Sellers Are Realizing, This May Be My Only Buyer, I May Need To Come To The Table And Negotiate

1. Eat yer crowz taxpayer.

   ‘‘What impact that will have is hard to gauge, but it increases the chances for a repeat of what happened in the aftermath of the Great Recession of the late 2000 and early 2010s, with rising foreclosures or people simply walking away from their properties, unable or unwilling to keeping paying off debt’

   Walk away? But they were the winners?

   ‘We recognize the COVID-19 health emergency has resulted in significant job loss and loss of income for thousands of L.A. County property owners…As a result, the number of property owners seeking foreclosure avoidance will increase’

   ‘Counselors fluent in multiple languages are available to help property owners work with lenders to…agree to a short sale to sell the home for less than you owe and settle the debt’

   Less than you owe? In California?

   1. Compass agents anticipate post-pandemic buyer’s market in California

      More than 700 Compass California agents shared their concerns, market predictions for when shelter-in-place laws lift

      https://www.inman.com/2020/04/15/compass-agents-anticipate-post-pandemic-buyers-market-in-california/

      When the cheerleaders are on the bus, the game is over.

   2. “Walk away? But they were the winners?”

      Does this mainly include those who used HELOCs to strip mine equity gains?

   3. Counselors fluent in multiple languages are available to help property owners

      It’s always blown me away how non English speakers can borrow hundreds of thousand of dollars to buy a shack.

   4. inventory in 22151 still 1/2 of par
      fed funded, tx for paying

      1. 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 Virginia 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.”

2. ‘In early March, I listed a home in Arvada that got seven offers. But if I was listing that home today, I don’t think I’d see multiple bids.

   Right now, a realtor is lying to somebody.

   https://www.youtube.com/watch?v=rMV-fenGP1g

3. ‘When told about the number of homes coming off the market, Gallagher, a St. Petersburg real estate lawyer, said the figure was shocking. ‘Those are anomaly numbers,’ he said. ‘Deals have been voluntarily killed … (because) buyers are saying, ‘I just lost a job,’ or lost interest and a seller is saying, ‘There’s no point in keeping it on the market trying to wait it out’

   BTW, the article didn’t include this guy first name.

   1. It’s Charles Gallager in case you want to make contact.
      https://www.msn.com/en-us/money/realestate/hundreds-of-homes-pulled-from-tampa-bay-real-estate-market-as-coronavirus-stirs-uncertainty/ar-BB12JHib

4. So I don’t think the sharks are circling yet. They’re waiting to see what’s going to happen.’”

   You sound nervous, realtor. I’m not nervous, because I’m a rent, and because I know what’s about to happen.

5. “Back in February, Sara Witte and her husband decided to hold off putting their Palm Harbor three-bedroom, 2½-bathroom home on the market because they had heard March was the best time to sell a house.

   Let me guess: they got that advice from their realtor Suzanne.

6. “In a recent report that examines county-level housing markets and their vulnerability to the impact of the coronavirus pandemic, Attom Data Solutions found that 24 of the 50 most at-risk markets are in New Jersey and Florida.”

   A whole boatload of people own houses in both places.

   The most at risk housing markets are former industrial areas where prior generations had good jobs with pensions. The pensions, the ghost of those former good jobs, is often a major income source, one that dies with them.

7. “‘I haven’t even come up with a word yet that makes sense of this craziness. There has been a huge change,’ Reggie Copeland, treasurer for NVAR, said.

   We here at the HBB can offer up plenty of word choices for you, Reggie.

   1. Suggested word that makes sense of this craziness: CR8R

8. “If the bottom falls out of the Denver market”

   That’s when, not if. And it’s already happening…

   1. You’d never read that in today’s Denver Post. It’s a good example of how much has changed with local media. In 2005 or 2006, the first foreclosures blew through the Denver area. It so happened the median price was still up. The DP went to great lengths to have UHS explain that with the foreclosures, prices were most definitely not going up, and that median is a lagging indicator. It’s not the same newspaper regarding the REIC.

      1. “You’d never read that in today’s Denver Post. It’s a good example of how much has changed with local media.”

         From Westword on Colorado. “‘I’m not seeing any dramatic move in prices,’ says Victoria Macaskill, an independent broker and co-owner with husband Mike Unruh of Denver Homes.”

         – A quick check at http://www.realtor.com for Denver, CO shows 3220 homes for sale, with 373 price reduced (More Filters, check the “Price Reduced” box). That’s 11.6%, which isn’t a small number.

         – The housing market and the general economy were already slowing well ahead of the CCP virus pandemic. Let’s face it, the economic “expansion” since the GFC was long-on-the-tooth already. The housing peak in the U.S. was probably mid-2018. This was partially masked by the huge drop in mortgage rates last year and continuing into 2020. Now that’s not going to matter anymore, since a) major job losses, and b) much tighter lending standards (no loan for you!).

         – We’re only a several weeks into this whole thing; It’s just getting started. Spring is the peak house buying season. If sales aren’t up bigly this time of year, which they aren’t, then there’s a problem. Sales are, in fact (shhh!) tanking. It’s now becoming obvious, and it would be disingenuous to claim otherwise.

         – I agree that there’s very little in the way of “non-positive” articles on RRE in the DP, which is a general truism for the national MSM as a whole. This is also true for stock markets as well. He (or she) that pays the piper calls the tune.

      2. It’s not the same newspaper regarding the REIC.

         You’re assuming that the DP is a newspaper, and not a propaganda outlet.

      3. Foreclosures, Denver, CO – 2007-08
         https://imgur.com/a/to6OYm2

         1. The Australian
            The countdown to catastrophe
            … announcing six-month deferrals for interest payable on business and housing … return and consigning the housing bubble to a curious historical footnote.
            51 mins ago

9. LOL@ New York City:

   “Despite assurances from Mayor de Blasio that only nonviolent, elderly or chronically ill inmates would be sprung, 329 prisoners accused of violent felonies were released from city jails in the three weeks to April 6, at least some under age 30.

   With nearly 20 percent of NYPD officers out sick daily, New Yorkers anticipating a “Mad Max” future are taking matters into their own hands.”

   https://nypost.com/2020/04/15/freed-thugs-sow-fear-in-nyc-during-coronavirus-lockdown-devine/

   1. Forget Max, this is right out of Escape From New York.

      “As prison activists take advantage of the pandemic to accelerate their declaration agenda, the city’s jail population has shrunk by more than 20 percent, to the lowest level since 1949, the Mayor’s Office of Criminal Justice boasted last week.

      “Advocate groups are now asking for everyone to be released,” NYPD Commissioner Dermot Shea fumed Wednesday.

      The Duke (A-number1) arrives:
      https://www.youtube.com/watch?v=_E31HluCz6E

      1. The chandeliers. Bling!

10. eeet…… eeet.🤣

    Falls Church, VA Housing Prices Crater 12% YOY As Northern Virgina/Washington DC Housing Market Sinks Like Boat With A Hole

    https://www.zillow.com/falls-church-va-22046/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist stated, “You’d have to have rocks in your head to buy a house in the last 20 years.”

11. “One example: ‘I had a buyer who offered $20,000 under list, and the seller didn’t even come back and counter us. Had it been two weeks earlier, there’s no doubt we would have seen a counter from that seller. So it’s shifting into a market where sellers are saying, ‘I have to negotiate.’”

    Are they saying the seller accepted the -20k offer without countering? If so, smart seller.

    1. It’s clear where this is going. The fool who offered 20k less will likely walk away eventually.

    2. I read that as the offer was ignored.

       1. I read that as the offer was ignored.

          I read it that way at first but it didn’t make sense with the rest of what was written.

12. ‘‘The higher mortgage requirements are another implication of the sheer volume of requests for forbearance and refinance against the difficulty of assessing credit worthiness in an economic environment of rapid job loss…To the extent that higher credit standards are a way of saying the pipeline is overwhelmed’

    Overwhelmed already? That was fast.

    ‘timing is going to be everything for the more marginal buyers, who need the forbearance, refinance or aid checks yesterday’

    Marginal buyers? Oh you mean the subprime FHA bunch Skylar. Well they’re just fooked.

    March 26, 2020

    “As America heads into a deep recession, the $11 trillion residential-mortgage market is in crisis. Investors who buy home loans packaged into bonds are dumping even those with federal backing because of panic that millions might not make their payments. Yet one risky sector had started to show cracks long before the coronavirus pandemic sparked the worst financial meltdown in 12 years: the federal government’s largest affordable-housing program, whose lenient terms are geared toward marginal borrowers.”

    “As real estate prices soared in recent years, working-class adults everywhere have increasingly relied on mortgages backed by the Federal Housing Administration — and U.S. taxpayers. Since 2007, the FHA’s portfolio has tripled in value to more than $1.2 trillion, almost 11% of the market. While private lenders make these loans, they are packaged into Ginnie Mae bonds, common in mutual funds and pensions.”

    “Before Covid-19 started roiling China, a November FHA report found that 27% of borrowers last year spent more than half their incomes on debt, a level it describes as ‘unprecedented.’ The share of FHA loans souring in their first six months has doubled over the last three years to almost 1%.”

    “Not long ago, Alex Castillo drove his shiny black Infiniti SUV through an office park north of the San Antonio airport, along a busy seven-mile stretch of highway that loan officers call ‘Mortgage Row’ because of its abundance of small independent mortgage companies that dominate FHA lending. Castillo, who has the words ‘The Dream Starts Here’ stitched into his jacket, works for Pennsylvania-based American Residential Lending. Oddly, amid the pandemic, his business is booming. His customers locked in FHA mortgages after interest rates plunged this month — adding to federally backed mortgage debt.”

    “‘If the government tells me you’re good enough to get a loan, I have to trust and believe in the government,’ Castillo said. ‘Then we just hope and pray that the client doesn’t get foreclosed on.’”

    “In downtown San Antonio, scores of investors stood on a parched lawn beside the city’s historic granite-and-red-sandstone courthouse. It was the first Tuesday of February, the day of the foreclosure auction. Matt Badders, a San Antonio lawyer who represents lenders, auctioned off two houses. The failed mortgages remind him of the run-up to the financial crisis 12 years ago, when lending to customers with spotty credit nearly brought down the world’s financial system. ‘We’re almost back to 2007, when mortgage originators are waking people up on park benches, saying sign here,’ Badders said.”

    “At the auction, the crowd bid on 338 homes, a third with FHA mortgages, according to Roddy’s Foreclosure Listing Service. One house had dual master bedrooms, a game room and granite kitchen counters. It sold for $202,000 — $52,000 less than the homeowner borrowed only two years ago. The taxpayer-backed FHA insurance fund will take a loss.”

    “Dave Stevens, FHA commissioner under President Barack Obama and former chief executive officer of the Mortgage Bankers Association, said a recession will expose hidden risks in home lending. ‘This should be an alarm bell to policymakers,’ Stevens said. ‘Sometimes you get blinded by a good economy and suddenly look at it and see a bubble of defaults coming.’”

    “The federal government has decided it doesn’t want to pursue — and has asked a judge to dismiss — a lawsuit against Utah-based Academy Mortgage Corp. The judge refused. The suit claims the company’s staff would repeatedly feed information into an automated federal underwriting system, manipulating it until the computer gave the green light. ‘Decline is a curse word,’ Plaintiff Gwen Thrower, a former underwriter, quoted a manager as saying. ‘We don’t use it.’”

    http://housingbubble.blog/?p=3070

    1. ‘At the auction, the crowd bid on 338 homes, a third with FHA mortgages, according to Roddy’s Foreclosure Listing Service. One house had dual master bedrooms, a game room and granite kitchen counters. It sold for $202,000 — $52,000 less than the homeowner borrowed only two years ago’

       This is a huge number of auctions for where we are. Do like the Denver guys and get your cash ready people. When the lenders are taking less than owed, there’s blood on the streets.

       1. “When the lenders are taking less than owed, there’s blood on the streets.”

          I don’t mind the sight of blood…unless it’s mine.

13. ” But if I was listing that home today, I don’t think I’d see multiple bids”

    Typical RE agent, like multiple bids are routine in the industry.

    Look, if I was even thinking of giving you a listing today you can forget 6%, maybe 4% but you won’t see that offer either, do you think so?

    1. “multiple bids”

       Think through the notion of that fully. You don’t get to a transaction in the case of “multiple bids” without fraud it there are mortgages involved.

       And realtors openly bragged about it for years. Dumb, dumb, dumb. Either they lied about the multiple bid narrative or they were complicit in fraud. It’s one or the other.

       1. If you’re getting multiple bids, you probably left money on the table.

          1. Don’t you get to pick the highest bid?

             (PS I deliberately underpriced last time we sold a property. Had multiple offers, and sold for more than $10K above the price the used home seller suggested us to list.)

             1. Different strategies. That’s my husband’s view after pricing rentals for over 25 years. If you have a bunch of people jumping, it was too low. Our realtor, with whom he has a lengthy history of referrals, commented that there are some advantages to multiple bids like asking bidders to waive appraisals and/or inspections. It also depends on the availability of appropriate comparables. The Encinitas property I’ll be selling is in a very non-conforming neighborhood from teardowns to new construction. It’s nothing like pricing a tract home.

             2. “That’s my husband’s view after pricing rentals for over 25 years.”

                It’s different when you have many (near) identical units on the market, which gets you closer to perfect competition (i.e. no monopolistically competitive pricing power).

             3. It also depends on the availability of appropriate comparables.

                Same idea.

14. Globalists gonna globe:

    “This is a tiny group of creatures that benefit the most from the pandemic crisis. Through this disaster they will be able to absorb vast amounts of hard assets for pennies on the dollar, devouring wealth and property from the middle class and changing the entire economy into something unrecognizable. The elites don’t want your property and wealth simply because they are greedy; they want your property and wealth because they don’t want YOU to have any. They want to end the concept of private property for all time, for without property and the ability to accumulate wealth through our labors the masses are always dependent on government for their survival.

    Beyond this, the ultimate goal of the elites is a one world cashless society, as well as a one world government. Already, the US Senate is considering a bill that would create a digital dollar and a digital wallet system to replace paper currency. Other nations have begun going cashless, and the coronavirus is being used as an excuse to speed up the process. The UN’s World Health Organization has specifically called for going cashless as well. Once the public is trapped into a digital system, they will never be able to trade without using the banks as the middle men, and all transactions will be tracked. Nothing will be private ever again, and with the push of a button what little wealth you are allowed to accumulate can be frozen within the new socialist control culture. You will be at the mercy of the government and the banks.

    Moving past the economic, the elites have bigger dreams of a massive surveillance society in which every person is tracked 24 hours a day. Bill Gates is all over the mainstream news lately promoting the idea of tracking apps (like those already being used in China) to “fight the coronavirus”. Apple and Google are pushing the agenda as well and are ready to launch tracking apps whenever the government is ready to write them into law.

    The Global Elites do not care about saving lives. They do not care about saving the economy as we know it. They do not care about political affiliations. They are on their own side, and they only care about power. Like I said, we are NOT all in this together.”

    https://www.alt-market.com/index.php/articles/4192-no-we-are-not-all-in-this-together

    1. Already, the US Senate is considering a bill that would create a digital dollar and a digital wallet system to replace paper currency

       Anyone know the name or number of this bill?

       BTW, most dollars only exist digitally nowadays, anyway.

15. Hey deeth.👾📰 … knot from Ra$h.limpbaugh$
    (& knot .99 cents toothpaste!)

    Early data on Gilead coronavirus medicine remdesivir is very encouraging

    Thu 16 Apr 2020 Author: Eamonn Sheridan | Category: News / Antiviral medicine

    Antiviral medicine remdesivir is being used to treat cov1 COVID-19 patients at a Chicago hospital,
    A small study only, and note: The lack of a control arm in the study could make interpreting the results more challenging, so not leaping to conclusions:

    The University of Chicago Medicine recruited 125 people with Covid-19

    two Phase 3 clinical trials

    113 had severe disease
    All the patients been treated with daily infusions of remdesivir

    “The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish,” said Kathleen Mullane, the University of Chicago infectious disease specialist overseeing the remdesivir studies for the hospital.

    EXCLUSIVE:
    Early peek at data on Gilead coronavirus drug suggests patients are responding to treatment

    By ADAM FEUERSTEIN and MATTHEW HERPER / APRIL 16, 2020
    Reached by STAT, Mullane confirmed the authenticity of the footage but declined to comment further.

    Asked about the data, Eric Topol, director of the Scripps Research Translational Institute, described them as “encouraging.”

    “The severely hit patients are at such high-risk of fatality. So if it’s true that many of the 113 patients were in this category and were discharged, it’s another positive signal that the drug has efficacy,” he said, adding that it will be important to see more data from randomized controlled studies.

    Gilead’s severe Covid-19 study includes 2,400 participants from 152 different clinical trial sites all over the world. Its moderate Covid-19 study includes 1,600 patients in 169 different centers, also all over the world.

    The lack of a control arm in the study could make interpreting the results more challenging.

    A lack of data has led to yo-yoing expectations for the drug. Two studies in China had enrollment suspended partway through because there were not enough patients available. A recent report of patients given the drug under a special program to make it available to those who are very ill generated both excitement and skepticism.

    In scientific terms, all the data are anecdotal until the full trial reads out, meaning that they should not be used to draw final conclusions. But some of the anecdotes are dramatic.

    1. Thanks for posting that! Hydroxychloroquine sucked the wind from remdesivir, understandably.

16. (Sorry) …The anecdotes continued:

    Slawomir Michalak, a 57-year-old factory worker from a suburb west of Chicago, was among the participants in the Chicago study. One of his daughters started feeling ill in late March and was later diagnosed with mild Covid-19. Michalak, by contrast, came down with a high fever and reported shortness of breath and severe pain in his back.

    “It felt like someone was punching me in the lungs,” he told STAT.

    At his wife’s urging, Michalak went to the University of Chicago Medicine hospital on Friday, April 3. His fever had spiked to 104 and he was struggling to breath. At the hospital, he was given supplemental oxygen. He also agreed to participate in Gilead’s severe Covid-19 clinical trial.

    His first infusion of remdesivir was on Saturday, April 4. “My fever dropped almost immediately and I started to feel better,” he said.

    By his second dose on Sunday, Michalak said he was being weaned off oxygen. He received two more daily infusions of remdesivir and recovered enough to be discharged from the hospital on Tuesday, April 7.

    “Remdesivir was a miracle,” he said.

    The world is waiting to find out if it is really so.

    1. “Remdesivir was a miracle,” he said.

       The world is waiting to find out if it is really so.

       If it can be obtained/produced/counterfeited for a reasonable price.

       1. a reasonable price

          🤣

          1. From 2016 but you should get the idea. And this is for payors with big bargaining power.

             Gilead hepatitis C pill was biggest 2015 drug cost for Medicare, Medicaid

             1. I remember mentioning it here late Jan/early Feb when the Chinese were trying it and seeing good results and you or someone mentioned the high expense. That’s why I said “counterfeited”…there’s no way the rest of the world are going to play our billionaire games at our prices if they can work around it.

    2. (Sorry if Bloomberg is locking this behind a paywall)

       This is a comprehensive list of drug treatments by various manufacturers, with data on their current status.

       https://www.bloomberg.com/features/2020-coronavirus-drug-vaccine-status/

17. US COVID-19 deaths
    April 15, 2020 29,465
    April 16, 2020 34,283
    One-day increase
    – Count 4,818
    – Percentage 16.4%
    Doubling time at this growth rate 72/16.4 = 4.4 days

    1. What’s Behind The Sharp Rise In New York City’s Coronavirus Death Toll?

       Isabel Togoh
       Apr 15, 2020, 08:30am EDT

       The coronavirus death toll in New York City was revised on Tuesday to include 3,700 people presumed to have died after catching coronavirus but who had not been tested, bringing the number of fatalities in the city to more than 10,000.

       https://www.forbes.com/sites/isabeltogoh/2020/04/15/whats-behind-the-sharp-rise-in-new-york-citys-coronavirus-death-toll/

       1. I guess that’s due to the new CDC “Assume it’s Covid” reporting guidelines. I think the only thing we’re going to be able to analyze as regular people is the total death toll from all causes.

          1. “I think the only thing we’re going to be able to analyze as regular people is the total death toll from all causes.”

             Perhaps that might be the end result.

             But that line of thinking is what fuels the Holocaust deniers arguements about the death camps causes & totals.

             “How do you he didn’t fall down & hit his head, and then died.”
             “Consumption!”
             “Wound infection!”

             Yadda, yadda, yadda … ’till they is “blue.in.the.face” & final solution number murdered is < 150 by gas.

             1. the Holocaust deniers

                The MSM wasn’t reporting daily concentration camp statistics to stir the people.

             2. The M$M wasn’t reporting daily concentration camp statistics to stir the people.

                eye was knot referring to the
                M$M bull.$hate, eye was referring to yer line.of.logic … which is what the holocaust deniers use to prove “their& sadly, yers” point!

                $ad

             3. yers” point!

                I don’t know if I have a point. I’ve been a process engineer for a very long time. If I’m watching something trying to recognize a trend and the thing being measured, or the measuring thing changes, I get disoriented.

                Holocaust denier is kind of a reach. If we were there in time and discussing the statistics without acting, shame on us.

18. “Median sales prices took a dive as well, sinking from $816,200 in 2019 to $633,115 in 2020. Overall dollar volume was nearly halved, plummeting from $12.24 million last year to $6.78 million this year. ”

    Suck those Bezos balls taypayer

    1. Gotta love that craterin’.

19. June Carter Raining This Morning

    https://www.youtube.com/watch?v=E-9_-Pz9WfY

    1. Well, that one took me down the Johnny Cash / June Carter rabbit hole.

20. Donna Summer – Stamp Your Feet

    https://youtu.be/tNMgPFp66lk

    1. 🙂

       Never heard that one.

21. “six to twelve months to see the best opportunities “
    I don’t think so. Early knife catchers.
    I remember in the mid 1990’s homes on the market for years and listed with multiple agents. Real estate was toxic. You wanted to be the first born , second wife and third realtor.
    This is going to take years to play out

22. As long as Unlimited Quarantinive Easing is pumping in liquidity, there is no need to worry about bad news all the way across the Pacific Ocean. It’s a ver

    The Financial Times
    Chinese economy
    China’s economy shrinks for first time in four decades
    First-quarter GDP falls 6.8% in wake of coronavirus pandemic ending era of uninterrupted growth
    Chinese officials have reopened factories and shops in cities including Wuhan, where the coronavirus outbreak started, in a bid to kickstart the economy
    © AP
    Thomas Hale in Hong Kong and Xinning Liu in Beijing 2 hours ago

    China’s economy shrank at the start of the year for the first time in more than 40 years, after the coronavirus pandemic ended an era of uninterrupted growth dating back to the late 1970s.

    Gross domestic product in the first quarter plunged 6.8 per cent year-on-year, the National Bureau of Statistics said on Friday.

    The historic contraction in China, the engine of global growth for the past two decades, is the starkest economic signal to emerge from a pandemic that originated in Wuhan and has wreaked havoc around the world.

    The official data comes in the same week that the IMF warned of the worst global economic outlook since the Great Depression, with output losses this year expected to far exceed those that followed the financial crisis of 2008.

    Fixed asset investment in the first quarter fell 16 per cent compared to last year, while infrastructure investment dropped 20 per cent. Total retail sales of consumer goods fell by 16 per cent in March.
    …

    1. That was a bit of a misfire. Chalk it up to Boomer fat thumb syndrome.

    2. “It’s a very large ocean.”

23. Hope or hopium? Time will tell!

    1. Market Snapshot
       Dow futures soar 800 points as investors pin hope on Gilead coronavirus treatment and U.S. reopening
       Published: April 16, 2020 at 9:26 p.m. ET
       By Mark DeCambre and
       William Watts
       Even though remdesivir is considered a front-runner to help treat COVID-19, the results represent a very small sample and aren’t a part of a clinical trial
       Hope in Gilead? AP

       Stock-index futures Thursday night were trading sharply higher, possibly setting the stage for a powerful rally for markets to end the week if the gains hold through tomorrow, amid progress toward a treatment for the deadly COVID-19 pandemic that has infected more than 2 million people worldwide.
       …

       1. “…the results represent a very small sample and aren’t a part of a clinical trial…”

          How large was the sample size when the Wright Brothers first proved the possibility of human flight?

          1. Gilead ha$ a rea$on to be a yapping upwind of “miracle” report$, & it ain’t about intravenou$ injection$.

             1. Interest piqued but not completely following.

       2. You shouldn’t assume that the real reason for the miraculous rise in the Wall Street stock market index futures is not a massive central bank liquidity dump to offset Lehmanesque financial shockwaves due to the Chinese economic crater announcement.

24. So much terrible real economic news, such great risk asset prices. Buying risk assets is a risk-free path to riches!

    1. The Financial Times
       US employment
       American jobless claims mount to 22m since shutdowns
       Total of first-time applicants for unemployment benefits rises by 5.2m in fourth week of lockdowns
       Mamta Badkar in New York and Brendan Greeley in Washington 14 hours ago

       More than 5.2m Americans filed new claims for unemployment insurance last week, pushing the total in one month to more than 22m, in the latest sign of the staggering job losses from the coronavirus shutdowns.

       The jobless figures follow a series of data this week that documented the magnitude of the blow from the public health crisis to all parts of the economy, with historical declines in industrial production and retail sales, and local business owners telling the Federal Reserve that economic activity had contracted “sharply and abruptly across all regions in the United States.”

       The initial jobless claims total of 5.25m in the week ended April 11 was lower than the 6.62m recorded the previous week, the labour department said on Thursday. That compared with economists’ expectations for 5.5m.
       …

    2. Business
       Fear of an Impending Car-Price Collapse Grips Auto Industry
       By David Welch
       and Keith Naughton
       April 13, 2020, 4:00 AM PDT
       Updated on April 13, 2020, 8:30 AM PDT
       – Auctions expect to be flooded with supply, predict weak demand
       – Imbalance could doom carmakers, lenders and rental companies
       …

    3. Futures Movers
       U.S. oil prices hold ground at the lowest finish since 2002
       Published: April 16, 2020 at 3:16 p.m. ET
       By Myra P. Saefong and
       William Watts
       Bloomberg

       Oil futures settled mixed on Thursday, with global benchmark prices up modestly for the session, but U.S. prices ending flat to hold ground at their lowest in over 18 years.

       West Texas Intermediate crude failed to find support at the key $20 a barrel mark on the back of a global glut in crude. The shutdown of major economies in the effort to contain the COVID-19 pandemic has led to slowdown in demand for oil and expectations for further growth in surplus supplies.

       A recent agreement by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, was “encouraging, but reports on demand from agencies like the IEA suggest it’s not enough…to offset the drop in demand,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
       …

       1. The Financial Times
          Oil
          US crude tumbles to 18-year low as supply overwhelms demand
          
          West Texas Intermediate contract for May delivery loses as much as 9% as expiry looms
          David Sheppard in London 2 hours ago

          US crude oil prices sank to around $18 a barrel on Friday, the lowest level since 2002, as energy markets struggled to absorb a record glut created by the coronavirus pandemic.

          Prices have dropped this week despite a landmark US-backed deal by the Opec+ group of producers to cut production by almost a tenth. But traders have judged that the collapse in demand is much greater — with up to a third of global consumption lost to measures to restrict the virus’s spread.

          That has led to volatility, as traders bet oil storage will rapidly fill up, including at the US crude benchmark’s delivery hub of Cushing, Oklahoma.

          The front-month West Texas Intermediate contract for May delivery, which expires early next week, lost as much as 9 per cent to trade down to $18.03 a barrel, an 18-year low. The second-month contract for June delivery was steadier, trading flat at about $25.53 a barrel. Brent, the international benchmark, was also steady at $27.84 a barrel, but it has lost almost $5 this week.

          “With low liquidity close to expiry, these erratic moves tend to happen,” said analysts at Rystad Energy. “But at the same time it is no wonder that WTI for May 2020 is seeing such low prices relative to the June 2020 contract.”

          “This is because the market knows that the US crude stocks will fill very rapidly … in the next few weeks as refinery runs continue to be cut tremendously in the US due to a lack of storage possibilities, especially for unsold gasoline.”
          …

          1. As of now oil futures are up bigly and so are stock market futures.

             https://finviz.com/futures.ashx

             1. 27%!?

                Get shorty!!!

             2. Just because you $urvived x1 dark night baling water$ from the life raft, doesn’t mean that the $torming ocean of liquiditie$ is yer friend.

             3. So long as the tsunami wave of liquidity keeps rising rapidly, there’s no reason to expect it to ever break.

             4. There must be at least a few survivors in the wreckage of the recent crash among$t all of those rapidly rising stock shares!

                The Financial Times
                US equities
                Investors hunt for ‘survivors’ in US earnings season
                In crisis mode, profits and growth matter much less than ability to ride out a downturn
                The energy, travel, retail and car sectors are likely to suffer, while utilities and communications companies are seen as stronger
                © FT montage; Bloomberg; Getty Images
                Richard Henderson in Melbourne 2 hours ago

                Investors scouring companies’ results in the US earnings season that began this week are not looking for growth. Instead, while the coronavirus pandemic tears a hole out of economies around the world, many are looking for businesses that can survive.

                Stung by sudden stops to revenues, many companies have fallen back on credit lines and debt borrowed in bond markets to keep themselves afloat. US investment-grade companies raised a record $150bn in March, as businesses hoarded cash to weather the downturn. Equity fund managers want to make sure companies can repay those debts and cling on until lockdowns end and life gets back to normal.

                “Survivability will be more relevant than near-term profitability — the standard metrics won’t matter that much,” said Liz Ann Sonders, chief investment strategist for Charles Schwab, about first-quarter earnings. “For companies that are in the crosshairs of this, there aren’t going to be any near-term profits — that ship has sailed.”
                …

          2. “US crude tumbles to 18-year low as supply overwhelms demand”

             Sounds like housing.

    4. Economics
       Another U.S.-Wide Housing Slump Is Coming
       The coronavirus pandemic will cause many cash-strapped Americans to sell their homes, flooding the market with excess supply.
       By Danielle DiMartino Booth
       …

    5. European new car sales plunge amid pandemic
       Published: April 17, 2020 at 2:40 a.m. ET
       By William Boston

       BERLIN–New car sales in the European Union plummeted 55.1% in March, as large swathes of the region’s economy was locked down in the midst of the coronavirus pandemic that has infected hundreds of thousands and left thousands dead.

       The European Automobile Manufacturers’ Association, or ACEA, said Friday that new car registrations, a proxy for sales, fell to 567,308 vehicles in March from 1.26 million a year ago, underscoring the sudden impact of the shutdown of thousands of businesses and public authorities throughout the 27-nation bloc.

       “With containment/lockdown measures taking hold in most markets from around the middle of the month, the vast majority of European dealerships were closed during the second half of March,” ACEA said in a statement.
       …

       1. I recall reading that car manufacturers would rather scrap vehicles than sell them at a heavy discount. Ill be ready to swoop up a nice audi rs from realtor after all their reserves run dry.

          1. They were all very quick to close their factories. And given the extent of cratering their incentives to sell the current inventory do seem paltry. I still haven’t heard a peep about auto plants reopening in the US.

             On a related note I read that Disney is losing $30 million a day as the theme parks, cruise lines. movies, ESPN and other lines of business are all cratering, and that they setup a $12B line of credit with Citibank. In hindsight those stock buy backs weren’t such a great idea.

             1. Don’t widespread corporate stock buybacks turn the whole corporate sector into the equivalent of Roaring 20$ stock market HODLers buying on margin? It seems like the widespread use of this strategy makes the corporate sector systemically risky, too-big-to-fail, and hence bailout worthy.

                Seems to me like a pretty smart strategy.

    6. Plan on living well pa$t a x100 i$ ye dear Professor?

       1. “So much terrible real economic news, such great risk asset prices. Buying risk assets is a risk-free path to riches!” Professor

          (Meant for this statement.)

          1. Good things will come to those who wait!

       2. Not sure how much of a say I’ll have in the matter.

25. (Quaratine Poem with the C word) CroneyCapitalismCreatesCooperativeCarelessnessCatipultingCoersionConditioningCopiousConsumption

    1. Deutsch?

    2. Eye’ve tossed x1 rock in my tumbler 2 months ago to get poli$hed, it was one eye found 12 years ago in a creek in Utah. Eye even gave it a $pecial name: “Carnage.”

       It’s $till a tumblin’ …

26. I guess not too many folks want to HODL bonds with the printing press running on high blast. Come to think of it, even I dumped some Vanguard bond shares last month. Didn’t want to be caught out out with too many long-term dollar payment commitments with Unlimited Quarantinive Easing in play.

    1. The Financial Times
       FTfm Fund management
       Giant US bond managers suffer March bloodbath
       Pimco and Lord Abbett hit as investors switch to safety of cash
       Pimco and Lord Abbett’s outflows were large compared to their overall mutual fund assets © FT montage/Bloomberg
       Siobhan Riding 3 hours ago

       US bond fund heavyweights Pimco and Lord Abbett were rocked by heavy outflows last month as investors abandoned fixed income over fears that the coronavirus pandemic would trigger a wave of corporate defaults.

       Pimco, the largest bond investor in the world, bled a net $27bn in March, its highest monthly redemptions since the departure of co-founder Bill Gross in October 2014.

       The outflows were equal to 6.7 per cent of Pimco’s total mutual fund assets at the end of February, according to data from Morningstar covering US long-term mutual funds and exchange traded funds.

       New Jersey-based bond specialist Lord Abbett racked up $13bn in net withdrawals, equivalent to 7.6 per cent of its February asset pool.

       The outflows reflected a marked investor shift away from bond funds last month. Having sucked up investor cash in recent years, the strategies experienced a dramatic reversal of fortunes as the escalation in the coronavirus crisis prompted investors to dump their holdings and flee to the safety of cash. US taxable bond funds suffered record outflows of $240bn over the month, according to Morningstar.

       Morningstar’s March ranking of the worst-selling US fund managers was dominated by groups with large bond fund ranges. Fidelity and Vanguard, two juggernauts of the global investment industry, had the heaviest redemptions in absolute terms, losing $39bn and $37bn respectively.
       …

       1. With such major outflows, one might normally expect some impact on prices, and associated changes in yields…

27. Because people are stupid …

    Over fifty cell towers in the UK are vandalized due to 5G coronavirus conspiracy theories.

    Do any of you pukes here on the HBB believe that presence of 5G towers and the coronavirus outbreak are related? If you do then you are an idiot.

    https://www.pcmag.com/news/over-50-cell-towers-vandalised-in-uk-due-to-5g-coronavirus-conspiracy-theories

    1. Comparing us with the inbred Limeyz?

28. https://www.detroitnews.com/story/news/local/michigan/2020/04/17/whitmer-hopes-some-relaxing-covid-19-restrictions-may-1/5150756002/

    What did I tell you?

    1. It’s nice of Eva Braun to relax restrictions.

29. Despite the massive job losses already announced in the MSM , the official Unemployment Rate barely showed an uptick as of March 2020.

    April’s number will be predictably ugly.

30. A bear has to admire a guy who started preparing for calamity years ago.

    Key Words
    Man who warned of the coronavirus crisis months ago says ‘gut’ tells him ‘a 50% or deeper decline,’ in stock market from the February top likely
    Published: April 17, 2020 at 10:30 a.m. ET
    By Mark DeCambre
    ‘This is a perfect environment for gold to take center stage’ says Paul Singer’s Elliot Management in a client letter
    Paul Singer, founder and president, Elliot Management Getty
    …
    Singer is an acclaimed investor on Wall Street and presciently warned his employees back on Feb. 1 to prepare for a monthsl ong quarantine. He was quoted by Bloomberg News as saying in an internal memo that the spread of the viral outbreak raises significant “uncertainty as to when its geometric growth will level off.”

    The hedge-fund investor has been preparing for calamity for years. Three years ago he warned the global financial system was in bad shape and investors were facing the possibility of a big market drop and raised a $5 billion rainy-day fund in preparation for what he described as “all hell” to break out.

    1. The Tell
       Goldman strategist says market rally has been ‘too rapid’
       Published: April 16, 2020 at 10:03 a.m. ET
       By Steve Goldstein

       The rally in markets has come too far, too fast, leaving risks tilted to the downside despite the huge fiscal and monetary support provided to cushion the world economy, according to a strategist at Goldman Sachs.

       “Our view is that the risk in the short term is still on the downside. And I think the rally that we’ve seen, which in many markets has been 25% or so from the low is probably too rapid given the near term prospects that we see for the economic and profit data,” said Peter Oppenheimer, chief global equity strategist at Goldman Sachs, during a presentation for U.K.-based reporters.
       …

       1. How much QE does it cost Powell as part of his morning routine to paint 500-pts on the tape?

          1. Unlimited QE is free.

    2. Not every investor is buying into the nearterm reopening narrative, not to mention the central bank backstop narrative.

       Key Words
       Mark Cuban is moving to cash ahead of what the billionaire sees as another rough stretch for the stock market
       Published: April 16, 2020 at 2:24 p.m. ET
       By Shawn Langlois
       ‘If you think you want to live in New York in the future, now’s the time to buy’
       Mark Cuban
       Steve Mack/Everett Collection

       ‘There’s good reason the market is going up… but I still think we have a leg down, so I’ve gone to cash.’

       That’s outspoken billionaire Mark Cuban giving some insight on “The Pomp Podcast” this week into how he’s approaching the sketchy investing climate.

       The Dallas Mavericks owner explained that, before his move into the relative safety net of cash, he lost a ‘s**tload of money” in his entertainment business. Fortunately for Cuban, his core holdings, Amazon (AMZN, -1.84%) and Netflix (NFLX, -4.75%), helped to balance out those losses, he said.
       …

       1. “…his core holdings…”

          I don’t really understand the wisdom of heavily relying on one or two stock HODLings. What if they suddenly go out of fashion?

          1. The Genius Options Trade that Saved Mark Cuban Billions of Dollars

             https://www.acceleratedfi.com/real-world-options-example-how-mark-cuban-used-options-to-survive-the-dotcom-crash/

31. The U.S. COVID-19 case count is a palindrome today: 676,676. The number also happens to represent 2/3 of a million, and an official per capita infection rate of about 1 in 500.

    If my understanding is correct, the numbers above only pertain to those who were tested. I don’t see any data on the number tested on the Google COVID-19 site, so have no idea what the overall true number of U.S. cases is, other than “more than 2/3 of a million”.

    1. Worldometer has a number for “tested”. 3.4 million.

       numbers above only pertain to those who were tested

       I believe the guidelines have changed to include presumptive cases.

    2. what the overall true number of U.S. cases is, other than “more than 2/3 of a million

       There’s that question again of what is true.

       One perspective is to express truth as a percentage. Suppose that the test is 80% accurate, or that 20% of the results are not true. In a population of 3 million where nobody has the virus, the number of false positive tests would be 600,000. I’ve seen estimates from 80% to 98% accuracy (and some 30% for tests made in China).

       1. Methinks you worry too much about testing error. I’m not sure if the 20% error rate in your scenario is for false positives (alpha, Type I error, concluding that someone has COVID-19 when they don’t), false negatives (beta, Type II error, failing to detect a COVID-19 case), or some combination thereof, but 20% seems quite pessimistic. Hopefully the test is better than that at giving correct results.

          Regardless, it seems clear that the number of U.S. cases is at least in the hundreds of thousands and likely an undercount, as to my knowledge the official case count implicitly assumes the number of cases among the vast majority of people who have not been tested is 0, which is obviously not accurate.

          1. I’m not sure if the 20% error rate in your scenario is for false positives

             I did say test a population that is virus free, so the false tests would all be false positives. I also just picked a number, because we don’t know about these tests, but I gather the accuracy is not 100%. My takeaway is that if a small percentage of people are really infected, testing inaccuracy favors false positive results, which means the published case count is not possibly the true minimum as a percentage, but rather the maximum.

             1. “…which means the published case count is not possibly the true minimum as a percentage, but rather the maximum.”

                Unless you try to add in the number of cases for individuals not yet tested.

                It’s a big number; albeit these are also the milder cases. (Where’d I put that facemask?)

32. Did anyone else have a parade of propaganda I mean first responders salute Hospital employees yesterday or was it just the town in Connecticut and the one in Florida I keep tabs on?

33. so they will just open up fire hydrants illegally…like in the bad old days
    https://sunnysidepost.com/mayor-to-close-city-pools-for-the-year

34. ‘Additional damage may then affect individual homeowners’ finances if values drop because it reduces their equity, cuts into their ability to borrow money against their property and lowers the profit they can make on a home sale,’

    Sounds like many of the reasons to be a loan owner are disappearing. This could lead to a lot of underwater borrowers walking away from their shacks, just like they did in the 2007-2009 episode.

35. There seems to be a complete lack of mystery about why U.S. stocks rallied this week in the face of some of most dismal economic news ever reported. The question going forward is whether central banks will maintain the ability and the desire to drive stocks up further, and whether such an effort is sustainable.

    The Financial Times
    Markets Briefing Equities
    US stocks extend rally with central bank safety net
    S&P 500 records 3% gain for the week as investors look past immediate economic pain
    Colby Smith in New York, Myles McCormick and Tommy Stubbington in London and Hudson Lockett in Hong Kong 4 hours ago

    US stocks have recorded their first back-to-back weekly gains since February as investors bet aggressive efforts by central banks and governments would mitigate the current economic pain and stabilise markets while the world works through the coronavirus pandemic.

    On Friday, the S&P 500 rallied 2.7 per cent to close the week 3 per cent higher, extending a bounce that has lifted the benchmark index more than 30 per cent from its mid-March lows.

    The latest gains came despite data showing a historic contraction in the Chinese economy. Instead, investors focused on hopes for a new coronavirus treatment and evidence that credit markets are once again open even to junk-rated borrowers.
    …

    1. They really should omit the word, “rally.”

       1. “zombie”?

Comments are closed.