thehousingbubble@gmail.com
Blog

They Just Had To Sell And Be A Price Taker

A report from Global News on Canada. “The housing industry in Saskatoon is slower but remains steady, according to experts. And right now it is a buyers market. ‘If you are in the market to buy a new home there has been no better time to do it (then right now),’ said Saskatoon and Region Home Builders Association CEO Chris Guérette. ‘You’ll absolutely get more for your bang for your buck right now then you did probably a year ago.'”

From iNews on the UK. “Paul Broadhead, head of mortgage policy at the Building Societies Association, says: ‘Lenders and borrowers are facing unprecedented conditions. The temporary move away from higher LTV products across the whole market reflects prevailing uncertainty and the fact that physical valuations are on hold.’ A downside for buyers is that you have to have 100 per cent of the property’s value in cash to now be in with a chance of securing a property. Assuming you have seen a house you liked before the restrictions came into effect, estate agents are unlikely to put any offers forward where a mortgage is required.”

“However, sellers should be aware that cash-rich investors often expect a price reduction, with some offering as much as 30 per cent below the asking price.”

The Jewish Journal in Israel. “Shelly Levine, owner of the Tivuch Shelly real estate brokerage that serves the Jerusalem area, has seen work grind to a halt. ‘It’s impossible to sell houses at the moment. Who can even get a mortgage at this point?’ she said. Some renters, like Ben, 29, who works in high-tech, have benefited from the coronavirus’s impact on the rental market, where there are more apartments available because people have left unaffordable apartments and others normally used for Airbnb travelers have been put on the market.”

“‘This hasn’t deterred me; the opposite is the case,’ he told The Media Line. ‘It’s given me more opportunities I think, less competition, greater selection and greater negotiating power.'”

From Kenyans. “Wealthy Kenyans are set to lose 16 multi-million houses to auctioneers after the High Court ruled in favour of the latter on Wednesday, April 8. A property developer who had sold the house to individuals including Josephine Mukuhi and Henry Ng’ang’a who had purchased two houses, suffered a blow when the court ruled for the auctioneers. The developers constructed over 30 houses in 2013 and had a plan to sell them in the open market. It borrowed a loan of Ksh 80 million, to be repaid in instalments in over 24 months. They were, however, not capable to beat the deadline due to the economic downturn.”

“‘The grant of an injunction would merely postpone the day of reckoning in view of the admitted indebtedness. During this time the interest would continue to accrue and increase substantially in proportion to the value of the security thus imperilling the lender’s prospects of recovery of the debt,’ Justice David Majanja ruled after the property developer admitted its indebtedness.”

From Economic Times on India. “State Bank of India Chairman Rajnish Kumar exhorted real estate firms to keep their bank account standard, clear inventory as soon as possible and improve perception about the business. While plain-speaking to the real estate players, Kumar said course correction has to be undertaken by the industry if they want to survive and get back on track as soon as possible.”

“‘Clear inventory as soon as possible. We believed that prices will go up but unfortunately the prices are not going up. There was a time when there were first time home buyers and there were investors and in five years you could double your money…those times are over,’ he said in a virtual conference organised by realtors’ body NAREDCO.”

The South China Morning Post. “Some investors who bought property in Hong Kong during a mid-2019 peak in prices might not even recover their monthly mortgage payments, as rents continue their headlong dive, industry experts said. ‘If vacancies rise, landlords who cannot cover their mortgage payments with rental incomes, will be forced to sell their properties,’ said Hannah Jeong, head of valuation and advisory services at international property company Colliers International, adding that this will swell the ranks of homes available for steep discounts, particularly in New Territories.”

“For instance, a 709 sq ft unit in Yuen Kung Mansion in Hong Kong’s Taikoo Shing district was last week rented out for HK$25,500 a month. The monthly rent was about 20 per cent lower than the HK$32,000 a month the landlord had charged previously, according to Midland Realty. If such a unit was bought in June 2019, the market peak, it would have cost the landlord HK$14 million, which amounts to monthly instalments of about HK$28,000, said Kenneth Ng, a senior sales director at Midland Realty’s Taikoo Shing branch. He based his calculation on a 50 per cent loan for 30 years for a home worth more than HK$10 million, according to current mortgage lending rules.”

“The new lease was HK$2,500 less than the landlord’s HK$28,000 monthly mortgage instalment. ‘This shows renting is cheaper than buying right now,’ he added.”

From Stuff New Zealand. “Property investors are being hit by a ‘perfect storm’ that is predicted to drive many out of the market. Rents have been frozen and evictions are on hold for the next three months as the country responds to the Covid-19 outbreak and lockdown. ‘David Pearse, managing director of Pukeko Rental Managers, predicted a ‘mass sell-off’ of rental properties in the coming weeks.”

“‘I’m already hearing reports of some wanting to sell but having to wait until the end of the lockdown,’he said. ‘Not only have some seen their rental income drop with no chance of government relief, but there’s a huge concern that the government won’t reverse the lockdown policy of making no-cause terminations illegal. It’s like the perfect storm for mum and dad landlords, who are the vast majority, and they can’t see an end in sight.'”

Two reports from Domain News in Australia. “Buyers of off-the-plan apartments are beginning to bear the brunt of the COVID-19-led economic downturn with some struggling to settle on properties bought at the height of the market. According to a range of industry sources, some are now scrambling to secure finance, others are trying to find new vendors and some are even walking away altogether in order to avoid bigger long-term losses.”

“In one worst-case scenario, a buyer who paid a deposit on an off-the-plan apartment valued at $646,000 in Melbourne 18 months ago has recently been informed that it was now only worth $500,000. Foster Ramsay Finance principal finance broker Chris Foster-Ramsay said many properties that were bought off-the-plan at the height of the market had valuations that were ‘shaky at best’ and were now being settled in a market downturn.”

“Mr Foster-Ramsay said more and more off-the-plan buyers who settle in coming weeks would find their valuations fall short of initial expectations set 18 months ago as the economic fallout of COVID-19 deepens, adding it could be the ‘tip of the iceberg.’ It’s going to become more and more problematic,’ he said. ‘I think in this particular market we’re heading down this path in highly built-up areas of Melbourne. There is an element of a ticking time bomb there.'”

“Good Designs chief of staff Jessie Summons said she’s also seen an increasing number of buyers willing to forfeit their deposit and developers extending sunset clauses. ‘We’ve seen a lot of buyers contact us and either pull out of sales or want to pull out of sales,’ she said. ‘Some have pulled out purely for the reason they believe or expect the market to tank. The market was running so hot [at the time of putting down a deposit] they felt pressured to make decisions quickly, but that has dissipated.'”

“Melbourne high-end buyer’s agent Mal James said the discounting trend began about three weeks ago, with some A-grade properties off by up to 5 per cent and B-grade properties by 5 to 10 per cent. ‘There was one property we were involved in was a $200,000 discount, there was another that was a $100,000 discount, within the space of two weeks,’ he said. ‘There’s not that many buyers.'”

“He shared an email he received offering a new four-bedroom townhouse, reduced to $1.49 million from $1.58 million, with the agent writing of their ‘clear instructions to sell this home ASAP.’ In Sydney, buyer’s agent Rich Harvey has transacted three properties at a discount to asking price or his appraised price over the last three weeks, for owner-occupier clients. Agents are using phrases such as ‘the vendor’s expectations are realistic,’ said the chief executive.”

“Henny Stier of OH Property Group has seen prices in some pockets of Sydney drop 10 per cent in the last month, but is cautious the trend is not evident everywhere. ‘They were probably vendors who had purchased and then COVID happened, and they didn’t want to be saddled with two mortgages, so they just had to sell and be a price taker,’ she said. ‘[The agents] would call and say, ‘Initially my vendor was at this price, and now willing to take a certain price.'”

“Buyer’s and vendor’s advocate Wendy Chamberlain cites one home marketed at $1 to $1.1 million, cut to $1 million, now with a best offer of $930,000. Another agent offered a free-standing house, a deceased estate, in inner-northern Brunswick for just $740,000 to $780,000 – an improbable price guide two months ago. Often the discounting is driven by the buyer too, she said. ‘They’re going, ‘COVID-19, I can negotiate,’ she said. ‘Sometimes it works, sometimes it doesn’t.'”

Related Posts
This Post Has 103 Comments

  1. ‘she’s also seen an increasing number of buyers willing to forfeit their deposit…’The market was running so hot [at the time of putting down a deposit] they felt pressured to make decisions quickly, but that has dissipated’

    So that phony “fear of missing out” the government/central bank/REIC ginned up kinda blew up in your faces. Can’t say you weren’t warned.

  2. ‘Wealthy Kenyans are set to lose 16 multi-million houses to auctioneers after the High Court ruled in favour of the latter on Wednesday, April 8. A property developer who had sold the house to individuals including Josephine Mukuhi and Henry Ng’ang’a who had purchased two houses, suffered a blow when the court ruled for the auctioneers’

    Sux to be you Josephine and Henry, you just got called out on the HBB.

    Click!

    1. They were, however, not capable to beat the deadline due to the economic downturn

      Sounds like they need to GET A JOB. Maybe there’s an opening for janitorial work on the night shift. Don’t worry….


      See (all night), I work for my pay
      (Alright), night and day
      (All night) work for my pay (alright), night and day
      (No, no, no, no, no, no, ooh, no, no, no, no, no, no, ooh)
      Can’t you feel it (no, no, no, no, no, ooh, no, no, no, no, no, ooh)
      If it’s, if it’s, if it’s, it’s got to be (alright)
      If it’s (all night),…

      Bob Marley – It’s Alright

      https://www.youtube.com/watch?v=Y9tCAIqmdQk

  3. London, Kenya, Sydney, Hong Kong: each were at one point the most expensive residential real estate on the planet.

      1. In some of the cities. Also Lagos, in Nigeria. For a brief time Cape Town.

        ‘Victoria Island with its annexe is situated to the south of Lagos Island.[59] It has expensive real estate properties and for that reason, many new luxury condos and apartments are blooming up everywhere.’

        https://en.wikipedia.org/wiki/Lagos

        Lots of money laundering went on in Kenya and Nigeria.

        1. ‘Nairobi is currently undergoing a construction boom. Major real estate projects and skyscrapers are coming up in the city. Among them are:The pinnacle twin towers which will tower at 314 m, Britam Tower (200 m), Avic International Africa headquarters (176 m), Prism tower (140 m), Pan Africa insurance towers, Pallazzo offices, and many other projects. Shopping malls are also being constructed like the recently completed Garden city Mall, Centum’s Two rivers Mall, The Hub in Karen, Karen waterfront, Thika Greens, and the recently reconstructed Westgate Mall. High-class residential apartments for living are coming up like Le Mac towers, a residential tower in Westlands Nairobi with 23 floors. Avic International is also putting up a total of four residential apartments on Waiyaki way: a 28-level tower, two 24-level towers, and a 25-level tower. Hotel towers are also being erected in the city. Avic International is putting up a 30-level hotel tower of 141 m in the Westlands. The hotel tower will be operated by Marriot group. Jabavu limited is constructing a 35 floor hotel tower in Upper Hill which will be high over 140 metres in the city skyline. Arcon Group Africa has also announced plans to erect a skyscraper in Upper hill which will have 66 floors and tower over 290 metres, further cementing Upper hill as the preferred metropolis for multinational corporations launching their operations in the Kenyan capital.’

          https://en.wikipedia.org/wiki/Nairobi

      2. Would an average price of $1 million US dollars for a 5 bedroom in Lagos, Nigeria surprise you? You can’t make this stuff up.

        2. Nigeria has a ton of oil being pumped. Shell is the lead global.

          In Africa this means a ton of middle men for oil equipment (end to end) and keeping tribal leaders satisfied.

          There is actually demand for ‘compounds’ for these snakes … er business consultants.

  5. “Buyer’s and vendor’s advocate Wendy Chamberlain cites one home marketed at $1 to $1.1 million, cut to $1 million, now with a best offer of $930,000. Another agent offered a free-standing house, a deceased estate, in inner-northern Brunswick for just $740,000 to $780,000 – an improbable price guide two months ago. Often the discounting is driven by the buyer too, she said. ‘They’re going, ‘COVID-19, I can negotiate,’ she said. ‘Sometimes it works, sometimes it doesn’t.’”

    Who are these predator buyers!?! Damn you! Damn you to HELL!!!

  6. A snowflake has a change of heart:

    Chris Cuomo apparently realized a thing or two during his battle with coronavirus. The CNN star rattled off a long list of grievances about his on-air gig. He said he doesn’t “value indulging irrationality, hyper-partisanship” or “trafficking in things that I think are ridiculous.” He also said he doesn’t want to spend time talking to either Democrats or Republicans who are spouting things they don’t really mean.

    https://www.yahoo.com/news/chris-cuomo-cnn-show-not-160116157.html

    1. OK then Chris, put your money where your mouth is. You’re worth $9 million. Go to some college and get a degree in civil engineering or something. Buy a regular house on 1/4 acre. Go to a job every day, just like the rest of us. Or, buy a nice little ranch house in an Oil City, grow rutabagas, and write a blog about your new-found wisdom.

      2. “…and get a degree in civil engineering…”

        Please, don’t do that. The U.S. prefers to spend its prosperity on things more important than its infrastructure.

    2. Chris Cuomo’s apparently erratic behavior may be a symptom of brain involvement by COVID-19. Or maybe he is just a melting snowflake.

      1. “Or maybe he is just a melting snowflake.”

        Maybe he is reflecting on himself and coming to the realization that he isn’t contributing anything useful to society?

  7. “The market was running so hot [at the time of putting down a deposit] they felt pressured to make decisions quickly, but that has dissipated.”

    No mention of bubble

  8. Are you a bull who finds itself straying into a trap set for you by da bears?

    In One Chart
    Why the recent strength in the market is an ‘ominous sign’ of what’s next
    Published: April 14, 2020 at 10:25 a.m. ET
    By Shawn Langlois
    Is the latest market rally a trap? iStockphoto

    Despite the steady flow of devastating economic news and the buildup to what will surely be a nasty stretch of earnings reports, the market has managed to bounce back decisively from its lows.

    Don’t get too excited, though.

    Chris Kimble of the Kimble Charting Solutions blog says the “quick burst higher” could be an “ominous sign” of what lies ahead. After all, we’ve seen this kind of action before. In fact, the timing and the size of the market move should be eerily familiar to anybody who’s been around awhile.

    Kimble used this 20-year chart of the S&P 500 to explain why:

    As you can see, the two prior market crashes — like the current one, so far — put in March lows before staging big, but short-lived, comebacks. From there, it got ugly in a hurry.

    “Could this be happening again this year?” Kimble wrote. “Is history repeating right on time? Is the bear market rally setting up a giant bull trap?”
    …

  9. Two weeks ago the POTUS said the federal government does not run the States, e.g., they have to procure their own PPE supplies. On this evening’s NBC news the POTUS says he’s the last word on anything and everything across the country. The “gulps” were audible in the Press room. LMAO! Panicky NBC News trots out some Constitutional scholar who says the U.S. doesn’t have a King.

    Gotta love Trump’s sarcasm…delivered with a serious face! These media Oracles of the Plebs don’t even realize they’re being played! Even the “Constitutional scholar” is oblivious! I’d bet money that Trump just LOL when the door to the press room closed behind him.

    1. I just realized something — this house/address is the +$500,000 flip that didn’t sell. I posted about it here a while back:

      https://www.redfin.com/MI/Birmingham/1897-Stanley-Blvd-48009/home/82422435

      The history of the flip and the interior photos between the sale for $375,000 in 2018 and now have been scrubbed from the MLS, but Redpilled might recall that she commented on how little cabinet space there was in the renovated kitchen.

      That goes a long way in explaining the recent price history — the flipper has obviously dug themselves into a hole that they’re trying to get out of now.

        1. Now that I think about it, I bet the old house is still there, and they are hoping that some sight-unseen buyer will take the stinky bait and buy the non-existent house based on a very bad computer rendition. If they find a buyer — unlikely — only then they would do the teardown and rebuild (or, more likely skip the country with the $$).

          1. computer rendition

            Has features of the original house so it looks like a proposed build up/out not teardown.

      2. Redpilled might recall that she commented on how little cabinet space there was in the renovated kitchen.

        I think I remember that. And IIRC BlueSkye commented on how they pushed the kitchen island back into the corner to make the room bigger.

        1. Whoops. I goofed up on this one — it’s not the same house, it’s one street east from the earlier one I was thinking of.

          The flip was on Maryland, not Stanley; they were both on the same side of the street, at about the same north-south location, which is what momentarily threw me. Web sites are not currently in agreement about the flip: Zillow and Realtor say listing removed, Trulia says pending for $495K, Redfin says it closed for $475K on 4/7. That must have been some closing with everyone in masks and gloves passing the paper back and forth.

          Fake news, sorry. Though now I’m back to being at a loss as to why the one on Stanley is delusionally climbing in price with no takers. I clearly don’t understand this local market.

          1. Redpill is still correct: the new house just added a second floor to the old house. The door and windows are the same.

            But in order to make it work they would still need to demolish some of the renovated main floor.

  11. It must be a bummer to have debt collectors breathing down your neck as you await the arrival of your stimulus check.

    2. Debt collectors are going after millions of stimulus checks — 5 ways to stop them
      Published: April 14, 2020 at 7:17 p.m. ET
      By Quentin Fottrell
      ‘Millions of Americans have court judgments against them,’ says Lauren Saunders, an associate director at the National Consumer Law Center
      The IRS says 80 million checks should arrive this week, but some Americans are wondering if they’ll ever arrive. Getty Images

      Stimulus checks are already winding their way to millions of Americans. They’re a key part of the government’s $2.2 trillion stimulus bill. The government had processed 80 million stimulus checks on Friday and they should arrive this week, Sunita Lough, deputy commissioner for services and enforcement at the Internal Revenue Service, told a video conference this week.

      That money can’t come soon enough for the nearly 17 million people who are out of work, and others worried about bills and rent due to the coronavirus pandemic. The Internal Revenue Service is sending $1,200 to individuals with annual adjusted gross income below $75,000 and $2,400 to married couples filing taxes jointly who earn under $150,000, plus $500 per qualifying child.

      The payouts — formally dubbed “economic impact payments” — reduce in size above the $75,000 per year/$150,000 per year household income threshold and stop at $99,000 per year for individuals and $198,000 per year for married couples. The money will appear automatically in your bank account if the IRS has your account information on file from previous years’ tax returns.

      For those whose information isn’t on file with the IRS, they can submit their details here and here.

      However, there’s growing concern among many Americans — especially those who are most in need of the checks and already have bills piling up — that debt collectors will garnish or swipe their checks before they can put the money toward rent, or utility and food bills.

      “Creditors may view stimulus payments as an opportunity to seize money for amounts owed on outstanding court judgments. Millions of Americans have court judgments against them,” said Lauren Saunders, an associate director at the National Consumer Law Center in Washington, D.C. where she directs the organization’s federal legislative and regulatory work.

      “Banks that are presented with a garnishment order are likely to freeze amounts in the account and give the consumer a short time to prove in court that account funds are exempt from seizure — a daunting prospect at any time, and a near impossibility today when many courts are at least physically closed, people are ordered to stay at home, and attorneys are inaccessible,” she said.

      “For most consumers, there is no magic bullet to avoid bank account seizure. Many approaches to minimize such seizures have drawbacks that are better to avoid if payments are not actually at risk of being seized. These are complex issues that consumers may not want to make on their own,” she added. Saunders outlined a process whereby people can see what action, if any, they can take.
      …

      1. give the consumer a short time to prove in court Not to mention the phone lines to banks are currently overwhelmed with all manner of calls brought on by the current economic collapse. Good luck getting in touch with your bank any day soon.

  12. The Financial Times
    Alice Woodhouse 51 minutes ago
    China to study extent of coronavirus infections in 9 regions
    Yuan Yang in Beijing

    China has launched a major epidemiological survey of the novel coronavirus across nine different parts of the country, state media reported on Wednesday. The survey will be the first globally to cover such a large geographical region, although the total number of people to be tested is unclear.

    Epidemiologists worldwide have been calling for random surveys in order to get a more representative view of the spread of the virus than different countries’ treatment programs currently offer, given that only a fraction of the total infected population may ever visit a hospital for testing.

    China Daily reported that Wuhan, the city where the global outbreak began, will test residents randomly. The nationwide survey is to “evaluate the scale of asymptomatic infections and immunity levels across the population”, China Daily said.

    The survey will include taking throat swabs to test for the presence of the virus, as well as antibody tests to ascertain whether residents have had immune responses to the virus.

    Wuhan will enroll 11,000 of its 11 million residents in the survey, and is due to finish collecting samples on Thursday. The majority of participants will be ordinary residents, with a small number of “virus control workers” such as security guards and taxi drivers, China Daily reported.

    The nine regions involved in the cross-country survey are the cities of Wuhan, Beijing, Shanghai and Chongqing, as well as the provinces of Liaoning in the northeast, Jiangsu and Zhejiang on the eastern coast, Guangdong in the south, and Sichuan in the west.
    …

  13. It’s a good time to have a household member who can
    provide you with free beans.

    The Financial Times
    Agricultural commodities
    Coffee climbs as locked-down consumers seek caffeine fix
    Industry wrestles with uncertainty over inventories, labour and long-term demand
    Coffee is now one of the world’s top-performing commodities
    © FT montage; Bloomberg
    Emiko Terazono in London and Andres Schipani in São Paulo 4 hours ago

    The coronavirus pandemic set off a scramble for coffee beans last month as roasters worked flat out to meet demand from stockpiling consumers while shutdowns disrupted supply.

    José Marcos Magalhães, head of Brazil’s second-largest coffee co-operative Minasul, watched shipments to Europe and North America surge. Minasul had been expecting to ship 400,000 bags (each containing 60kg of beans) for the whole of 2020, but its orders rose past that level in March. Mr Magalhães now expects international sales for the year to top 800,000 bags — more than double last year’s 360,000.

    “We are having very high demand, mainly from Europe . . . consumption has increased a lot in supermarkets in the USA, and they want to replenish stocks,” he said.
    …

      1. I wonder what explains the coffee price index dropping from circa 140 in mid-December 2019 to around 100 by February 1, 2020, apparently before COVID-19 took over the world economy?

  14. Fairfax, VA Housing Prices Crater 10% YOY As Northern Virginia/Washington DC Emerges As Ground Zero For Mortgage Fraud Epidemic

    https://www.zillow.com/fairfax-va-22031/home-values/

    *Select price from dropdown menu on first chart

    A distinguished economist quipped, “Why buy a house when you can rent one for half the monthly cost. Buy it later after prices crater for 70% less.”

      1. I also wonder now that we are in truly difficult times, if people who in the past were mesmerized by hacks like this woman might finally realize they have bigger issues to worry about.

  17. Mr Market seems quite unruly these days, whether the move is up or down. I have never seen anything like this, including the period following the 20% one-day drop on the Dow on Black Monday, October 19, 1987.

    1. There’s too much crater to post this morning on the Financial Times web site. Here’s a smattering of the headlines; you’ll have to pay your $1 for a 4-week trial subscription if you want to read them:

      Coronavirus
      Coronavirus latest: US industrial output tumbles by the most since 1946
      new 8 minutes ago

      Global Economy
      Governments face ‘massive’ rise in public debt, IMF warns
      an hour ago

      Goldman Sachs Group
      Goldman lifts loan reserves as it braces for client pain
      new 19 minutes ago

      Bank of America Corp
      Bank of America profits almost halve as it prepares for loan losses
      new 27 minutes ago

      Equities
      Global stocks fall with earnings set to outline coronavirus damage
      European shares falter after five days of gains

    4. Who knew that disaster insurance wasn’t a free lunch?

      Economics
      El-Erian warns global economy risks ‘stumbling into depression’
      Renowned Allianz economist tells FN there will be a swing in corporate focus from efficiency to resilience
      By David Ricketts
      April 14, 2020 3:15 pm GMT

      Mohamed El-Erian, chief economic adviser to Allianz and former Pimco chief executive, says the Covid-19 crisis will lead to a period of de-globalisation, forcing companies to prioritise resilience over their ability to remain nimble.

      El-Erian, also a former deputy director of the International Monetary Fund, warned economies would have to untangle a “spaghetti bowl” of unprecedented intervention from governments into the private sector, which have been made in recent weeks.

      Speaking to Financial News, El-Erian said: “What does the post-crisis landscape look like? There will be a swing in corporate behaviour from a strong emphasis on efficiency to a strong emphasis on resilience. That pendulum swing from efficiency to resilience will mean de-globalisation.”

      He added: “I don’t think the market has realised we don’t come out of this where we went in.”
      …

      1. He added: “I don’t think the market has realised we don’t come out of this where we went in.”

        Certainly a lot of people blabbing on the Sirius-XM Bloomberg, CNBC, and Fox Business channels haven’t realised this. I’m still hearing talk about a quick recovery, a V-shaped recovery, etc.

        1. It takes time for sentiment to change. We were in the biggest credit bubble/everything bubble in the history of the world. It’s hard to transition from that mentality to one of hopelessness in such a short time. This collapse is less than 2 months old.

      2. Heard on the Street
        Banks Can Only Guess at Ultimate Virus Fallout
        JPMorgan Chase and Wells Fargo have set aside billions of dollars to cope with the coronavirus fallout, but that may be far from enough
        JPMorgan Chase Chief Financial Officer Jennifer Piepszak on Tuesday said more provisions are highly possible in the coming quarters.
        Photo: JPMorgan
        By Telis Demos
        April 14, 2020 12:29 pm ET

        Two of the largest U.S. banks have set aside billions of dollars to cover loan losses related to the new coronavirus crisis. Unfortunately, that may only be enough under a rosy scenario.

        For the first quarter, JPMorgan Chase added nearly $7 billion to its loss reserves, while Wells Fargo put aside almost $3 billion. These are extraordinary amounts, especially against the placid credit markets of the past several years. But as the banks acknowledge, it may not be reflective of what is coming down the road in more dire scenarios. That could be particularly the case for risks to corporate borrowers.

        At JPMorgan, the bulk of the new provisions were for credit-card loans, $3.8 billion out of the total $6.8 billion. That makes sense, given the fact that cards are unsecured by collateral, and with the unemployment rate—a primary driver of card losses—feared to jump to 10%, if not double that, in the coming months, according to JPMorgan’s economists. Including other adjustments related to new accounting rules, overall allowances for loan losses now represent 9.7% of retained credit-card loans, up from 3.4% at the end of last year.

        JPMorgan also put aside an additional $2.4 billion for wholesale loans gone bad for the first quarter. But as a proportion of total loans, the allowance ratio moved in the opposite direction. Allowances for loan losses as a percentage of retained wholesale loans are now 0.87%, down from 1.02% at the end of last year. That is partly a result of the new loan-accounting standards, as well as the fact that corporate lending had an extraordinary growth surge in the first quarter.
        …

    5. Megabanks, Inc. is having a rough earnings season so far.

      Goldman Sachs Stock Is Dropping After Earnings. Here’s Why.
      Last Updated: April 15, 2020 at 8:35 a.m. ET
      First Published: April 15, 2020 at 8:17 a.m. ET
      By Carleton English

      Referenced Symbols
      GS -2.46%
      JPM -4.02%
      WFC -4.87%
      BAC -5.87%
      C -4.09%

      Goldman Sachs saw profits plunge in the first quarter due to the coronavirus-spurred economic shutdown.

      Profits came in at $1.1 billion, down 49% from last year’s first quarter.
      …

    7. The Financial Times
      Airlines
      US Treasury reaches deal to prop up airlines
      $25bn in aid to pay staff comes in form of grants, loans and warrants
      Southwest Airlines expects to receive $3.2bn under the programme © AP
      Claire Bushey in Chicago and James Politi in Washington 44 minutes ago

      The US Treasury department has reached an agreement with US airlines that paves the way for the sector to receive billions of dollars in aid to cover payroll costs during the coronavirus pandemic and could see the government emerge as a shareholder in several public companies.

      The deal comes after days of testy exchanges between President Donald Trump’s administration and America’s leading passenger carriers over the terms of $25bn in funding allocated to the industry in the $2tn stimulus legislation enacted last month.

      Airlines tried to resist the idea of US taxpayers taking an equity interest in their companies, while unions representing flight attendants and pilots criticised the government for moving too slowly on aid designed to safeguard jobs.

      American, Delta and Southwest airlines all will grant warrants — the right to buy shares at a pre-determined price — to the US government as part of the bailout deal. JetBlue Airways and Alaska Airlines will do the same.

      Southwest Airlines expects to receive $3.2bn under the programme, with $2.3bn as a grant and the rest as an unsecured, low-interest 10-year loan. The loan agreement is expected to include warrants issued to the US Treasury to buy 2.6m Southwest shares.
      …

      1. Maybe it’s different this time, with the early announcement of Unlimited Quantitative Easing at the onset of the financial meltdown last month. But it seems like the announcement of U.S. government bailouts for various major private corporations in September 2008 immediately preceded six months of stock market collapse.

  18. Dr Dan may have been correct all along. Can it be?

    May be it’s just a flu if they have to jack up the death stats like NY did yesterday?

    1. There are several inputs into the death rate. Extensive testing will skew the denominator high, lowering death rate. Social distancing with or without masks can limit the initial viral load; even if the number of infections is the same, the cases will be milder, lowering the death rate. The use of zinc and hydroxychloroquinone and/or other drugs are lowering the death rates.

      Meanwhile it appears that social distancing and masks are helping. A study out of China suggests that the R-naught is 5.6 with no mitigation. With extensive social distancing, that R-naught can be as low as 1.25. That’s still not low enough.

      1. “Meanwhile it appears that social distancing and masks are helping.”

        I’m not buying that. If everyone is forced to stay home, you can’t conclude that masks were the reason.

  19. The mortgage and appraisal fraud pandemic is far more widespread than this Communist Flu thing.

  20. US marks highest number of deaths in a day after several days of a downward trend
    By Christina Maxouris, CNN
    Updated 9:19 AM ET, Wed April 15, 2020

    (CNN) The US recorded its highest number of coronavirus deaths in a day after several days in which the death toll had fallen or was nearly flat.

    The daily death toll was 2,405 on Tuesday, according to Johns Hopkins University’s tally of cases, bringing the total number of US deaths to 26,033. At least 609,240 people have been infected with the virus in the US.

    Despite the grim numbers, health officials have said they believe US numbers are leveling. “There’s no doubt what we’ve seen over the last several days is a flattening out,” Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Wednesday on NBC’s “Today.”
    …

    1. 2,405/(26,033-2,405) = 10.2% one-day increase in the body count; doubling time at that growth rate is just over one week (gulp)…

    2. For perspective, the case count for the entire period of the SARS outbreak of about nine months’ duration, from November 2002 through July 2003, was 8,098 with 774 deaths worldwide.

      COVID-19 case tally climbs above 2 million, Johns Hopkins data shows
      Published: April 15, 2020 at 10:29 a.m. ET
      By Ciara Linnane

      The global case tally for the coronavirus that causes COVID-19 topped 2 million on Wednesday, according to data aggregated by Johns Hopkins University. The death toll rose to 128,071. The U.S. has the highest case toll in the world at 609,696 and the highest death toll at 26,059. Spain has the highest number of cases in Europe at 177,633 and Italy has the most deaths at 21,067.
      …

      1. 2 million ÷ 8,000 = 250

        There are about 250 times as many COVID-19 cases worldwide so far than the total number of SARS cases that occurred from November 2002 through July 2003. And July 2020 won’t be over until another 3 1/2 months from now.

        1. Covid 19 deaths …….,.

          Data on the Flu

          In 2009 H1N1 world wide deaths Estimate range from 151,000 to 575,000.
          The latest estimate from December 13 article on Medicine Net is that each year between 291,000 and 646,000 people die from the flu.

          1. “In 2009 H1N1 world wide deaths Estimate range from 151,000 to 575,000.”

            Worldwide COVID-19 deaths are now on this order of magnitude after a shorter time period.

            For meaningful comparisons, you need to also need to factor in rates and duration. For instance:

            “From April 12, 2009 to April 10, 2010, CDC estimated there were … 12,469 deaths (range: 8868-18,306) in the United States due to the (H1N1) pdm09 virus.”

            So the recent weekly number of U.S. COVID-19 deaths is nearly as high as the number of H1N1 deaths was over an entire year.

          2. How much did Medicare pay hospitals for H1N1 patients?

            NYC Adds 3,800 Probable Virus Victims to Death Toll

            By Henry Goldman
            April 14, 2020, 4:42 PM EDT Corrected April 15, 2020, 9:18 AM EDT

            https://www.bloomberg.com/news/articles/2020-04-14/nyc-adds-3-700-to-death-toll-to-count-victims-not-hospitalized

            Minnesota doctor blasts ‘ridiculous’ CDC coronavirus death count guidelines

            Published 5 days ago

            “I’ve never been encouraged to [notate ‘influenza’],” he said. “I would probably write ‘respiratory arrest’ to be the top line, and the underlying cause of this disease would be pneumonia … I might well put emphysema or congestive heart failure, but I would never put influenza down as the underlying cause of death and yet that’s what we are being asked to do here.”

            “Right now Medicare has determined that if you have a COVID-19 admission to the hospital you’ll get paid $13,000. If that COVID-19 patient goes on a ventilator, you get $39,000; three times as much. Nobody can tell me, after 35 years in the world of medicine, that sometimes those kinds of things [have] impact on what we do.

            https://www.foxnews.com/media/physician-blasts-cdc-coronavirus-death-count-guidelines

          3. 12,469 deaths (range: 8868-18,306)

            There must not be any at that CDC who took a single classic science lab in college. Well, that passed such a course.

            Mathematician: 12,469 deaths (range: 8868-18,306)

            Scientist: 12,000 deaths +/- 5,000

          4. I would never put influenza down as the underlying cause of death Oh, come now. I would certainly have put “influenza” down as an underlying cause of death, if appropriate on a patient’s death certificate. In my genealogy research, I have uncovered many death certificates mentioning “la grippe” or “influenza” as a cause of death. Remember, Abe Lincoln wrote that you can’t believe everything you read on the internet.

          5. Remember, Abe Lincoln wrote that you can’t believe everything you read on the internet.

            As long as it supports his partisan rhetoric, it is to be taken as the gospel.

          6. “I would certainly have put “influenza” down as an underlying cause of death, if appropriate on a patient’s death certificate.”

            Even if the death was caused by heart failure?

            “”I’ve never been encouraged to [notate ‘influenza’],” he said. “I would probably write ‘respiratory arrest’ to be the top line, and the underlying cause of this disease would be pneumonia … I might well put emphysema or congestive heart failure, but I would never put influenza down as the underlying cause of death and yet that’s what we are being asked to do here.”

          7. One result of the new CDC guidance on Vital Statistics seems to be NY adding some 3,000 previous deaths (no testing) to the COVID data.

          8. “As long as it supports his partisan rhetoric, it is to be taken as the gospel.”

            Does this have something to do with the crystal clear video of the patient holding the water bottle in a hospital bed you said was blurred?

  22. I’ve been scratching my head the last couple of days over the amount of cheery “we can reopen the economy soon!” talk. A vaccine is still far away. As for “herd immunity”, etc…

    “There is no proof at this point that the development of an antibody response will be protective,” said David Walt, a professor of pathology at Harvard Medical School and Brigham and Women’s Hospital in Boston. “There is no evidence yet that people can’t be reinfected with the virus.”

    https://www.bloomberg.com/news/articles/2020-04-14/do-coronavirus-survivors-have-immunity-from-reinfection-maybe

    1. “There is no evidence yet that people can’t be reinfected with the virus.” Other coronaviruses that cause the common cold will mostly cease causing symptoms when the patient’s immune response kicks in. This response is none to fade away over the next 1-2 years, so the patients can contract the same virus again. Rinse & repeat. Many people have contracted the same coronavirus repeatedly over the course of their lives. No reason why this can’t happen with the new coronavirus. Another possibility is that the test verifying the loss of the virus shedding after the first infection was a false negative, that the patient was still shedding, still infected, but had little or no symptoms for a period. There are other possibilities.

      1. No reason why this can’t happen with the new coronavirus.

        This!

        “a false negative . . . other possibilities”

        Viral load lower than assay sensitivity.

      2. “Another possibility is that the test verifying the loss of the virus shedding after the first infection was a false negative, that the patient was still shedding, still infected, but had little or no symptoms for a period.”

        Got the t-shirt?
        https://imgur.com/a/UfE9duj

        2. 2020 ain’t close to being over yet! I wouldn’t tempt fate by ordering that shirt just yet.

      3. cease causing symptoms when the patient’s immune response kicks in

        Are you suggesting that catching a cold once a year might be a blessing?

        1. I think he’s suggesting that we already have well-equipped immune systems to handle with these sorts of things. But that may be just me projecting.

    2. There is no proof at this point that the development of an antibody response will be protective As if each COVID-19 patient has the exact same antibody response as every other patient, which is nonsense. More likely is that some COVID-19 will have a protective and lasting response, some will not have a less effective response. Either type can vary over the passage of time.

    3. Fascinating article; thanks for posting. Unfortunately it is not all that encouraging for the hope to develop herd immunity.

      I wonder whether the COVID-19 virus’s membership in the same family of viruses as the one that causes the common cold
      also has implications for the hope to develop a vaccine? I can’t recall ever getting vaccinated against the common cold; however I must be blessed with pretty good immunity, as I seldom catch them.

      ‘“There is no proof at this point that the development of an antibody response will be protective,” said David Walt, a professor of pathology at Harvard Medical School and Brigham and Women’s Hospital in Boston. “There is no evidence yet that people can’t be reinfected with the virus.”

      The Journey to Herd Immunity

      Studies of SARS and MERS, which are closely related to SARS-CoV-2, have suggested limits to the body’s immune response. One 2007 report on SARS demonstrated that its antibodies dissipated after an average of two years, making patients potentially vulnerable to reinfection. A study of MERS found antibodies tended to stick around for a bit longer, but not in everyone. And neither study demonstrated whether the presence of antibodies was protection against re-infection.

      “The most similar virus to this shows there is not a protracted immune response,” Walt said.’

      2. Coronavirus discussion with Dr. Paul Offit

        Paul Offit is a pediatrician and an expert on vaccines, immunology, and virology. Offit is also the director of the Vaccine Education Center at The Children’s Hospital of Philadelphia.
        In this video, we discuss the current Coronavirus (covid-19) outbreak.

Comments are closed.