thehousingbubble@gmail.com
Blog

Real Estate Needs Their Toilet Flushed Of Some Of The Realtors

A report from the Berkeley Newsroom. “Berkeley Haas Professors Nancy Wallace and Richard Stanton were some of the few voices to forewarn of the massive risk posed by shoddy practices in the mortgage industry prior to the 2008 financial crisis. Unfortunately, history seems to be repeating itself. More than two years ago, Wallace and Stanton again began raising the alarm that the mortgage landscape that emerged from the last crisis is dominated by ‘nonbank’ lenders who operate with little of their own capital or access to emergency cash. It was another disaster waiting to happen, they warned, and called for increased oversight.”

“Wallace says this new crisis will begin to show itself within the next 30 days, as people forgo their monthly payments and the highly leveraged nonbanks face margin calls from the brokers they’ve borrowed from—commercial banks like JP Morgan Chase and Wells Fargo Bank and investment banks such as Morgan Stanley. They need cash to pay these lenders, and they don’t have it. The nonbanks have already begun asking for a rescue.”

NBC San Diego in California. “The coronavirus pandemic has claimed another victim: San Diego’s once red-hot housing market has at least temporarily hit the ice, said Andy Nelson, president of Willis Allen Real Estate. Nelson said the upper end of the housing market — where homes sell for $1 million or more — has taken the hardest hit. ‘That’s the market of choice,’ Nelson explained. ‘It’s not (the price-range) in which buyers need a home out of necessity.'”

“Afton Miller, a veteran agent with Coldwell-Banker Realty, said San Diegans are still buying and selling, but agreed with Nelson that the once-booming real estate market has definitely slowed down in March and April.”

The Dallas Business Journal in Texas. “Ask Rogers Healy where the Dallas-Fort Worth residential real estate market is headed, and he doesn’t sugarcoat it. ‘We’re in for some relative hell for at least a couple of quarters,’ Healy said in an interview with the Dallas Business Journal. Healy, founder of Rogers Healy and Associates Real Estate and owner and CEO of Rogers Healy Cos., said the likely slowdown in the months ahead will have an upside in that it will cause real estate agents who don’t belong in the field to wash out.”

“Why do you think we’ll have that lag before rock bottom? ‘There’s stuff like forbearance, where people think forbearance is the forgiveness of the mortgage. It’s not. They can go in and potentially press pause on the mortgage payments for a couple of months, and then it balloons, potentially with interest, to where they have to write a check all at once, which, that’s not going to happen. I would say if 50 percent of people who practice forbearance are able to make it happen, we’d be lucky. So, it’s going to lead to some foreclosures.'”

“‘On top of that, lending requirements are changing drastically. This morning (Monday) a big bank announced at least 20 percent down and 700 credit score to qualify for a loan. That’s not even a jumbo loan – that’s just a loan. So I think we’re in for some relative hell for at least a couple of quarters.'”

“‘I think real estate needs their toilet flushed of some of the realtors of DFW. I think this is going to be, unfortunately, the way to go and do that.'”

From Mansion Global on Florida. “Home sales were stable across South Florida in the first quarter of this year, reflecting strength before the Covid-19 pandemic hit the state, according to market data from Douglas Elliman. In Miami Beach and Barrier Islands, the median sales price of luxury single-family homes-defined as the top 10% of the market segment-slipped 7.9% to $9.3 million. The number of sales remained unchanged, at nine. The number of luxury condo sales, at 69, was roughly flat compared to the same period last year. However, the median sales price dropped 20.8% year-over-year to $2.55 million, according to the report, prepared by Jonathan Miller.”

“In the first quarter, Tampa’s median luxury sales price-single-family and condo included-fell 13.6% to $760,000. In Delray Beach, the median sales price decreased 19.6% year-over-year to $1.4 million in the first quarter, according to the report.”

The Bangor Daily News in Maine. “The short-term rental unit Rudy Ferrante hosts next to his home on Munjoy Hill is booked solid in a typical April. Not this year. Even before the state ordered a shutdown on Airbnb and other short-term rentals through April due to the new coronavirus, Ferrante’s guests canceled on him well into June. With no short-term revenue coming in, he’s now leaning toward renting his Vesper Street unit for a year. ‘That way I don’t have to worry about when this is going to end,’ Ferrante said.”

“Some of the roughly 800 registered short-term rental units in Portland could go back on the market because of the pandemic. With no revenue coming in, owners like Ferrante are weighing switching units over to long-term rentals or riding things out until the virus passes. David Burke, a high school teacher who rents out units in two buildings through Airbnb, VRBO and ads he places in nursing magazines, estimated that spring cancellations from short-term guests have already cost his family between $10,000 and $20,000. If the shutdown lasts through the summer, he may have to go into debt to pay the mortgages.”

The McCall Star News in Idaho. “Kelly Hill stood in a cavernous entertainment room inside a short-term rental in McCall and pondered how she will be able keep the bills paid if the threat of the COVID-19 virus keeps tourists away into the summer. Those losses worsened on Monday after Valley County commissioners set May 15 as the soonest short-term rentals could begin renting to non-essential personnel again. About 75% of the company’s annual income is earned through its 66 short-term rental properties capable of housing up to 740 guests from Cascade to New Meadows, Hill said.”

“The company has seen over 80 reservations canceled as far out as August since Idaho Gov. Brad Little issued a statewide isolation order on March 25, she said. ‘Even more disturbing is the lack of new reservations being made,’ she said. Hill is preparing for an 85% decrease from the $150,000 the company made last April booking short-term rentals, most of which were for summertime stays.”

“Frost Property Management reported similar losses, with 59 short-term rental reservations amounting to about $50,000 in revenue cancelled since March 16, Owner Jonathan Frost said. ‘That is significantly more than the combined total number of altered or refunded reservations we’ve had since we were founded in 2012,’ Frost said.”

Related Posts
This Post Has 118 Comments

  2. ‘Berkeley Haas Professors Nancy Wallace and Richard Stanton were some of the few voices to forewarn of the massive risk posed by shoddy practices in the mortgage industry prior to the 2008 financial crisis. Unfortunately, history seems to be repeating itself. More than two years ago, Wallace and Stanton again began raising the alarm that the mortgage landscape that emerged from the last crisis is dominated by ‘nonbank’ lenders who operate with little of their own capital or access to emergency cash’

    I don’t recall hearing of these two before. I don’t know why they jump to the conclusion of bailing out these non-bank/servicers. I think it might just be the go-to answer for academics and media types. Is it really a big deal if Quicken goes away? Like FHFA Director Calabria said, just get a new servicer. Anyway we need to toilet flush the lending biz too, right after they take a big bite of the sh$t sandwich they made.

    2. If a non-bank entity originates the mortgage, and then sells the mortgage to, say, JPM, and the buyer defaults and forecloses, who gets the house? JPM or the non-bank?

      1. Was there PMI? After a period of time, the hot potato game begins with the guarantor. Was the underwriting sound? Call the lawyers!

        1. Gosh, I hope no judges or lawyers lose their shacks to foreclosure. They might be a bit vindictive toward the REIC.

    3. “Wallace says this new crisis will begin to show itself within the next 30 days, as people forgo their monthly payments and the highly leveraged nonbanks face margin calls from the brokers they’ve borrowed from—commercial banks like JP Morgan Chase and Wells Fargo Bank and investment banks such as Morgan Stanley. They need cash to pay these lenders, and they don’t have it. The nonbanks have already begun asking for a rescue.”

      With Unlimited Quarantinive Easing in place, isn’t a Fed bailout for the nonbank lenders only a matter of time?

      Which reminds me: How come the entire subprime industry was allowed to go up in smoke back in 2007, given that the Fed could have chosen to bail them out?

      1. Reeks of Japan. This is what the Japanese central bank & government did to prop up lousy companies that should have gone bankrupt. The reason given to gullible public was “to save jobs”, when in fact, it was to save their buddies.
        After this, the average person can say goodbye to a decent wage/ salary.

    4. I’m so old I remember when the markets and bankruptcy courts would sort all of this out. Now we have petulant children all whining for a bailout. Please! The Fed is buying everything and in the process conditioning everyone (in the FIRE sector) to expect a backstop. Taxpayer gets the bill (shaft).

      https://twitter.com/HedgeyeDDale/status/1250444205652140032
      Darius Dale
      @HedgeyeDDale
      “The @federalreserve is trying to circumvent the entire bankruptcy system. Employees aren’t the ones who get hurt in restructurings – it’s the shareholders and creditors. They’re picking winners (the 0.1%) from losers (capitalism).“
      -@DiMartinoBooth
      via @Hedgeye
      #InvestingSummit
      9:21 AM · Apr 15, 2020·Twitter Web App

    5. “Is it really a big deal if Quicken goes away?”

      And if it is a big deal, will they really go away if they go Chapter 11?

      When they talk about bailouts, just remember who and what is being bailed out.

      1. I remember when Quicken was known for accounting software and TurboTax. All that now belongs to Intuit.

        I think it would be fine if QuickenLoans were to disappear in a puff of smoke.

        1. ‘What will the real estate profession look like after the COVID-19 pandemic is over? Jeff Campbell, broker, San Diego Estates Co. joined Good Morning San Diego to try and answer that question. Campbell also discussed the impacts of the coronavirus on the local housing market the possibility of the coronavirus create a housing crisis in a post-pandemic economy.’

          https://www.kusi.com/impacts-of-the-coronavirus-on-the-san-diego-housing-market/

          Have to sell? Oh dear…

        2. No native of Cleveland ever refers to Quicken Loans Arena (where the Cavs *used* to play) as “The Q.” It was, is, and will forever be Gund Arena. The best thing to come out of them going out of business will be losing the naming rights and the disappearance of that astroturf nickname.

  4. “‘I think real estate needs their toilet flushed of some of the realtors of DFW. I think this is going to be, unfortunately, the way to go and do that.’”

    It will be hungry games soon for these folks LOL

    1. Has Rogers offered up some sort of reasoning as to why he doesn’t see himself or anyone in his employ to be in that water closet that needs flushing? Or perhaps this is just sharks becoming aware of blood in that water?

  5. No “pent-up demand” for $500,000 starter homes happening here:

    “The pandemic crippling the American economy portends a sharp increase in poverty, to a level that could exceed that of the Great Recession and that may even reach a high for the half-century in which there is comparable data, according to researchers at Columbia University.

    If quarterly unemployment hits 30 percent — as the president of one Federal Reserve Bank predicts — 15.4 percent of Americans will fall into poverty for the year, the Columbia researchers found, even in the unlikely event the economy instantly recovers. That level of poverty would exceed the peak of the Great Recession and add nearly 10 million people to the ranks of the poor.”

    https://www.nytimes.com./2020/04/16/upshot/coronavirus-prediction-rise-poverty.html

    1. “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

  6. Because rents in Denver can only go up, forever:

    “A snapshot study by eviction defense lawyers warns that more than 450,000 Colorado renters are at risk of being evicted from their homes in coming months when guidance against removing tenants expires, putting depth to the economic crater caused by COVID-19 lockdowns and layoffs.

    Colorado’s unemployment claims literally crashed state computers in what state officials called an “unprecedented” surge in recent weeks; nationally, more than 17 million new unemployment claims were filed in the first three weeks of coronavirus shutdowns. In Colorado, there were 127,000 claims filed. In another signal of how difficult things will get, the City of Boulder on Tuesday announced it was furloughing 737 workers for 10 weeks. Broomfield last week said 235 city workers will be furloughed through June 30, and the city of Denver is reassessing its budget and has put worker furloughs on the table.”

    https://coloradosun.com/2020/04/15/coronavirus-renters-colorado-study/

    1. “A snapshot study by eviction defense lawyers warns that more than 450,000 Colorado renters are at risk of being evicted from their homes in coming months when guidance against removing tenants expires,…”

      – 1) Blowing asset bubbles has consequences (when they pop). Everyone was cool with it as it inflated though.
      – 2) So, when the renters get evicted, who’s gonna pay the rent? Many of the luxury apt. builders (speculators) are levered to the hilt. They were toast anyway, since vacancy rate was already pretty high, from what I’ve read prior to.
      – 3) Based on recent actions, the current options in 2020 seem to be: UBI, MMT, or bailout. Choose your poison.
      – 4) This was a preventable crisis; it was foreseeable based on the last two asset bubbles blown by the Fed. And yet, here we are…

  7. I’m looking ahead. All those red numbers up ahead look alot like red lights.

    Opinion: The biggest mistake stock market investors are making now — failing to look ahead
    Published: April 16, 2020 at 11:08 a.m. ET
    By Nigam Arora
    Thinking in time frames is important for investors. The economy’s depressive state may end soon
    Getty Images

    Referenced Symbols
    DIA
    -0.96%
    DJIA
    -0.89%
    SPY
    -0.38%
    SPX
    -0.27%
    ZM
    -2.60%
    TDOC
    -1.87%

    In the wake of coronavirus-related volatility in the stock market, investors are asking: “Is the economic data showing that there will be a depression?”

    The No. 1 mistake investors make as they try to figure out the answer is that they are mostly focused on one dimension of a two-dimensional problem.
    …

    1. No worrie$! This $ort of cata$trophe will.knot.happen$ to another $ingle.bidne$$.company in America!

      Che$apeake Energy’$ $tock has plummeted 90.1% year to date

      Chesapeake Energy’s $tock $uffers record plunge as rever$e $plit confirm$ financial trouble$

      MarketWatch / Published: April 16, 2020 / By Tomi Kilgore

      Shares would be valued at about 8 cents each if the 1-for-200 reverse split didn’t take effect

      Chesapeake Energy’s stock has been $piraling lower over the past couple of years as the company $truggled under a heavy debt load$, made wor$e by falling natural-ga$ and crude price$ on supply concerns, and more recently as the COVID-19 pandemic $apped demand.

      (Eye wonder$ iffin’ this rever$e adjustment$ is effecting aq.dannyboy energie$ portfolio$?)

      Next: Boeing & Dec 2019 tailwind$ … “Coming.$oon!”

      1. GF just checked her account and they zeroed her for her Chesapeake. She literally only had one share of it as a practice lesson in investing and they just zeroed it with no notice whatsoever. What a great lesson in how the game truly works!

  8. ‘On top of that, lending requirements are changing drastically. This morning (Monday) a big bank announced at least 20 percent down and 700 credit score to qualify for a loan. That’s not even a jumbo loan – that’s just a loan’

    Note the GSE’s haven’t raised their guidelines, the lenders did. They know people don’t have 20%. They just don’t want to make the loan. Now all it takes is one fire-sale comp.

      1. Maybee someone will create a HB.B II Bankruptcy digital counter:
        Jan 1$t 2020 – Dec 31$t 2020🗓🚾

    2. We’ll see. The first bubble in the Northeast peaked in 1987. It took SEVEN years for it to deflate to fair value. People just refused to sell. And back then, there was enough inflation to get a 50 percent real decline with just a 30 percent nominal decline.

      “Now all it takes is one fire-sale comp.”

      We’re really counting on the AirBNB folks here.

    3. Exactly! House price is set at the margins. Lower comps = bad (for REIC), but good for everyone else. Again, asset bubbles always pop. Not going to stop it this time either, unless the Fed jumps in and buys houses too, which even now, seems like a stretch. Humpty Dumpty.

      1. Not going to stop it this time either, unless the Fed jumps in and buys houses too, which even now, seems like a stretch.

        What makes it a stretch? Just historical precedent so far? The precedent I’ve seen set for the last 12 years is that nothing is off the table if bank solvency is at risk.

        1. “What makes it a stretch? Just historical precedent so far? The precedent I’ve seen set for the last 12 years is that nothing is off the table if bank solvency is at risk.”

          – Fair comment. I certainly don’t know the future. Maybe it’s a hope or wish, like aspirational pricing! 🙂

          – The Fed has already floated a trial balloon for outright stock purchases. If they also buy houses, then the circle will be complete.

          – Q: Who would the REIC then buy and sell houses from/to? Completely redundant at that point. It’s still early in the game yet. Let’s see how this pans out.

          – One possible future… 🙂

          https://vimeo.com/284449766
          The Vapors – Turning Japanese (1980) Official Video

          1. “The Fed has already floated a trial balloon for outright stock purchases. If they also buy houses, then the circle will be complete.”

            Except for a few messy details:

            1) If the Fed makes speculators whole through buying up collapsed housing and stocks, won’t that merely encourage more high-risk gambling activities by speculators down the road?

            2) What would the Fed do with portfolios of stocks and houses?

            3) Wouldn’t removing housing from the market potentially worsen the homelessness problem, by arbitrarily pushing up the price to a level out of reach for most American families, especially if the latest wave of subprime mortgage lending crashes?

          2. 4) A general asset bailout could result in a longterm problem of zombie houses and companies.

            5) Millenials might find themselves holding a devalued currency and facing years of high inflation.

          3. won’t that merely encourage more high-risk gambling activities by speculators down the road?

            Seems the Fed, etc., has long since forgotten what “moral hazard” means.

          4. Seems the Fed, etc., has long since forgotten what “moral hazard” means.

            I believe it’s now seen as a feature, rather than a bug in the system.

      2. QE nor rates saved anyone during the last minor correction when prices fell 45%+.

        There’s nothing left but the cryin’….. and some dust from stampeding DebtDonkeys.

  10. If the shutdown lasts through the summer, he may have to go into debt to pay the mortgages.

    Which side of the balance sheet was the alligator on anyway?

  11. “‘I think real e$tate needs their toilet$ flu$hed of some of the realtor$ of DFW.”

    myopic $entence Example$:

    “He needs to be admoni$hed not to have a mind which is narrow or myopic.”

    Why $top flushing just @ DF Texa$? I$ they $pecial?

  12. 99% of “sponsored” ads on Facebook are now real estate agents. This is so annoying! I thought the Bloomberg “Mike will get it DONE” was bad. I will start posting these ads soon as I troll them on FB too.

    2. Faceplant is now warning anyone who “likes” information deemed coronavirus hoaxes or disinformation. Is the Surgeon General telling the sheeple not to buy face masks as coronavirus was winging in from China considered disinformation?

      You can see where this is going. Soon anyone who “likes” non-Narrative compliant FB content will be warned, then banned. Their social media score will be forwarded to our PC Commissars for review and downgrade.

      https://sports.yahoo.com/facebook-warn-users-liked-coronavirus-130414873.html

    3. Hey… where is Mike anyway? Those billions of his could go to good use helping out the unemployed….

  13. ‘Even more disturbing is the lack of new reservations being made,’

    Not surprised. Who will want to hot swap living arrangements with strangers any time soon? Including hotels? Airbnb may be finished. Marriott might be able to convince me that they sanitize well enough to do necessary business travel and hope for the best. But until I’m 100% confident in a vaccine I’m not interested in Airbnb. That may be years.

      1. I wonder how many lenders seriously believe that FBs who need forbearance on their mortgage payments will be able to magically produce 3X payments at the end of the grace period.

        1. I assume none. But how many FBs believe? How many have made their last payment and know it? How many think they can stay afloat if they just keep making the payments?

          I would expect the experiences and reports of the last 12 years to have a major impact on all schools of thought. Not only has everyone been trained to buy the dip, they’ve also been trained when things go south to stay in place rather than mailing in the keys. Everybody will be looking for that 5+ years of no payments that they heard about.

          1. My friend’s mortgage broker is telling her that he thinks the government will give zero or negative interest loans to the big lenders to give the economy a jump start, which will revitalize the real estate market. He also expects lots of refinancings in the next 6-12 months. Other than “it is difficult to get a man to understand something, when his salary depends on his not understanding it,” thoughts?

          2. he thinks the government will give zero or negative interest loans to the big lenders to give the economy a jump start,

            That would fit the pattern.

            which will revitalize the real estate market.

            That’s a big “we’ll see”. It can’t work forever. But will it work this time? I don’t think they can get people excited to buy anytime soon but I think they can keep most of the inventory off the market if they decide to…again. But I think we’re going to be talking about really big numbers this time…we’ve gone from what…0-15+% unemployment in one month and so far that’s been limited by how fast they could process the claims? So there could still be a claim backlog? That’s a TON of people who are going to stop paying all at the same time this year. I don’t think last decade’s tactics will be nearly enough.

          3. As my husband points out, we have major income destruction this time. It doesn’t matter how low interest rates are if someone doesn’t have income to qualify.

          4. how low interest rates are

            There will be people with half a brain that will learn something from this and never buy a house with borrowed money for the rest of their lives.

  14. I$ their any “angry” repubican tea.partie$ members $till $tanding? I$ they gonna take this $orta new$ lieing down$? Fight! Fight!

    Economy & Politic$

    Profe$$ional gambler$ in Nevada may now be able to collect unemployment benefit$

    MarketWatch / Published: April 16, 2020 / By Weston Blasi

    People who gamble for a living would not normally collect unemployment, but the statewide shutdown of casino$ due to the coronaviru$ could change that.

    The Coronaviru$ Aid, Relief, and Economic $ecurity (CARE$) Act was $igned by President Trump on March 27.

    One aspect of the bill extended unemployment benefit$ to %elf-employed individual$.

    Nevada Gov. Steve Sisolak ordered the shutdown of all casino$ until April 30, and possibly longer, so gambler$ will not be able to visit to their “worksite$” for at least three more weeks.

    $ad. … $ocialist”.$ad.

        1. Wonder$ iffin’ she has a “Toilet made of Gold” like dtRumpsis?

          (What maybee he use$ 8ply wiper$?)

        2. The Comrades of Proven Worth must be generously rewarded for their exertions on behalf of The People.

          Remember, it’s for the children.

      2. It just goes to show how tone deaf they are. She probably thought the unemployed proles who can’t even get an unemployment claim filed would be inspired by her gourmet ice cream.

  15. Woe$er & woe$er, …T$k, T$k

    Market$ / U.S. & Canada / Market Extra$:

    U.S. commercial real e$tate brace$ for default$ as pandemic cut$ ca$h flow$.

    Published: April 16, 2020 at
    By Joy Wiltermuth

    ‘Everybody needs help,’ says Ann Hambly, founder of 1$t $ervice $olutions, about commercial property owner$

    Delinquencie$ on commercial mortgage-backed $ecurities (CMBS), which are loans on malls, skyscraper$, apartment$, office$ and other property type$ packaged into bond deal$, stood at 2.57% in March, far below than their 10.06% peak in July 2012 in the wake of the global financial crisis

    But those figures also don’t fully capture the economic disruption$ cau$ed by the coronaviru$ pandemic, Moody’s analysts warned, adding that property-level “ca$h-flow stre$$, particularly across hotel$ and retail propertie$,” will trigger more default$.

    i$$uance of new CMB$ debt$ this year could plunge to $50 billion, down from their initial forecast of $112 billion, in part because banker$ still need to find a home for property loan% they originally earmarked to $ell into new bond deal$.

    “CMBS loans on originator balance sheets from before COVID-19 are utilizing balance sheet capacity,” Reardon’s team wrote in a client note Wednesday. “These loans need to be re-marked and sold to free up originator balance sheets for new lending again.”

    CMBS, a canary in the coal mine
    CMBS is one of the more transparent parts of the U.S. commercial real-estate finance market in terms of flagging performance issues early on, largely because property-level details are recorded in monthly bond reports, unlike the loans held by banks, insurance companies or other lenders.

    And already, in the first two weeks of the U.S. coronavirus outbreak, more than 2,600 borrowers with CMBS loans sought potential debt relief, according to Fitch Ratings, which tracked 47% of the relief requests to hotel assets and 30% to retail properties.

    That’s likely only a hint of what’s ahead, particularly as retailer sales plunged in March, providing an early picture of the damage wrought by the coronaviru$ as unemployment $kyrocketed and many American$ $hut their wallet$ to all but the e$$ential purchase$

    $ad.

  17. I’m in Ada County, Idaho, and can tell you this state is somewhat delusional. First there’s the uneducated, oblivious individuals who think this pandemic is a hoax or annoyance. Then there’s the real estate industry and developers who insist on plowing through. Putting up one subdivision after another despite the fact most buyers will be coming in from California, not locally. Where are all those buyers? Still in soft lockdown? It’s going to be six to ninth months minimally before they have the cash available to come here. And new construction is competing with a bunch of owners trying to get out. Have five neighbors so far who put their homes up, and these are all houses built in the last two years.

    1. What$ the moving rental truck yards$ @ Pen$ke & U-Haul$ look$ like? Any with license plates from Alaska or Hawaii?

    2. This is the place where speculators were paying over $400k for moldy crap shacks not that long ago. The hangover will be brutal.

  18. How did all the VRBO and AirB&B landlords get the financing for these units?
    Did they state they were owner occupied? If they were apartments they would need at least 20-30% down.
    I’m stunned to see the number of units people have.
    Where did the money come from?

  19. https://twitter.com/batkaren/status/1250790545166929929
    Darius Dale Retweeted
    batkaren
    @batkaren
    I’d absolutely watch a TV show where Steve Mnuchin and his wife were forced to survive on $1,200 for 10 weeks.

    8:17 AM · Apr 16, 2020·Twitter Web Client

    https://twitter.com/BWestbrookAZ8/status/1250563107874918400
    Brianna Westbrook
    @BWestbrookAZ8
    Steve Mnuchin thinks Americans can live on $1,200 for 10 weeks.

    https://twitter.com/i/status/1250563107874918400

    5:14 PM · Apr 15, 2020·Twitter for iPhone

    1. Unless I get inspired to buy something I don’t need, I’ll still have all that $1200 sitting around at the end of 10 weeks.

    2. Steve Mnuchin thinks Americans can live on $1,200 for 10 weeks.

      Don’t like him but he did not say that. This is how Fake News works.

      1. My opinion of him improved after we watched San Andreas the other day and his name flashed by at the end as one of the producers. Love him or not, you can’t say he didn’t help produce an amazing number of movies during his stint in Hollywood!

      2. “Steve Mnuchin thinks Americans can live on $1,200 for 10 weeks.”

        “Don’t like him but he did not say that. This is how Fake News works.”

        – From the clip: Mr. Mnuchin said “bridge liquidity for about 10 weeks.” He was speaking of the entire package, but only $1200 per person, $2500 per couple of the entire multi-$T bailout package ($6-8T depending on how it’s calculated) is going directly to people. This is “helicopter $”, but I calculated only about $350B to John and Jane Q. Public. $0.35T/$6T=5.8% of the bailout package. Not including unemployment benefits, of course.

        – The financial sector reaped the lion’s share of the bailout, with no oversight or accountability at the Fed/Treasury complex.

        – Bailing out the 1% doesn’t do anything for the demand side of the equation, nor for those “little people” suffering directly from this economic disaster in the making. The narrative is always “trickle down economics,” which hasn’t worked much for Main St., but has been enriching Wall St. handsomely.

        1. “Bridge liquidity” is not “live on.” A biased interpretation of his statement was made and amplified on Twitter. Fake News.

        2. Got vega?

          I guess volatility is peachy if you know how to trade it.

          Finance
          Banks Brace for Consumer Pain, but Wall Street Trading Arms Shine
          Units at Goldman Sachs, Bank of America turn in some of their strongest performance in years
          By Liz Hoffman and
          David Benoit
          Updated April 15, 2020 6:41 pm ET

          For Americans checking their retirement accounts, the market’s swings during the first quarter were a horror show. For Wall Street’s traders, they were a windfall.

          Big banks’ trading desks posted their strongest results in years during the first three months of 2020—when the deepening coronavirus crisis wreaked havoc on the markets—buying and selling trillions of dollars worth of stocks and bonds, commodities and interest-rate products.

          Goldman Sachs Group Inc.’s debt traders had their best three-month stretch in five years, pulling in nearly $3 billion. Bank of America Corp. ’s stock traders’ $1.7 billion in revenue was a quarterly record.
          …

  20. Jared: “Dad.in.law, can you$ get Uncle $tephen @ Treasury to print up some more$ of those paper$ flying off the pre$$es, plea$e, … pretty plea$e?

    Busine$$:

    Ku$hner Co$. Face$ $queeze in Brooklyn Over WeWork$, Coronaviru$

    By Caleb Melby and David Kocieniewski / April 16, 2020

    Project partnership owe$ $300 million$ to South Korean insurer$ Company says Dumbo Height$ $ite fully lea$ed, ‘huge succe$$’

    Kushner Cos., the real estate firm owned by members of Jared Kushner’s family, is staring down another crisis.

    The firm’s partnership in four Brooklyn office buildings barely covered debt payments last year. Now a global recession caused by the coronavirus pandemic is threatening to disrupt a financial high-wire act: balancing an ailing major tenant, WeWork, and $300 million of loans issued in 2018 by South Korean insurers

    A deteriorating situation at the property, known as Dumbo Heights, would add to the family’s business woes. Last month, Kushner Cos. missed a mortgage payment at another property, a tourism-focused one in Manhattan’s Times Square with $285 million of debt issued by Deutsche Bank AG. That project has been foundering for two years. Financing arrangements at both properties allowed little wiggle room for tenants unable to pay rent.

    “Dumbo Heights has been a huge success, and any suggestions to the contrary are absolutely false,” a spokesperson for Kushner Cos. said in an email. “Of course, rent collections during the pandemic will likely be similar as with all other landlords at this time. The properties are essentially 100% leased at rents far exceeding the initial underwriting at acquisition.”

    Troubled Debt$

    Dumbo Heights, which the Kushner family co-owns with Aby Rosen’s RFR Holding LLC, had $27.5 million of free cash flow to cover $25.4 million of debt payments last year, an uncomfortably close margin for lenders. In August, banks put it on a list for potentially troubled debt, which triggered the lender$’ right to review new lease$ and major change$ to lease$

    One major tenant, WeWork, which sub-leases office space, has engaged more than 600 landlords in discussions as it seeks to reduce its rent by as much as 30%. In some cases it is offering a share of revenue in exchange, as some of its tenant% refu$e to pay rent$, exacerbating one of the most $pectacular flame-out$ of a high-flying $tartup in recent memory

    Kushner Cos. is already in discussions with its lenders about the Times Square property, where it defaulted on high-interest loans late last year. Help might soon be needed in Brooklyn and beyond. Whether it comes from existing lenders, new ones, private equity firms or rescue funds from state or national governments isn’t yet clear.

    $ad. … “$ocialist”.$ad.

    With assistance by Gillian Tan, and Kyungji Cho

  21. Will face masks help prevent transmission of coronavirus?

    The public was, understandably, confused. N95 masks appear to be effective for health-care workers. This study says N95 medical-grade masks do help filter viruses that are larger than 0.1 micrometers (One micrometer, um, is one millionth of a meter.) The coronavirus is 0.125 um. They have “efficacy at filtering smaller particles and are designed to fit tightly to the face,” it said.

    However, hospitals have reported a shortage of masks. Lawmakers say they should be used by medical staff who are up close and personal with patients who have COVID-19: Health and Human Services Secretary Alex Azar has said that there are only 30 million N95 masks in the national stockpile, and “as many as 300 million masks are needed in the U.S. for health-care workers.”

    Dispatches from a pandemic:Letter from New York: ‘When I hear an ambulance, I wonder if there’s a coronavirus patient inside. Are there more 911 calls, or do I notice every distant siren?’

    Others are even more skeptical than that. Paul Glasziou, a professor of medicine at Bond University in Australia, and Chris Del Mar, a professor of public health at Bond, analyzed a dozen studies on face masks. They concluded: “Face masks may not do much without eye protection.” Experts say masks may also remind people of the seriousness of this public-health emergency.

    They say the best way of staying safe is to avoid public settings with other people whenever possible. “People may also wear masks inappropriately, or touch a contaminated part of the mask when removing it and transfer the virus to their hand, then their eyes and thus to the nose,” they wrote in The Conversation. “Masks may also provide a false sense of security, meaning wearers might do riskier things such as going into crowded spaces and places.”
    …

    1. “Will face masks help prevent transmission of coronavirus [CCP virus]?”

      – Yes, in spite of CDC lies, disinformation, and waffling. Next question.

      https://twitter.com/Jonn__Mc/status/1244957684820070402
      Jonn Mc
      @Jonn__Mc
      Replying to
      @nntaleb and @WHO
      Sad but true, you suck @WHO

      . The mask countries are so much better off. Best masks should go to highest prio of course. Hospitals, nursing homes etc

      See embedded chart here (data):
      https://twitter.com/Jonn__Mc/status/1244957684820070402/photo/1

      6:00 AM · Mar 31, 2020·Twitter Web App

      – S. Korea seemed to get it right.

    2. People may also wear masks inappropriately, or touch a contaminated part of the mask when removing it and transfer the virus to their hand, then their eyes and thus to the nose

      Add to this, you need to sanitize your hand(s) or put on clean gloves before removing the mask, then throw away the mask and gloves, then sanitize your hands again. Tell me how many people are doing that!

      More likely, they’re putting on gloves and a mask when they leave home, then bouncing from place to place, touching countless un-sanitized surfaces, and constantly fiddling with the mask.

      2. throw away the mask and gloves

        How does that help if you don’t also throw away your clothes and the things you bought at the store?

        1. Funny how people who wear gloves and masks regularly generally wear lab coats and/or scrubs too.

    3. Wash your hands.
      Don’t touch your face.

      My wife works in healthcare and she is in direct contact (up close & personal) with Covid-19 patients every day. She wears a mask and a face shield along with a head covering and protective glasses and gown.

      She has three N95 masks that she uses and then cleans at the end of her workday.

      The protocol before the virus was dispose of the mask after each patient. Now its use it (and clean it) until it’s “soiled”.

      The management is telling her, and her fellow workers, that there just aren’t enough masks available in this Country to cover their immediate needs.

      After repeated cleaning most N95s don’t fit very “tightly to the face”………….

      Three masks.

      So, considering the “shortage of masks being reported in this Country” what are we doing giving (“delivering”) a million masks to F-cking Israel?

      “US Department of Defense Give 1 Million Masks to IDF for Coronavirus Use”.

      By JERUSALEM POST STAFF APRIL 7, 2020

      The US Department of Defense delivers one million surgical masks to be used by the IDF

      A plane carrying over a million surgical masks for the IDF landed in Ben-Gurion airport Tuesday night, in an operation ran by the US Department of Defense’s Delegation of Procurement.

      “In the past two weeks we have purchased and flown to Israel tens of thousands of swabs, masks, protective suits for medical staff and more,” said Limor Kolishevsky, head of the New York Purchasing and Logistics Division.

      https://web.archive.org/web/20200407234505/https://www.jpost.com/Israel-News/US-Department-of-Defense-give-1-million-masks-to-IDF-for-coronavirus-use-623976

  22. Oh no, Free potatoe$! … (can someone send a #5 bag to that “evil” $ocialist “feel.thee.bern” $ander$!)

    American Qua$i.Capitalism i$ in a deeth.👾.$piral, just like Hussein.health.care!

    An Idaho farm is giving away 2 million potatoe$ because coronaviru$ has hurt demand.

    By Alisha Ebrahimji, CNN

    With coronavirus severely affecting the potato supply chain, a farm in Idaho is giving away about 2 million potatoes so they don’t go to waste. First come, first served.

    Ryan Cranney, CEO of Cranney Farms in Oakley, Idaho, about 150 miles from Boise, told CNN the majority of his potatoes from the farm are typically sold to grocery stores and to restaurants to make french fries.
    Because of stay-at-home orders throughout the nation, Cranney said the food service demand is down significantly, leaving him with six months worth of crop.

    A little over 50% of Cranney’s sales come from its potato crop, according to Cranney.

    Cranney Farms also grows sugar beats, wheat, barley, mustard seeds, corn and alfalfa and they raise cattle, but Cranney said their potato crop and cattle have been hit the hardest.

    “We’ve made our best assumptions so we’re cutting back what we’re going to grow this year,” Cranney said. “If things turn around quickly and take off, we’re going to be short. But if it drags on longer for several more months, it could be a total disaster. People are going to lose their farms over this.”

    Initially, Cranney said he posted about the crop on Facebook, urging members of his community of about 700 people to show up at the farm and grab as many potatoes as they want. But now, people are driving hours to pick some up.

    “The response has completely blown me away,” Cranney said. “People are coming from all over the place.”

    Cranney said he’s expecting a woman from Kansas on Thursday who will have driven 19 hours. Food banks and soup kitchens are also starting to show up.
    Most of the people who have come for the potatoes are doing it for others, grabbing them for friends and neighbors.

    “We gave a little bit and now they’re giving in return, and that’s what made it worth it to me,” Cranney said. “It’s been fun for me to see people thinking of others and give their time and resources to take care of other people.”

  23. Hey some non.deeth👾 new$.

    (Still involves death sadly.)

    Brian Dennehy, a versatile character actor whose career spanned five decades, has died at the age of 81, his talent agency confirmed.

    Dennehy, a two-time Tony Award winner who co-starred in a wide range of films, often in tough-guy roles, died of natural causes in Connecticut on Wednesday night

    Dennehy had a slightly more humble reflection on his body of work in an interview with the Daily Actor in 2018.

    “I’m now 80 and I’m just another actor and that’s fine with me. I’ve had a hell of a ride,” he said. “I have a nice house. I haven’t got a palace, a mansion, but a pretty nice, comfortable home. I’ve raised a bunch of kids and sent them all to school, and they’re all doing well. All the people that are close to me are reasonably healthy and happy. Listen, that’s as much as anybody can hope for in life.”

    Amen & salute! 🍷

    2. Check out Dennehy’s speech (around the 23:00 spot) during a work shutdown at the plant that his character manages.

      It fits in nicely with what we discuss here on a daily basis. Except companies no longer worry about profits (1990) now it’s all about the companies’ stock price.

      Rising Son (1990) Brian Dennehy, Matt Damon:
      https://www.youtube.com/watch?v=dE6Wb05iWR8

      1. Excellent reference!

        “Thee.$uits with fancy neck.tie$ & Robot$”

        (Would Jareed bee dtRumpsis’$ “Ri$ing $on”?)

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

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

    *Select price from dropdown menu on first chart

    As a noted economist said so eloquently, “liquidate whatever you’ve got to eliminate all debt and hold onto every dollar you’ve got…. You’re going to need every last one of them.”

  26. NBC San Diego in California. “The coronavirus pandemic has claimed another victim: San Diego’s once red-hot housing market has at least temporarily hit the ice, said Andy Nelson, president of Willis Allen Real Estate.

    Um…I think you mean the REIC has hit an iceberg, Andy. Kinda like the Titanic.

  27. I would say if 50 percent of people who practice forbearance are able to make it happen, we’d be lucky. So, it’s going to lead to some foreclosures.

    People who didn’t have enough money saved to make at least six months of house payments following a loss of income had no business buying a house.

    1. Anybody who *needs* to delay a few payments will not be able to pay it back later. All we’re doing is delaying the foreclosures for the weak and giving a freebie to the strong. Same as it ever was.

      1. I suspect we’ll be seeing some automagic refi’s to roll those unpaid months back into the loan, and I think they will be more than just 3 months. A lot more.

          1. My stepmother was offered forbearance on her rental property. She was given 3 options: lump sum; extend loan; refi.

  28. “Home sales were stable across South Florida in the first quarter of this year, reflecting strength before the Covid-19 pandemic hit the state, according to market data from Douglas Elliman.

    Yeah, and being a lifeguard was my best summer job ever until that blue kid turned up.

  29. David Burke, a high school teacher who rents out units in two buildings through Airbnb, VRBO and ads he places in nursing magazines, estimated that spring cancellations from short-term guests have already cost his family between $10,000 and $20,000. If the shutdown lasts through the summer, he may have to go into debt to pay the mortgages.”

    I bet David teaches Common Core math.

  30. Facebook AD

    “The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; today, we face a health crisis. What we know now is that housing is in a much stronger position today than it was in 2008. It is no longer the center of the economic slowdown. Rather, it could be just what helps pull us out of the downturn.”

    1. Rather, it could be just what helps pull us out of the downturn.”

      HAHA that’s as funny as the guy trying to sell BMW’s on the radio KNX1070

  31. New York, New Jersey, Pennsylvania, Rhode Island, Connecticut, Massachusetts and Delaware have extended the shutdown of non-essential businesses through May 15.

    I wonder what will happen here in Nevada? Our order currently lasts through April 30, but I have a feeling it will be extended. 🙁

    1. Lots of pressure cooker situations the longer stay-at-home orders drag on. Still getting along swell with the family and dawg, but relations with the cat, never cordial, have taken a turn for the worse. I’ve been convinced for some time now that he’s working out how to kill me, and despite his walnut-sized brain I have the uncanny feeling he’s further along than I’d like to think. If he had opposable thumbs, I’m pretty sure I’d be a goner by now. He used to lurk on top of the refrigerator and bat me when I walked past, but now the ambushes are occurring with greater frequency and show a tactical cunning that wasn’t there before. He’s evolving, and that frightens me.

      2. I had cats when the kids were little and we lived on the farm. Occasionally, one would attempt a hostile takeover of the family home, and yes they are sneaky little bstrds. My kids used to place bets on whether such a perp would clear the sandbox in the back yard on its farewell trajectory. We had a big yard.

  32. It’s obvious house prices will drop, but I suspect the extent won’t be what most of you are predicting – we’ll see.
    However, house volume sales will crater. I suspect nationally we’re talking 75%. If I were a realtor I would definitely be sharpening my burger flipping/barista skills right now.
    The real estate industry won’t be anything like it is after this crisis finally resolves. In countries like South Africa and Australia deals are being struck up totally online, with the proviso that once the ban is lifted potential buyers have a 24 hour period in which they can do a “house walk through”. They then have to pull the trigger.
    Which of course begs the question – what do you need a realtor for?

    1. It’s obvious house prices will drop, but I suspect the extent won’t be what most of you are predicting – we’ll see.

      The only way to prevent massive price drops is to sequester from the market all the houses that are owned by the bank and nobody is making payment on. How do you think that will be accomplished? The banks carry them all on the books and eat the loss like last time x10? The Fed buys them? Or ???

    2. However, house volume sales will crater…75%

      It would be an interesting bizzaro world thing to watch if the house horny herd was decimated by 75% and prices didn’t crater. Especially since the cratering is already underway, worldwide.

Comments are closed.