in a statement.

    1. The Financial Times
      Markets
      How coronavirus tore through global markets in the first quarter
      Every major asset class has been disrupted
      Philip Georgiadis, Tommy Stubbington, Joe Rennison, Eva Szalay and Steve Johnson 2 hours ago
      Column chart of % change, by quarter showing MSCI All World sees worst quarter since 2008

      Global stocks are set for their worst quarter since the 2008 financial crisis under the pressure of the coronavirus pandemic.

      The wave of stress has been concentrated into six weeks of frenetic trading, as many of the world’s biggest economies went into lockdown and the outbreak shattered investor confidence.

      Here is how some key asset classes have fared.

      Equities
      Line chart of S&P 500 in 2020 showing S&P 500 tumbled into a bear market

      On Wall Street, the S&P 500 suffered its quickest fall into a bear market on record, taking just 16 days to slump from all-time highs and bring an end to an 11-year bull market.

      “The speed of the declines is what stands out,” said Peter Oppenheimer, chief equity strategist at Goldman Sachs.

  30. sold several of their apartment complexes last year. They reinvested the some of the proceeds by purchasing commercial properties. In normal times, those retail properties would be a safe investment

    wtf?

  31. Oil: Wor$t quarter EVER, $ad.

    Poor mB$, poor Putain, poor $audi’s, Poor Ru$$ia … Trumpy want$ to help them, $ad.

    Commoditie$ Corner:

    First quarter ‘bloodbath’ for oil will give way to the ‘Valley of Death’ in Q2

    Marketwatch/ By Myra P. Saefong

    WTI oil futures drop by more than 66% in the first quarter

    Published: March 31, 2020

    Both WTI and Brent saw their biggest quarterly percentage declines on record, based on data going back to the 1980s.

    Trump spoke by phone with Russian President Vladimir Putin on Monday about the latest developments and efforts to combat the coronavirus, according to a statement from The White House. They both agreed on the importance of stability in the global energy markets and to work together through the G-20 to defeat the virus.

    While Trump “appears to think oil prices have fallen too far, perhaps because he realizes the devastation to shale producers in Texas and North Dakota, [Saudi Arabia] may not be through with its effort to squeeze Russia and the shale patch,” said Marshall Steeves, energy markets analyst at IHS Markit.

    1. Unfortunately, the only news I’m interested in hearing about are treatments, vaccines and masks.

    2. Fun, tanks! … (so much goodwill for a “fake.flu 👾”?)

      Wait, even more good news from Rash.limbaugh$!:

      🎤📢 … ” it’$ just a common.cold folks! “

  32. 1$t inning$ of 👾 De$truction data just being relea$ed.

    MARKET IN$IDER

    What could be ‘$hocker’ economic report$ may test $tocks in week ahead

    cBC / By Patti Finn / PUBLISHED FRI, MAR 27 2020

    KEY POINT$
    Stocks are expected to remain volatile in the week ahead as fresh data on employment and manufacturing will show the impact of the early weeks of the coronavirus shutdown.

    Everything from auto sales to manufacturing surveys and employment data in the coming week will likely paint a bleak picture of how much the first weeks of the coronavirus shutdown have already hit the economy.

    It’s the economy:

    In the coming week, the big number to watch could again be Thursday’s weekly jobless claims, up a record 3.2 million for the week ended March 21, as the shutdown of stores, restaurants, and other businesses across the country resulted in immediate layoffs.

    Economists expect several million more claims to be filed for the past week, and they are looking at that new claims report as potentially more important than Friday’s March employment report. The survey week for the March jobs report was ahead of some of the major shutdowns by the states most impacted by the virus.

    Other data could show some of the early signs of an economy brought to a standstill. There are auto sales and ISM manufacturing releases on Wednesday, both March reports.

    Service sector data will be released Friday.

    Market focus will be more intensely focused on the economic data, shifting from the $2 trillion aid bill, signed by President Donald Trump on Friday.

    Economists expect the economy already may be in a slowdown and that it should trough with a double-digit decline in the nation’s gross domestic product in the second quarter.

    Vehicle sales will be reported Wednesday, and sales are expected to have come to a near standstill even though shuttered dealerships continue trying to deliver autos to buyers.

    For “car sales, I would think the drop would be more precipitous,” said Diane Swonk, chief economist at Grant Thornton. “They shut down in every major market. Even though they’re offering deliveries and all that stuff, it’s going to be a shocker … large double digit decline.”

    Auto sales were at an annualized pace of 16.8 million in February, and some economists say the number in March could be closer to 12 million.

    Separately, the Fed has delivered a massive amount of monetary stimulus that has helped ease up some of the problems in illiquid credit and even the Treasury market. It has been buying Treasury and mortgage-backed securities at a record pace of $70 billion a day, and markets are focused on when the Fed will alter the size of its purchases, which are open-ended.

    “This week, plus last week was more than $600 billion. It’s monumental.” said Michael Schumacher, director, rates at Wells Fargo. The Fed said it was reducing the purchases to $60 billion a day, which is the amount it had been buying in a one-month period.

    Credit un-crunching:

    In addition to its Treasury and mortgage purchases, the Fed has cut rates to zero, added liquidity in the repo market and committed to creating vehicles to help corporate paper, municipal bonds and corporate debt.

    1. Does it seem like catastrophic damage on Wall Street is being hidden from view? I’m thinking of margin calls playing out behind the scenes, which help explain why we are running out of dollars at the same time there’s a toilet paper shortage?

  33. Reckon the$e number$ will have any effect$ on up & coming: “bli$tering.$pring.$helter.$hack.$ales&loan$?”

    Bug$: “eh, Pennsylvania’$ & Ohio’$ rabbit hole$ look kinda $wampy!” (🥕munch, munch.)

    ECONOMY:

    These are th$ states with the mo$t job lo$$es so far because of the coronavirus$

    CNBC / PUBLISHED THU, MAR 26 2020 / By Thomas Franck & John W. Schoen

    KEY POINT$:

    The record-breaking spike in U.S. jobless claims varied in its impact on American workers depending on the state.

    But the claims for state unemployment benefits were most concentrated in Rhode Island, Nevada, Pennsylvania, Massachusetts, New Jersey and Washington state.

    Looking at absolute unemployment unadjusted for state population, Pennsylvania came out on top with more than 378,000 workers filing for benefits, up 363,000 from the prior week.

    The record-breaking spike in U.S. jobless claims data released Thursday varied in its impact on American workers depending on the state as governors across the country instituted different combinations of restrictions and closures to help slow the spread of COVID-19.

    But the claims for state unemployment benefits were most concentrated in Rhode Island, Nevada, Pennsylvania, Massachusetts, New Jersey and Washington state with 63.6, 59.8, 57.9, 38.6, 34.2 and 33.7 claims per 1,000 workers, respectively. The data is for jobless filings through the end of last week.

    Looking at absolute unemployment unadjusted for state population, Pennsylvania came out on top with more than 378,000 workers filing for benefits, up 363,000 from the prior week’s print of just 15,439. That’s a more than 2,000% increase.

    Ohio workers filing for state unemployment rose from 7,046 in the week ended March 14 to 187,784 in the week ended March 21, a surge of more than 180,000.

    Still, the headline jobless claims numbers set records for the single-largest number of American workers seeking unemployment benefits in a single week at an eye-popping 3.28 million.

    The figure shattered the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982. The previous week, which ended March 14, reflected the period before the worst of the coronavirus hit and saw just 282,000 claims.

    — CNBC’s Jeff Cox contributed reporting.

  34. Palm Springs, CA. Huge dump of new inventory on to market in past hour. See Realtor.com, 300 new listings in just the past 60 minutes. First 3 pages of new listings are so fresh no pix! No panic there!

    1. Intere$ting: but wouldn’t 102°F 👾 killing daily temperatures be a $ales pitch for those $caredy.Kat$ de$perately $eeking safe $helter.$hacks?

      (does Zilliow have any li$tings in Death Valley?)

    2. I imagine there are few developers who will unload their existing inventory at cost before of the others, e.g., get through the exit turnstile.

    3. What are you seeing for San Diego county today? I just looked and see over 150 in last 24 hours. Courtesy of Trulia. Not sure how anyone could think this is not a run to the exit…

      1. in last 24 hours

        First, how accurate are these filters? I know the single-story filter on Zillow sucks. Second, if these sites are scraping data from elsewhere, these “new” listings may represent listings since their last data scrape. Sadly, I no longer have access to the MLS to get a more accurate picture.

          1. We saw recently with your comments that descriptions from these sites differ. I’m also seeing two Poway properties I’m following showing as off market on Zillow but pending on Realtor.com. My confidence in any of sites’ information is very low. Perhaps I should pay the $1K to get access to the MLS again.

          2. My confidence

            How would a pancaking market affect your inheritance management strategy for you kid?

          3. inheritance management strategy

            So long as I’m able to transfer equity inland for a property suitable for us 10+ years I’ll be happy. My recent appeal for In-Home Supportive Services was VERY successful. I’ll be helping at least two other families with my experience. If all goes as planned/hoped, at least one of them will have a secure placement for their adult child who will be unable to live alone.

          4. SoCalJim’s website is just as anecdotal as any other. I think as a realtor he would prefer to mask any stats that would potentially scare any potential clients. As seen on many of his forum posts he is quite a real estate bull and upwardly bias on the future of his commission checks.

          5. “Perhaps I should pay the $1K to get access to the MLS again”

            Correct me if im wrong but doesn’t the state require you to have a realtor license to get access to the MLS?

          6. “As seen on many of his forum posts he is quite a real estate bull and upwardly bias on the future of his commission checks.”

            SoCalJim clearly knows that FHFA/FNMA/FHLMC backed mortgages above $800k given to $45k/yr millionaires are a once in a lifetime anomaly, and he is running with the RE herd until it ends.

          7. realtor license

            My husband and his business associate. For rentals, the ROI on the MLS subscription wasn’t high enough so they invested in other tools.

          8. JtR is SoCalJim. Gotcha!

            Rich Toscano’s Piggington used to be good but he appears to be MIA.

          9. This blog has achieved a quorum of interesting commenters who realize that something is terribly wrong with the economic path our plutocratic government has charted. While some might not “see” the way out of this mess it doesn’t alter the fact that we’re on a path toward incredible currency debasement, higher taxes and possibly war. Hats off to our blogger who allows distasteful but relevant points of view. Please support the HBB via checks or Paypal.

          10. “ It’s the only thing I have to go off of right now and covers the more volatile of the two markets I’m concerned with”

            I agree, without the proprietary Realtor access to their coveted mls system it can be a challenge to acquire accurate data but i think even zillow, trulia, redfin, etc provide reliable (With a small margin of error of course) mls tracking when it comes to days on market as its pulled directly from the mls system. Have you used mlslistings.com? A realtor at an open house once told me its the only reliable site so i never bothered looking at at. Looking at it now shows the same data as trulia but very limited on filters. Reasons i like the trulia app are: shack tracking, new listings within 24 hours, and visual map view to filter homes. Trulia lacks: correct pricing history, up to date descriptions, and filters on price reductions (has the filter but its inaccurate). I typically use trulia to capture my data and movato and zillow to validate. Oh and all these “tools” lack correct pricing forecast. We can only get that here on the HBB 😉

          11. mlslistings.com

            Didn’t know about that one! California specific, updated every 5 minutes.

  35. Is there a possible upside to exploding mortgages, in the form of future affordability improvements in U.S. residential real estate? Why not give the poor Millenials the same chance their parents enjoyed to purchase a home at a price point that won’t make them go broke?

  36. Federal Reserve
    Mortgage bankers warn Fed mortgage purchases unbalanced market, forcing margin calls
    Published Sun, Mar 29 20209:24 PM EDT
    Updated Mon, Mar 30, 2020 12:02 PM EDT
    Steve Liesman
    Key Points
    – The Mortgage Bankers Association warned that the housing market could face a ” large-scale disruption,” due to actions by the Fed that were meant to help the mortgage market.
    – The Fed bought $183 billion of purchases last week of mortgage-backed securities, in an effort to drive down rates, and they did.
    – But the Fed’s actions, amid a volatile market environment, helped add further strains that resulted in blowing up a widespread hedge that mortgage bankers use to protect themselves against rate increases, and now some lenders are facing margin calls that are eroding their working capital and threaten their ability to operate.

    1. blowing up a widespread hedge

      I don’t know what the Fed intends. If they are backstopping the GSE’s I don’t know. But bailing out the hedgers who placed bets against their own product would be hilarious, in a sick sort of way.

      1. One can create $pectacular di$tortion$ being ” UNLIMITED ” whil$t you dwell in guaranteed “indemnification$”

        You look$ marvelou$ darling!

    2. Everything is the government’s fault, so bail us out!

      And then raise taxes on, and cut services for, later born generations of serfs.

  37. The outlook gets a little bit bleaker by the day.

    Here’s to hoping these projections are unduly pessimistic.

    Coronavirus
    Donald Trump warns of up to 240,000 coronavirus deaths in US
    President changes tone as he tells Americans to prepare for ‘very, very painful two weeks’
    Trump stands in front of a chart projecting the peak of coronavirus fatalities reaching 2,200 per day in two weeks and then tailing off through June.
    © Bloomberg
    Demetri Sevastopulo in Washington 19 minutes ago

    Donald Trump on Tuesday said the US coronavirus death toll could quickly reach almost a quarter of a million people as the president warned Americans to prepare for a “very, very painful two weeks”.

    In a dramatic change of tone from his comments on the crisis only days ago, Mr Trump and his top health scientists said there could be between 100,000 and 240,000 deaths even Americans follow the social distancing guidelines the president had recommended until the end of April.

    “We’re going to go through a very tough two weeks and then hopefully as the experts are predicting . . . we’re going to see some real light at the end of the tunnel. But this is going to be a very, very painful two weeks,” he said.

    1. up to 240,000 coronavirus deaths in US
      President changes tone fatalities reaching 2,200 per day in two weeks

      I am sorry to say that the maths do not add up at all for me. I’m not talking fine irrelevant points of how you show a calculation of %. The predictions from the “scientists” are getting bat-shit crazy. And they are shifting from side to side like a roller coaster.

    1. Very nice propaganda film.

      Kinda lets you know what it felt like to sit in a theater in Berlin in 1939.

      1. Yer $lipping Jeff.er.referee.

        “$ociali$t propaganda film”

        Lo$t “the Bern” already?

        1. Virginia Governor Orders Residents to Stay Home Until June 10

          By MAIREAD MCARDLE
          March 30, 2020 3:54 PM

          “I want to be clear: Do not go out unless you need to go out. This is very different than wanting to go out,” the Democratic governor said in announcing the order.

          The Virginia order goes into effect immediately and will remain in effect until June 10 unless the governor cancels it sooner. Violators can be punished by up to a year in jail and a $2,500 fine.

          https://www.nationalreview.com/news/virginia-governor-orders-residents-to-stay-home-until-june-10/

    1. Related question: What is currently more valuable, for the same weight volume?

      – stocks

      – gold

      – toilet paper

    1. Good question but I’d rather be on the hook for rent than a big fat mortgage payment, depreciation, taxes and insurance on a rapidly depreciating house.

      Corvallis, OR Housing Prices Crater 19% YOY As One Portland Broker Admitted, “The Housing Market Is Radioactive With Mortgage And Appraisal Fraud”

      https://www.movoto.com/corvallis-or/market-trends/

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

    2. $elling pencil$ ain’t gonna be as lucrative as in 1929.

      (Maybee SIM card$ this go round.)?

    3. Likewise, debt service will be due for millions of broke mortgagors. The foreclosure countdown clock starts now.

    4. So, the rent is due tomorrow for millions of renters. How many will be able to pay it?

      If they’re in Nevada, it doesn’t matter, there’s a moratorium on commercial and residential evictions. I just wonder what happens when the crisis is over and all that rent is due.

    1. I had to create a screen shot and expand it to see it in order to read the table of cases by zip code on my phone. Here are a few observations:

      1) Better data would include populations and numbers tested by zip code as well as the case counts.

      2) It appears that every zip code has cases, suggesting that the spatial extent of the outbreakin San Diego is quite evenly distributed. This makes strategies to single out hotspots seem less promising.

      3) La Jolla (92037 / 26 cases) and Hillcrest (92103 / 57 cases ) are relative hotspots.

      1. “It appears that every zip code has cases,…”

        Corollary: It is unsafe to buy anywhere in San Diego.

    1. ADV China said the tourists were taking full suitcases of certain items home with them as part of their “travel package”. Discounts on the cruise were given in exchange. That should be over long time now.

      1. The global infection count is approaching 1 million. Will it be 32M by the end of the month?

        1. Depends on the evolving case growth rate. However, the virus’s recent incursion into large swaths of the Third World is not a favorable development. And the virus has ample opportunity to mutate while chewing through millions of variants of the human genome, raising the risk of new waves among populations that already thought they had recovered.

          1. I think that 3rd worlders travel a lot less has helped delay the spread in their countries, but now that it is there they are worried. Even though Mexico has only 1000 confirmed cases they too are going into lock down in the major cities.

  38. Here’s a somewhat ignorant question: What’s going to happen to long-term Treasurys when Unlimited Quantitative Easing is eventually unwound, against a backdrop of economic recovery?

      1. The Financial Times
        Coronavirus business update 30 days complimentary
        US Treasury bonds
        Fidelity shuts three Treasury funds to new investors
        Asset manager caps money market inflows after yields on short-term government debt go negative
        Joe Rennison in London and Colby Smith in New York
        12 hours ago

        Fidelity said it would stop accepting new money into three money market funds that invest in US Treasuries, as it sought to protect existing investors from the dramatic decline in interest rates since the outbreak of coronavirus.

        Assets in the three funds have soared by more than $23bn to $85bn during this month’s clamour for safe assets, and new money has had to be invested in increasingly low-yielding securities.

        With some short-term Treasury debt even trading with negative yields, new investments could dilute returns for existing investors in the funds, Fidelity said.

        In a note to investors seen by the Financial Times, the asset manager said that its Fidelity Treasury Only Money Market Fund, Fidelity Institutional Money Market Treasury Only Portfolio and Fidelity Institutional Money Market Treasury Portfolio would close to new investors from the end of Tuesday.

        “Restricting inflows will help reduce the number of new Treasury securities that the funds will need to purchase,” the investor note said. “That’s important because the newer issues generally have lower yields than the funds’ current holdings, and as such they would affect the funds’ ability to continue to deliver positive net yields to shareholders.”

        The Federal Reserve abruptly slashed interest rates earlier this month as it sought to ease financial conditions and temper an escalating economic downturn sparked by the spread of coronavirus.

        The move, amplified by investors seeking out the safety of government debt to shelter from a sharp sell-off across markets, has dragged the yield on three-month Treasuries to below zero, compared with more than 1.5 per cent in February.

        Money market funds that invest in Treasuries have been a particular favourite of investors seeking to keep their money in safe havens during the virus-related turmoil.

        Assets in such funds have skyrocketed from $800m at the beginning of March to over $1tn, notching their largest one-month rise on record in data going back to the beginning of 2007, according to the Investment Company Institute.

        “The faster these funds take in new money, the faster returns head to zero,” said Pete Crane, who runs money market fund data provider Crane Data. “The only glimmer of hope is that the torrential flows into Treasury money market funds has some of them looking to shut their doors. Fidelity is doing this to protect existing investors.”

    1. What’s going to happen to long-term Treasurys when Unlimited Quantitative Easing is eventually unwound, against a backdrop of economic recovery?

      I thought this last year had proven it will never be unwound?

  39. “A cargo plane loaded with medical supplies and protection equipment may depart for the US by the end of Tuesday, the Kremlin said, after a phone call between US President Donald Trump and Russian President Vladimir Putin.”

    Excellent!

    I can only imagine how the TDS addled broadcasters on CNN will try to spin that. Maybe they won’t even mention it.

    1. how the TDS addled broadcasters on CNN will try to spin that

      “See, this proves Russian collusion!”

  40. This is quite a tweet…no fooling!

    Mike Baker
    @ByMikeBaker
    8h
    Q1 of 2020: A Decade in 3 Months
    • Soleimani drone strike
    • Near-war with Iran
    • Australia on fire
    • Earth’s warmest January on record
    • Impeachment trial
    • Royal family
    • Brexit
    • Kobe
    • Africa locust swarms
    • Global pandemic
    • Olympics postponed
    • Markets collapse

    1. What ever came about the trade war thing that was sending the stawk market up and down 🤔

  41. With asset prices collapsing, I’m wondering how the many highly-leveraged gamblers are repaying their creditors?

    Or buying more assets, for that matter?

    1. If the Fed has enough $$$ to help out all the hapless mortgage bankers who suddenly can’t afford to pay back their loans, couldn’t they ante up a skosh more to buy up all the student loan debt from presently unemployed students?

      This is a great opportunity to put Modern Monetary Theory Unlimited into action, baby!

      1. Money Stuff
        Margin Calls Are Coming on All Sides
        Also corporate lending, price discovery and paused activism.
        By Matt Levine
        March 30, 2020, 9:14 AM PDT
        Matt Levine is a Bloomberg Opinion columnist covering finance. He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz, and a clerk for the U.S. Court of Appeals for the 3rd Circuit.

        Mortgage margin calls

        I suppose the easiest place to start is that [a major] real-estate investor … is calling on the government to decree that real-estate investors shouldn’t have to pay their debts, that’s a thing that is happening:

        Tom Barrack, who a week ago warned that commercial real estate financing was on the brink of collapse because of the coronavirus pandemic, is now calling for a moratorium on margin calls and intervention by the Federal Reserve to keep values of mortgage debt from plummeting further.

        “America needs the immediate cooperation and support from our banking sector,” Barrack, chairman and chief executive officer of Colony Capital Inc., said in a white paper he posted on Medium.

        Here’s the white paper. It’s fine, really, I could not resist a little sarcasm above but I don’t really object. We talked last week about a commercial real estate investor suing its bank to stop a margin call, and I said that my instinctive sympathies are with the bank—if your stuff loses value, you get a margin call—but I see the investors’ point. The Fed is trying to prop up … I was going to say “the commercial mortgage market,” but of course I really mean “every single financial market in the world all at once” … and margin calls and forced liquidations are not helpful for that mission. I don’t know what is, really; a ban on margin calls—a government decree saying “you can’t get your money back” (or “you can’t have price discovery,” etc.)—is not exactly good for confidence. Some sort of collective voluntary denial of reality—“we all feel so good that we won’t even ask for our money back, everything is great, la la la”—probably is good for confidence, but it’s harder to coordinate.

    2. These guys remind me of kids grumbling about the food their mother put on their plates. “You got your bailout, now enjoy it.”

      Mortgage
      Margin calls threaten to destabilize mortgage market
      Lenders need “flexibility” in meeting hedge obligations as Fed buys bonds, MBA says
      March 30, 2020, 2:37 pm By Kathleen Howley

      Margin calls on hedges used by lenders to protect themselves from rate swings threaten to destabilize the mortgage market after the Federal Reserve began purchasing billions of dollars of bonds backed by home loans, the Mortgage Bankers Association said.

      While the MBA supports the Fed’s purchases, aimed at preventing a credit crunch by creating demand for bonds, they’re creating an “urgent concern” about hedges, MBA CEO Robert Broeksmit said in the letter Sunday night to the Securities and Exchange Commission and the Financial Industry Regulatory Authority, known as FINRA.

      Lenders need “flexibility,” he said, in meeting margin calls created by the hedges – financial instruments that protect companies from rate volatility. The transactions happened in the so-called TBA market, which stands for “to be announced.” In a TBA trade, the seller of a mortgage bond agrees on a price and the types of loans that will be in the security but doesn’t specify which securities will be delivered to the buyer on settlement day.

  42. The Coronavirus Crisis
    28 College Students Who Chartered A Spring Break Plane To Mexico Now Have Coronavirus

    April 1, 2020 10:26 AM ET
    Bill Chappell
    The Austin Public Health investigation centers around a group of students who traveled together to Cabo San Lucas, Mexico.
    Prisma by Dukas/Universal Images Group via Getty

    Around 70 people in their 20s are under investigation in Austin, Texas, for possible infection with the coronavirus that causes COVID-19, after they chartered a plane for a vacation to Cabo San Lucas, Mexico, last month. At least 28 of the passengers from that flight have tested positive for the coronavirus, with dozens more tests pending.

    All of the people who have tested positive are students at the University of Texas at Austin, according to member station KUT. They are currently self-isolating. Of those 28 cases, four people did not show any symptoms of COVID-19, health officials said.

    In another worrying detail, health officials say that some members of the spring break party returned to Austin on separate commercial flights – widening the potential spread of infection.

  43. Is it too late to get a mask? I went out to shop yesterday morning; my fellow customers kept their distance, and not a one of them sneezed or coughed. But maybe the mere act of breathing is enough to spread the virus? How afraid am I supposed to be?

    1. We are about to go Chinese with mask requirements.

      White House task force could soon recommend Americans wear masks
      By Kevin Liptak, CNN
      Updated 10:30 AM ET, Wed April 1, 2020
      Trump extends social distancing guidelines until April 30

      (CNN) Most members of President Donald Trump’s coronavirus task force have come to agree that Americans should begin wearing face coverings in public and could issue formal guidance on the matter soon, people familiar with the matter said.

      Trump signaled he was open to the idea during Tuesday’s White House briefing and members of the task force are working to draft recommendations on how to fashion the coverings to prevent spread of the virus.
      “My feeling is, if people want to do it, there’s certainly no harm to it. I would say do it,” Trump said Tuesday. “But use a scarf if you want, you know? Rather than going out and getting a mask or whatever.”

      His comments reflect a growing belief by administration officials that more needs to be done to prevent the spread of the virus by infected people who aren’t displaying symptoms. A fabric covering of the nose and mouth could prevent the virus from reaching other people, health experts believe.

        1. wearing a mask will prevent you from doing this

          I think people not used to wearing masks might fuss with them thus negating their effectiveness.

    2. Does wearing a mask in public offer protection against COVID-19 hysteria?

      Health
      Everyone Thinks They’re Right About Masks
      How the coronavirus travels through the air has become one of the most divisive debates in this pandemic.
      Ed Yong
      10:02 AM ET
      Victor J. Blue / Getty
      Editor’s Note: The Atlantic is making vital coverage of the coronavirus available to all readers. Find the collection here.

      As the coronavirus pandemic continues, many people are now overthinking things they never used to think about at all. Can you go outside? What if you’re walking downwind of another person? What if you’re stuck waiting at a crosswalk and someone is there? What if you’re going for a run, and another runner is heading toward you, and the sidewalk is narrow? Suddenly, daily mundanities seem to demand strategy.

      Much of this confusion stems from the shifting conversation around the pandemic. Thus far, the official line has been that the new coronavirus, SARS-CoV-2, could be transmitted only through close contact with infected people or contaminated surfaces. But recently, news reports have suggested that the coronavirus can spread through the air. After 60 choir members in Washington State rehearsed together, 45 fell sick, even though no one seemed symptomatic at the time. Now people who were already feeling cooped up are worrying about going outside. Many state guidelines are ambiguous, and medical advice can muddy matters further. When the writer Deborah Copaken came down with COVID-19 symptoms, her doctor chided her for riding her bike through New York City a week earlier. Going outside in the city wasn’t safe, the physician implied, with “viral load everywhere.”

      1. close contact with infected people That is an ambiguous term. If you wind up inhaling airborne particles from an infected person, I would call that close contact. If the wind blows the particles in another direction, no contact. Who pays attention to details like that? Social distancing is more a goal than a reality, particularly when it is repeatedly violated. The authorities who advised most people not to wear masks had ulterior motives, i.e., preserving the supply of masks / preventing another round of hoarding as elements of the population do whatever they can to get not just a few masks but as many as possible. This hidden agenda certainly makes other people (like me) doubt the source altogether.
        I “stole” my own N95 mask from my garage left over from a sanding & painting project. I wear that for my few trips out of the house for shopping. I won’t wear it when I go for my long walks outdoors, and I don’t need it inside my house at all. I tell my friends & relations to cover their nose/mouth with whatever they can, on my theory that some protection is better than none at all. Of course my theory can never be validated by randomized double blinded studies.
        Also note that last week Dr. Fauci at a press conference said that the antimalarials did not have evidence of usefulness against COVID-19. Within a day or so of that, he was interviewed on a radio talk show, and stated that if he had the responsibility of caring for COVID-19 patients on ventilators, he would be giving all of them antimalarials, since he has nothing else to offer them. This is not a contradiction on his part. But the general public would not see it that way.

        1. he would be giving all of them antimalarials

          I read yesterday that there are some 1,000 patients in NY being given this.

    3. “I went out to shop yesterday morning;”

      You are supposed to be more afraid than that.

      By MAIREAD MCARDLE
      March 30, 2020 3:54 PM

      “I want to be clear: Do not go out unless you need to go out. This is very different than wanting to go out,” the Democratic governor said in announcing the order.”

      “The Virginia order goes into effect immediately and will remain in effect until June 10 unless the governor cancels it sooner. Violators can be punished by up to a year in jail and a $2,500 fine.”

      Have your food delivered and get your exercise at home.

      https://www.youtube.com/watch?v=l5sIspLfmXM

      1. Response to…

        Professor Bear
        April 1, 2020 at 8:16 am

        “How afraid am I supposed to be?”

  44. To think that when they got rid of defined benefit pension plans, they called 401Ks “defined contribution” plans.

    https://www.wsj.com/articles/companies-hit-hard-by-coronavirus-look-to-cut-401-k-contributions-11585746000?mod=hp_lead_pos4

    “Amtrak, La-Z-Boy Inc., LZB -6.67% retailer Mattress Firm Inc., and travel tech company Sabre Corp. SABR -9.11% are among the first in an expected wave of businesses suspending or reducing matching contributions to employees’ 401(k)s, a move that can have a spillover effect on workers’ own contributions.”

    “Marriott International, MAR -6.10% which employed some 17″4,000 people at the end of last year, said it would delay paying the matching contributions it was scheduled to deposit in participants’ accounts on March 10 until September. Macy’s Inc. M -3.46% is also delaying its 401(k) match to later this year, according to a spokesperson.”

    “Lawyers and consultants who specialize in employee benefits say companies across industries have sought advice on how to suspend or reduce their payments to workers’ retirement plans in recent days.”

    I guess the workers had better save more. But they also had better spend more. Meanwhile, those losing their jobs will not be contributing anything to their 401Ks. So none of that money will be going into the stock market when it get down. Only when it was up.

    1. I’ve worked at a few places where the match was 0%. Where I am now it’s a paltry 3%.

      1. So far I’ve only seen one company exceed 3.5% for the peons. It was a Japanese owned company that matched 7%. That was a big plus to me, but it wasn’t enough to get me to stay in San Jose with a manager that had a much different philosophy than I did.

    2. Good luck getting a mask at this point. Early on I tried to get some and couldn’t find any.

      They didn’t even have enough masks for medical workers.
      It all goes back to lack of preparing for a big outbreak.

      1. Early on I tried to get some and couldn’t find any.

        I posted a link back then several times to a reputable supply house that had them, and then that had P100 masks. Sorry you missed that.

      2. I bought my masks months ago before there was a run on them. I suggested to my extended family and friends that it might be a good idea to get some because they would likely run out. Not a single one of them bought any.

        Just a few days ago, a sibling called to lament not heeding the advice. It was along the lines of “you were right.” Seems a lot of people fell for the CDC’s lies of “masks don’t work, but doctors and nurses need masks so they don’t get sick” BS.

        1. Seems a lot of people fell for the CDC’s lies of “masks don’t work, but doctors and nurses need masks so they don’t get sick” BS.

          Isn’t it still true that masks protect others from you much more than they protect you from others? I thought that was still the case, but now everybody is realizing we are them.

          1. I thought that was still the case

            Me too. Now we’ve got backpedaling from a ridiculous lie when the truth (i.e., save them for health care workers) would have been sufficient.

      3. Back in January all these Chinese people around here (including my wife) were buying up the retail ones and sending them back to relatives in China.

  45. More hysteria…

    One thing that I notice yesterday while shopping: The empty shelves where toilet paper should have been showed a price of $0.99 a roll. Why not try a price of $9.99 a roll to avoid stock outs?

    Toilet Paper Startup Ramps Up And Rolls In Wake Of Coronavirus Pandemic
    March 31, 2020 5:00 AM ET
    Heard on Morning Edition
    Jennifer Mitchell
    From Maine Public
    3-Minute Listen
    Local demand from individuals, senior centers, stores and the state prison system is unspooling every roll as fast as the workers at this Maine plant can wind them.
    Nick Woodward /Maine Public Radio

    The coronavirus pandemic has led to the panic-buying of one item in particular: toilet paper.

    Stores have been rationing the goods, in some cases, doling out as little as one roll apiece. This sudden demand for what some are calling “white gold” is proving a challenge — and an opportunity — for one fledgling family business in Maine, where the paper industry has seen some hard times.

    “It’s been insane. I don’t sleep much,” says owner Marc Cooper. But he’s up, overseeing the early shift anyway. It’s a busy, industrial scene of forklifts and pallets, and workers hustling from machine to machine, turning out rolls of tissue. It has been this way since his toilet paper startup, Tissue Plus, was forced into sudden go mode.

  46. “China Concealed Extent of Virus Outbreak, U.S. Intelligence Says”

    “China has concealed the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House, according to three U.S. officials.

    The officials asked not to be identified because the report is secret and declined to detail its contents. But the thrust, they said, is that China’s public reporting on cases and deaths is intentionally incomplete. Two of the officials said the report concludes that China’s numbers are fake.”

    Say it ain’t so!

    https://www.bloomberg.com/news/articles/2020-04-01/china-concealed-extent-of-virus-outbreak-u-s-intelligence-says?srnd=premium

    1. the report concludes that China’s numbers are fake

      You don’t need a classified intelligence report for that conclusion.

    1. Refis up

      Hurry and sell to the bank at peak price while they’re still suckers enough to go for it…it’s Mr. Banker’s one weakness. That and guillotines of course.

        1. Unless his name is Rothschild or Rockefeller. Mr. Banker is a wage slave like everyone else.

          1. Yup. Which is why he’s so worried about making his quota. Once they are made, not his problem.

    1. 44,156 / 883,225 = 5%

      The needle is stuck at 5%, even while the case count is still growing rapidly.

  47. 35% of hotel loans could go into default.

    https://www.denverpost.com/2020/04/01/coronavirus-colorado-springs-broadmoor-hotel-dismisses-workers/

    Although the state’s shelter-in-place order allows hotels to continue to operate, so few people are showing up that many hotels don’t see the point in staying open.

    I know a couple that just moved from San Diego to Denver. They said that the roads and hotels were nearly empty.

    The hope is that all the hotels will reopen once the all-clear is given. But Trepp, a research firm, warned that as many as 35% of hotel loans could go into default because of the COVID-19 outbreak, making it the most vulnerable sector in commercial real estate.

    1. Some people I know that provide electric power, sewage, municipal and industrial water are getting per-Diem preferring motels rather than infect kids or older family members.

  48. Idaho becomes first U.S. state to ban trans athletes

    MARCH 31, 2020

    Governor Brad Little signed the two bills into law on Monday, according to the Idaho government’s website, drawing criticism from LGBT+ groups that called the move harmful and discriminatory.

    “It is a sad day in the United States when lawmakers are more determined to stop trans young people from playing games than to provide them with the care, support, and opportunities they need to survive and thrive,” said its head of advocacy and government affairs Sam Brinton.

    Idaho’s “Fairness in Women’s Sports Act” bans trans girls and women from competing in girls’ or women’s sports leagues affiliated with the state’s public school and higher education systems.

    “Under this bill, boys and men will not be able to take the place of girls and women in sports because it is not fair,” state lawmaker Barbara Ehardt, who introduced the bill, told the Thomson Reuters Foundation earlier this month.

    Idaho’s second bill, preventing transgender people from changing the sex on their birth certificate to reflect their identity, was also criticized by LGBT+ advocates and is likely to face a legal challenge.

    “Transgender people need accurate identity documents to navigate everyday life, and this gratuitous attack puts them back in harm’s way for harassment and even violence,” said Kara Ingelhart, a lawyer at Lambda Legal, in a statement.

    https://www.reuters.com/article/us-usa-lgbt-lawmaking/idaho-becomes-first-u-s-state-to-ban-trans-athletes-idUSKBN21I2AF

    1. I would imagine that there are some title 7 folks in Boise who are schitting in their leopard bikini underwear.

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