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Just Not Something Investors (Or The Lenders Who Sell To Them) Are Interested In

A report from Forbes on what’s happening with FHA loans. “Today should have been the day that Ignacio Paulino closed on his new mortgage loan. But thanks to the coronavirus outbreak—and the fears that it will set off a wave of foreclosures—that’s no longer happening. Paulino applied to refinance his FHA mortgage loan on March 4 and was approved—with conditions—just last week. On Tuesday, he got the news: His loan would no longer close on April 3 as planned. In fact, according to his loan officer, he could no longer get the loan at all. The reason? His credit score—which qualified him for the refinance just a week prior—was no longer high enough.”

“As more and more Americans lose their jobs or see reduced wages because of the virus, the risk of foreclosure goes up. Investors who buy mortgage loans will lose out when that happens—and taking on more risk by lending to lower-credit borrowers? That’s just not something investors (or the lenders who sell to them) are interested in.”

“To be fair, the official minimum of FHA loans—as set out by the Department of Housing and Urban Development—is actually 580. If you can make a 10% down payment, it’s just 500. But those are only minimums to qualify for FHA insurance. Lenders set their own credit score requirements based on how much risk they’re willing to take on. And according to Paulino’s conversation with his lender, their new FHA FICO minimum is now 680—well above HUD’s established floor.”

“A look at rate sheets from lenders across the country reveals a similar theme. Credit score requirements are either much higher than the official FHA minimum (one lender’s floor was 740), or tiered interest rates make the loans virtually unaffordable for lower-credit borrowers (another lender added 15% for scores between 600 and 619).”

“The result is a mortgage market that essentially shuts out buyers (and existing homeowners) who don’t have sterling credit. It also throws off in-progress loans like Paulino’s. (He was even told that some already-closed loans would no longer be funded due to the change—though his loan officer declined to confirm this).”

“‘Folks like me—who are simply waiting to close on their home loans—are being dropped out of the blue because investors don’t want to pay,’ Paulino said. ‘I understand that a lot of people are going to miss payments and investors have a right to be concerned, but I thought the fact that this was an FHA loan, that this would serve as a safety net for investors in the event that I or anyone would default due to the current situation. I guess not.'”

This Post Has 69 Comments
  1. I’m going to be posting more often as there is so much to keep up with. I didn’t want to let this article slip past as it’s critical to understanding what’s happening – so fast!

    1. Anyone who lived through 2008 and has chosen to be willfully ignorant of the cruel lessons taught in that crisis deserves everything they’ve got coming. It’s not that complicated:

      DEBT IS SLAVERY.

      1. I started coming to Ben Jones’ site well before the 08′ crash, which was instrumental in saving my own ass. Everyone, and I mean EVERYONE…friends, family, coworkers and the like were hard-selling me to buy a new house(s), car(s), cell phones that make pancakes and scratch your balls and anything else they thought I was missing out on. But all the while I just kept saving/investing and staying out of debt. My car is old, my couch is old, my cell phone and service is cheap, my appliances are old, but, mysteriously all seem to serve me just fine.
        Saving outside the stock market (cash on the sidelines) has been viewed for decades by the irrationally exuberant masses as stupid. We’ll. I’ve got a little story for you: At the beginning of WWII right after Japan tore us a new one at Pear Harbor, our Government and Military, which were both much smaller, realized they needed a sh*t-ton of money–and right F’n quick. So, did they ham-handedly have the FED print worthless greenbacks out of thin air to pay for all those tanks, planes and bullets? NO. They went straight to where they new that sh*t-ton of hard money they desperately needed was.
        Where was all that cash, you ask? Simple . Us. That’s right, Boys and Girls…The Citizens of the USA. Why? How? Because back then, (drumroll) people…were…savers. Imagine that! What a concept! Waitresses, Janitors, Teachers, Plumbers, all the way up the tree were all SAVERS. The Government asked us to buy War Bonds with our hard-earned SAVED cash and we stepped up.
        What I’ve learned over the decades (I’m in my early 60’s) is most people these days hate/avoid uncomfortable facts/reality and love/embrace irrational, risk-laden schemes that make them feel giddy. Others, who’ve exercise prudent caution and saved have all been labeled chicken-sh*ts and dumbasses who were “missing out” on higher risk returns…until the shit hits the fan and then they’re (savers) viewed with undeserved hatred.
        Saving be damned. “I want my stuff and I want it NOW” has been the new mantra of the masses.
        Fiscal/personal responsibility? F*ck that.
        Fiscal/personal accountability? F*ck that.
        Delayed gratification? F*ck that.
        Don’t worry everyone, just keep partying, borrowing and spending to oblivion, because, after all…Big Daddy Government will print to infinity and save us all.

  2. ‘I understand that a lot of people are going to miss payments and investors have a right to be concerned, but I thought the fact that this was an FHA loan, that this would serve as a safety net for investors in the event that I or anyone would default due to the current situation. I guess not’

    Government backed doesn’t mean government guaranteed. Remember all the lawsuits and settlements from last decade? They are ongoing.

    FHA is entry level. Soon you’ll be hearing about “buyers can’t move up.”

    1. Government backed doesn’t mean government guaranteed. Remember all the lawsuits and settlements from last decade? They are ongoing.

      The TBTF bank I worked at took a hit over $120 MM on GNMA loans (triple damages due to Civil war era law) and we really did run a pretty conservative mortgage group. But, of course, if you don’t loosen up guidelines some, all the MLOs leave and go to “Countrywide.”

      No “Countrywide” this bubble at least not to the from what I hear.

    2. I thought the fact that this was an FHA loan, that this would serve as a safety net for investors in the event that I or anyone would default due to the current situation.

      I assume the fact that he’s already thinking about that means that for sure he’s not one of those people who might be tempted do take advantage of such a thing?

    3. I think about August or so will be a good time to pick up a vacation home. It will be capitulation time for the part time airbnbers.

  3. “The result is a mortgage market that essentially shuts out buyers (and existing homeowners) who don’t have sterling credit.”

    Paying double or triple actual value for a depreciating asset with a subprime mortgage?

    You better have solid gold credit.

  4. Hard Times In Age Of Coronavirus: Quarter Of Americans Have No Emergency Savings – Study Finds
    https://www.studyfinds.org/hard-times-in-age-of-coronavirus-quarter-of-americans-have-no-emergency-savings/

    (snip)

    “A total of 1,100 Americans were polled, and one in four (25%) said they don’t have any emergency savings at all. Another 23% only have enough to get by for three weeks. While there is some help on the way in the form of $1,200 government stimulus checks, 42% said they’ll have to immediately spend that money on bare essentials like groceries.”

    1. “spend that money on bare essentials”

      New i-phone.
      $600 truck payment.
      Starbucks.
      Cable TeeVee.
      “Buying” a house for more than 1.5x household income.
      Taking pictures of any discretionary consumer product/service and posting it on social media.

      The stupid… it burns 🙁

      1. ‘The price of Crude oil, has fallen by more than 60 percent this year to around $ 25 per barrel. If you look at the price per liter in Indian rupee, then it will be around 12 rupees per liter. While the price of one liter of bottled water is running around Rs 15 in the market. That is, crude oil is now being sold cheaper than water.’

        https://www.inventiva.co.in/stories/inventiva/crude-is-now-cheaper-than-water-why-is-the-government-not-reducing-the-price-of-petrol-and-diesel-explained-in-3-points/

        1. “Beauty is only skin deep, but ugly goes clean to the bone.”
          ― Dorothy Parker

          ‘I can only describe this week’s price action in the ag commodity markets as ugly. It doesn’t get much uglier than front month hog futures dipping down to October 2002 prices or cotton futures hitting the lowest readings since 2009. Old crop corn futures were the lowest since 2016. Crude oil had dipped to 2001 levels the previous week and then was rescued by the potential for a production cut deal. At times like these we need to remember the famous market axiom that “low prices cure low prices”.

          ‘Live cattle futures plunged more than 12% this week, anticipating sharp declines in both wholesale beef and cash cattle prices over the next 27 days (until April futures expiration). Cash trade dropped from $115 the previous week to mostly $105 at the end of the week. but April futures are calling for a drop to $88 by the end of the month. Is this speculative excess? Panic liquidation by fund longs running out of money? Or an accurate assessment of a coming decline in beef prices due to all the restaurants being forcibly closed? The market is still trying to sort that out. Feeder futures were down 10.6% this week as they just plain don’t “pencil” at the futures prices being observed.’

          ‘April lean hog futures plunged 31.2% in a single week, reaching the lowest level for nearby futures since 2002. As with cattle, futures are discounting a substantial drop in cash hog prices over the next two weeks (until April futures expiration).’

          https://www.agweb.com/blog/some-kind-ugly

          1. “Futures Lean Hogs Chart Monthly”

            Still seeking a bottom off the 2014 peak, six years later.

          2. Protein $ales have for the most part knot been put on the grill. Forward demand is now $tored in millions of two.leggeds freezers.

            Fyi: (“other $olution$)
            (For those interested in local beef, see beefusa(dot)org for local supplies other than Walmart or Omaha.)

            Hope ya don’t mind Mr. Ben

        2. ‘While the price of one liter of bottled water is running around Rs 15 in the market. That is, crude oil is now being sold cheaper than water.’

          Makes sense, because there’s a lot more oil than water in storage, with more on the way, and you can’t drink it. What use is oil when nobody is driving, boating, or flying much?

          1. “What use is oil when nobody is driving, boating, or flying much?”

            Didn’t the Venezuelans arrive at a similar conclusion?

    2. Spending one’s money on bare essentials and saving the rest implies only a tiny fraction of the current consumer economy would be able to exist.

      1. Yeah, but imagine if then people came up with something to do that other people really wanted or needed rather than just scamming and grifting?

  5. The year’s hottest new cars just got cold as ice – BNN Bloomberg
    https://www.bnnbloomberg.ca/the-year-s-hottest-new-cars-just-got-cold-as-ice-1.1416838

    (snip snip snip)

    “At least three years and about US$1 billion. That’s roughly what it takes to make a new vehicle, from drafting table to dealerships.”

    “The global auto industry of 2020 is witnessing an unprecedented, near-instantaneous drop in demand as potential customers steer clear of car lots, and dealers close up shop to comply with public health mandates. Volkswagen, Honda, Hyundai, and Mazda each reported a more than 40 per cent decline in U.S. sales last month. For the year, S&P expects global auto sales to plummet almost 15 per cent.”

    “In North America alone, the pandemic is destroying US$12 billion in potential sales each week while scrapping 331,000 vehicles that would otherwise have come off of assembly lines, according to Bloomberg Intelligence. Still, U.S. automakers like Ford hope the second half of 2020 will allow them to make up some lost ground.”

    1. Volkswagen, Honda, Hyundai, and Mazda each reported a more than 40 per cent decline in U.S. sales last month.

      I’ll bet April’s numbers will be even worse.

      So, when are those 50% off sales?

      1. So, when are those 50% off sales?

        Toyota suffered a 30% decline in sales. They responded by cutting incentives. LOLZ.

        1. I wonder if today’s Toyotas are as bullet proof and long lasting as they were in the past. I read about a recent Corolla recall where they had to replace the transmissions (CVTs). Will the replacements last 200-300K miles, or will they break early like other CVTs are prone to do?

          It seems that most new cars have either CVTs or one of those dual clutch automatics. Slushboxes seem like an endangered species these days.

          1. “I wonder if today’s Toyotas are as bullet proof and long lasting as they were in the past.”

            I doubt it as the emissions and safety equipment has become much more sensitive and sophisticated. I’m with you on the CVT drivetrain, not yet proven.

        2. Makes sense from a bean-counter point of view. People who are buying now (feel like they) HAVE to buy a car. Why cut your profit margins with marketing programs when volume is so low to begin with?

          1. Because you have bills to pay and need cash flow? I don’t know, I guess I’m old-fashioned.

  6. Archive dot is ad-block paywall bypass of Washington Post — Facing coronavirus pandemic, Trump suspends immigration laws and showcases vision for locked-down border:

    “Citing the threat of “mass, uncontrolled cross-border movement,” the president has shelved safeguards intended to protect trafficking victims and persecuted groups, implementing an expulsion order that sends migrants of all ages back to Mexico in an average of 96 minutes. U.S. Border Patrol agents do not perform medical checks when they encounter people crossing into the country.

    Homeland Security officials say the measures are necessary to protect U.S. agents, health-care workers and the general public from the coronavirus. Tightening controls at the border and preventing potentially infected populations from streaming into the United States minimizes the number of detainees in U.S. immigration jails and border holding cells.”

    http://archive.is/unDl0

    This is a globalist narrative:

    “We created this situation at the border where there are thousands of people in these shelters waiting for their numbers to be called … If people get sick in the shelters, their deaths are going to be our faults. They are in these conditions that will ultimately lead them to their deaths or severe disability. And why? Because they were scared enough to leave the only country they knew, to seek refuge.”

    The United States is not an all you can eat buffet for the world’s poors.

      1. dtRumpsis has some very descriptive adjectives to describe those needed ag workers, applies to each & every one of ’em.

      2. an exception for seasonal ag laborers Back in my little town of origin, in the middle 1950s, they were also referred to as “local kids out of school for the summer”. I picked a lot of cherries for 50 cents a lug. Friend of mine hoed potatoes. In northern Michigan in the 1930s schools adjourned for a week or so when the potatoes needed harvesting. I wonder if we will come back to that…

        1. Good point. My dad worked 18 hour days in Del Monte “pea pack” during the summer years of his youth, and saved some money that probably came in handy when trying to afford raising four young’ns.

  7. Half of Small Businesses Haven’t Paid Full April Rent, Early Poll Suggests

    Bills become out of reach as coronavirus forces companies to close and customers to stay at home

    ‘The remaining half reported paying their entire rent on time. Only a quarter of respondents said their landlord or bank offered a reduction or deferral on what they owed. The survey was of companies with up to 50 employees, including retail, restaurant, auto-repair and other small businesses.’

    ‘The preliminary findings illustrate the crisis affecting small businesses and how their troubles could set off a financial chain reaction that could inflict heavy damage on landlords and lenders across the U.S.’

    “I think this shows the time-sensitive need for the policy response to get liquidity in the hands of small businesses,” said Michael Feroli, chief U.S. economist at JPMorgan. “Half of all small businesses have only 15 days or less worth of cash buffers, and with shelter-in-place orders likely to persist they will need to replace lost revenue in a hurry.”

    https://www.wsj.com/articles/half-of-small-businesses-havent-paid-full-april-rent-early-poll-suggests-11585945604

    When I was a public accountant in Austin, I often worked on taxes/payroll for companies that were losing money. And that was during “good” times.

  8. This is the top bold font link on Drudge right now, Wall Street Journal — The Coronavirus Pandemic Will Forever Alter the World Order, authored by war criminal Henry Kissinger:

    “safeguard the principles of the liberal world order. The founding legend of modern government is a walled city protected by powerful rulers, sometimes despotic, other times benevolent, yet always strong enough to protect the people from an external enemy. Enlightenment thinkers reframed this concept, arguing that the purpose of the legitimate state is to provide for the fundamental needs of the people: security, order, economic well-being, and justice. Individuals cannot secure these things on their own. The pandemic has prompted an anachronism, a revival of the walled city in an age when prosperity depends on global trade and movement of people.

    The world’s democracies need to defend and sustain their Enlightenment values. A global retreat from balancing power with legitimacy will cause the social contract to disintegrate both domestically and internationally.”

    https://www.wsj.com/articles/the-coronavirus-pandemic-will-forever-alter-the-world-order-11585953005

    Ben Jones I just looked at my passport and it says United States of America. I pay my taxes and obey the laws here but I don’t remember signing a “social contract” obligating me to pay for or care about the problems of the rest of the world.

    1. Drudge is another I don’ bother with anymore.

      ‘prosperity depends on global trade and movement of people’

      What’s funny about the trade thing is this ass-hat has never worked a day in his life, and couldn’t run a real business if his life depended on it. People illegally immigrating, driving down wages (throw in a few DWI’s) and weakening the safety net isn’t prosperity. Globalists have made money by shifting jobs to cheap labor, then to cheaper labor, etc. Ruining the environment and creating labor disasters everywhere they go. It’s an unsustainable race to the bottom that has failed. It’s not about Brexit, it’s not about the current president. It is about what we are going to do next.

    2. “…”signing a “social contract” obligating me to pay for or care about the problems of the rest of the world.””

      Thee $717+ Billion$ (yearly) of U$ Military $pending is derived from ALL USA taxpayer$.

      (Are you inferring that you don’t feel obligated to pay certain taxe$?) good.luck with the IRS with that argument.

  9. ‘Cash rents are down across all regions of North Dakota from 2019 to 2020. The largest drops are in the northwestern region falling 8.2%, the south-central region falling 8.7% and the southeastern region falling 7.6%.’

    ‘The north-central, southwestern and east-central regions experienced cash rental declines between 1 to 2%, for a statewide average decline of nearly 5%. The most expensive pastureland rental rates continues to be in the southeastern region at $31.70 per acre or $44.65 per Animal Unit Month (AUM), while the least expensive is the northwestern region at $11.1 per acre or $16.82 per AUM.’

    “Regionally, pastureland values across North Dakota were more mixed,” says Parman.“While the statewide average did decline nearly 3%, some regions show modest increases while others declined, in some cases dramatically.”

    ‘Two NDSU regions increased modestly in value from 2019 to 2020 including the south-central region and southeastern region. The south-central region increased approximately 1.1% from $1,042 per acre to $1,054 per acre, while the southeastern region increased from $1,437 per acre to $1,489 per acre or approximately 3.6%.’

    ‘The two largest declines in pastureland values occurred in the northwestern region and east-central region. The northwestern region fell from $630 per acre to $552 per acre or a decline of 12.4% while the east-central region fell from a high in 2019 of $1,052 per acre to $948 per acre or a drop of 9.9%.’

    “The 2020 Department of Trust Lands survey was conducted before the effects the COVID-19 crisis had a chance to be felt across the livestock industry,” says Parman. “Livestock markets have moved dramatically lower in recent weeks and should they persist well below 2019 prices for much of the year, it will likely have an impact on pastureland prices and rents heading into 2021.”

    ‘Parman concludes, “Also of note will be any government assistance provided to livestock producers, which may help prop-up net incomes during the year. In essence, the drop in pastureland values and rents across North Dakota seen from 2019 to 2020 could continue downward as livestock producers grapple with low prices and uncertainty.”

    https://www.newsdakota.com/2020/04/03/n-d-pastureland-values-decline-in-2020/

      1. Unlike dtRumpsis advice to farmers, now is perhap$ knot the time to buy Deere $800,000 tractor$.

    1. Same solution as there is for the milk. Instead of these convoluted loans and crap, cut the financial BS and just outright BUY the hogs and steers, can it, and hand it out to those who need it. Canned meat is highly nutrient dense and lasts a long time.

      Heh, canned food has its uses. I read an article about poor Venezuelans migrating to Columbia. Govs and NGOs were giving them cans of tuna so they wouldn’t starve. Cans of tuna quickly became currency.

      1. people are flooding food panties so why not give the milk to them? Ive also noticed lately the past year Milk never seems to make it to the sell by date without going bad…our fridge is cold enough…

        1. I’ve been drinking “lactose free” milk for the past few years. Unlike the regular stuff, it’s Ultra High Temperature pasteurized, and as long as you don’t open it it typically has a “use by date” that is about two months long, and I’ve found it does last.

          1. We’ve taken that on a cruise. No refrigeration required until open. Must have for her tea. The First Mate stocked in some powdered milk for the current situation. She says the new stuff is miraculously good.

          2. The lactose free stuff sold in the US requires refrigeration before opening, unlike the stuff sold in Europe (like say Parmalat).

        2. Use ultra pasteurized milk. It keeps a _lot_ longer. More expensive, but then you don’t have to throw much out

  10. ‘As restrictions on movement and nonessential work take hold across the country, coworking spaces have become ghost towns. These spaces — unlike traditional offices that can require five- or 10-year terms — mostly operate on short-term leases, making it easier for tenants to walk away and leaving office-sharing companies unable to pay landlords.’

    “With the spaces now inaccessible, many [cowork] tenants are stopping rent payments even if their lease agreements don’t include a fully articulated force majeure clause,” said Alex F. Cohen, a real estate advisor with Compass in New York City. (A force majeure clause removes liability for unavoidable catastrophes, like the current pandemic, and restricts parties from fulfilling contractual obligations.) “At the end of the current crisis, given, at least short-term, severe economic uncertainty, I expect new and renewed commitments to coworking space to be dramatically off original forecasts.”

    ‘Coworking spaces have contributed to inflated rents in many cities because they account for so much of the real estate space. According to a report by Cantor Fitzgerald, companies like WeWork and Industrious have lowered office vacancy rates while raising rent costs in many cities.’

    ‘Take WeWork: With almost 9 million square feet of space, WeWork is the largest tenant in New York City, noted Adam Henick, co-founder of Current Real Estate Advisors. If even half that space is left vacant, it’s very difficult for the commercial real estate market to absorb it — especially during an economic downtown — which could result in decreased office rents.’

    ‘Even before the pandemic, there had been a slowdown in office-sharing, Henick said. Last fall, there was heightened scrutiny of the business model after WeWork canceled its initial public offering. ‘

    “Since WeWork’s pre-IPO debacle, there was real weakness in the segment and this was already impacting the psychology of the office leasing market, despite very favorable economic conditions,” Cohen said. ‘

    ‘These effects weren’t just felt in the Manhattan market. The market for shared office space was becoming oversaturated in Boulder, Colorado, according to Laura Frenkel, a commercial real estate broker for Market Real Estate, a commercial real estate firm in the city. ‘

    “There are so many options and not enough startup tenants to fill them,” she says. As companies grow, they move out of coworking space and rent office space, Frenkel added, cheaper than a shared office though requiring a long-term lease.’

    ‘Cohen in New York City said that shared-office companies overexpanded in the largest markets in the last 24 months, particularly the fastest growing players. Even before the pandemic, there was a 50% vacancy rate at Knotel locations that opened in 2019, he said.’

    https://www.marketplace.org/2020/04/03/will-covid-19-be-the-death-of-coworking-spaces/

      1. “But quickly, WeWork withdrew its IPO and turned to SoftBank for bailout funding to avoid going bankrupt. Employees were offered the chance to reprice their shares at around $4 each. The former employee, though, still had a tax bill based on the value of the shares at their time of purchase, around $50 apiece. ”

        Dont count your chicken before they hatch?

        Dont gamble in the casino IPO markets?

      1. 2/3 is the new number to be down by at least for oil prices and for select companies.

          1. I am not adept at predicting the eventual depth of stock market declines, and the current one has already exceeded my and almost everyone else’s wildest imaginings.

            But I will state some obvious facts undergirding what is happening now:

            1) There have been four great bear markets since when Alan Greenspan was Fed chairman, including Black Monday in 1987, the tech stock collapse of the early 2000s, the Housing Bubble collapse of 2007-2009+, and the present, ongoing Everything Bubble collapse*.

            2) Greenspan ushered in the so-called “Greenspan Put”, where Fed intervention was routinely used to mitigate large market declines.

            3) A rational belief among market participants that any selloff would be met by a Fed rescue encouraged speculators to play a “privatize profits, socialize losses” strategy of buying stocks at “irrationally exuberant” valuations that reflected the added value of the Fed’s risk subsidy, knowing that a Fed-orchestrated rescue would make them whole again in the event of a selloff.

            4) Each subsequent bear market since 1987 has been more protracted with more lasting damage than the preceding one, reflecting the cumulative imbalances of a market skewed by a policy bias in favor of excessive risk taking. In particular, the rescue following the 2007-2009 crisis was never unwound before the onset of the current market downturn, leaving the Fed with limited scope to employ the traditional remedy of reducing interest rates before running into the zero bound, which their public statements indicate they don’t want to breach (though short-term Treasury yields already have).

            5) Rather than waiting for any dust to settle before acting, the Fed pulled out all the stops very early in the current market turmoil, announcing emergency rate cuts of short-term rates essentially to zero (but accidentally negative due to the flight to cash), “Unlimited Quantitative Easing”, and various targeted market interventions. The European Central Bank similarly announced interventions of unprecedented and unlimited size and scope early on.

            6) After the Fed and the European Central Bank shot off multiple ginormous monetary bazookas, global stock markets responded with continued large volatility waves, punctuated by moves over the span of days or hours that normally take months or years to play out.

            In light of the above, the stock market is currently navigating a perfect storm of volatility generated by the violent tension between a global collapse of real economic activity and unprecedented monetary interventions, and exacerbated by worse-than-anticipated economic impacts of the COVID-19 response and an avalanche of margin calls as leveraged gambles that looked smart a couple of months ago collapse and careen down the steep, snow-packed slope.

            Where and when a bottom will be reached, only God knows.

          2. * I am not merely referencing the frequent recent observation made here and in the MSM that “everything is in a bubble now” as a consequence of the unending period of extraordinary central bank accommodation of ever-increasing magnitude and scope, but also the unusual nature of the recent selloff. Normally gold and long-term Treasurys are reliable safe-havens in periods of market turmoil, as investors selling stocks use them as flight-to-quality investments.

            The current selloff is different, as even gold and Treasurys sold off. This anecdotally was because of a flight to cash to cover margin calls. Never mind that a Treasury bond is no more nor less than a scheduled sequence of future payments in fixed dollar amounts; the demand for cash today versus cash later became so extreme that the short end of the Treasury yield curve (“dollars soon”) was driven to negative levels while the long end (“dollars later”) went up, reflecting discounting of cash money payments in the long-term future relative to cash payments of equal amounts over the next six months.

          3. There’s no shelter from this volatility storm available.

            Business News
            March 15, 2020 / 4:13 AM / 20 days ago
            Haven assets losing their mojo in virus-stricken market
            Saqib Iqbal Ahmed, April Joyner

            NEW YORK (Reuters) – A rush to safety amid a massive drop in stocks has stretched prices for haven assets, leaving investors fewer places to hide in the wake of a freshly-minted bear market.

            Treasury yields stand near record lows, reflecting investors’ thirst for U.S. government bonds in the wake of a stock decline that has seen the S&P 500 give up more than 20% from its record high on concerns that the coronavirus will hit economic growth. The Japanese yen and Swiss franc have both touched multi-year highs against the dollar in recent days, while gold prices hit a seven-year peak earlier this month.

            That avalanche of buying has skewed the normal trading patterns of many haven assets, leaving investors vulnerable to unexpected price swings and periods of illiquidity, adding an extra dimension of risk to a market already fraught with pitfalls.

            Gold, often a popular destination in down markets – fell 3.5% during Thursday’s nearly 10% selloff in the S&P 500 .SPX. The move was likely prompted by investors liquidating their holdings in the metal to meet financing requirements on leveraged positions elsewhere in their portfolio, said Arnim Holzer, macro and correlation defense strategist for EAB Investment Group.

            Prices for the metal fell another 3.3% and Treasury yields shot higher on Friday, amid a sharp selloff in haven assets and a rebound in stocks after U.S. President Donald Trump opened the door to providing what he said would be about $50 billion in federal aid to fight the disease.

            Meanwhile, liquidity in the $17 trillion Treasuries market has deteriorated to its worst levels since the financial crisis, traders said. Some market participants have in recent days complained of being unable to get a satisfactory market price, a result of too many buyers and not enough sellers.

            “The U.S. Treasury bond market is supposedly the most liquid of the financial markets (except the FX market). Yet yesterday there were reports that there was diminishing liquidity in important sectors of the market. That’s unprecedented,” analysts at BDSwiss said in a note to clients on Friday.

          4. “… collap$e and careen down the $teep, snow-packed $lope.”

            One doesn’t need to be exactly @ “thee bottom” of the $lope in order$ to get$ ab$olutely cru$hed by an accelerating AVALANCHE!

            👾…munch, … munch, … munch …

      2. Lung.tissue chewin’ varmints 👾 don’t care$ none ’bout$ you$ two legged’$ eCONomy.

        Monkey.pox!

  11. $audi, Ru$$is, OPEC+ + U$A

    look$ like it ain’t nece$$arily.$o

    $ad.

    SAT APR 4, 2020

    OPEC+ meeting delayed as $audi Arabia and Ru$$ia row over oil price collap$e

    Reuters / By Rania El Gamal, Vladimir Soldatkin and Alex Lawler

    “Washington, however, has yet to make a commitment to join the effort and Russian President Vladimir Putin on Friday put the blame for the collapse in prices on Saudi Arabia – prompting a firm response from Riyadh on Saturday.

    “The Russian Minister of Energy was the first to declare to the media that all the participating countries are absolved of their commitments starting from the first of April, leading to the decision that the countries have taken to raise their production,” Saudi Energy Minister Prince Abdulaziz bin Salman said in a statement reported by state news agency SPA.

    Putin, speaking on Friday during a video conference with government officials and the heads of major Russian oil producers, said the first reason for the fall in prices was the impact of the coronaviru$ on demand.

    “The second reason behind the collapse of prices is the withdrawal of our partner$ from $audi Arabia from the OPEC+ deal, their production increa$e and information, which came out at the same time, about the readiness of our partners to even provide a discount for oil,” Putin said.

    OPEC sources, who asked not be identified, said the emergency virtual meeting planned for Monday would likely now be postponed until April 9 to allow more time for negotiation$.

      1. There’$ a $ong: “Come Monday”

        (Nice personal intro, lookin’ like eye remembers him in 1976!)

        https://youtu.be/XKGw_hrlaOY

        Anywho’$ let’$ where the black.goo i$ @ once they cease to cat.claw$ oneanother$, don’t get$ to close!

  12. Here in New York State;

    Daily increase continues, with over 10,000 new cases, bringing the current number up to 113,704. More than 23,000 people tested yesterday statewide, bringing the total number of tests to 283,621.

    Deaths in NY as of yesterday were advertised at 3000.

    1. I’m going to guess that since 40% of the tests return red, most of them are people showing up at the hospital with symptoms. If you make it that far, up to now you have a 1% chance of becoming a fatality statistic. 0.015% in the general population.

      I’m hearing that if you die of any “cause” and tested positive for the Bat Flu that goes down as your cause of death as a matter of policy. Also read there were only 20 people (patients) on the hospital ship in NY Harbor.

      1. I’m hearing that if you die of any “cause” and tested positive for the Bat Flu that goes down as your cause of death as a matter of policy.

        Proof, please.

        1. Proof

          Sorry, hard to link to something that was said to me. It did give me pause though. If I see this discussed in print I will post a link. I have read more than once that most of the virus deaths were “co-morbid”. I guess that one thing has to be picked to fill in the form.

      2. “I’m hearing that if you die of any “cause” and tested positive for the Bat Flu that goes down as your cause of death as a matter of policy.”

        Likely better compensation for the hospital this way.

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