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Suddenly Investors Have Unrentable Units To Carry, Many Will Find They Have No Alternative But To Offload

A weekend topic starting with the Wall Street Journal. “More than 600,000 small businesses were created in Airbnb’s inaugural year, according to the U.S. Bureau of Labor Statistics. Half of them were out of business within five years. Only one-third were still standing at the end of 2019. ‘There’s this crazy idealism that founders have,’ Brian Chesky, one of those Airbnb founders and the company’s chief executive, told me this week in a video chat. ‘They’ve learned to cope with a lot of adversity and have a lot of resilience.’ He notes Airbnb launched four different times before success. When times get tough, entrepreneurs like him look to the ‘metaphorical mountaintop.'”

“The coronavirus crisis has companies like Mr. Chesky’s wondering whether the menacing clouds shrouding that mountaintop will ever lift. And, despite the grit and creativity it took for someone to found this disruptive company, skeptics worry Airbnb may not be around long enough to reach it. Mr. Chesky said 30 investors expressed interest in providing funding.”

“My colleagues have reported in recent weeks, however, that this round of fundraising wasn’t a bed of roses. Its valuation is much smaller than it was, falling to $18 billion, according to the Journal’s reporting. The first round of $1 billion came at a steep price, with an interest rate north of 10%, and the second $1 billion came with a 7.5% plus Libor rate. Some investors declined to put in money after Airbnb said it would not replace Mr. Chesky. Mr. Chesky said he’s enjoyed largely favorable press over the years and that while recent reports feel like ‘a little bit of a punch,’ he’s confident investors and his board back him.”

From Bloomberg. “The question that’s difficult to quantify is just how much damage a collapse in the Airbnb economy could cause to the $16 trillion U.S. mortgage market. The anecdotes on social media immediately spread like wildfire. Many centered on the idea that so-called ‘superhosts’ — those who consistently meet certain thresholds including near-perfect ratings, a large number of bookings and infrequent cancellations — have taken out mortgages on several properties, banking on Airbnb income to cover those payments.”

“Now with little to no cash flow, they’ll soon default on those mortgages, the thinking goes. In large enough numbers, that would bring about a reckoning. This is a compelling narrative. After all, a quick online search reveals articles such as ‘HOW TO MAKE MONEY WITH AIRBNB (OVER $10,000 PER MONTH!),’ which comes from a millennial Ohio State graduate who lives in Los Angeles and manages nine listings in Columbus.”

“It includes advice such as ‘by leveraging your debt capacity, you will be able to effectively invest more money than you would otherwise be able to.’ If newer hosts were the ones clamoring for Airbnb to offer support, maybe they’re the most overleveraged.”

The Mountain Express in North Carolina. “Richmond Hill resident Leanna Echeverri says she and her partner are complying with current regulations and doing what they can to stay positive during the pandemic. After investing about $5,000 in renovations to create a private entrance and space inside their home, they launched the short-term rental in March 2019. ‘Almost immediately, we were booking like crazy,’ Echeverri recalls. But a year later, everything has drastically changed. Her seven April reservations, spanning 21 days, have all fallen by the wayside. Those rentals were Echeverri’s main source of income; her partner works at Whole Foods Market.”

“Making matters worse was the fact that, even before the pandemic kicked in, 2020 had begun with a low occupancy rate. ‘We kind of trudged along during those winter months,’ Echeverri explains. ‘We saved money to get us through … and planned to play catch-up when March and April came around. … But that’s been pulled out from under our feet.'”

The Times of London in the UK. “Brian Chesky had hoped that 2020 would be the year in which he could convert paper riches into something more tangible. The boss of Airbnb aimed to float the room-booking app for more than $50 billion, crystallising multimillion-dollar paydays for his long-serving staff. Covid-19 has laid his ambitions to waste. The freeze in tourism has thrown Airbnb into turmoil. Faced with a collapse in revenues, it is scrambling to shore up its finances.”

“While Airbnb describes itself as ‘an economic empowerment engine,’ it has angered many cities by skirting local rules. In Barcelona, residents complain that already crammed districts are overflowing with Airbnb guests. They accuse Airbnb of pricing locals out of the housing market, as landlords can earn more by renting out their properties for a night or two.”

“An even bigger fear is whether the travel industry can regain its pre-crisis vigour. Airbnb talks about forging ‘people-to-people connections,’ but after enforced social isolation, won’t we wary of renting room and apartment from strangers? Sure, hotels are crowded places that are ripe for transmitting diseases, but travellers may decide that they’re cleaner and offer a lower risk than an Airbnb. Coronavirus will change our perceptions of many things, the sharing economy included.”

From Domain News in Australia. “The Tasmanian capital of Hobart has become a beacon of unaffordability for many of its residents. But now the collapse of tourism from the coronavirus pandemic has seen a massive number of homes being transferred from the short-term holiday letting pool to the long-term rental market. That’s a whopping 60 per cent rise in the three weeks to April 5 this year compared to the same period in 2019.”

“‘Hobart has had an extremely tight rental market which has been tough for tenants,’ said Domain senior research analyst Dr Nicola Powell. ‘But over the last two weeks of March, it saw a strong lift in available rental listings. Hobart is driven by tourism, both interstate and overseas, and with that ceasing, a lot of short-term rental accommodation has been converted to the long-term rental market instead which should to help to alleviate the really tight rental conditions.'”

The Echo in Australia. “There has been a large increase in the number of properties available for rent in the Byron Shire, as former Airbnb and short-term holiday letting properties start returning to the long-term residential market. Local housing economist Thomas Keily describes the surge as ‘unprecedented.’ He told The Echo, ‘That label is getting bandied about a lot right now, but we’re talking about 500 properties in the Northern Rivers region in the last two weeks. That’s a 50 per cent increase on a year ago. Those numbers are substantial.'”

“This is a trend we’re seeing in a number of popular tourism destinations. ‘Properties available for rent have increased 55 per cent in Cairns and 38 per cent in the Whitsundays,’ Mr Keily said. Mr Keily cites rental data from real estate platform Domain, which shows that across the country, the number of rental properties has increased 20 per cent relative to a year ago, largely on the back of tourism hot-spots.”

The Huffington Post on Canada. “Amid all the bad news surrounding the COVID-19 pandemic, there might be something of a silver lining for renters and homebuyers in Canada’s priciest cities: When the lockdown ends, they may find themselves in a more affordable housing market. And if it happens, it will be in no small part thanks to the sudden flame-out of Airbnb, whose hosts have seen a collapse in revenue as global tourism ground to a halt in the past few months.”

“Airbnb’s situation right now is about as dire as it could be. Even before the pandemic hit, changing attitudes and changing rules meant Airbnb owners were facing a much harsher new reality. One major earthquake for the vacation rental platform came in November, when a new Toronto by-law came into effect, forbidding homeowners from renting out any properties on Airbnb except for their primary residence or rooms in a primary residence.”

“The new rule seems to have had an immediate impact. Toronto saw a 29-per-cent spike in the number of furnished, long-term apartment rentals available in the first three months of this year, according to real estate consultancy Urbanation, which sees this as a sign that Airbnb owners are shifting to long-term rentals ― though that was largely before the impact of the pandemic was felt.”

“Others believe Airbnb hosts are more likely to sell their units instead. ‘They’re not going to hold on to it for the rental market,’ said Diana Petramala, a senior researcher at Ryerson University’s Centre for Urban Research and Land Development. Short-term rentals bring in far more revenue than long-term rentals, so renting out an apartment on a one-year lease is ‘a less attractive investment to hold on to,’ she told HuffPost Canada. That’s especially true if you’re one of the many homebuyers using Airbnb income to cover a large mortgage. Rent in the apartment market might not be enough to cover that monthly payment.”

“Scott Chatford, CEO of analytics firm AirDNA, says many Airbnb hosts will likely hang in there to see how the summer turns out. ‘There is still hope that people are going to be able to salvage their business by end of summer. But if people aren’t able to pay their mortgages in August, then you might see people giving up hope.'”

The Toronto Sun in Canada. “Torontonians love to talk about Toronto real estate. Given that the definition of ‘market value’ is what a given property will sell for on the open market, we will need the real estate market to open up again before we can get any real sense of our new normal with respect to house prices and property values. After years of historically low vacancy rates on the rental market, largely attributed to investor-owners experiencing bank-robber returns through short-term rentals, the lockdown had an immediate impact.”

“Suddenly investors have unrentable units to carry. Almost immediately Craigslist and Kijiji were flooded with new rental apartments. Suddenly investors have unrentable units to carry. Almost immediately Craigslist and Kijiji were flooded with new rental apartments. Even without a crystal ball, we can certainly expect to see an immediate impact on the condo market.”

“Those same investor-owners are suddenly entering their second month of lockdown with no clear end in sight. Mortgage relief options are limited for non-principal residences, and the short-term rentals that used to cover costs and then some are now banned outright in the province. Many investors will find they have no alternative but to offload, so it would be entirely reasonable to expect a rise in ‘distress sales.'”

“Even pre-construction condominiums will surely take a hit as buyers under contract, now experiencing lost earnings and unemployment, may no longer qualify for financing and could be unable to close on their deals. Is this bad news? For some it’s not great. But is it opening up a wedge of opportunity for buyers and renters who have long needed a break? Absolutely. So, while we have all surely lost patience with false optimism in the midst of this pandemic, everything isn’t completely awful.”

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This Post Has 112 Comments

  1. ‘if you’re one of the many homebuyers using Airbnb income to cover a large mortgage…Rent in the apartment market might not be enough to cover that monthly payment…’if people aren’t able to pay their mortgages in August, then you might see people giving up hope’

    Oh dear…

    1. These Airbnb goons destroyed the rental market of every mountain town in Colorado with their greed.

      Yes, these towns are expensive, but lifties and bartenders (i.e. the actual essential workforce) should be able to at least live with roommates in a rental without government subsidies.

      1. They also sucked the inventory off the market in most parts of Coastal California, creating the illusion of a permanent housing shortage.

        1. Yeah, I’m surrounded by these short-term rentals. The county government started cracking down on short term rentals recently and now the virus. It was almost impossible to find decent long-term rentals and home prices far surpassed what local wages could support. This bug may have an upside for locals.

          1. Only if the AirBnB hosts don’t qualify for bailouts and are forced to give up their HODLings when they are unable to pay the monthlies.

    2. There were so many people doing AirBNB arbitrage.

      For instance my cousin has nice 3 brm condo on a high floor with a very decent but not great view of L.Ontario near downtown Toronto (Mimico near the Humber river if you know the area.

      What she would do is rent it out via AirBNB (had a lock on her bedroom, the smallest room – and put the personal effects in there) for a effective 2 bdrm condo.

      If she got offers to short-term rent with BnB, she just stayed with her BF – and got $s to put on advanced payment of the mortgage. She has done this for 4 years – and paid off significant amounts on the condos.

      So what happens now – nobody seems to know. And does the condo retain the 2018 or 2019 sales value

  3. I’m in Palm Springs,CA and wonder how many of the vrbo and Airbnb will be foreclosed on.
    The STR market pit neighbor against neighbor especially in Deep Well and Twin Palms.
    I have a friend that has 6 rentals and they are all vacant.
    I don’t know how these “ owners” were able to obtain loans for the numerous properties.
    The Coachella valley is ground zero for the burst. No tourist, no money.
    Last time it dropped 50-75%

    1. Just the other day I posted an article with a 24 YO who bought two shacks in Austin for STR. He was applying for a government forbearance so it must have been Fannie/Freddie “investor” loans.

        1. I think your right but its easy to check off a box on an application that may not represent the truth and the lenders aren’t likely going to verify if the loanowner is actually occupying the shack.

  4. When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.

    Citigroup’s Chuck Prince,
    July 10, 2007

    Socially Distance This
    Carnival Executives Knew They Had a Virus Problem, But Kept the Party Going
    More than 1,500 people on the company’s cruise ships have been diagnosed with Covid-19, and dozens have died.
    By Austin Carr and Chris Palmeri

    The news, when it reached the Grand Princess early on March 4, barely registered at first. In a letter slipped under passenger cabin doors, Grant Tarling, Carnival Corp.’s chief medical officer, announced that the U.S. Centers for Disease Control had begun “investigating a small cluster” of Covid-19 cases in California that might have been linked to the ship. Thirteen days after leaving San Francisco for Hawaii, the vessel would be skipping a scheduled stop in Mexico on its return voyage and sailing back early to its Bay Area port.

    That day, passengers noticed new hand sanitizer stations and crew members wearing gloves, but life on the Grand Princess, which advertises 1,301 cabins, 20 restaurants and lounges, about a dozen shops, and four freshwater swimming pools, otherwise went on as normal. Guests prepared for a ukulele concert, played bridge at shared tables, and took line-dancing classes. That night, Laurie Miller and her husband, John, attended True or Moo, a show featuring an emcee in a cow costume; the following morning, John joined about 200 other passengers in the ship’s Broadway-style theater for a lecture on Clint Eastwood movies. “I’m surprised they’re even letting this event happen,” he whispered to a nearby friend. “This is a big crowd.”
    …

    1. When in doubt, eat more ice cream:

      ‘Around lunchtime on March 5, the ship’s captain, John Smith, announced a quarantine over the ship’s public address system. All 2,422 passengers needed to go to their cabins to shelter in place. Laurie Miller was in the Da Vinci dining room eating chocolate peanut butter ice cream. “Oh my God,” she remembers thinking. “This is real.” Then she ordered more ice cream.

      Other passengers ambled to the ship’s stores and dining areas, too, to take advantage of the perks while they could. “Evvverrrybody went to the buffet,” recalls 61-year-old Debbi Loftus, who was traveling with her parents. “I just thought, Oh, crap, the ukulele concert is going to be canceled.” Crowds of elderly guests filed to their cabins through narrow hallways and down the stairs of the ship’s 17 decks. Sixty-nine-year-old Karen Dever tried an elevator only to find it packed with fellow passengers. “So much for social distancing!” she joked aloud.’

    2. Given all the Norovirus breakouts on cruise ships it amazes me that anyone would take a cruise after Wuhan was locked down.

      1. From a comment in the prior post:

        “The rent strike, they say, will continue until Cuomo cancels rent across the state for four months, or for however long the pandemic lasts; freezes rent prices; and houses the 92,000 homeless people across the state, for whom stay-at-home orders are “cruel and meaningless.”

        If Cuomo hadn’t spent half a $billion on ventilators perhaps he could have purchased enough abandoned cruise ships for all of them.

        1. “… abandoned cruise ships.”

          Today I went to Sunset Beach, CA and I counted 22 ships sitting at anchor just outside LA/Long Beach harbor. And four of them were cruise ships.

      2. Given all the Norovirus breakouts on cruise ships it amazes me that anyone would take a cruise after Wuhan was locked down.

        The average ‘Murican cruise-ship passenger seems a few IQ points short of moron.

  5. As a CPA in Florida, I’ve had 80 clients inquire about, and apply for, the PPP loan. All 80 have no funds as of yet. I’m a CPA with mostly s-corps with less than 10 employees. So it seems only larger small businesses are getting funding. Interestingly, Lately I’ve had a lot of clients inquiring as to how to chance their NAICS code. Hmmm. It seems small businesses aren’t created equal. You have to supply the “right” services to get a potentially forgivable loan. If you’re a bakery on a budget, buh bye…

  6. ‘Uncertainties caused by the coronavirus crisis have affected the rental market in Zagreb as well, where a drop in prices was registered even before the 22 March quake, it was noted in an analysis published by a real estate advertiser Crozilla.com.’

    “The uncertainty caused by the coronavirus situation left a mark on the rental market in Zagreb even before the major earthquake, which exacerbated this difficult situation. The flat rental market, both monthly and daily, is already suffering from the consequences of the emerging developments,” Crozilla stated.’

    ‘Along with the monthly rent market, changes were registered in the daily rent market as well. However, in that case, not even price reduction could help, said to Crozilla Bruno Babic. “Prices are not dropping in a competition for guests. You can stay for free, but every guest must first go to isolation for 14 days, and the vacation becomes too expensive, no matter how cheap the accommodation,” stated Babic, adding that they currently have no guests, as their business is based on exclusively on tourists.’

    https://www.croatiaweek.com/zagrebs-rental-market-disrupted-by-pandemic/

    1. On comparing notes with friends, I am increasingly convinced that a number of people I know had “mild” (undetected/nonlethal/non-intensive care ward) cases.

      The bad news:
      1) That “1/3 of the people” is roughly two orders of magnitude above the very I’ll subpopulation whose posititive test results comprise the official case count (e.g. upwards of 100 million if 2/3 is scaled up to the entire U. S. population)
      2) Over 700,000 confirmed cases and still growing is nonetheless a large number.
      3) Around 38% of resolved confirmed cases in the U.S. have ended badly.

      2. It sort of appears that most “confirmed cases” are not on a path to being “resolved”. Maybe it’s like the IRS, they’ll never tell you you’re clean, they just stop chasing you.

        1. Agreed. The postmortem on the pandemic will be based on mathematical models and heroic assumptions, with big error bounds.

          1. The postmortem on the pandemic will be based on mathematical models and heroic assumptions

            Models are for predicting the future, not the past.

          2. Actually also for the past, unless you have full information about what occurred (we don’t and never will).

      3. “…100 million if 2/3…”

        Should have said 200 million.

        Anyway, I now have to wonder whether the number of U.S. citizens already exposed is comparably high. We might be able to reopen much sooner if only there were a way to implement widespread antibody testing. (I requested a test a couple of places two weeks ago, and was told the FDA had not approved any antibody tests.)

        1. One reason I might have spoken too soon: The testing currently underway is most likely just discovering existing cases, rather than picking up the emergence of new ones. I.e. the case counts are still very low due to limited testing so far.

    1. I hate to say this but if you owed Bill $1,200 at the same time Bill owed me $2,400 and you gave me $1,200 to pay Bill.

      Bill would only owe me $1,200 🙂

    1. Not a bad day for Vanguard energy fund HODLers:

      Vanguard Energy Fund Investor Shares / Stock Price
      29.44 +1.83 (6.63%)
      VGENX (MUTF)
      Apr 17, 12:00 AM UTC · Currency in USD

      1. The number of outstanding Exxon shares is 4.23 billion. That’s billion, with a “b”.

        During Friday’s trading the stock price increased in value by $4.07 per share. This means the value of Exxon, as a company, increased by 17.2 billion dollars. Again, that’s billion, with a “b”.

        This huge change in value, driven by a change in price, was “voted on” by thousands of complete strangers. This appears to be quite amazing If one cares to take the time to think about it.

        1. This is a good example that illustrates the concept that Price equals Value and this value is not inherent in any fundamental sense but only reflects the opinions of thousands of strangers.

          These relative few thousands of strangers who “voted” for the change of price of Exxon stock ended up changing the value of the entire company by 17.2 billion dollars – in just one day.

          Whether you were one of these voters or not if you are a shareholder of Exxon then yesterday your wealth increased in value by possibly a substantial amount due the actions of complete strangers.

          1. Could a deluge of over $40 million in Unlimited Quantitative Easing per minute have possibly impacted the “voting” on value of which you speak?

        2. Meanwhile, outside in the real economy,…

          Oil & Gas industry
          Idle North Sea oil rigs point to fresh crisis
          Mature basin battles global slump in demand and price war between Russia and Saudi Arabia
          Sixteen idle rigs are in the Port of Cromarty Firth.
          Other Scottish ports with strong links to the oil industry, such as Dundee, are also storing rigs
          © Bloomberg
          Nathalie Thomas in Edinburgh 4 hours ago

          Off the coast of the Scottish town of Invergordon, 25 miles north of Inverness, ghostly silhouettes of idle oil rigs dominate the horizon.

          The Cromarty Firth, a sheltered stretch of water leading out to the North Sea, became a barometer of the health of the UK’s oil and gas industry after the last oil price crash of 2014, when it turned into something of a rig graveyard.

          Now the number of rigs stored in the Cromarty Firth is again on the rise as the North Sea battles a dual crisis, the extent of which industry veterans admit they have never seen before. A global slump in oil demand because of the coronavirus pandemic has been compounded by a price war between Russia and Saudi Arabia.

          Sixteen idle rigs are in the Cromarty Firth, surpassing the average of 12 recorded in 2016 when the last crisis reached a nadir. Of those, nine still have a small crew on board ready to be deployed if work arises but seven are unlikely to be leaving any time soon. The Port of Cromarty Firth is in negotiations with operators about potentially storing a further five.

          Other Scottish ports with strong links to the oil industry, such as Dundee, are also storing rigs.

          “I hate to say it but the whole of the North Sea has gone into meltdown again,” said Bob Buskie, chief executive of the Port of Cromarty Firth. “Once the price drops to where it is now . . . basically the place just goes into shutdown.”

          Although record cuts to global oil supply were struck last weekend between the Opec group of producing nations and Russia, crude prices are still languishing below $30 a barrel, spelling trouble for more mature, marginal basins such as the North Sea.

          “We are heading into a crisis behind a crisis,” said Jake Molloy regional organiser for the RMT union in Aberdeen, which estimates that as many as 1,500 North Sea workers are going through a redundancy consultation process, as drilling contractors’ work has dropped off sharply.
          …

        3. Amazing how exxon can count billions of shares without a mistake and we cant verify 100 million votes for an election???

  11. I’m disappointed but not surprised. Being responsible is for chumps. When we had the chance to tighten our belts we squandered it on tax cuts for the 0.01%. Now we’re printing money without limit, heading for a Weimar 2.0. As a conservative I’m deeply disappointed no party left in America reflects my values.

    1. There is no party left that reflects progressive values either.

      Once we had McGovern and Goldwater. Those were the days. Now?

  13. Brian Chesky had hoped that 2020 would be the year in which he could convert paper riches into something more tangible. The boss of Airbnb aimed to float the room-booking app for more than $50 billion, crystallising multimillion-dollar paydays for his long-serving staff. Covid-19 has laid his ambitions to waste.

    I know it’s rude to laugh…

    1. How a room reservation system could be worth $50B still baffles me. There are real tech companies that make real physical and tangible stuff that actually gets used that have market caps worth much less than that. I suppose that sometime in the future people will scratch their heads, wondering what we were thinking.

      1. I suppose that sometime in the future people will scratch their heads,

        Some of us in the present have been scratching our heads for some time.

          1. Any puke attempting that and any ditz falling for that probably deserve each other.

      3. Tesla had a market cap greater than GM and Volkswagen combined! There’s magic in having a rock star shyster CEO.

      4. “How a room reservation system could be worth $50B still baffles me.”

        And let’s not forget the “high tech” taxi cab industry.
        But hey, someone bought the stock. Why? I have no clue

        “I know it’s rude to laugh”
        Yes it is, but I can’t help myself either!

        1. I’m just laughing that Brian’s dreams of shearing and fleecing the retails investors at such a high level fell so flat. Maybe they deserve it but his plan was borderline evil. It brings me joy to watch evil intentions fail. I admit I used the product a few times so I suppose I’m not 100% clean. But we’ve all been hurt by what they did to the market.

  14. The Financial Times
    George Russell an hour ago
    New wave of infection in China’s north-east sparks alarm
    Christian Shepherd in Beijing

    New clusters of coronavirus in China’s north-eastern city of Harbin after weeks of near zero domestic transmission have sparked stricter controls and a reprimand for local officials, as fears mount of a second wave.

    In mid-March, China for the first time since the outbreak began reported zero new local infections. In the past week, however, dozens of transmissions within the country have been confirmed, the vast majority in Heilongjiang province, which borders Russia.

    As of Saturday, Heilongjiang had 61 active cases of Covid-19 from local transmission, 54 of them in Harbin, the provincial capital.

    A 22-year-old university student who returned to Harbin from the US and was quarantined at home, rather than in a central facility, has been identified by authorities as being the source of more than 40 new infections, including one in the neighbouring province of Liaoning.
    …

    1. “A 22-year-old university student who returned to Harbin from the US and was quarantined at home, rather than in a central facility, has been identified by authorities as being the source of more than 40 new infections,”

      Isn’t that delicious.

    2. from the US

      The CCP is telling it’s people that the disease comes from America & etc. The rights of foreigners are being severely restricted, like to buy food and such. It’s really tough there now for black Africans.

      As if we didn’t need more incentive to bring our manufacturing home, these CCP guys are shooting themselves in the foot with a full magazine.

      The willingness/effort to integrate these bad actors into our civilization for generations will be broken for generations. Just guessing. Unless the good Chinese people crush their CCP overlords.

      1. Unless the good Chinese people crush their CCP overlords.

        There are definitely good people in China who care about their fellow man. But the CCP has been in power so long that the only Chinese people I ever see even thinking that something major should change have already left China. Everyone I know on the inside are just keeping their heads down and trying to work the system like everybody else. If they really question it they never mention it. At all. Not even a vibe that they might ever question it someday in the future.

        1. That was the impression I got from our former Chinese colleagues, that they were loyal subjects of the party. I never ever heard one of them complain, while visiting the US, about anything back home.

          I recall one time I told one of them that I had dual citizenship. The look of horror on her face is one I still remember well.

    3. “…the source of more than 40 new infections…”

      Queue a sandwich boards parade and a retraining facility.

      1. How does that compare to, what, 740,000 U.S. cases that trace back to the introduction of the CCP virus by travelers from China to the U.S. early in the outbreak?

  15. Are improvised facial coverings enough? Shouldn’t we also require people to wear eye goggles, or perhaps even astronaut suits when going out in public, to avoid contact with the evil virus?

    1. You can’t be careful enough!

      Newsroom – Published on: April 01, 2020
      COVID-19 May Be Transmitted Through the Eye, Report Finds
      Gianna Melillo
      Researchers analyzed data from 38 patients with COVID-19 from Hubei Province, China, and found 12 individuals had ocular manifestations, including epiphora, conjunctival congestion, or chemosis.
      A new report published by JAMA Ophthalmology found preliminary data may suggest severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes coronavirus disease 2019 (COVID-19), might be transmitted through the eye.

      Researchers analyzed data from 38 patients infected with COVID-19 from Hubei Province, China, and found 12 (31.6%; 95% CI, 17.5%-48.7%) individuals had ocular manifestations, including epiphora, conjunctival congestion, or chemosis.

      These symptoms commonly occur in patients with severe systemic manifestations of COVID-19 and are consistent with conjunctivitis, or pink eye. None of the 12 patients experienced blurred vision. However, “by univariate analysis, patients with ocular symptoms were more likely to have higher white blood cell and neutrophil counts and higher levels of procalcitonin, C-reactive protein, and lactate dehydrogenase than patients without ocular symptoms,” the researchers found.

      The study also found COVID-19 was present on conjunctiva swabs from 2 of 11 (18%) patients tested for SARS-CoV-2 via nasopharyngeal swabs.

      Previously, the American Academy of Ophthalmology (AAO) observed that some reports suggest “the virus can cause conjunctivitis and possibly be transmitted by aerosol contact with conjunctiva.” The AAO also reported that there is a low risk of spreading COVID-19 through tears.

      The researchers hope their preliminary results will help “inform ophthalmologists and others around the world regarding ocular symptoms with COVID-19.”

      “The primary importance of this finding is epidemiologic: it confirms other reports that the virus can invade the conjunctiva, which might, in turn, serve as a source of its spread,” said Alfred Sommer, MD, dean emeritus and professor at Johns Hopkins Bloomberg School of Public Health in a commentary on the new study.
      …

    2. require people to wear eye goggles

      Now the alien virus is squirting from people’s eyes? How far does it travel that way, exactly?

        1. Are we overworrying this enough yet?

          How you could catch coronavirus from someone’s fart
          Brooke Rolfe
          Yahoo News Australia
          19 April 2020, 12:36 am GMT-7

          Evidence has suggested COVID-19 can be transmitted via faeces, begging the question if the same is true for farts.

          The proposition was put to Dr Norman Swan, an Australian physician, in an episode of ABC’s Coronacast podcast, during which he explained farts weren’t entirely innocent when it came to spreading the virus.

          To avoid potentially transmitting the disease via faecal particles, people should not pass wind without their underwear and pants on, Dr Swan said.
          …

      2. For eyes, the pathway would be for expelled drops to fly from an infected persons cough (or sneeze, or even talking) far enough to land on a second person’s eye membranes. Not as bad as breathing droplets far into the nasal passages, but still an infection.

        Or someone could touch an infected surface and rub his eyes and take in the virus that way.

  16. “More than 600,000 small businesses were created in Airbnb’s inaugural year, according to the U.S. Bureau of Labor Statistics.”

    That sounds like a hell of a lot of inventory sucked out of America’s residential housing markets to be converted into illegal hotels.

      1. Ok. But I believe that after the dust settles, an incredible number of homes in San Diego and other destination cities will turn out to have been snapped by AirBnB speculators.

  17. If social distancing measures seem challenging in the U.S., imagine how they work in Africa.

    1. The Financial Times
      Coronavirus
      Court suspends lockdown in Malawi
      Ruling sets precedent in continent where poorest fear cure could be worse than the disease
      Peter Mutharika, Malawi’s president, declared the lockdown in the midst of a political crisis after the country’s highest court overturned his re-election last year as suspect.
      © REUTERS
      David Pilling in London and Joseph Cotterill in Johannesburg
      9 hours ago

      A three-week lockdown due to begin in Malawi this weekend has been suspended following a high court decision that the government had not made enough provision to stop poor people going hungry.

      The ruling, the first successful legal challenge to the concept of a lockdown in Africa, adds to a growing debate on the continent about the trade-offs between shutting down economic activity and saving lives.

      In Africa, there have been relatively few reported deaths from coronavirus, with just over 1,000 so far. But the economic consequences of the virus have been palpable as people have been prevented by anti-pandemic measures from earning a living and from leaving often cramped accommodation where social distancing is impossible.

      On Friday, Malawi’s high court ordered a seven-day suspension after the government’s planned three-week lockdown was challenged by the Human Rights Defenders Coalition, a civil society group.

      “We are not against the fight against pandemic,” the rights group said. “But we see gaps which the government needs to rectify,” it said, adding that measures needed to be taken to prevent hunger when large food markets were closed.

      Malawi has recorded only 17 cases of the virus with two deaths, but the southern African country of 18m people is one of the most densely populated and poorest in the region, leading to concern that the virus could quickly spread.

      The pushback against the lockdown in Malawi reflects concerns throughout a continent of 1.2bn people, where the virus has been slow to take hold but the economic impact is already biting.

      Governments throughout Africa have tried to impose lockdowns with varying degrees of success. In South Africa and Rwanda, lockdowns have been near-complete. Kenya is among several countries to cobble together restrictions including social distancing, compulsory mask-wearing and a curfew.

      Kennedy Odede, a grassroots organiser in Kenya, said there was little appetite for lockdowns in the tightly packed informal urban settlements where he works. “They are telling me we better die from corona than die from hunger,” he said.

      “Every theory we are hearing now comes from the developed world,” he added. “Social distancing means you must have three weeks food in the fridge. Clean your hands means you must have water and soap.”
      …

  18. Most likely Thomas Jefferson never made this often quoted statement.

    “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)

    https://www.markturner.net/2008/10/01/tracing-the-bogus-thomas-jefferson-bank-quote/

    It’s more likely he said this… “I sincerely believe … that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

    “Late stage capitalism” is really just “creeping socialism”

    1. “Late stage capitalism” is really just “creeping socialism”

      Certainly pronounced by medical advances leading to another twenty years of life, non-productive life for many. Or industrial automation, SCADA is creeping into everything especially in monitoring roles since wireless communication costs have rapidly declined. Technology is deflationary.

  19. Wonder if AirBNB hosts are going to get some kind of Covid insurance? First guest that files suit for catching virus at one of these STR’s will create quite a panic among STR landlords.

    1. Such lawsuits will go nowhere. Since you can catch this simply by breathing in someone else’s droplets or a contaminated surface, and because there is no set incubation time, there is no way to prove when or where someone picked up the COVID virus.

    2. Just avoid staying in AirBnBs if you fear catching the previous occupants’ diseases.

  20. Mr Market did this all by himself, with no assistance, whatever. Honest! “Look, mom, no hands!”

    Market Snapshot
    Coronavirus creates a market of ‘haves and have-nots,’ with the Dow posting its best 2-week run in 82 years amid 22 million job losses
    Published: April 18, 2020 at 5:31 p.m. ET
    By Mark DeCambre
    MarketWatch’s review and preview of the stock market
    MarketWatch photo illustration/iStockphoto

    “It was the best of times, it was the worst of times…it was the spring of hope, it was the winter of despair,” to borrow from the opening lines of Charles Dickens’s “A Tale of Two Cities.”

    In this case, the epoch of coronavirus that has infected some 2.2 million people globally has essentially created a tale of two markets: one of Wall St. and the other of Main St.

    On Wall St., hope of reopening plans and unvetted therapeutics for the deadly illness has propelled the Dow Jones Industrial Average to its best two-week run since 1938, according to Dow Jones Market Data.

    On Main St., the market for jobs has been decimated, with forced-shutdown protocols, meant to limit the spread of the pathogen, wiping out nearly all of the 23 million jobs created in the aftermath of the 2007-09 recession, in a manner of four, incredibly short weeks.

    The disconnect between the two is palpable.

    “It took ten years of job growth to pull these workers off the sidelines; now they will be thrown back into the shadow pool,” wrote Bob Schwartz, senior economist at Oxford Economics, in a Friday research report.
    …

  21. Was That Cold I Had in November or December Coronavirus?
    https://news.yahoo.com/cold-had-november-december-coronavirus-090408878.html

    There is a massive amount of slant contained in this article but this tidbit stands out:

    “On Friday, preliminary results from the Stanford study pointed to as many as 4.6 percent of the Santa Clara County population possibly having antibodies for the coronavirus—85 times the number of confirmed COVID-19 cases there.”

    Eighty five times. That’s a hefty number. This suggests the infection rate is huge but, as you can see, most of these infected people do not get sick.

      1. Opinion
        The numbers are in: COVID-19 is worse than the flu and is now a leading cause of death
        It’s time to stop minimizing the impact of this virus.
        Omar Rodriguez (left) works with Joe Neufeld, the owner of the Gerard Neufeld Funeral Home, to move a newly delivered casket into the Queens business, March 27, 2020 during the coronavirus pandemic in New York. A funeral home in New York City has seen a steady stream of people who have died from the coronavirus. In just the past week, the funeral home has had services for almost a dozen people who have died, and is expecting more. For those mourning loved ones, funerals in the age of self-quarantine and social distancing are a far cry from the rituals of collective mourning that took place even a few weeks ago.
        (AP Photo/Mark Lennihan)
        Omar Rodriguez (left) works with Joe Neufeld, the owner of the Gerard Neufeld Funeral Home, to move a newly delivered casket into the Queens business, March 27, 2020 during the coronavirus pandemic in New York. A funeral home in New York City has seen a steady stream of people who have died from the coronavirus. In just the past week, the funeral home has had services for almost a dozen people who have died, and is expecting more. For those mourning loved ones, funerals in the age of self-quarantine and social distancing are a far cry from the rituals of collective mourning that took place even a few weeks ago. (AP Photo/Mark Lennihan)(Mark Lennihan)
        By Dallas Morning News Editorial
        12:00 AM on Apr 19, 2020

        We can now officially put to rest all comparisons of COVID-19 to influenza. The numbers are in. Coronavirus is killing more Americans than the flu and almost everything else. According to data compiled by The Washington Post, COVID-19 is now the second leading cause of death in America.

        In some parts of the country, it’s way ahead. In Louisiana and Washington, D.C., more people died of COVID-19 during the first week of April than any other cause. In New York, it’s not even close: 5,226 died in that state from the virus that week compared to 870 who died of heart disease.

        The upward march of these numbers is steady and disturbing. The week of March 16, COVID-19 didn’t rank among the 15 most common causes of death. The next week, it ranked seventh. The following week, it moved up to third. The week of April 6, COVID-19 killed more people than anything besides heart disease. And it’s likely to take the top spot soon. Possibly, it already has since news emerged last week of variations in the way different states report coronavirus cases.
        …

  25. Will the early implementation of Unlimited Quantitative Easing enable the Everything Bubble to survive the COVID-19 pandemic?

    1. The Financial Times
      Opinion Coronavirus
      Coronavirus has shaken our laid-back attitude to financial risk
      The present flap would not have surprised economist Hyman Minsky
      Jonathan Ford
      The markets have taken on the characteristics of Ponzi finance, as described by Hyman Minsky
      © Kazuhiro Nogi/AFP/Getty
      Jonathan Ford
      April 18 2020

      The coronavirus epidemic has been accompanied by sharp declines in equity values. Share prices have slumped by about 20 per cent around the world since its severity became known.

      That is clearly grim news for investors in quoted companies. But it is even more frightening for those pursuing highly leveraged strategies. That decline alone might have eaten through the slender equity cushion shielding their bets from insolvency. It is why a claque of heavily indebted companies in hard-hit sectors — such as airlines and airports — have been loudly imploring governments to bail them out.

      Of course, not all companies are to blame for their predicament. Many smaller businesses simply have not built the balance-sheet reserves to endure a prolonged period of zero or limited income. Governments are right to have pursued policies to assist these businesses through cost subsidies and access to capital through guaranteed loan schemes.

      But for others high leverage has been a conscious strategy aimed at magnifying returns. They are a major factor behind the extraordinary expansion in corporate borrowing over the past decade, when the global outstanding stock of non-financial corporate bonds reached an all-time high of $13.5tn last year, double its level in real terms in 2008, according to OECD data.

      It is this population of heavily leveraged companies — especially lower-grade borrowers in the US and Europe — that threatens to magnify the severity of the crisis. Their fragility may lead to more insolvencies, idle assets and dispersals of skilled workforces than would otherwise have been the case.

      High leverage makes returns more volatile — both on the upside and the downside. Normally the fear of loss should act as a self-regulating check on excessive borrowing. But monetary policy has in recent decades short-circuited this mechanism, with the authorities supporting markets when they plunged but failing to damp them down when they inflated bubbles. Excessive risk-taking consequently cascaded through the financial system, creating a web of incentives that encourage the bosses of enterprises to take on more debt.

      None of this would come as much surprise to the American economist Hyman Minsky, who died in 1996. He noted how prudent financial arrangements can give way to what he called “Ponzi finance”, which is where borrowers are unable to service their debts or repay principal out of current income. Ponzi borrowers depend on refinancing against the collateral of rising asset prices to stay afloat.

      Long before economists were hailing the era of the “great moderation” of low inflation and stable growth that preceded the financial crisis, Minsky argued that stability itself was destabilising because people responded to the good times by changing their risk-taking behaviour.

      Just how Ponzi-like the markets have now become is revealed in some analysis from Matthew Mish, global credit strategist at UBS. This looks at how the riskiest borrowers — many backed by private equity — have massaged a measure known as ebitda — earnings before interest, tax, depreciation and amortisation — to appear more creditworthy and hence able to take out bigger loans.
      …

    2. Equivalent to throwing a engine rod going down a 10,000 ft mtn road. You can throw it in neutral a cooooa$t alooooong time, but yer engine $it.u.a.$hun i$ knot going to bee improved much by the time you $low to a $top when ya run$ out of “everything$.downhill” end$.

      1. Interesting analogy. What’s the financial economy equivalent to the defunct vehicle reaching the bottom of the hill?

          3. Unlimited Quarintinive Easing?

            It’s like a relentless pile driver because it’s focused. Eventually all sorts of old stumps and bodies will pop up out of the ground.

          4. “…patients who spend years on life support…”

            The Terri Schiavo story was a sad state of affairs.

        2. Interesting analogy. What’s the financial economy equivalent to the defunct vehicle reaching the bottom of the hill?

          Value of the dollar reaches zero and then only real productivity matters and then only if another productive person wants what you produce and you want what they produce or an acceptable medium of exchange can be found?

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