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Anything Left On The Market Now, The Price Is Just A Suggestion

A report from Reuters. “The coronavirus crisis is likely to cut home and office building prices, may lead to a permanent shift in the demand for office space, and could push highly indebted households and companies toward default, Boston Federal Reserve bank president Eric Rosengren said on Wednesday. ‘For both homes and apartments as well as office properties we are likely to see softening of prices in some markets and maybe a fairly significant softening over time,’ Rosengren said.”

“Rosengren, who in recent years has warned that historically low Fed interest rates encouraged unhealthy levels of borrowing, also said that overhang of debt could worsen the recession to come and slow the recovery from it. ‘When you have a black sawn event like this individuals and firms that are very levered have much more difficulty in making sure they can manage through,’ Rosengren said, adding he expected banks will see more commercial real estate borrowers fall behind on payments.”

From Market Watch. “Federal Housing Finance Agency Director Mark Calabria told CNBC that ‘it is certainly possible’ the number of delinquencies caused by the coronavirus outbreak could exceed the subprime mortgage crisis in some segments of the market. ‘The place to look right now is the FHA market with the credit quality of their borrowers,’ Calabria said. ‘They are going to be the first canary in the coal mine if you will in terms about what the broader implications are going to be.'”

From CNBC. “Some are concerned that the government’s forbearance program is ripe for fraud, because it specifically says borrowers do not have to prove any financial hardship. They simply have to ask. ‘When Congress passed the Cares Act, it did so without either fully considering the risks it created in the housing market or consulting with the firms that would have to implement and step in on the borrowers’ behalf to advance forborne payments,’ said Joshua Rosner, managing director at Graham Fisher & Co., an independent research consultancy. ‘The Act does not require any proof be furnished, and in fact, prohibits mortgage servicers from asking for any proof of such an economic hardship.'”

“Rosner said that creates a dangerous moral hazard, ripe for fraud. Das, however, said he doesn’t see it that way. ‘We’ve been thinking about the risk of moral hazard. We know that that existed even the last time around when there were principal reductions done,’ said Sanjiv Das, CEO of Caliber Home Loans, which services about 750,000 government-backed mortgages. ‘Look, the speed with which this is unraveling, it’s going to be very difficult to implement if we had to verify every piece of documentation to prove that somebody was sick. I think we need to act fast and if that means that on the margins some people abuse the system, I’m sure the system catch up with them.'”

From Yahoo Finance. “Between virtual tours and digital closings, realtors are hopeful they might be able to keep selling houses amidst the global pandemic that is keeping many Americans in their homes. But Barbara Corcoran, Shark Tank judge and founder of New York City residential brokerage The Corcoran Group, says relying on virtual tours is unrealistic. ‘There is no way people are going to be buying units because of a phenomenal virtual tour,’ said Corcoran. The only other way to find success with virtual tours would be to offer housing units at a steep discount, she said.”

“If ‘units could be offered at half price — hey — maybe even I’ll jump in there and say, ‘What the heck, let me take a shot!’ But it’s not the typical buyer by any means,’ she said.”

From Fox 11 Los Angeles in California. “Officials say sellers are canceling transactions, and brokerages are pulling homes from the market. ‘The homes aren’t selling, inventory is growing, and buyers are on the sideline,’ Tarek El Moussa, host of HGTV’s ‘Flip or Flop,’ said. ‘If you are in the market to sell your house in today’s market, you want to sell it fast. You’re going to have to sell it to an investor at a discount. Whatever you think your house is worth is a lot different today from two months ago.'”

The New York Times. “The luxury market, which is in a yearslong price correction, could be further affected. Last week, only two properties in Manhattan went into contract at $4 million or more, the lowest weekly sales rate since August 2009, during the last recession, said Donna Olshan, the president of Olshan Realty. ‘Anything left on the market now, the price is just a suggestion,’ she said, noting that sellers already in contract, as well as new buyers, are pushing for more aggressive price cuts.”

“What happened in the first two months of the year no longer matters, said Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers & Consultants. After the Sept. 11 terrorist attacks and the fall of Lehman Brothers in 2008, sale prices fell 25 to 35 percent, said Mr. Miller. It’s unclear where prices will end up, but they have been sliding since the market peaked around 2015, he said. ‘We find ourselves with little to no empirical evidence of what’s happening,’ said Mr. Miller, because the virus outbreak became a factor so late in March. ‘I don’t have a sense, other than it’s going to be catastrophic.'”

The Dallas Morning News in Texas. “U.S. foreclosure starts in February were up 3% from the previous month. Texas had one of the biggest percentage jumps, increasing 28%. Foreclosures were up 63% in Nevada, 49% in Oregon and 47% in Washington, according to Attom Data. Frank Nothaft, chief economist with CoreLogic, expects the number of mortgage defaults to rise. ‘It will definitely happen,’ Nothaft said. ‘We have seen it happen in every single recession the U.S. economy goes into.'”

From Toronto Life in Canada. “Steven Argyris is CEO of SkyView Suites, a purveyor of upscale, furnished condo suites for on-the-move corporate execs in need of short-term accommodations. Q: I guess that business has, unfortunately, evaporated for you right now. A: Yeah. But, ironically, there’s an opportunity there. There’s some vacancy that we can take advantage of. And we’re trying to repurpose that to help people out. Q: How many condos do you have available for this purpose? A: Speaking for SkyView, we have about 170 units. But if you’re talking about the whole corporate housing industry, there’s upwards of a thousand.”

From Scottish Construction Now. “Britain’s mortgage lenders have dramatically increased their loan-to-value deposits for house purchases with Halifax and Barclays among those seeking 40% down-payments to fund buyers amid rising expectations of a housing crash. Barclays and Halifax’s intermediary brands have stopped selling mortgages above 60% loan-to-value this week, coinciding with the drastic slowdown of the UK housing market. The move means that prospective buyers without a deposit or equity worth at least 40% of the property’s value will no longer be able to secure a mortgage to buy a property, or even remortgage their existing home, with both Barclays and Halifax.”

The Phnom Pen Post in Cambodia. “Vin Chhunhiet is a real estate entrepreneur who buys parcels of land in Kampot province and in the capital’s outskirts and subdivides them into separate plots for resale. There are currently no buyers, he said. The impact has been huge and it echoes across all sectors. ‘Weeks ago, before the Covid-19 outbreak, my company was able to sell more than 20 parcels per week. However, since the beginning of March, sales have been steadily declining, especially over the past week. It is impossible to sell,’ said Chhunhiet.”

From Interest New Zealand. “Quotable Value is warning that the fallout from the Covid-19 lockdown could have an adverse impact on the residential property market until the end of the year. ‘Up to this point we were seeing multiple buyers, often with plentiful funds available, competing for tightly held stock,’ QV General Manager David Nagel said. ‘Selling an existing property and upgrading to a different home will likely be furthest from their mind, although some may be forced to downsize or even relocate to another city in order to gain employment.'”

The Financial Standard on Australia. “Gone are the days of ‘business as usual’ with Australia’s capital cities and skyscrapers empty and its employees now working from the comfort (and safety) of their homes. But what impact will this have on our real estate investments? Principal Real Estate Investors real estate securities portfolio manager Shern-Ling Koh said Australian REITs had been the hardest hit during the COVID-19 sell-off. ‘Asia has held up quite well in this bear market, with REITs displaying their typical defensive characteristics going into a period of uncertainty, until a week or two ago when there was a sharp collapse,’ he said. ‘This selling-off had a material impact on REITs. Australia was impacted hardest in the region, down almost 50% in US dollar terms year to date, while Hong Kong has held up the best down 23%.'”

“Investors in residential real estate also face a tumultuous period ahead, according to research by RiskWise. Investing in rental apartments has become more risky of late, and now with COVID-19 threatening employment, it is even more so, RiskWise chief executive Doron Peleg said. ‘In the past few years what we have seen is a series of events that resulted in price reductions due to oversupply of units in many major cities, followed by the credit restrictions on local and foreign investors and then the potential changes to negative gearing and capital gains tax,’ Peleg said.”

“Peleg believes housing prices will continue to fall as population growth and employment decelerate. ‘While it is a bit early to say what the price reductions will be, if these projections are correct, they will be highly likely across Australia as unemployment and underemployment materially increase,’ he said. ‘And this is the first problem for the majority of people when they buy an investment property because the key driver is long-term capital growth and not cash flow.'”

“Investors need to be careful during this period of uncertainty, Peleg said. ‘First, they should ensure that financially they are in a very strong position to service the mortgage or to potentially address longer periods of vacancy or provide a discount on the rent,’ he said. ‘Then, if they do want to invest, they should pay a discounted price for the unit to reflect both the risk for a price reduction and the cash flow risk associated with the property.'”

This Post Has 144 Comments
  1. ‘U.S. foreclosure starts in February were up 3% from the previous month. Texas had one of the biggest percentage jumps, increasing 28%. Foreclosures were up 63% in Nevada, 49% in Oregon and 47% in Washington’

    It had already hit the fan.

    ‘Frank Nothaft, chief economist with CoreLogic, expects the number of mortgage defaults to rise. ‘It will definitely happen,’ Nothaft said. ‘We have seen it happen in every single recession the U.S. economy goes into’

    Now you tell us Frank. Wa happened to the “rock solid lending blah, blah?

    1. “Now you tell us Frank. Wa happened to the “rock solid lending blah, blah?”

      He lied.

      1. The PNW is one of the most overbought markets in the US because it’s the regional shiny object du jour, so to speak, and “everyone” is moving here.

        New listings the past month in the $500-750K range are coming on at ~$50K off the Zestimate. About time.

        1. A lot of it has been jobs related. Most people don’t like 9 months of overcast skies and cold temps.

  2. ‘First, they should ensure that financially they are in a very strong position to service the mortgage or to potentially address longer periods of vacancy or provide a discount on the rent,’ he said. ‘Then, if they do want to invest, they should pay a discounted price for the unit’

    But how am I gonna win the bidding war?

    ‘While it is a bit early to say what the price reductions will be, if these projections are correct, they will be highly likely across Australia as unemployment and underemployment materially increase,’ he said. ‘And this is the first problem for the majority of people when they buy an investment property because the key driver is long-term capital growth and not cash flow.’

    Yeah, for many years Australian shack gamblers have been losing money every day. Now we’ll see how wise that set up was.

  3. ‘Q: How many condos do you have available for this purpose? A: Speaking for SkyView, we have about 170 units. But if you’re talking about the whole corporate housing industry, there’s upwards of a thousand’

    Good luck servicing those alligators Steve.

    1. remember the luxury rental on 2nd Ave in Seattle. They converted half their units to business hotel suites. There is no traffic – so what happens.

      I hope that the pension funds in WA did not buy into the REIT for their safety – and because Seattle was growing to the moon

  4. ‘‘The Act does not require any proof be furnished, and in fact, prohibits mortgage servicers from asking for any proof of such an economic hardship’

    ‘Rosner said that creates a dangerous moral hazard, ripe for fraud. Das, however, said he doesn’t see it that way. ‘We’ve been thinking about the risk of moral hazard. We know that that existed even the last time around when there were principal reductions done,’ said Sanjiv Das’

    Fraud? Eat yer crowz jingle male.

    Moral hazard, why that term disappeared form modern dictionaries years ago.

    ‘Rosengren, who in recent years has warned that historically low Fed interest rates encouraged unhealthy levels of borrowing, also said that overhang of debt could worsen the recession to come and slow the recovery from it. ‘When you have a black sawn event like this individuals and firms that are very levered have much more difficulty in making sure they can manage through,’ Rosengren said, adding he expected banks will see more commercial real estate borrowers fall behind on payments’

    Yellen warned too, repeatedly. Problem is nobody did anything about.

    Can we have a do over?

    1. This is the do over. This is the chance to allow a collapse followed by a re-boot and “New Deal,” rather than bail out asset prices. That, however, is not being done.

      “I think we need to act fast and if that means that on the margins some people abuse the system, I’m sure the system catch up with them.”

      Depending on how rich, powerful and connected they are, maybe not.

      1. They didn’t bail out the rich in the Stock Market Crash of 1929, in fact they shamed them with public trials.

        Prior to C-19 the USA was riding on empty.

        The USA had,

        Unsustainable debt
        Unsustainable housing prices and bubbles like the stock market.
        Unsustainable college and health costs.
        Unsustainable price fixing monopolies
        Unsustainable Globalism that made the rich richer, gutted our job and manufacturing base, messed up trade balances, set the stage for world transfer of viruses, along with National Security Violations with outsourcing manufacturing to places like China.
        A uptick in social unrest because of the rigged markets. Uptick in crime.

        Ok, I could go on and on.
        So, if these factors listed above aren’t corrected in a just way, than something else will happen.

        I think deflation in a number of false and rigged markets is a reset that s needed. There is no room for price fixing monopolies. Faulty lending had to stop along with a economy of debt slaves. Reset is needed because it’s to big to bail

        1. The Great Depression was also a too-big-to-fail situation.

          Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.

          — Andrew Mellon

          1. Professor Bear,

            There must be a somewhat just way to do a reset of the markets. This BS that they set up bail outs for the rich is not acceptable.

            For instance, they could do workouts on loans whereby the loss is split between parties. The last bail out was a we win and you lose type of thing.

          2. Easy for Andrew Mellon to say. He already made his pile off the backs of those same laborers and farmers. So much for values and morals.

          3. Didn’t Henry Ford agree? Say that if his company went under, he and his managers would just start another one.

      2. “I think we need to act fast..”

        That’s the #1 REIConplex tag line. In other words, don’t do any due diligence, just trust me. Yeah, right.

        “..I’m sure the system catch up with them…”

        Oh sure, Sanjiv Das. The ‘system’ is airtight. Just like flying pink elephants, they are airtight also.

        Of course , Sanjiv Das most certainly is servicing loans as his patriotic duty in these uncertain times. Not that he will make any money off potential fraud, that’s unthinkable, given all that air tightness.

  5. ‘The homes aren’t selling, inventory is growing, and buyers are on the sideline…If you are in the market to sell your house in today’s market, you want to sell it fast. You’re going to have to sell it to an investor at a discount. Whatever you think your house is worth is a lot different today from two months ago’

    Wa happened to my shortage California?

    1. Tarek has been having trouble selling his shacks for years now. For one show (maybe a year ago) he actually had to set a price with all the 8’s in it.

  6. So we don’t have to write a letter when submitting offers promising to feed the squirrels anymore?

    1. Squirrels, on the property, can now be used as a selling point by FBs as they are quite high in protein and much easier to get than a pre-cooked Costco chicken during an economic collapse.

      Anybody paying attention to sales tax receipts collected around the Country over the last month? How long before the Towns, Cities and Counties around the U.S. start screaming for their bailouts?

        1. My mom ate some that Grandpa bagged during the Great Depression. This childhood experience was traumatic for her.

          1. A friend of mine told me of his dad bringing the occasional groundhog in “from the garden”.

      1. Cuomo and Nancy have already started. NY State wants the Feds to top up the difference between what they are collecting to what they had projected

        —-

        Anybody paying attention to sales tax receipts collected around the Country over the last month? How long before the Towns, Cities and Counties around the U.S. start screaming for their bailouts?

      2. “…Anybody paying attention to sales tax receipts collected around the Country over the last month?..”

        And yet another big elephant in the room: Property tax receipts as distressed properties are sold at a discount and re-assessed.

        Where is all the $$$ going to come from to pay those bloated government salaries and pensions? [1]

        “…a pre-cooked Costco chicken during an economic collapse…”

        I would eat a bug or any kind of rodent than one of those Costco chickens.

        [1]

        If you live in California, and you ever want an eyeful, goto

        https://transparentcalifornia.com/

        and type in the name of your favorite public servant.

        Prepare yourself.

  7. It’s unclear where prices will end up, but they have been sliding since the market peaked around 2015, he said. ‘We find ourselves with little to no empirical evidence of what’s happening,’ said Mr. Miller, because the virus outbreak became a factor so late in March. ‘I don’t have a sense, other than it’s going to be catastrophic.’”

    Now he tells us!

    “U.S. foreclosure starts in February were up 3% from the previous month. Texas had one of the biggest percentage jumps, increasing 28%. Foreclosures were up 63% in Nevada, 49% in Oregon and 47% in Washington, according to Attom Data. Frank Nothaft, chief economist with CoreLogic, expects the number of mortgage defaults to rise. ‘It will definitely happen,’ Nothaft said. ‘We have seen it happen in every single recession the U.S. economy goes into.’”

    Some of the hottest markets a year ago

    1. The Rock Stars Of The Real Estate Recovery And The Emerging Third Wave Of Distress

      December 12, 2019

      “Foreclosure auction inflow data points to a third wave of post-recession distress building in late 2019 and early 2020. A total of 43,232 residential properties nationwide were referred to Auction.com in Q3 2019 for a potential future foreclosure auction, up from the previous quarter and a year ago to the highest level since Q1 2017. The characteristics of the increasing foreclosure auction inflow are distinct enough to label it a third wave of distress emerging in the wake of the Great Recession.”

      “The first and largest wave comprised primarily risky loans originated during the 2004-2008 housing boom. The second post-recession wave of distress emerged in 2018 as the result of a series of devastating natural disaster events—primarily hurricane-related—in 2016 and 2017 in Florida and Texas. The emerging third wave of post-recession distress is showing up in parts of Florida and Texas, but it is also showing up in markets far removed from Florida and Texas (see below for some more geographic details). That’s because this wave is less characterized by geographic concentrations of distress and more characterized by concentrations of distress based on loan type and lender type.”

      “More to the point, the emerging third wave of distress is primarily driven by a rising undercurrent of defaults among government-insured loans and privately held loans. Two sub-categories within the overall government-insured space stand out: VA-backed loans with a 31% increase and FHA-backed loans serviced by mid-market lenders—many of them so-called nonbank lenders and servicers—with a 17% increase.”

      “The Black Knight report shows that the delinquency rate at six months after origination is trending higher for loans originated in 2018 and 2019, with a more extreme upward trend among Ginnie Mae-securitized loans—primarily comprising VA- and FHA-backed loans. The report shows that 3.3% of Ginnie Mae-securitized loans originated over the past 12 months were delinquent at six months, up from 3.1% for loans originated in 2018 to the highest level since 2009.”

      “Among all loan originations, the delinquency rate six months after origination was 1% for loans originated in the first quarter of 2019, up from 0.9% for loans originated in 2018 to the highest level since 2010.”

      “Among 2,410 counties with foreclosure auction inflow into Auction.com in Q3 2019, 870 counties (36%) posted a year-over-year increase in foreclosure auction inflow, including Maricopa County (Phoenix), Arizona; Miami-Dade County, Florida; Los Angeles County, California; and Bexar County (San Antonio), Texas. Also posting year-over-year increases in foreclosure auction inflow in Q3 were all three counties in the Seattle metro area: King, Pierce, and Snohomish; and three counties in the Denver metro area: Denver, Arapahoe, and Adams.”

      “‘Some of the markets with the biggest inflow increases in the third quarter may be surprising given they have been rock stars of the real estate recovery of the last seven years,’ said Jesse Roth, SVP of Strategic Partnerships and Business Development at Auction.com. ‘But those markets may now be victims of their own success, with an unsustainable run-up in home prices pushing the limits of affordability for many homebuyers in recent years. Those financially stretched borrowers now have less equity cushion to protect against foreclosure, particularly if they are in a government-insured loan that came with a low down payment and down payment assistance.’”

      “The inflow geographic trends align with recent foreclosure start data released by ATTOM Data Solutions, which shows that U.S. foreclosure starts in the first nine months of 2019 increased in 14 states and 80 of 220 metropolitan statistical areas analyzed (36%). Among larger metro areas, those posting year-over-year increases in the first nine months of the year included Atlanta (up 23%), Orlando (up 24%), Jacksonville (up 7%), San Antonio (up 8%), Seattle (up 7%), and Denver (up 3%).”

      “Given no other shocks to the economy or housing market, this emerging wave of distress will likely be the smallest of the three that have materialized in the wake of the Great Recession. However, if dangerous rip currents develop in the housing market (think widespread and sustained home price depreciation) or in the larger economy (think recession), this distressed wave could pack a bigger punch.”

      http://housingbubble.blog/?p=2713

      1. “the emerging third wave of distress is primarily driven by a rising undercurrent of defaults among government-insured loans and privately held loans. ”

        And that was pre-COVID.

        1. But with COVID-19 available as a scapegoat of convenience, certainly these folks can be added to the victim list and qualified for bailouts?

  8. “The New York Times. “The luxury market, which is in a yearslong price correction, could be further affected. Last week, only two properties in Manhattan went into contract at $4 million or more.”

    Perhaps they need to stop defining the luxury market by price paid. Perhaps size, features and location is a better measure.

    1. This is a salient point. Most of the “luxury” houses use the same cheap materials. They may be a tad larger, but the finishes are cheap Home Depot sh!t.

  9. From the Reuters piece: “Other effects of the crisis, he said, may prove persistent, with housing and office building prices likely to fall — and in the case of commercial real estate perhaps remaining depressed if people continue to work from home.”

    I can imagine several environmental benefits from working at home if we get a lingering effect. Both of my kids will be attending college on-line for the Spring quarter. Can society survive with fewer Volvo driving Oracles wearing tweed sport coat with elbow patches and European sandals to work?

  10. “Fauci said that we can start to “relax” social distancing once there are “no new cases, no deaths.” Is it just me or is that completely batshit insane? That would keep us in a lockdown for many months or years. And if the virus becomes endemic, forever. How can that be the plan?”

    https://twitter.com/MattWalshBlog/status/1245683695211687938?ref_src=twsrc%5Etfw

    This situation reminds me of the South Park episode, where a group of people get trapped somewhere and within hours they are debating which person they’re gonna eat first.

      1. When I lived in Fremont, CA someone snitched me out to the water authorities for watering the front yard plants on an odd rather than even calendar day. I even had a valved nozzle for crikey-sake!

    1. We got the largest bailout in history when all we needed were some fawking masks for the workers.

      1. masks for the workers

        That simply would not have served as a smokescreen for the faltering financial institutions.

    2. .”….batshit insane…”

      It is insane IMHO. The Doctors act like they would like to lock down people until they develope a vaccine.

      My understanding is the herd immunity needs to develope. Again isolate the high risk. But, the high risk can’t remained lock up forever either and maybe a vaccine will help that group.

      A flu burns out according to a Dr I was listening to, for reasons I don’t know totally. Otherwise the virus would keep going in circles until it gets everybody.

      Many things the CDC are doing does not make sense.
      I think a lot of this lock down was so the medical system could handle the uptick they were not prepared for

      1. IMO, the lock down is solely for the medical system to catch up. If they don’t relax restrictions as the medical systems get on board, there are much larger issues which will come into play. I’m hearing that lots of stores in Santa Monica are boarded up in advance of the riots that people are expecting.

        1. “…riots that people are expecting.”

          Hopefully it won’t happen. We have enough problems to deal with in the absence of new ones deliberately dumped on the pile.

      2. They’re trying to save lives. There’s a high death rate, and a big need for ventilators. Worse, each patient needs those ventilators for several weeks, so very few ventilators open up for new patients, which leads to more deaths.

        I read a lot of stories like “I had a mild case; it was brutal.” Trump (ie. Fauci) is right. This next month is going to be brutal, as existing infections finally manifest, with a lot of coughing and death. But after that, I think we can start to win the war. Stay-at-home orders to get that R-naught value down (flatten the curve), masks to reduce the severity of new cases (inoculation theory), and hydroxy chloroquine and other drugs for the very sick. We aren’t going to beat this virus entirely for another year, but at least we can get to a point where we can get out, go to work, and buy stuff at Home Depot.

      3. “isolate the high risk”

        That’s the rub, I think. At first it was thought to infect only the olds-with-colds. A few spring breakers later and the youngs-with-lungs apparently aren’t so immune either, and also new stories daily of people in their 30s and 40s dying. There’s a common factor that hasn’t yet been identified.

        1. “common factor”

          There may also be unidentifed random factors that result in one young person having mild symptoms and another one dying.

          1. That “factor” is the initial viral load, and possibly early stage diabetes from obesity:
            Young obese person on the edge of diabetes gets a face-full of virus –> serious case.
            Relatively thin Rand Paul who may have picked up a few virus particles from a bathroom sink –> mild case.

            There are a few freak cases like that South African swimmer, but that seems to be rare.

        2. “There’s a common factor that hasn’t yet been identified.”

          Obesity?
          Look at the doctors, nurses, orderlies as well as the patients!

        1. isolate the high risk Simply knowing who is immune & cannot directly spread coronavirus and who is susceptible, would make a huge difference in preventing infection. Immune people (theoretically) could just go back to work as usual. Not possible at the moment due to lack of antibody testing and insufficient acute coronavirus testing.

      1. I seem to remember him promising an AIDS vaccine by 1985 too. Guy’s always been a slick playa.

        Props.

      2. Not so long ago, one day Fauci said hydroxychloroquin and chloroquin were not proven useful to treatment of COVID-19 and the next day he said that if he had critical COVID-19 patients to treat, he would give them those same drugs if he had them.

        1. Can’t remember where but someone tried to say those statements weren’t inconsistent.

  11. YES! Received the closing papers on the sale of my winter condo Tampa Bay FL Its becoming a done deal! I am out of FL thanks God (or whatever)!
    By the way 88 degrees in the Tampa Bay area (yech) and no let up on the virus.

  12. 6.6 million people file claims for unemployment, and the DOW is up 150+. It’s pretty obvious what this country has become.

    1. I’ve noticed over the years that the period early in a recession when unemployment rates are ramping up tends to coincide with rising stock prices. I have no explanation to offer, as I find this market response to bad news counterintuitive.

      1. Maybe we’ll have DOW 30,000 in the face of the highest unemployment in history. Who knows? But the stock market is not the economy, and it’s completely irrelevant now.

    2. Oil market today: More expensive gas!
      Stock market: Woohoo!

      Why do people hate low prices?

      1. Why do people hate low prices?

        Most people don’t hate low prices. But most people don’t own stawks.

    1. I paid my rent yesterday, in full and on time. With no pathetic sob stories about how the meanie virus robbed me of my ability to honor my financial obligations.

      1. I paid mine and I’ve suffered a loss of income. But I could pay 10 years worth without a job.

        1. “But I could pay 10 years worth without a job.”

          You need one of those OC housewives. 🙂

        2. I could survive about a year without a job. But if my prospects were really that dire, I wouldn’t feed my alligator for any longer than that. I’d sell, take the proceeds, go Oil City and teach in some rural high school or small college. And I’d likely carry.

          1. a year without a job

            If a bright young FedGov worker like you is out of work for a year then things would have gotten serious. Shack prices would be collapsed and there would be no proceeds. Looking down the barrel of that, spending all your reserves on the alligator might not give the best outcome.

    2. Someone should write a quick note to Ramin Mazaheri (sounds like a boxed microwavable pasta dish) and explain to him that the Cultural Revolution has already occurred.

      The Bankers won.

      When asked what it felt like to kill another human being Rafal Ganowicz responded…………… “I wouldn’t know I’ve only ever killed communists”.
      https://www.youtube.com/watch?v=l3PRHLCu3l0

  13. DFW – area. What happens to Frisco, Plano and the other upscale suburbs that had scaled up so much with luxury housing capacity now that the jobs from Toyota, Liberty Mutual, Chase and others will now come in very slowly (if at all)

    1. https://www.wsj.com/articles/upheaval-in-retail-world-sets-stage-for-texas-foreclosure-battle-11580212800

      “A group of Texas businessmen that launched a $1 billion plan to redevelop the Plano, Texas, headquarters of J.C. Penney Co. say they have been tripped up by the reluctance of lenders to get involved with a project that depends heavily on the health of the struggling retailer. ”

      “The group led by Sam Ware and Jeffrey Blakeley bought the 1.8 million-square-foot building and about 45 acres of land from J.C. Penney three years ago in a deal valued at $453 million, including planned upgrades. Its strategy was to improve the sprawling building and add over $500 million of new retail, housing and hotel development. J.C. Penney agreed to continue to occupy and pay rent on two-thirds of the building until 2032. Now the project, named the Campus at Legacy West, is running into trouble refinancing $384 million of debt because prospective lenders are concerned about J.C. Penney’s future. “

      Who cares about JC Penny? If they go under, you still have a beautiful building in a booming suburb to lease to someone else, don’t you?

      “Mr. Ware said that even if J.C. Penney moves out of the building before its lease expires, his group won’t have trouble leasing the space because the office market is hot and the company has been paying below-market rents. He said the property has been appraised for $200 million to $300 million more than the existing debt.” “There’s nothing but upside here,” he said.

  14. A report from Reuters. “The coronavirus crisis is likely to cut home and office building prices, may lead to a permanent shift in the demand for office space, and could push highly indebted households and companies toward default, Boston Federal Reserve bank president Eric Rosengren said on Wednesday. ‘For both homes and apartments as well as office properties we are likely to see softening of prices in some markets and maybe a fairly significant softening over time,’ Rosengren said.”

    Rosengren, who in recent years has warned that historically low Fed interest rates encouraged unhealthy levels of borrowing, also said that overhang of debt could worsen the recession to come and slow the recovery from it. ‘When you have a black sawn event like this individuals and firms that are very levered have much more difficulty in making sure they can manage through,’ Rosengren said, adding he expected banks will see more commercial real estate borrowers fall behind on payments.”

    “Boston Federal Reserve bank president Eric Rosengren said…”

    “Rosengren, who in recent years has warned that historically low Fed interest rates encouraged unhealthy levels of borrowing,”

    – In the Fed we have an arsonist in the fire department. The fire department only has a firehouse on Wall St. There are no firehouses on Main St.

    How did we get “historically low Fed interest rates”? Didn’t the Fed set them (ZIRP)? Doesn’t that lead to speculation and asset price inflation? Didn’t they see that happen in housing bubble 1.0 leading up to the GFC 1.0? I’m sure the Greenspan Put had no impact on the dot com bubble that popped in 2000 either. Serial arsonists all, and yet they still have a job. The quickest way out of this mess is to fire their a$$es; all 18K Fed employees. Shut it down. After three spectacular failures in 20 years, is there any question?

    – The Fed created the conditions for this financial collapse by blowing “The Everything Bubble.” The virus/pandemic was the pin that popped the bubble(s). General truism: The Fed blows.

    1. In the 80’s and 90’s: “the fed doesn’t set long term interest rates.”

      And “monetizing US debt would be illegal.”

      At some point under Greenspan: “the fed has lost control of long term interest rates.”

      1. “the fed doesn’t set long term interest rates.”

        Hmmm…

        Federal Reserve’s unprecedented interventions
        Wednesday, April 1, 2020 10:08 AM
        By Dr. Ron Paul
        Former Congressman
        The Ron Paul Institute

        September 17, 2019 was a significant day in American economic history. On that day, the New York Federal Reserve began emergency cash infusions into the repurchasing (repo) market.

        This is the market banks use to make short-term loans to each other. The New York Fed acted after interest rates in the repo market rose to almost 10 percent, well above the Fed’s target rate.

        The New York Fed claimed its intervention was a temporary measure, but it has not stopped pumping money into the repo market since September. Also, the Federal Reserve has been expanding its balance sheet since September. Investment advisor Michael Pento called the balance sheet expansion quantitative easing (QE) “on steroids.”

        I mention these interventions to show that the Fed was taking extraordinary measures to prop up the economy months before anyone in China showed the first symptoms of coronavirus.

        Now the Fed is using the historic stock market downturn and the (hopefully) temporary closure of businesses in the coronavirus panic to dramatically increase its interventions in the economy.

        Not only has the Fed increased the amount it is pumping into the repo market, it is purchasing unlimited amounts of Treasury securities and mortgage-backed securities.

        This was welcome news to Congress and the president, as it came as they were working on setting up trillions of dollars in spending in coronavirus aid/economic stimulus bills.

        Recently, the Fed announced it would start purchasing municipal bonds, thus ensuring the state and local government debt bubble will keep growing for a few more months.

      2. “A body of men holding themselves accountable to nobody ought not to be trusted by anybody.” – Thomas Paine

        “When the President [the Fed] does it, that means that it’s not illegal.” – Richard M. Nixon [Boston Federal Reserve bank president Eric Rosengren]

        1. “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”
          ― Frédéric Bastiat

          1. One of the best quotes of all time, and it perfectly sums up the current state of affairs. And he was an economist. Now we have hacks like Paul Krugman. Man, I’d love to kick that guy in the teeth.

  15. This Pandemic Is Not Your Vacation
    You might not want to spend your quarantine in a city. But the rural places many Americans treat as playgrounds, and the workers who keep them running, will suffer for it.
    By Anne Helen Petersen
    Posted on March 31, 2020, at 3:30 p.m. ET
    Idaho Highway 75 outside of Sun Valley, Idaho.

    The journalists at BuzzFeed News are proud to bring you trustworthy and relevant reporting about the coronavirus. To help keep this news free, become a member and sign up for our newsletter, Outbreak Today.

    “Wealth is the vector.” That’s what sociologist Tressie McMillan Cottom tweeted last week, in reference to the spread of COVID-19 across both the globe and the United States. Wealth is not the cause of every concentrated outbreak dotting the United States. But it’s the common denominator of so much of its spread outside of major urban areas. It’s the reason why so many of the coronavirus hot spots in the Mountain West — Sun Valley, Idaho; Gunnison County, Colorado; Summit County, Utah; Gallatin County, Montana — overlap with winter playgrounds for the wealthy. The virus travels via people, and the people who travel the most, both domestically and internationally, are rich people.

    1. Penicillin was discovered in 1928, and that was a great discovery.

      I heard a Dr. say years ago that cost saving created a problem in the medical industry. Rather than clean more in hospitals they decided they would save on cleaning costs by just giving penicillin or another antibiotic to a person who caught a germ at the hospital.

      Than you fast forward to modern times and what developed were “Super Bug germs” that were immune to antibiotics.

      Anyway it would be nice if some new discovery comes out of this pandemic, but like anything it can’t be abused.
      Penicillin was discovered by accident when some green mold from a sandwich got in a dish at a lab by accident. Greatest medical discovery maybe ever.

  16. I think we need to act fast and if that means that on the margins some people abuse the system, I’m sure the system catch up with them.’”

    Hey Sanjiv, in a country where 66 million voters nearly elected a one-woman crime spree with a 30-year history of scandals, influence-peddling, and corruption, the fraud won’t be “on the margins.” It’ll be massive and all-pervasive, reflecting the breakdown of public and private morality and civic virtue over the past 50 years.

  17. “Between virtual tours and digital closings, realtors are hopeful they might be able to keep selling houses amidst the global pandemic that is keeping many Americans in their homes.

    Hope was the last and most dangerous thing in Pandora’s box.

  18. ‘The homes aren’t selling, inventory is growing, and buyers are on the sideline,’ Tarek El Moussa, host of HGTV’s ‘Flip or Flop,’ said.

    It’s gotta be a sick feeling for the “I’m not giving it away!” greedheads as it sinks in that the Ship of Greater Fools has sailed, and it ain’t coming back.

  19. ‘I don’t have a sense, other than it’s going to be catastrophic.’”

    Au contraire, Mr. Miller. Watching the Fed’s Everything Bubble bursting is cause for celebration for the prudent and responsible who sat out the madness of the past 11 years.

  20. Texas had one of the biggest percentage jumps, increasing 28%. Foreclosures were up 63% in Nevada, 49% in Oregon and 47% in Washington, according to Attom Data.

    Is that a lot?

  21. Q: I guess that business has, unfortunately, evaporated for you right now. A: Yeah. But, ironically, there’s an opportunity there. There’s some vacancy that we can take advantage of. And we’re trying to repurpose that to help people out.

    Q: I see. For an alternative perspective, we’ve invited Mr. Boo Randy down to our studio. While Mr. Randy has no real estate credentials to speak of, he is a heavily moderated poster on the Ben Jones Housing Bubble Blog, and uses only the most expensive hair care products. Boo, what’s your take on all this?

    A: You’re delusional, Steven. The only “opportunity” awaiting you and your business model is a reaming straight out of DELIVERANCE. But I’ve prepared a map of soup kitchens and food banks, as well as bridges, off-ramps, and tunnels, that will help you transition to the post-solvency phase of your corporate short-term housing scheme.

    Host (visibly disconcerted): That view seems at odds with those of most economists and real estate analysts, Mr. Randy. Do you have any helpful advice for investors who are caught on the wrong side of this downturn?

    A: Why yes, I do. Die, speculator scum. Just die already.

    Host: Security! Could you please escort Mr. Randy from the premises?

  22. “prospective buyers without a deposit or equity worth at least 40% of the property’s value will no longer be able to secure a mortgage”

    Lol. Imagine paying these peak bubble, borrowed-funny-money, zero-down prices; yet forking over 40% of the price in cold hard cash. As if.

  23. However, since the beginning of March, sales have been steadily declining, especially over the past week. It is impossible to sell,’ said Chhunhiet.”

    Not if you do enough sawin’ and slashin’ to catch down to the market, Chhunhiet.

    1. The surgeon general was just parroting the party line. Look at what the Navy did to the former CO of the USS Theodore Roosevelt.
      Most US half wits knew that some nose & mouth protection was better than none at all.

  24. ‘Gov. Newsom appeals to 11 states that haven’t ordered residents to stay home. “What are you waiting for? What more evidence do you need? If you think it’s not going to happen to you, there are proof points all over the United States, all over the world,” California Gov. Gavin Newsom said Wednesday.’

    Stamp those little feet guvna!

    ‘Alabama, surrounded by states who just announced they’d be implementing stay-at-home orders, has not issued a similar order.

    “Many factors surround a statewide shelter-in-place,” Gov. Kay Ivey’s office told CNN affiliate WSFA, “and Alabama is not at a place where we are ready to make this call.” One of the governor’s concerns is the impact the order would have on businesses and residents whose “well-being also relies on being able to have a job and provide for themselves and their families,” the affiliate reported.’

    https://ktla.com/news/california/what-are-you-waiting-for-gov-newsom-appeals-to-11-states-that-havent-ordered-residents-to-stay-home/

    1. Can we get Newsom to make his order permanent? Californians locked inside their houses sounds like heaven to me.

      1. Kelly.Annie, get out there & spin the Deeth.👾.knob.handle.killa.germ deaths like the “True.Believers” of el Presidente Duterte does it.

        Shoot them dead”: Philippine President Rodrigo Duterte orders police and military to kill citizens who defy coronavirus lockdown

        BY CHRISTINA CAPATIDES
        APRIL 2, 2020 / CBS

        I will not hesitate. My orders are to the police and military, as well as village officials, if there is any trouble, or occasions where there’s violence and your lives are in danger, shoot them dead,” he said in a mix of Filipino and English in the televised address. “Do not intimidate the government. Do not challenge the government. You will lose.”

        So far, actions taken by authoritarian governments have proven most effective in stemming the spread of the virus – asking citizens to sacrifice privacy and some of their freedoms in exchange for public health.

        On Thursday, as often happens after Duterte makes these sorts of inflammatory public remarks, Filipino officials rushed to insist that the president was simply using hyperbole to communicate the gravity of the situation.

        “Probably the president just overemphasized on implementing the law in this time of crisis,” Philippine National Police Chief Archie Gamboa said, adding that officers understood that they were not actually being instructed to kill troublemakers.

      2. Who’$ gonna be left standing after the killa.👾.knob.handle.deeth.germs finishes up circling the Globe, disguised as: “it’s just a common.cold folks!”

        Bolsonaro is leading Brazil to coronavirus catastrophe

        The Canary / Fiona Edwards ‌ / 2nd April 2020

        Brazil’s far-right leader Jair Bolsonaro is pushing Latin America’s largest nation to the brink of catastrophe. In a country of over 210 million people, Bolsonaro’s inaction and outright denial of the real threat that the coronavirus (Covid-19) pandemic presents is risking the premature and unnecessary death of hundreds of thousands of people. With the stakes so high, Bolsonaro is facing unprecedented opposition from millions of Brazilians as pressure builds for him to resign as president.

        His extremely dismissive attitude to the coronavirus, which he persistently describes as a “little flu“, emulates Donald Trump’s repeated downplaying of the pandemic.

        Bolsonaro’s approach is essentially to allow coronavirus to spread uncontrollably through the population, taking no serious measures to prevent it. This approach is very similar to the “herd immunity” strategy initially advocated by Boris Johnson and the British government on 12 March, which was only modified after a public outcry. The UK’s modifications, however, have proved too small and come too late to prevent the catastrophe which is now unfolding. At the time of writing, around 3,000 people have died from coronavirus in the UK, and the number of new daily cases continues to rise. Data from the Financial Times suggests that the UK and US responses to the coronavirus have been the worst in the world, with the death toll accelerating on a steeper trajectory than Italy and Spain.

      3. LOL! I was thinking the same thing. Throw in NY, I’m sure most of the east coast would like to quarantine them permanently. Maybe Fauci is *right*, lockdown until there are zero cases, lmao!

    2. I had to run out to the feed store for some food for the pooch. I have never seen such an event, and I’ve been going there for years. Vehicles lined up out the drive onto the road, with workers loading hay and every type of feed into trucks and autos. Long lines to pay for everything. So much for sheltering in home and social distancing. It was an “everybody come together!” moment.

      I was one of only a handful wearing a mask – an N-95 with a bandana covering it, a stocking cap and a pair of glasses to complete the full head gear. After getting my loot, I tossed it in the back of the pickup and grabbed my waiting Clorox wipe to sanitize everything myself and others had touched, then squirted some alcohol based hand sanitizer on my bare hands to kill anything left. It’s a jungle out there.

      1. Was at Sam’s Club yesterday. It wasn’t busy at all. Mostly fully restocked, including the meat counter (I picked up some nice T-Bones for $7/lb)

      2. I went to Walmart yesterday morning, 0730-hrs. I did notice the shopping carts were really full again. The bakery aisle was cleaned-out, again; ditto for the cleaning supplies. Otherwise, I got everything on our list.

  25. The Keynesian fraudsters at the Fed are up to their old tricks, but you’d never know it from reading the MSM.

    https://www.counterpunch.org/2020/04/02/the-dark-secrets-in-the-feds-last-wall-street-bailout-are-getting-a-devious-makeover-in-todays-bailout/

    From December 2007 to November 10, 2011, the Federal Reserve, secretly and without the awareness of Congress, funneled $19.6 trillion in cumulative loans to bail out the trading houses on Wall Street. Just 14 global financial institutions received 83.9 percent of those loans or $16.41 trillion. (See chart above.) A number of those banks were insolvent at the time and did not, under the law, qualify for these Fed loans. Significant amounts of these loans were collateralized with junk bonds and stocks, at a time when both markets were in freefall. Under the law, the Fed is only allowed to make loans against “good” collateral.

    Six of the institutions receiving massive loans from the Fed were not even U.S. banks but global foreign banks that had to be saved because they were heavily interconnected to the Wall Street banks through unregulated derivatives. If one financial institution in this daisy chain of derivatives failed, it would set off a domino effect.

    1. the Federal Reserve, secretly and without the awareness of Congress, funneled $19.6 trillion in cumulative loans to bail out the trading houses on Wall Street.

      cumulative loans

      Oh my.

      If I loan you a dollar today any you repay it in the morning, and we do that for a month, how many dollars is that?

      Unknown to Congress? Don’t they read the news?

    1. can’t be used on coronavirus patients This depends on which health expert you consult. If you consult 2 experts on any medical matter, you will get at least 3 conflicting opinions.

  26. So stocks were up because the U.S. is joining OPEC as a junior, subservient member. Great.

    1. Hark!, thee.🍊.jesus $peaketh:

      👀👂🏾: “$ucker$!

      Politic$ & Policy

      Trump’$ 10 Million$ Barrel$ Tweet Is Performance Art

      The pre$ident, Ru$$ia and $audi Arabia all gain from pretending to have power over an oil market already out of control.

      Bloomberg / By Liam Denning
      April 2, 2020

      Get the obvious out of the way. “I expect & hope,” “maybe,” and “if it happens” are not caveats to be ignored, especially coming from the president who oh-so-recently said coronavirus would disappear “like a miracle.” Initial reports from Saudi Arabia and Russia certainly came across a little more tempered about what had (or hadn’t) been agreed. We can assume that the tweet’s “10 Million Barrels” (and subsequent “15 Million”) figure is probably supposed to be 10-15 million barrels a day, although one can’t entirely rule out the possibility of MBS (Crown Prince) simply throwing out a large-sounding number and then saying “sorry DJT (President), you’re breaking up; try lat-”.

      There’s an implacable mathematical problem confronting all oil producers: The world will soon run out of places to store excess barrels. Trading house Trafigura now estimates 35 million barrels a day — or one-third — of global oil demand has disappeared amid Covid-19 related distancing. When storage maxes out, oil prices will crash further. That will wreak havoc on frackers, but will also accelerate the burn rate on Russia’s and Saudi Arabia’s financial reserves. When refiners stop taking all that crude oil, production will be cut anyway.

    2. It will take awhile for traders to realize that supply cuts have limited effect in the face of collapsed demand.

      1. The global storage is running out. I’m concerned that some idiot might take a tanker or two out to sea and “liquidate,” if you know what I mean.

      2. IIMHO, I think unless you have a N95 mask you could get the bug anywhere.

        Ok, they need the masks for the medical workers, but don’t try to tell me the people didn’t need them also. I would wear one in any grocery store but I don’t have that option like most people don’t. I have to take the chance or starve.

        I have ways of protecting myself that I will employ but I hate being lied to.

        1. you have a N95 mask you could get the bug anywhere. FDA sez: “The ‘N95’ designation means that when subjected to careful testing, the respirator blocks at least 95 percent of very small (0.3 micron) test particles. If properly fitted, the filtration capabilities of N95 respirators exceed those of face masks. However, even a properly fitted N95 respirator does not completely eliminate the risk of illness or death.”
          If you happen to live alone on, say, an island in Lake Michigan which gets no human visitors, you would be extremely unlikely to become a COVID-19 patient. You might well starve or freeze to death, though.

          1. tresho,
            I hear you. Just venting a little. I’m actually not that worried about me but more so about a super high risk friend who keeps going to the grocery stores.

          2. I used to use N95 masks for dust protection. The metal clip on the nose was a constant source of fiddling. I move up to the rubber mask with the twist on filters. The ones I have are P100.

            I’ve been giving the N95 masks stored in the cupboard away.

          3. The metal clip on the nose was a constant source of fiddling.

            Just what I thought. So much for not touching your face. (Not you specifically 🙂)

          4. So much for not touching

            Not to worry. We’re informed that a “little” exposure is a very good thing, as it makes you immune bit by bit. I actually asked my daughter in nursing college about this and she explained it to me. That’s what they’re teaching. So thanks for the education.

            Now, if your immune system isn’t up to the task, you’re not going to join the herd immunity party. My dad was dying slowly from lymphoma until he died suddenly from a flu virus.

            He spent the week after Thanksgiving deer hunting with me out in the hills, then Christmas with a gaggle of grandchildren. New Years he was suddenly gone. I’m playing chess with one of my grandsons over the smart phone.

          5. We’re informed that a “little” exposure is a very good thing, as it makes you immune bit by bit.

            Here on HBB is the first time I’m seeing this argument and I’m not buying it. I gladly welcome more information that this is true.

            My dad was dying slowly from lymphoma until he died suddenly from a flu virus. He spent the week after Thanksgiving deer hunting with me out in the hills, then Christmas with a gaggle of grandchildren. New Years he was suddenly gone.

            😢

            I’m playing chess with one of my grandsons over the smart phone.

            🙂

          6. Had to laugh this afternoon. Took my son out for a drive in my late mother’s MINI and wanted to play his desired Frozen 2 CD. Jim Croce has been in the player for the last 4 years.

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