Feelings Of Buyer’s Remorse Surface When People Who Purchased During The Frothy Days Wonder If They Paid Too Much
A report from Bloomberg on Canada. “Canadian housing once seemed so infallible that the head of the world’s biggest asset manager in 2015 described Vancouver condos as a better store of wealth than gold. The coronavirus is putting that theory to the test. Canada’s situation is more precarious than most. As its oil sector shriveled in recent years, Canada’s economy became ever more driven by real estate, an industry now in a state of paralysis. Nearly one in three workers have applied for income support. What’s more, its households are among the world’s most indebted, poorly placed to weather the storm.”
“‘I think it is the Great Reckoning,’ says Douglas Hoyes, a bankruptcy trustee in Kitchener, Ontario. ‘We’ve been in a period for so long where it didn’t matter what property you bought or how highly leveraged you were. Well, guess what? Now it matters.'”
“It doesn’t take much to tip a seemingly tight market into a meltdown. If only 2% of the housing stock were to be listed for sale, it would trigger the kind of supply shock behind a 1990 crash, according to Veritas. That’s most likely to come from investors, half of whom weren’t generating enough cash to cover the cost of owning their rental properties, Veritas found in a survey last September. For loss-making landlords, things are about to get a lot worse: about 30% of apartment rent due April 1 went uncollected, according to estimates by CIBC Economics.”
“Then there are those who invested in properties for the short-term rental market that’s all but dried up because of travel restrictions. Nearly a third of Canada’s Airbnb hosts — who jointly had 170,000 active listings in late 2019 — need the income to avoid foreclosure or eviction, Airbnb said in a letter to the Canadian government last month.”
“In steps that dwarf those taken during the global financial crisis, the federal housing agency and the Bank of Canada are ready to purchase billions of dollars worth of mortgages and mortgage-backed securities to backstop the market, while lawmakers passed a historic wage bill to stem job losses.”
“‘It’s great we have a government that says they have the fiscal firepower to do this but anyone with any math skills can calculate that my daughter’s grandchildren aren’t even going to be able to pay this off,’ says Reza Sabour, a Vancouver mortgage broker. ‘What’s the plan after?'”
The Globe and Mail in Canada. “Real estate lawyer Mark Weisleder has some pragmatic advice for buyers, sellers and real estate agents facing conundrums around closing deals: ‘You must find a way to make it work.’ The partner with RealEstateLawyers.ca LLP says the fallout from the coronavirus pandemic is leading to all manner of glitches between the time when a buyer and a seller sign an agreement of sale and the transaction closes.”
“‘We’re in a different world now,’ Mr. Weisleder says. ‘You have to understand what you took for granted can’t happen.'”
“Feelings of buyer’s remorse surface when people who purchased property during the frothy days of February and early March wonder if they paid too much to beat out legions of competing bidders for a property. Some of those deals were inked during a time when buyers were paying astounding amounts above the asking price and some bidding wars drew 30, 40 or even 70 plus offers.”
“Mr. Weisleder says some buyers do try to negotiate a reduction in price – which the seller may agree to rather than have the deal collapse. Mr. Weisleder points out to sellers that suing a runaway buyer may not bring a satisfactory result in any case. A first-time buyer, for example, may not have enough assets to make a court battle worthwhile. ‘What’s the point of suing someone who doesn’t have any money?’ he said.”
The Edinburgh Evening News in Scotland. “Edinburgh’s Old Town was believed to have the highest concentration of properties being let out anywhere in the UK at the start of this year and the Airbnb site was listing nearly 12,000 properties in the city at the end of last year. However that figure had slumped to just over 8,500 before the plug was pulled on the city’s money-spinning festivals. A leading property agency has launched a helpline service to landlords worried about suffering ‘potentially huge losses’ this summer as a result of the coronavirus pandemic.”
“Edinburgh-based Rettie is offering the advice after reporting a dramatic slide in the number of Airbnb properties listed in the city. The company’s website states: ‘Are you facing potentially huge losses as a result of the coronavirus pandemic? It’s a worrying time for Airbnb and short lets landlords as the global tourism industry is dramatically impacted.'”
“Dr John Boyle, director of research and strategy at Rettie, said: ‘Given the cancellation of the festivals, I imagine that most whole short term properties will probably come back into long term rent. There will still be a tourism market but I imagine it will be seriously affected for some time to come and long term rents will provide a greater level of security, particularly given people can’t really sell just now. I think advertised rents will fall over the next six months or so at least.'”
From Domain News in Australia. “The Queensland government’s rental relief package has sent shockwaves through the property industry, with divisive proposals sparking both fear and outrage among investors and landlords. Queensland’s Shadow Treasurer Timothy Mander said the government’s protections were not in line with national cabinet guidelines, with the burden placed disproportionately on landlords.”
“‘This package says they [tenants] don’t have to prove or provide a case that they are in financial hardship … it would seem the Queensland government has gone far further than other jurisdictions and governments,’ Mr Mander said. ‘The end result can be negative for both the landlord and the tenant. If they [landlords] can’t keep up their loans, they’ll have to dispose of the property – that, ironically, is the result this could end up with – and in the future who would want to invest?'”
The Australian Financial Review. “House-and-land package sales are expected to crash over coming months as prospective buyers delay purchasing decisions due to job security concerns. ‘We can safely assume in the growth corridors that sales volumes and enquiry will fall to record low levels over the coming months of uncertainty,” said Terry Portelli, the founder and managing director of Red23, one of the country’s leading land sales agencies.”
“Inquiries across the 19 Melbourne and Geelong housing estates the group was marketing had ‘dropped dramatically’ since the COVID-19 pandemic hit the market in March, Mr Portelli told The Australian Financial Review. He said it was ‘100 per cent the case’ that a similar situation was unfolding in Sydney and the other major land markets. ‘The number one issue is job security. People on our database who were in a position to buy are now questioning that decision,’ he said.”
“A growing number of sales contracts were falling over at settlement because buyers had lost their jobs and could not get a loan, he said. In other cases, sales contracts were being cancelled as buyers took advantage of valuation shortfalls due to the pandemic to get out of deals. As the unemployment rate – which is expected to double to 10 per cent in the June quarter – rises, so will the cancellation and fall over rate, Mr Portelli warned.”
“‘Buyers are asking developers whether they are prepared to discount the lot to make up the valuation shortfall. Some buyers are seeking to renegotiate an agreement signed two years ago,’ Mr Portelli said. According to Red23, Melbourne and Geelong lot sales rose a strong 23 per cent in February to over 2000 before the pandemic made those monthly numbers ‘redundant and irrelevant.’ ‘We’ll be lucky if we get half that figure now,’ Mr Portelli said.”
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‘A growing number of sales contracts were falling over at settlement because buyers had lost their jobs and could not get a loan, he said. In other cases, sales contracts were being cancelled as buyers took advantage of valuation shortfalls due to the pandemic to get out of deals’
‘Feelings of buyer’s remorse surface when people who purchased property during the frothy days of February and early March wonder if they paid too much to beat out legions of competing bidders for a property. Some of those deals were inked during a time when buyers were paying astounding amounts above the asking price and some bidding wars drew 30, 40 or even 70 plus offers’
But, they were the winners?
Seattle, WA Housing Prices Crater 13% YOY As Demand Plummets On Skyrocketing Inventory And Plunging Rental Rates
https://www.zillow.com/seattle-wa-98102/home-values/
*select price from dropdown menu on first chart
As one Seattle broker conceded, “If you’re a buyer, the broker is lying to you. I know a liar when I hear one. I’ve been lying my entire life.”
And then the music stopped.
“the world’s biggest asset manager in 2015 described Vancouver condos as a better store of wealth than gold.”
Not so much any more!
Trillions flooding financial markets send gold price to 7-year high
MINING.com Editor | April 14, 2020 | 1:57 pm Intelligence Markets Asia Australia Canada Europe USA Gold
Gold continues to rally.
Credit: Matt Johnson via Flickr
Gold has tallied its 4th straight session gain, continuing its rally last week, which saw the price of the precious metal reach its highest in more than seven years.
Gold’s latest run is spurred by cash injections to mitigate the severe impact of covid- 19 on the global economy. Governments worldwide are signing off on massive stimulus measures on top of the near-zero rates and quantitative easing in hopes of jumpstarting businesses.
Evercore ISI’s Ed Hyman said as many as 285 stimulus measures have been announced around the world in the past eight months, the most ever by a wide margin.
In the US alone, a historic $2 trillion stimulus package was recently approved by President Donald Trump to help the nation fend off the crisis.
Some of the money must go somewhere, including a “trickle-down effect” on investments, and gold has historically been a safe haven asset investors pile in on in times of uncertainty.
According to Frank Holmes, CEO of US Global Investors, there is a “clear correlation” between the annual growth rate of M2 money supply in the US and gold performance. In times when money supply surged from the same period a year earlier, gold prices followed.
…
Gee, I hope no one overpaid in this environment.
Oh wait…
“Nearly a third of Canada’s Airbnb hosts — who jointly had 170,000 active listings in late 2019 — need the income to avoid foreclosure or eviction, Airbnb said in a letter to the Canadian government last month.”
“Nearly a third of Canada’s Airbnb hosts — who jointly had 170,000 active listings in late 2019 — need the income to avoid foreclosure or eviction,
1/3 only???
I would personally guess that 90% of Canada’s Airbnb hosts need the income to avoid foreclosure or eviction.
Canada is one of the most indebted countries in the world.
I think I recall someone here joking that when it came to debt, Canada made the US look like a bunch of novices.
It gets so much worse for Canadian pension funds.
Feb 2018 the rules were changed to allow the use of leverage by the massive Can pension funds. My understand is that they plowed up to 30% of this into commercial real estate and REITs.
——-
In a move exclusively available to pension plans with serious scale, Canada’s eight largest funds have all made forays into issuing their own bonds. The Ontario Teachers’ Pension Plan took the lead with its initial $600-million bond issuance in 2001 at 5.7 per cent. The trend towards lower interest rates in the years since has coincided with other plans following suit. The Ontario Municipal Employees Retirement System put out $500 million worth of bonds in 2002 at 5.48 per cent, followed by a $750-million issuance by the Caisse de dépôt et placement du Québec at 4.2 per cent. At the lowest initial coupon, the CPPIB joined the party with $1 billion in 2015 at 1.4 per cent.
Borrowing to buy
Other than under strict, specific circumstances, Canadian pension plans can’t borrow money in order to invest if they want to remain a tax-exempt entity under the Income Tax Act. Issuing bonds is one way to get around the restriction by resorting to what Jason Mercer, vice-president and senior analyst at Moody’s Investors Service Inc., refers to as “sort of a regulatory arbitrage.”
https://www.benefitscanada.com/news/a-look-at-how-canadian-pension-funds-are-using-leverage-117860
The public pension plans have become the mother’s milk of the investment banks and private equity funds. The workers who contribute to these plans usually have a basket of strategies that they can select from, and they really should look closely at the expenses, risk and tax implications of each one, and they probably shouldn’t be more than 33% in any given one. That said, the ideal strategy for a worker is to maximize earning potential, minimize debt load and marry smart.
But…but…now we are victims!!!
“‘We’ve been in a period for so long where it didn’t matter what property you bought or how highly leveraged you were. Well, guess what? Now it matters.’”
“…Well, guess what? Now it matters…’”
Wonder how the minister of high leverage Robert “debt=wealth” Kiyosaki is doing these days?
Me thinks that big rumbling sound you hear in the background is the Robert Kiyosaki big ball of dried out rubber bands exploding.
“Kiyo$aki” … he’$ dead.to.me!
How long did that take$ you to figure$ out?
Kiyosaki is now pushing precious metals. I haven’t kept track of the guy… so you’re saying he advocated debt for other people while stacking PMs for himself? Dayum.
BAHAHAHAHAHA!
And when the property was going up in value, I am sure these buyers would have happily renegotiated with the sellers/developers to share some of that sweet equity.
“Some buyers are seeking to renegotiate an agreement signed two years ago,’
Coronavirus Apr. 14, 2020
There’s More Bad News on the Long-Term Effects of the Coronavirus
By Matt Stieb
Photo: Getty/2020 Getty Images
We’re committed to keeping our readers informed.
We’ve removed our paywall from essential coronavirus news stories. Become a subscriber to support our journalists. Subscribe now.
Uncertainty has been the trademark of both the economic and public-health crises caused by the coronavirus. Occasionally that’s not a bad thing — like in the emerging consensus that the initial models for case fatality rates and ICU beds needed were too high. But over the last few days, several new reports on the nature of the coronavirus showed how much more we need to learn about the pathogen before the effects of reopening the country can be fully anticipated. Below are four such alarming studies — though approach with some caution, as the clinical understanding of the outbreak continues to change as testing expands.
Scientists report a case of a body infecting a live patient
Let’s begin with the most morbid detail: Thailand is now reporting the first fatal case of coronavirus that was transmitted from a deceased patient to a medical examiner. “Not just the medical examiners but morgue technicians and the people in funeral homes need to take extra care,” Angelique Corthals, a professor of pathology at CUNY’s John Jay College of Criminal Justice, told BuzzFeed News. With the high daily death count pushing the capacity of morgues in cities across the country, the concern that bodies could transmit the virus is especially alarming, considering pictures from Sinai-Grace Hospital in Detroit showing bodies piled in vacant spaces in the facility.
…
Thailand is now reporting the first fatal case of coronavirus that was transmitted from a deceased patient to a medical examiner.
I provided a direct link to this “observation” the other day while noting it’s lack of causation. Enough with the fearmongering.
*its not it’s
It only takes a single instance of something occurring to prove that it can occur.
Correlation is not causation and there’s no evidence of causation in the observation yet that is the headline swirling about.
https://www.sciencedirect.com/science/article/pii/S1752928X20300718
a single instance of something occurring
or even a single instance of something being said on the internet.
Do animals like dogs cats pigs cow get coronavirus?
Ye$
Can they get COVID-19 👾?
Would that an$wer bee:
Ye$
Maybee
No
?
Fer gawds sake:
📣🎙”…it’s just the common.cold folks!”
By Ra$H limp.baugh$
“Blow.yer.nose, & get yer 👾 a$$ to work! Now!”
This seems pretty hard to prove. How do we know that the medical examiner didn’t pick up the virus from the grocery store the week beforehand?
Is there any documented case of anyone catching it while grocery shopping? Aside from at the Wuhan fish market, that is?
We can’t prove any of it, but grocery workers are catching it too.
https://www.washingtonpost.com/business/2020/04/12/grocery-worker-fear-death-coronavirus/
Still, the greatest enemy is people exhaling virus-laden sprays. Wear a mask (sorry) and stay away from people.
‘Wear a mask and stay away from people’
I found that setting my hair on fire, flapping my arms and running in circles has kept me for contracting anything. I even do this when I go to the grocer (life threatening, I know), where I see the same employees. And they aren’t dead! (I still haven’t seen that darned bring out your dead cart for weeks!) I don’t know anybody who has it. Nobody I know knows somebody who has it.
See the control freaks for what they are.
One of my wife’s cousins has it. But she has around 60 cousins.
I don’t know anybody who has it. Nobody I know knows somebody who has it.
Not that you “know” me Ben, but you know (hopefully) I’ve been reading/commenting on your blog for..13 years now? Damn time flies…
I too had reflected on the fact I didn’t know anyone directly, or with one degree of separation that had had it. Until last week.
Now It turns out I know two people that have had it. Both have recovered (one is mid-20s, the other mid-30s).
Not saying I disagree with any of your other comments…
“See the control freaks for what they are.”
Well, it’$ deet.👾 found it’s way to RFT-TV, so it now has a rural audience 👀 👂🏾that is knot just:
📣🎙”its just a common.cold folks!”
Ra$h.limp.baugh
blow yer nose, & get back to slicin’ & dicin’ them hog$ & chicken$ … Pronto.like!
My social circle is pretty small, but I do know people who know people who have tested positive.
In general I am not seeing “hair on fire” panic when I go out. Was at King Soopers mid day yesterday. It was pretty busy, probably because there was a big snowfall forecast for last night. It looked like people were doing normal shopping (as was I). I would say that 90% were wearing masks.
I’m seeing long lines at drive thrus, so I guess people aren’t too worried about catching it from someone who works there preparing the food. I have no idea if the workers at MickeyD’s or Taco Bell wear masks, as I haven’t been to a drive thru for a few weeks, but I expect that they do.
Aside from at the Wuhan fish market, that is?
You must have missed the news last night as well The Epoch Times documentary. That narrative is out the window.
I’m seeing long lines at drive thrus, so I guess people aren’t too worried about catching it from someone who works there preparing the food.
I think people are pretty convinced that they won’t get it no matter how much they ingest in their food. They are just worried about getting it in their eyes, nose, or lungs. That’s what we’re being told, right?
Providing care at home for a person sick with COVID-19? Or caring for yourself at home? Understand when emergency care is needed and what you can do to prevent the spread of infection.
By Mayo Clinic Staff
If you have coronavirus disease 19 (COVID-19) and you’re caring for yourself at home or you’re caring for a loved one with COVID-19 at home, you might have questions. How do you know when emergency care is needed? How long is isolation necessary? What can you do to prevent the spread of germs? How can you support a sick loved one and manage your stress? Here’s what you need to know.
At-home treatment
Most people who become sick with COVID-19 will only experience mild illness and can recover at home. Symptoms might last a few days, and people who have the virus might feel better in about a week. Treatment is aimed at relieving symptoms and includes rest, fluid intake and pain relievers.
Follow the doctor’s recommendations about care and home isolation for yourself or your loved one. Talk to the doctor if you have any questions about treatments.
It’s also important to consider how caring for a sick person might affect your health. If you are older or have an existing chronic medical condition, such as heart or lung disease or diabetes, you may be at higher risk of serious illness with COVID-19. You might consider isolating yourself from the sick person and finding another person to provide care.
Emergency warning signs
Carefully monitor yourself or your loved one for worsening symptoms. If symptoms appear to be getting worse, call the doctor.
If you or the person with COVID-19 experiences emergency warning signs, medical attention is needed immediately. Call 911 or your local emergency number if the sick person can’t be woken up or you notice any emergency signs, including:
– Trouble breathing
– Persistent chest pain or pressure
– New confusion
– Bluish lips or face
…
Secretariat – Kentucky Derby 1973
https://www.youtube.com/watch?v=74Usj3K4oZ0
Paco de Lucia Tico-Tico-completo-by Daniel Vilas Boas
https://www.youtube.com/watch?v=HIXLC5SRC7w
ZZ Top Dust My Broom (Live)
https://www.youtube.com/watch?v=OEboJDL4d0M
Cab Calloway & his Band – Geechy Joe – Stormy Weather (1943)
https://www.youtube.com/watch?v=RlE-Zv4Pyhk
That’s spectacular.
Brings back memories of Charleston when i lived there in my youth https://gullahgeecheecorridor.org/
I admit this quarantine thing is getting old. But Maryland is now starting to require masks or face coverings, which is an excellent sign. Masks will either prevent infection or at least reduce the severity of the infection. That will help the economy open up again… but beware the second wave!
Lil Sis asks for my investment advice from time to time.
I told her to offload her dip-bought stock market HODLings on the reopening, then reload after the quarantine measures go into effect for the second wave.
I think everybody has the same idea.
I wouldn’t be in a hurry to re-buy. I predict that the crash will be a dip followed by a real crash. By the time the second wave of COVID hits, we’ll all be experts at treatments, quarantines, and masks. So I expect only a little dip. But then I think finally the money printing and the repo market and the debt will finally catch up to the market. Wait for that before going all in.
“But then I think finally the money printing and the repo market and the debt will finally catch up to the market. Wait for that before going all in.”
The Wall Street types tend to ignore the massive debt pileup when predicting the near term return of Happy Days.
” …then reload after the quarantine measure$ go into effect for the $econd wave.”
Would that timeline be before the 1$t week in Nov 2020 … or … afterward$?
Hey Donk
emergency warning signs
Irrespective of COVID-19.
I suppose those symptoms could be for a lot of other reasons besides COVID-19. Like, for instance, the time we almost lost my mom about a decade ago, when she developed post-flu pneumonia.
Perhaps tresho can comment on the spectrum of conditions leading to those symptoms.
Gap between real economy and risk asset prices continues to diverge…
New York Fed Factory Index Collapses in April to Record Low
Vince Golle
Bloomberg
April 15, 2020, 5:54 am
(Bloomberg) — Manufacturing in New York State shrank in April at the fastest pace on record, highlighting the severe impact of the economic stoppage designed to combat the pandemic.
The Federal Reserve Bank of New York’s general business conditions index tumbled 56.7 points to minus 78.2, the lowest in records back to 2001, a report out Wednesday showed. The bank’s measures of orders, shipments, employment and the average workweek all declined at a record pace this month amid dismal demand. Manufacturing has slowed significantly as the coronavirus disrupted global supply chains and caused sharp cutbacks in demand.
Manufacturers in New York expect only a slight improvement in conditions over the next six months. The regional Fed bank’s future index rose 5.8 points to 7, though expectations for orders and sales declined.
…
“…minus 78.2, the lowest in records back to 2001,…”
What does that ‘minus’ even mean?
Sounds ominous…
Will the porcine beauticians be able to paint lipstick on this pig, based on no favorable evidence whatsoever?
Tomorrow is another day.
U.S. stock futures slide as investors brace for jobless-claims report
Published: April 15, 2020 at 8:36 p.m. ET
By Mike Murphy
U.S. stock index futures fell late Wednesday, following losses on Wall Street and ahead of a sure-to-be-ugly U.S. jobless-claims report due Thursday. Dow Jones Industrial Average futures (YM00, -0.77%) slid 178 points, or 0.8%, as of 8:30 p.m. Eastern, while S&P 500 futures (ES00, -0.81%) and Nasdaq-100 futures )NQ00, -0.75%) were off about the same, percentage-wise.
…
The stock market index futures are already powering up on no news whatsoever, many hours before the opening bell. This bull has some legs!!!
Referenced Symbols
YM00
0.85%
ES00
0.86%
NQ00
0.97%
Economic Report
Philly Fed manufacturing index plunges in April
Published: April 16, 2020 at 8:49 a.m. ET
By Greg Robb
Index drops to -56.6, worse than anything seen in Great Recession
A container ship on the Delaware River in Philadelphia. Associated Press
The numbers: The Philadelphia Fed manufacturing index in April dropped to -56.6 after registering -12.5 in March. This is the lowest reading since July 1980.
Any reading below zero indicates deteriorating conditions. Economists polled by MarketWatch expected a -37.5 reading.
…
Get a load of this:
https://www.9news.com/article/news/health/coronavirus/2000-dollar-per-month-stimulus-proposal/73-79d0ef57-932c-4d58-a4ab-5fd897f00b79
The new bill, named the Emergency Money for the People Act, is being introduced by Rep. Tim Ryan, D-Ohio, and Rep. Ro Khanna, D-Calif.
Ryan said the plan provides a chance to examine programs like universal basic income.
“This is an opportunity for us I think in a national emergency to both help the American people and explore some of these options that may be out there,” Ryan told WKYC on Wednesday. He said direct cash payments and sustaining people during a time of great need “makes sense.”
Every American age 16 and older making less than $130,000 annually would receive at least $2,000 per month. Married couples earning less than $260,000 would receive $4,000 per month.
Families with children would get $500 per child per month for up to three children.
How much would this cost? How many trillions?
“It’s ClownWorld, Jake. Forget about it.”
https://usdebtclock.org/
I can understand helping the unemployed, but giving $2000 a month to every adult in the country? It would cost $5 trillion a year.
I know there is no way this will pass, but that it’s even being proposed shows that we are indeed living in Clown World
giving $2000 a month to every adult in the country
Never let a crisis go to waste. Introduce universal basic income.
It’s people trying desperately to figure out how to claw some wealth back from the 0.1% because they don’t understand why the current system works the way it does. So instead of demanding term limits to reduce corruption and less government interference in the market they are begging for more.
term limits to reduce corruption and less government interference in the market
I’ve always thought that campaign finance reform is a critical piece. Make all campaigns publicly-funded, so no rich PACs, etc. own any elected officials.
Willie, teachin’ ya ’bout being re$pectful to a “#3 porter”
https://youtu.be/KJ0ncVqrd8M
The Financial Times
Markets Briefing Asia-Pacific equities
Asia stocks fall as IMF warns of coronavirus growth standstill
New data show extent of economic havoc unleashed by the pandemic
Hong Kong’s Hang Seng fell after the IMF warned that Asian economic growth will shudder to a halt
© AP
Be the first to know about every new Coronavirus story
Stocks across Asia-Pacific fell after the IMF warned that growth in the region would grind to a standstill for the first time in six decades due to coronavirus, in the latest ominous sign of the havoc being wrought on the global economy by the pandemic.
The gloom in Asia’s markets on Thursday came after a dismal day on Wall Street, where traders were confronted by plunging US retail sales and industrial output.
Japan’s benchmark Topix index fell 0.8 per cent, while Australia’s S&P/ASX 200 shed 0.9 per cent. Hong Kong’s Hang Seng index dropped 0.7 per cent as China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks slipped 0.1 per cent.
Overnight the S&P 500 closed 2.2 per cent lower following a choppy trading session. Futures markets tipped the Wall Street stock benchmark to rise 0.2 per cent when trading begins later in the day, while the FTSE 100 was expected to edge up 0.1 per cent.
The losses for Asian equities followed a report from the IMF that forecast an “unprecedented” hit to the region’s economies, with growth slowing to virtually zero this year. The IMF estimated that Chinese GDP growth will fall to just 1.2 per cent in 2020.
…
Drama much?
The Tell
The next 45 days are the ‘most critical period in U.S. financial history,’ says stock-market expert who profited in 1987 and 2008 crises
Published: April 15, 2020 at 11:38 p.m. ET
By Mark DeCambre
How will the economy look in the next month and a half? Getty
After recovering a chunk of the losses racked up during the worst of the coronavirus-induced selloff last month, the stock market finds itself at a crucial inflection point, writes Alan B. Lancz.
“The next 45 days may just become the most critical period in U.S. financial history,” he wrote in a newsletter published Wednesday. “While on average we may face a bear market every 10 years, this one is like no other,” he said.
…
The Financial Times
Foreign exchange
Unusual price swings around daily FX ‘fixes’ spark alarm
Extra volatility increases costs, say experts, and could suggest market manipulation
The Australian dollar, the euro and the pound have been behaving oddly in the run-up to London’s so-called 4pm fix
Eva Szalay in London yesterday
Abnormal moves in currencies shortly before the calculation of daily benchmarks are bumping up costs for investors and could even suggest that high-speed traders are trying to manipulate exchange rates, according to Raidne, a market surveillance company.
Since the start of March, Raidne says, the Australian dollar, sterling and the euro have started to behave oddly in the run-up to London’s so-called 4pm fix — the most commonly used benchmark in foreign exchange, run by WM/Reuters. The fix is a five-minute period of trading used to calculate daily exchange rates that underpin a huge range of transactions.
Price swings within that window have doubled compared with previous months, and the pick-up in volatility starts earlier, Raidne has calculated. The pattern could suggest that computer-driven hedge funds are anticipating orders and tilting exchange rates against the interests of investors and companies that use the benchmarks.
“Something has changed in March; we’ve seen a step-change in the way the exchange rate moves around the fixing,” said Jamie Walton, co-founder of Raidne and former head of the currencies and rates quantitative trading team at Morgan Stanley. “Some of the moves suggest that at least one person is manipulating the market, particularly in the Australian dollar.”
…
Are people out preaching that now is a bad time to own Treasurys actually just trying to drive down the price so that they can snap them up at a discount before yields drop below the zero bound?
Just curious…
In a choice between low-yielding bonds and cratering housing or stocks, I’d take the bonds.
Key Words
Billionaire investor Ray Dalio says ‘you’d be pretty crazy to hold bonds’ right now
Published: April 15, 2020 at 3:57 p.m. ET
By William Watts
‘This period, like the 1930-45 period, is a period in which I think you’d be pretty crazy to hold bonds.’
— Ray Dalio
Ray Dalio, the billionaire founder of Bridgewater Associates, the world’s largest hedge fund, offered that warning in a Bloomberg webcast on Wednesday, arguing it made no sense to hold bonds when the Federal Reserve and other major central banks are effectively printing money at a rapid clip as part of their effort to backstop a global economy racked by the COVID-19 pandemic.
“If you’re holding a bond that gives you no interest rate, or a negative interest rate, and they’re producing a lot of currency and you’re going to receive that, why would you hold that bond?” Dalio asked.
Bond-buying by the Fed is seen contributing to a fall in Treasury yields this year. The yield on the 10-year Treasury note (TMUBMUSD10Y, 0.647%) was down 10 basis points at 0.64% on Wednesday. Yields have fallen sharply as the coronavirus pandemic forced the shutdown of most of the U.S. economy and other countries. Stocks plunged from record highs in February into a bear market before stabilizing late last month, to bounce off their March 23 lows.
…
‘This period, like the 1930-45 period, is a period in which I think you’d be pretty crazy to hold bonds.’
Was that a really great period for the stock market or something? I have to check some market history, as my recollection is that the Dow mostly tanked in the 1930s, and didn’t even regain its nominal high of 1929 until 1958.
Do you believe they will be able to bail out nominal asset prices, even at the cost of creating mass inflation? Will the excess debts be inflated away or defaulted away, or will the PTB impose perpetual stagnation?
That is the question.
Dalio isn’t talking about markets. He is talking as if markets are irrelevant.
Yes I get that.
And if he’s correct about the irrelevance of markets, how come his HODLings just cratered so much?
Flagship Bridgewater Fund Reportedly Tumbles 20% From …
Chief Investment Officer
1 month ago · In a LinkedIn post on Monday, Dalio wrote that he was “surprised” that the COVID-19 disease …
More market irrelevance is upon us today.
Economic Report
Jobless claims soar by 5.25 million to push coronavirus-tied layoffs above 20 million
Published: April 16, 2020 at 9:14 a.m. ET
By Jeffry Bartash
U.S. unemployment rate has likely reached 15%, economists say
…
1954
Even though “cash is trash “, it seems like hedge fund managers are trying to get more of it.
Key Words
‘It’s a complete abomination’ says Wall Street money manager about hedge funds applying for bailouts from small-business recovery funds
Published: April 15, 2020 at 2:44 p.m. ET
By Mark DeCambre
…
“Wall $treet money manager about hedge fund$ applying for bailout$ from small-busine$$ recovery fund$”
Really, where you$ thinking they would knot$ goe$ for grabbin’ free monie$ from poor lil’ American $mall bidne$$ folk$? Really?
(Bye.thee.way, x7 day$ & thee.free.monie$ already ALL.GONE$!) 💸💸💸💸💸
$ad. … “$ociali$m”.$ad
Funny, how when I go to the grocery store, they want to be paid in cash.
It’s always a good time for dips to buy!
Need to Know
Why ‘fleeing to cash’ in turbulent COVID-19 markets could be the worst plan, says Invesco strategist
Published: April 16, 2020 at 7:25 a.m. ET
By Barbara Kollmeyer
Critical information for the U.S. trading day
Stay in markets or go?
Getty Images
More talk of reopening economies is giving stocks a boost on Thursday, but a test is coming ahead of the open, with another set of bleak unemployment claims in the U.S.
No doubt it’s an incredibly tough time to be an investor, who are understandably facing these markets with lots of fear and a dose of loathing. Our chart of the day suggests taking a different approach right now, and looking past the worries that a bottom for stock markets is still waiting to ambush us all.
“What if investors, instead of fleeing to cash during the tumultuous times, instead invested more money following each of the worst days in the market?” asks Invesco global market strategist Brian Levitt,…
The Financial Times
Disease control and prevention
Hunt for origin of coronavirus raises new US-China tensions
American officials press China to share data from Wuhan about earliest cases of disease
‘Until the source of this virus is identified and controlled, there is a risk of reintroduction of the virus in the human population,’ said the WHO
Katrina Manson in Washington, Sun Yu in Wuhan and Clive Cookson in London 4 hours ago
Wuhan’s tentative re-emergence from lockdown has spurred hope of resolving an urgent mystery: the origin of the new coronavirus.
The easing of movement restrictions means local scientists can resume investigations into early-stage biological samples, patient trails and other data that may hold clues to how Covid-19 arose.
But there are signs that China is not sharing all the information the rest of the world is eager to see. Although it has been widely presumed that the virus emerged from animals in a live food market in Wuhan, scientists who have studied its genetics say there is no clear evidence this was the source.
US officials are pressing for China to share more data about the disease from the period before December 31, the day the authorities reported to the World Health Organization a cluster of cases of pneumonia in Wuhan.
But a senior Trump administration official said access to Wuhan had been restricted since the coronavirus outbreak.
…
Got shrinkage?
The Financial Times
fastFT BlackRock Inc
BlackRock assets under management tumble below $7tn on market tumult
World’s biggest fund manager garners inflows into cash management and ETF units
© Bloomberg
Richard Henderson 42 minutes ago
BlackRock’s assets under management dropped in the first quarter by the most on record as its clients’ portfolios were slammed by the turmoil in global markets caused by coronavirus.
The group’s assets tumbled to $6.5tn from a record high of $7.4tn at the end of 2019.
The world’s biggest fund manager still garnered $35bn in inflows over the period, although a significant portion came from an influx of cash as investors moved to the safest types of assets. Investors also shifted into BlackRock’s exchange-traded fund business, iShares.
…
zillow predictions went from +3% to negative 1%
report in
22151 inventory still at 1/2 par,but building
Rise and shine Rip.
Dunn Loring, VA Housing Prices Crater 21% YOY As Fairfax County Sellers Beg For Offers
https://www.movoto.com/dunn-loring-va/market-trends/
As one Northern broker conceded, “If you’re a buyer, the broker is lying to you. I know a liar when I hear one. I’ve been lying my entire life.”
*rising and shining*
Was it good for you too hon?
Hey Donk.
😂 There are going to be some readers really confused.
There’s no concealing hoof-stamping and DonkeyTalk.
Crystal over here! 🙂
Who is Crystal?
Crystal Clarity.
I was thinking more about casual readers rather than people who comment regularly.
Crystal Clarity
Sounds like a stripper.
Interesting how they have engineered their forecast so that, no matter when, it looks like now is the best time to buy a home. Big surprise there.
There’s always never been a better time to buy.
Realtors are liars.
…. and every closing a crime scene.
https://www.detroitnews.com/story/news/politics/2020/04/15/stay-home-protest-michigan-capitol-opposition-whitmer-order-coronavirus/2989230001/
General Half-Wit gives her state the finger. “Don’t like the lock down? Fine — I’ll make it even longer!”
One of these things is not like the other
One of these things just doesn’t belong
Can you tell which thing is not like the other
By the time I finish my song?
Thousands protest Michigan governor’s social distance order
Mike Householder and Ed White, Associated Press Updated 7:46 pm CDT, Wednesday, April 15, 2020
LANSING, Mich. (AP) — Thousands of flag-waving, honking protesters drove past the Michigan Capitol on Wednesday to show their displeasure with Gov. Gretchen Whitmer’s orders to keep people at home and businesses locked during the coronavirus outbreak.
https://www.mrt.com/news/article/Hundreds-protest-Michigan-governor-s-social-15203363.php
Hundreds Protest Michigan Governor’s Social Distancing Order by Rallying at the State Capitol
BY MIKE HOUSEHOLDER AND ED WHITE / AP APRIL 15, 2020
LANSING, Mich. — Hundreds of flag-waving, honking protesters drove past the Michigan Capitol on Wednesday to show their displeasure with Gov. Gretchen Whitmer’s orders to keep people at home and businesses locked during the coronavirus outbreak.
https://time.com/5821873/michigan-protest-governor-social-distance-coronavirus/
There’s right and wrong on both sides of this issue, but it would not be unreasonable to review the guidelines and adjust them where it makes good sense to maintain safety while attempting to lessen the economic fallout.
Unfortunately, our governor doesn’t have any, and instead it’s going to be all about “**** you, we’re doing this my way”.
LANSING, Mich. (AP) — Thousands of flag-waving, honking protesters drove past the Michigan Capitol on Wednesday
LANSING, Mich. — Hundreds of flag-waving, honking protesters drove past the Michigan Capitol on Wednesday
View from London below
When I was last in London in 2019 for work, there were 4 of us – so the company had a driver take us from LHR into downtown. The amount of 4-8 story rental building going up was considerable. Who the hell is going to own the shortfall – REITs, Investment companies
—–
Predicting how much house prices may fall this year is a bit like playing lucky dip. Roll the tombola and see what number you pull out.
It may be 3pc, suggests Capital Economics, or it might be 13pc, says the CEBR, another think tank. These are all based on extensive research, but until we know when the lockdown might end and the true scale of the impending recession, these numbers mean little.
…
For investors, the situation looks bleak. After being pummelled by tax hikes and changes to mortgage interest tax relief, and squeezed by shrinking yields, this may be the crisis that finally ends the buy-to-let dream – and spurs house price falls.
The economic situation will hit renters the hardest, the very people who landlords make their money from. A survey of renters in the Guardian found that one in five had been forced to choose between food and bills or paying rent, while six in 10 said they had suffered financially due to the shutdown. On average, a renting household spends a third of their income on rent, so even a temporary reduction in earnings will make many unable to pay.
https://www.telegraph.co.uk/property/house-prices/landlords-could-catalyst-impending-house-price-crash/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Facebook&fbclid=IwAR2GQ7rCEpUVRB4yRjX73JRdixUgOtLeLLP0d455c2AUk-G7XmmK0O55Jv8#Echobox=1587035987
The economic situation will hit renters the hardest, the very people who landlords make their money from. A survey of renters in the Guardian found that one in five had been forced to choose between food and bills or paying rent, while six in 10 said they had suffered financially due to the shutdown.
So much for the UK government paying 80% of their wages to stop the layoffs. I’ll bet that like our stimulus checks, that subsidy will show up one of these days.
Pocket the profits, offload the losses…
Key Words
Embrace socialism or let corporations fail — America needs to make a choice, NYU professor says
Published: April 16, 2020 at 9:14 a.m. ET
By Shawn Langlois
MarketWatch photo illustration/Everett Collection, iStockphoto
“It’s rugged individualism, capitalism and ‘The Hunger Games’ on the way up, and on the way down it’s a lot of call signs by CEOs that we’re in this together and sort of a Hallmark Channel-like socialism.”
…
“Key Word$:
Embrace $ocialism or let corporation$ fail.”
Barny “Feel.thee.Bern” $anders will de$troy America! & he’$ “evil!” too!
Oh, wait yer not$ talkin’ ’bout that “evil” $ocialism, maybee you mean the $weet, wonderful, benelovent$ type of Federal.Re$erve.Wall.$treet.+1% ‘ter$ type$ of $ocialism.
Yeah, that’$ what poor American$ have to rally around & $ave it!
Go Munchin! Print More$!, More$!, More$! & even More$!
Don’t.$top! Don’t … $top! … Don’t!
🌊🙏💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵 …
“That’s most likely to come from investors, half of whom weren’t generating enough cash to cover the cost of owning their rental properties, Veritas found in a survey last September.”
These aren’t investors, they are speculators.
The Plunge Protection Team has entered the market. We are all saved!
Bellair Beach, FL Housing Prices Crater 18% YOY As Gulf Coast Housing Market Tanks
https://www.movoto.com/belleair-beach-fl/market-trends/
As a noted economist said, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable.”