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More Vendors Selling At Bigger Discounts

A report from CBC News in Canada. “There is nothing so bad that it does not end up helping someone is the old saying, and while the COVID-19 outbreak is bad for pretty well everyone, long-suffering renters may finally get a break. Already, there are early signs that while the supply of rental properties continues to grow, demand has slumped, even in Canada’s hottest property markets, such as Vancouver and Toronto. That’s partly because the market was already showing signs of strain and was due for a readjustment. Like other sectors of Canadian real estate, the sudden economic downturn will expose faults in a rental market dependent on high levels of borrowed money.”

“The devastated Airbnb market, down about 95 per cent, is only part of it. Unemployed gig workers and students are moving in with relatives. Immigration has slowed to a trickle. ‘All this is going to hit the rental market first,” says Ben Rabidoux, who runs North Cove Advisors, an information service for the professional residential real estate market. Of course, a warning to landlords of falling rents will be good news for renters. ‘We have a 50-year high in rental units under construction and a 50-year high in completions of those rental units coming online,’ says Rabidoux. That’s over and above the current flood of condos built to sell to Canadians as rental investment properties. And once underway, he says, those projects will continue to inundate the market over a two-year timeline.”

From Global News on Canada. “The City of Montreal says it is financially prepared to face the potential impact the novel coronavirus crisis will have on its economy. Before the coronavirus crisis hit, the city was going through a property boom. But the Moshe Lander, a Concordia University economy professor says a few things are missing. ‘You build today in the anticipation there is going to be people there to fill it. Are we going to be talking five years from now in a property glut?’ Lander said.”

The Times of London in the UK. “Demand for mortgages and credit card lending is expected to fall in the second quarter as the economy suffers a sharp fall in output, the Bank of England has forecast. Hansen Lu, a property specialist at Capital Economics, the consultancy, said: ‘Mortgage availability is set to collapse in the second quarter.'”

The Khmer Times in Cambodia. “Sales of apartments have fallen and have inflicted a severe blow because most potential customers are foreigners. With lockdown being imposed in many countries and travel being banned, there are hardly any customers who have shown any interest in buying property. Life Design Partners alone has 70 percent loss in sales in the face of the viral pandemic. Some tenants are even asking for a 50 percent discount having been hit by pay cuts, forcing the hands of property owners reliant on a steady cash flow.”

“Some of the potential customers have been waiting for the downturn so that they can buy while some of the owners are desperate for a panic sale. ‘Don’t panic sell.’ said Paul Ellender, Manager of Freer Properties.. ‘It is always best to buy in a downturn and sell in an upturn. Now is a good time to review your portfolio.'”

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

“Home prices did, in fact, fall 7.9 per cent in March from their peak in June last year, according to Centaline. Wong Leung-sing, senior associate director of research at the agency, said 639 old homes were sold at 10 major housing estates in the city in the first quarter this year, up 1.4 per cent from the previous quarter. ‘The rise in transactions is driven by more vendors selling their homes at bigger discounts and encouraging prospective buyers to return to the market,’ he said.”

“In New Territories, a 356 sq ft unit at The Reach in Yuen Long was recently rented out for HK$9,500 a month, about 10 per cent less than a previous lease of HK$10,500, according to Centaline. Units of a similar size were selling for HK$5.4 million in June 2019, and those who bought them at that point will be required to pay a monthly mortgage instalment of as much as HK$17,069, based on a 80 per cent loan for homes worth HK$4 million to HK$6 million then. This means, the landlord might have to fork out an additional HK$7,569 to meet their mortgage commitment.”

From Mingtandi on China. “The containment measures and economic uncertainty that weakened leasing demand during the period also had an impact on capital markets, with only four significant assets being traded in Shanghai during the quarter, according to Savills. Property investment across all sectors stalled, dropping nearly 78 percent compared to the first quarter of 2019 to total just RMB 12.4 billion during the period from January through March, according to Savills, which tracked deals over RMB 500 million. Savills noted in its quarterly Shanghai report that deal negotiations are taking longer than usual in the current climate due to a mismatch of pricing and expectations.”

The Otago Daily Times in New Zealand. “Economists have predicted a downturn in prices for the remainder of the year following a downward trend in the economy due to the Covid-19 lockdown. Dunedin Bayleys Metro real estate agent Dave Buckley was aware of economists’ comments about prices and said the market was likely to ‘swing from a sellers’ market to a buyers’ market. ‘The buyer’s going to become king.'”

From Nine News in Australia. “Economists are increasingly calling Sydney a buyer’s market as key suburbs in the city suffer a fall in asking prices due to conditions created by COVID-19. Data compiled exclusively for Nine News by My Housing Market found suburbs in the Canterbury-Bankstown area, Sydney’s north west and south have all had significant falls in asking prices and a rise in the number of homes for sale. In Canterbury-Bankstown the median asking price has fallen 5.2 per cent in the past month to $970,000 and listings have risen by 4.5 per cent.”

“Greenacre offers buyers the most choice right now, followed by Revesby, Bankstown and Padstow. In Sydney’s northwest, the median asking price is down 6.5 per cent and listings are up 8.6 per cent. The suburbs with the highest listings are Baulkham Hills followed by Carlingford, Castle Hill and West Pennant Hills.”

“My Housing Market chief economist Dr Andrew Wilson says current market conditions are similar to those experienced a year ago, when buyers and sellers were largely dormant over fears of a sharp and sustained crash in home prices.”

From Domain News in Australia. “The six-month grace period being offered by the banks to mortgage holders may not be enough to see off the ill-effects of the coronavirus-induced economic weakness and a longer period may be needed, economists warn. ‘Our assumption is there will be a major spike in credit defaults across the entire country in the next 12 months,’ said Riskwise Property Research chief executive Doron Peleg. Mr Peleg said for the least desirable houses, a forced sale could result in up to a 15 per cent price reduction.”

“Domain economist Trent Wiltshire said that forecast could be optimistic, but he agreed this might be necessary if mass forced sales were to be avoided, and with them mass price falls. ‘There’s a potential this crisis will drag on well into 2021 and some people might need to be able to defer their payments for a lot longer,’ he said. ‘If that’s the case and the economy’s still very weak and people start defaulting on their mortgages, we might see more significant price falls.'”

“Mr Wiltshire said some might still slip through the cracks, as banks would try to manage the arrears on a macro scale and not try to keep every person in their homes. ‘There’s no doubt some people will need to sell their homes and that’s always the case,’ he said. ‘There’s always people who can’t afford their mortgage, who have negative equity. But it’s about the extent that that happens. Banks are worried about that being widespread and not just a small uptick.'”

This Post Has 108 Comments
  1. ‘We have a 50-year high in rental units under construction and a 50-year high in completions of those rental units coming online’…That’s over and above the current flood of condos built to sell to Canadians as rental investment properties. And once underway, he says, those projects will continue to inundate the market over a two-year timeline’

    Looks like that ‘we gotta build more shacks and airboxes so prices come down’ wasn’t a good idea.

    1. we are now in downtown Toronto. It is beyond the new construction. When we go on our (once daily allowed) walk on sidestreets, there is a ton of houses getting re-hab’ed and redone. These are likely smaller guys – and might totally get crushed.

  2. ‘economist Dr Andrew Wilson says current market conditions are similar to those experienced a year ago, when buyers and sellers were largely dormant over fears of a sharp and sustained crash in home prices’

    Let’s review. Australia cratered. New guy gets elected, REIC goes nuts and stampedes the weak minds to go all in on the bubble. Bubble crashes yet again and – congratulations Australia, you managed to financially bury even more FBs!

    1. No worrie$, kangaroo.land has knot $uffered a dece$$ion/repre$$ion in like 86 year$, or $omething like that.

  3. ‘Some of the potential customers have been waiting for the downturn so that they can buy while some of the owners are desperate for a panic sale. ‘Don’t panic sell’

    Paul, really, I’m fine. I don’t happen to own any Cambodian dirt. But if I run into somebody who does, I’ll pass along your advice.

    1. That’s great advice for folks who didn’t leverage up on easy money to amass a mini-mogul sized property portfolio, only to find themselves HODLing falling knife assets while facing loan payments they can’t afford to make due to a sudden and future absence of rental income.

    1. Oil prices are reequilibrating over time and space.

      The Financial Times
      Oil
      US oil price takes new dive as market turmoil widens
      WTI for June delivery nearly halves, a day after the May contract traded below $0
      © (c) Sakuratang | Dreamstime.com
      Myles McCormick and Anjli Raval in London, Henry Foy in Moscow and Matthew Rocco in New York 4 hours ago

      The price of US crude oil for June delivery almost halved on Tuesday and Brent, the international benchmark, dropped below $20 per barrel for the first time in 18 years, as global oil markets remained under intense pressure.

      The value of West Texas Intermediate for delivery in June — which had held above $20 a barrel on Monday even as the May contract traded at a historically unprecedented negative price — slumped to $6.50 at its worst, before recovering to settle at $11.57, down 43 per cent.

      The move suggested the blowout in the May contract was more than just a technical blip, and reflected growing concern that US storage facilities will fill up unless energy demand quickly rebounds from its coronavirus-related collapse.

      Brent crude, meanwhile, extended its fall in afternoon trading in New York, touching a fresh low of $17.51 a barrel before recovering slightly to settle at $19.33 a barrel, down 24 per cent on the day.

      “The car is speeding up and market forces will inflict further pain until either we hit rock bottom, or Covid clears, whichever comes first,” said Michael Tran, commodity strategist at RBC Capital Markets.

      1. Whatever float$ yer boat …

        Market$:

        Oil Tanker$ Are $urrounding California With Nowhere$ to Unload$

        Bloomberg / Ny Robert Tuttle
        April 21, 2020

        Total of 20 million barrel$ of oil float$ off U.S. West Coast

        Tanker$ float off coast as fuel demand plummet$ amid viru$👾

        Oil tankers carrying enough crude to satisfy 20% of the world’s daily consumption are gathered off California’s coast with nowhere to go as fuel demand collapse$

        The more than 20 million barrels of crude is the highest volume of crude to ever float off the West Coast at one time, according to Paris-based Kpler SAS, which tracks tanker traffic. About three quarters of those tankers are holding oil in storage, meaning they have been floating steadily for seven days, also a record.

        Almost three dozen ships — scattered in waters from Long Beach to the San Francisco Bay — are mostly acting as floating storage for oil that’s going unused as the coronavirus pandemic shutters businesses and takes drivers off the road. Marathon Petroleum Corp.’s refinery in Martinez, California, has been idled and others, including Chevron Corp.’s El Segundo refinery, have curtailed crude processing

        1. Well damn! Can we set up a still in the backyard and refine our own crude? I am tired of paying over $2/gallon when the world is drowning in oil, and it sounds like there’s plenty of the stuff just offshore.

          1. “Half of that is taxes.”

            That used to go toward road maintenance until 2008 when Obama needed to coddle the K12 teachers since the investment banks were not paying property taxes on their non-performing assets.

          2. Half of that is taxes.

            YMMV.

            80 cents a gallon in the Golden State (Fed + state), 40 cents in the Centennial state.

          3. Well, 👁 $ee’s 59.8% of the CA population is Mexican so as dt.Rumpsis would say: “Mexico i$ paying for mo$t of it!” 💃👏

        2. “…are mostly acting as floating storage for oil…”

          Perhaps all those abandoned crap-shack swimming pools could be used to store crude oil?

          Your REIConplex realtor could then could fluff up the MLS listing with “property includes oil rights”. Bump up the price a little??

          1. Perhaps all those abandoned crap-shack swimming pools could be used to store crude oil?

            That would be one smelly neighborhood.

          2. “…That would be one smelly neighborhood…”

            Aw shucks, a pool cover from Home Depot, and a little spritzer of pool chlorine and who would know?

            Just don’t walk on the cover on a moonless night…

        3. Oil tankers carrying enough crude to satisfy 20% of the world’s daily consumption BFD! 4.8 hours of a single day’s consumption. Who cares?

    2. Some 63% of National Association of Realtors members surveyed said buyers are expecting a decline in home prices because they sense less competition.

      Just read this on Marketwatch. Even the UHS’ are expecting house price declines.

      1. CovidScam provided perfect cover for what was already happening….. falling housing prices. NARscum is telegraphing it to condition the their HousingHen employees and all the DebtDonkeys they scammed.

    3. Beyond ugliness!

      Is This The End Of The World’s Largest Oil Fund?
      By Alex Kimani –
      Apr 21, 2020, 5:00 PM CDT
      The oil markets have just gone through an epic long squeeze, with oil prices crashing into negative territory for the first time in history.

      The May 2020 WTI futures contract sunk an agonizing 310% to minus $38.45/barrel by late Monday afternoon, marking the first time that a futures contract for U.S. crude prices went negative–and made all those seemingly improbable ‘negative oil’ prognostications suddenly appear prescient.

      Other maturities with oil-related assets such as Brent took it on the chin, too, recording double-digit declines.

      None, however, came anywhere close to the WTI crash, which adds to the sense of the mystique in the oil markets.

      Negative oil prices is an absurd notion that essentially means that producers would pay traders to take the oil off their hands. However, there’s more to it than meets the eye in the sometimes arcane and convoluted world of futures trading.

      We will be hearing more of this in the coming days and weeks after forensics analysts have done a deep dive into the day’s trades. The early consensus though, seems to point to one culprit: The United States Oil Fund LP, the country’s largest long-only crude oil exchange-traded fund (ETF) with $2.35B in net assets.

      As of last week, USO owned 25% of the outstanding volume of May WTI oil futures contracts as per Bloomberg.

      The May contract was set to expire on Tuesday, meaning owners of this paper oil had to take physical delivery of the underlying oil assets they represented.

      However, it’s impractical for ETF buyers like USO’s general partner/sponsor is U.S. Commodity Funds, LLC (USCF), to take physical delivery of all those millions of barrels of oil, leaving them with selling the contracts as the only viable option.

      But dumping such huge volumes of contracts in such a dire market is just the perfect recipe for disaster.

  4. I have to say that I am looking forward to the AirBnB crash.

    I’ve seen too many people whose sole focus has been Rent Seeking. I find myself hoping that the projections that it will take years before travel returns to pre-2020 level are true.

  5. devastated Airbnb market, down about 95 per cent

    LOL! Airbnb introducing Online Experiences: Unique activities we can do together, led by a world of hosts (e.g., Tango Concert with Latin Grammy Nominee, Wine Class with a Cool Wine Expert)

    1. Standard economics analysis suggests that a demand-driven drop in transactions of 30%-40% with relatively fixed supply will result in a sizable price decline.

      I know that real estate is different…blah, blah, blah.

    1. The U.S. Navy was going to try herd immunity on the USS Theodore Roosevelt until the Captain got cold feet and went public.

      1. That worked out horrifically in the cruise ship industry, but maybe Navy ships are different? (Younger passengers, for one…)

        1. (Younger passengers, for one…)

          How old i$ Ra$h.limpbaugh$?:

          “📣🎙li$ten folks, it’s just the common.cold!”

      2. So you think that was why he was relieved of duty?

        No worries — I suspect they’re trying it on some other ship now (like a Destroyer, do we still have those?)

    1. MASKS. We can open much of the economy using masks.
      Restaurant/bar, travel/leisure, and sports will suffer for a while, but we can probably pull off almost everything else.

      Masks will also give people milder cases, I hope. No more stories of people struggling to breathe for weeks on end.

      1. Maybe restaurants can install bubbles that lower from the ceiling, a la cones of silence in Get Smart 😉

        1. Some stores now have plastic sheets hanging everywhere in addition to arrows on the floor to protect the workers who are exposed during an entire shift. It’s sort of like navigating a labyrinth. At the end of the day the high-risk cohorts will have to better protect themselves via isolation and PPE until a vaccine is discovered while the asymptomatic carry-on with employment and frolic.

      2. Masks will also give people milder cases, I hope. No more stories of people struggling to breathe for weeks on end. Hope is not a strategy, but you have a point there. The economy can’t stand an indefinite lockdown regardless of what our “top men” think. Even N95 masks allow some viruses through, but at least many few than with no mask at all. As far as people being on vents for weeks on end, I’ve been there & done that. That’s been happening ever since the first patients were put on vents. Only got publicity in the last couple of months. People keep forgetting that none gets out of here alive.

      3. I’ve seen a lot of internet ads for hats with a plastic face shield over the front — like a stylish version of a welder mask. I wonder if those are effective at blocking exhalation droplets. I would certainly consider using one. It’s a lot less confining than a face mask, and it would wash up easily with some bleach or hydrogen peroxide cleaner.

      4. I’ve read that masks primarily protect those in the surrounding area from the wearer spreading COVID-19 if infected, unless they are the medically-approved kind. And we have a shortage of the latter.

  6. I think we can safely say the oil bubble has popped. How long will it take for the housing component of the Everything Bubble to follow suit?

    1. The Financial Times
      Equities
      International oil prices fall to more than two-decade low

      Brent tumbles on investor concerns over coronavirus pandemic and global crude glut
      WTI prices have fallen by more than two-thirds since the start of the year
      © Bloomberg

      International oil prices have tumbled to their lowest level in more than two decades as concerns over the economic impact of the coronavirus pandemic hit global crude markets.

      In Asian trading on Wednesday, Brent crude dropped as much as 17.3 per cent to $15.98 — its lowest point since mid-1999. Prices for the international oil benchmark are down by about 40 per cent this week.

      The fall in Brent follows a plunge in the price of the US marker West Texas International, which earlier this week fell into negative territory for the first time as the spread of Covid-19 pummelled demand for crude and created a global oil glut.

      The historic collapse in WTI prices came as producers were forced to pay buyers to take oil off their hands ahead of the expiry of futures contracts. Traders are concerned about the lack of space to store physical oil in the key transit point of Cushing, Oklahoma.

      Brent’s price has been less volatile than WTI as much of it is shipped by sea to customers, meaning it avoids landlocked choke points. But concerns are growing that other storage options, such as floating vessels, could hit capacity as well.

      “The idea that floating storage around the world is filling up just as fast [as US storage] is a story that weighs on other crude [benchmarks] including Brent,” said Robert Rennie, global head of market strategy at Westpac.

      Mr Rennie added that sentiment had also been hit by a lack of meaningful results from Tuesday’s Opec+ conference call as well as the delay until May 5 of a decision on production cuts by the Texas Railroad Commission, the US state’s oil and gas regulator.

      In trading in Asia on Wednesday, the price of WTI for June delivery was 4.2 per cent lower at $11.08 a barrel after plunging by more than 40 per cent a day earlier.

      “The realisation of negative prices has clearly spooked the market, with worries that we could see the same for the WTI June contract and possibly even in the Brent market,” said Warren Patterson, head of commodities strategy at ING.

    2. P Bear, the question might be were the worst demand of house is.

      Out of favor i think
      – downtown luxury condos – many can work from home now
      – top trim >4 bdrm houses in the suburbs and outer city ring
      – etc.

      What is left? starter homes and town/row homes

      1. I’d guess anything around San Diego priced “from the X-millions” ain’t gonna sell for what the builder envisioned.

    3. Poor, poor mb$, … poor, poor Ru$$ian Czar Putain, eye’$ need to help them, they i$ hurtin’ $o awful, … $ad!
      Trumpy.deare$t

      Why Trump’s plan to rai$e ga$oline price$ will not help the coronaviru$-damaged economy

      Yahoo.News/ Steven Strauss, Opinion columnist / April 21, 2020

      President Donald Trump was celebrating his recent deal (with Saudi Arabia, Russia and other oil-producing nations) to prop up oil prices — by reducing oil production — though so far his attempt at rigging the oil markets has been a $pectacular failure. One of the few bits of good news from the coronaviru$ rece$$ion is the large drop in U.S. gasoline prices — due to falling oil prices, as demand for oil has collapsed. So why is Trump trying to reverse this trend?

      The United States is now largely self-sufficient in oil production. If Trump’s deal finally does raise gasoline prices, this will, in effect, be a financial transfer from American consumers in all 50 states to the oil industry, and the few states where production is concentrated. Internationally, the democracies of Europe and Asia (our allies) are energy importers. This market-rigged oil price increase will burden their economies.

      Trump claims the American oil production cuts will come about due to market forces under current conditions. But if market forces don’t cause cuts, the Trump administration is considering using COVID-19 as an excuse to $hut down off$hore U.S. oil production. And it’s even talking about paying oil companie$ to not produce oil. Worse yet, if we retain these oil production cuts when the economy recovers, we’ll again be a significant net oil importer, dependent on places like Ru$$ia and $audi Arabia for our economy to function.

      As usual with Trump, nothing about this deal is transparent or well-documented. This might seem moot (with the current oil price collap$e). But since the current deal isn’t working —Trump might press even further to $upport oil prices. It’s worth asking — who benefit$?

      The American $hale oil indu$try (as a high-co$t producer) was particularly damaged by the collap$e of oil price$ and its own incompetence. Other oil producers (e.g., the Mexican government) had the common sense to hedge oil prices in the market. The shale oil industry gambled on $table (or higher) oil price$. It lost, and now American consumer$ will pay for their greed.

      1. I can’t speak for the rest of American consumers, but I don’t believe I will ever drive anywhere near as much as I did in the pre-COVID-19 era again.

        1. ” but I don’t believe I will ever drive anywhere near as much as I did in the pre-COVID-19 era again.”

          Really? …

          AAA Road.Trip$ = Di$cover America!

          (Eye’s Hope’s eye lives longs enough to drive Studebaker.CyberTruck back to my Amish cousins in Ohio., via Kansas & Nebraska & Tennessee
          & Kentucy 🤞🤞)

          (Delivering 📦 Hemp.hybrid seedling$🌱)🤫

          1. I may eat those words ifn oil prices remain near $0/bbl and drag down gasoline to under $1.00/gal.

        2. I can’t speak for the rest of American consumers, but I don’t believe I will ever drive anywhere near as much as I did in the pre-COVID-19 era again.

          I didn’t drive a lot before. But unless I lose my current job I suspect they still have dreams that everything is going to go back to exactly the way they were before.

          1. I think that OPEC should subsidize the sales of big pickups and SUV’s in the US. Or at least send everyone owns one a gift card as a thank you.

        3. I don’t believe I will ever drive anywhere near as much as I did Tell me how much you will not be driving, and I’ll make up for it and then some. But I camp out of my car & have always avoided crowds. Last time I camped in Yellowstone I bathed in the big lake, that was a real thrill even on a hot August afternoon. Nobody around either!

          1. I’ll make up for it and then some

            As will I. Camping on my boat in Lake Ontario isn’t far off.

    4. 👾 … munch,🛢munch, 🛢munch …🛢🎈📌💣

      👀📉📉📉⛽🎁🎉

      “Coming.$oon!” … Next!:

      1. Now that ALL the $uper.Tanker$ & 3,000 mile long pipeline$ & 800,000 Humungou$ $torage tank$ i$ over.flowin’, it’$ time to try “other” $torage $olution$!

        The Rating$ Game:

        Using railroad tank car$ to $tore exce$$ oil: It’s ‘po$$ible but improbable’ for now.

        MarketWatch/ Published: April 22, 2020 / By Tomi Kilgore

        Elkott estimates that there is tank car storage capacity that is readily available for at least 25 million barrels of crude oil, and that can be ramped up in the coming weeks.

        There are at least 30,000 Class 3 flammable liquid tank cars, each with capacity for over 30,000 gallons of crude in North America, that could be deployed to hold more oil, according to his estimates. Even more cars could become available in the coming weeks, as some cars that come off leases have limited renewal prospects, while others are rolling off manufacturing lines into a “depressed-demand” market.

        Although regulatory standards may not be an issue, it’s still “unlikely” that the tank cars would be used for storage, “because oil would still have to be received from the source in compliant equipment and then transloaded,” Elkott said. So even if regulators provided a temporary exception for storage, “the railroads were most likely be opposed to the idea,” as execution would be difficult.

        Storing oil in tank cars would accelerate their corrosion, which would make it less profitable.

        While U.S. railroad companies may be examining the prospects of entering the oil storage business, the Canadian counterparts do not appear to want that business. “This is likely as they do not see a compelling economic case in which revenue generated would compensate for the liability risk of doing something unfamiliar, as storing oil in tank cars for indefinite periods, as well as for the potential disruptions to other traffic on rail networks,” Elkott wrote.

        He said it can’t be ruled out, however, that the Canadian government may intervene to make the economic case more compelling, in an effort to help out the oil industry.

        (–Myra P. Saefong contributed to this article.)

        1. I wish they would stop writing about billions of barrels of oil & convert the measure into something we all understand, like “hours of world consumption” at 2019 levels.

          1. barrels of oil

            It’s the only meaningful measure for those who actually produce or process the stuff.

          2. 1 barrel of oil = 42 U.S. liquid gallons.

            A typical swimming pool holds 19,000 gallons, according to Google.

            So one could store 19,000/42 = 452 bbl of oil in one’s pool, if one took delivery on a contract valued at -$38/bbl, and sell it the next day for a big profit!

  7. ‘A popular investment among Asia’s wealthy in the years of rock-bottom interest rates has been upended in the recent market rout, leaving investors facing losses estimated to be in the billions of dollars.’

    ‘Structured products called fixed coupon notes attracted scores of private banking clients in Hong Kong and Singapore in recent years. Promised regular coupons even in turbulent times, some put 20 per cent or more of their portfolios into the instruments.’

    ‘One catch: the principal was tied to swings in assets like stocks, and losses could mount quickly during deep market declines.’

    ‘About 5 per cent, or more than US$80 billion (S$114 billion) of Asian private banking assets outside mainland China is probably tied to such notes, estimates University of Hong Kong’s Professor Dragon Tang. They worked smoothly until Covid-19 struck.’

    ‘The promised payouts have since been dwarfed by capital losses as stocks slid and some leveraged holders were forced out of the non-liquid notes. Others are hanging on, hoping for a turn in sentiment.’

    ‘The products work well in a rising market or one moving sideways, where investors recover the initial investment and the coupon owed, which could be as high as 12 per cent per annum. But the interest-bearing notes, linked to the performance of underlying assets, open holders to the risk of steep losses if those assets fall below a preset level.’

    ‘Some leveraged investors have been forced into selling early at steep discounts. Those who continue to hold the notes may see their investments recoup losses in a market rebound.’

    ‘One Singapore-based financial services professional lost up to 40 per cent of the US$400,000 he invested in fixed coupon notes tied to shares, including Microsoft, Broadcom and India’s ICICI Bank.’

    ‘He sold the investment, which was leveraged up about 60 per cent, prior to maturity after receiving margin calls and deciding he did not want the stress of monitoring daily prices and worrying about fresh calls from his bankers.’

    ‘A second investor said about 10 per cent of his financial holdings were in notes offering yields of between 6 and 12 per cent. Those tied to energy and the automotive sector were in the red at the end of last month, he said, though he remained invested in hopes of a recovery over the next few months.’

    https://www.straitstimes.com/business/invest/billions-lost-in-structured-notes

    1. $ynchronized Global $lowing is a $ocial.media digital di$tributional di$informational myth!

      “Coming.$oon!”: un.$ynchronized Global $oft.landing$!

      (Keep a clingin’ to yer high.yield$ Everything$, you will bee richly rewarded for yer “True.Belief$!)

    2. ‘Alberta’s government-owned money manager has lost more than $4-billion on what clients are calling a wrong-way bet against sharp swings in stock prices, dealing a heavy financial blow to a province already reeling from falling oil prices and the COVID-19 pandemic. ‘Alberta Investment Management Corp., known as AIMCo, suffered far larger losses than comparable funds after investing in contracts that pay off only if stock markets remain stable. It lost billions of dollars when the economic collapse wrought by COVID-19 sent the S&P 500 and other stock benchmarks on a roller coaster ride, putting it on the losing end of the trades, according to several senior pension plan officials and other sources who are familiar with the situation.’

      ‘The Globe and Mail is not naming the people because they aren’t authorized to speak publicly about AIMCo’s investing strategies. The sources said that AIMCo now acknowledges its executives were not fully aware of the risks they were taking. A $4-billion loss would equate to more than a third of AIMCo’s 2019 net investment income of $11.5-billion.’

      https://www.theglobeandmail.com/business/article-alberta-pension-manager-loses-4-billion-on-investment-bet-gone-wrong/

      1. Hospitality sector warns of ‘bloodbath’ without more help on rents

        ‘The letter to the chancellor, written by Jonathan Downey, 54, of Hospitality Union, and signed by the bosses of companies including Burger King, Pret A Manger and Wahaca, said that without the initiative “as many as two million jobs will not survive the next few months”.

        ‘Mr Downey said that a nine-month deferral of rent payment had to be accompanied by a similar “push-back” on loan and interest payments owed by landlords against the properties. Without it, he warned, “thousands of commercial premises will soon be empty”.

        https://www.thetimes.co.uk/edition/business/without-more-help-on-rents-hospitality-sector-warns-of-bloodbath-jd95x2h5f

    1. “Mortgage debt$ is the mo$t toxic and damaging debt$ of all. Avoid it at all co$t$.”

      Doe$ yet beloved Trumpy have any mortgage$.debt$, any? Iffin’ $o, that mu$t bee … $ad.

        1. Matter$ knot to me, (Trumpy’$ been good for ol’ Hwy50), … ye is the Trumpy.”True.Believer” lover.boy

          1. Trumpy is good for every body. That’s while he’s going to be with us for another 4 years.

          2. “Trumpy is good for every body.”

            mB$ & Czar Putain, i$ in complete$ agreement$ with ya Block$! … It’$ a ki$$ing $oiree! 💋💘

          3. Jeff.er.referee, maybee you can supply his an$wer? (Blocks must knot be a liaryer, he can’t even answer his own question$)

            “Mortgage debt$ is the mo$t toxic and damaging debt$ of all. Avoid it at all co$t$.”

            Doe$ yet beloved Trumpy have any mortgage$.debt$, any? Iffin’ $o, that mu$t bee … $ad.

    2. For the record, mortgage debt is not the most toxic and damaging debt of all. That would be student loan debt.

      1. Incorrect.

        A student defaulting walks away with credits. Default on a rapidly depreciating asset like a house and you get nothing.

        That’s why it’s best to default early and fast on a mortgage.

      2. “That would be student loan debt.”

        My 1990s engineering degree was worth the $22k debt at 8%, and I wound it down to zero in 5-yrs while supporting a wife and two children. I attribute my success with that student loan debt to not rewarding myself with a new automobile upon graduation.

        1. But what about all those Victim Studies majors who graduate with 100K+ of debt? At least you can walk away from your no down shack.

          1. I suspect that many will have to dump the proverbial artist espousing environmentalism and “marry-up” with someone pragmatic who can afford to retire her student loan debt and support a couple of children including shelter. It’s not going to be “easy street” for either of them, but life isn’t a Carnival Cruise.

          2. I certainly don’t want my life to be a Carnival cruise! 🤢😷😱🤒☠

            And yes, I just want to scream when some politician brings out the old saw about “We have to get women interested and passionate in science!” 🙄

            Those victim studies majors probably had the right idea. They couldn’t balance an equation and they didn’t know what a weekly quiz was, but they were experts at hair, makeup, partying, and bringing an entire SBUX takeout breakfast to morning class. They’re doing better than I am.

        2. My 1974 MD was associated with about $3K debt at 2% interest while my checking account earned 5%. So I paid off my debt slowly, slowly and not all at once.

  8. Interesting watching all of this jousting in Washington over CARES — GOP wants the funding targeted to businesses and workers, Democrats want it all to go to state and local government employees. I hope voters are paying attention to that. You know, because government is the engine that creates wealth and drives our economy.

    1. It would be an interesting social experiment for sure to eliminate all local government services (sanitation, water, police, fire, etc.) and listen to the wailing of the real estate private sector peops when all their free sh!t goes away.

      1. And how long any do you think any of them are going to survive when there aren’t any private sector workers paying taxes?

      2. Once upon a time local fire departments operated by subscription. If you paid ahead of time, they would come to your house when it burned. If you did not pay, the local FD showed up to spray the houses of your paying neighbors so that they wouldn’t go up in flames too. But no amount of payment would persuade them to put your fire out if you didn’t pay ahead of time. Free enterprise at work here.

    1. It isn’t ‘snitching’ unless you call in on the homeless living in the subways, then they don’t want to hear it. Of course the homeless can’t pay De Blasio’s $1,000 fine.

      De Blasio: Ratting out neighbors for social distancing isn’t ‘snitching’

      By Lee BrownApril 19, 2020 | 11:30am

      “In war times, in a time when people’s lives are threatened … I’m sorry, this is not snitching, this is saving lives,” Hizzoner said of his “New Squeal” push for New Yorkers to snap photos of those gathering in public.

      “You’ve got to do it,” he said, insisting it was the only way of “protecting your own family” and fellow Gothamites.

      “If you don’t understand it yet, we’re gonna have to get tougher and tougher,” he said.

      As of Sunday, the city had issued a total 244 summonses and fines of up to $1,000 thanks to “proactive enforcement efforts” — not including extra ones from the NYPD in response to 311 or 911 calls, a City Hall spokesperson told The Post.

      On Saturday alone, the NYPD said it issued 60 summonses and made two arrests during patrols on restaurants, bars and supermarkets to ensure social distancing was being maintained, the force said.

      https://nypost.com/2020/04/19/de-blasio-reporting-social-distancing-flouters-is-saving-lives/

  9. Eva Braun is in the news again.

    State changes vendors for COVID-19 data after furor over Democratic-connected firm

    Beth LeBlanc, The Detroit NewsPublished 4:32 p.m. ET April 21, 2020 |

    NGP VAN bills itself as the “leading technology provider to Democratic and progressive campaigns and organizations.” It has provided campaign services to several state and national Democratic candidates, including Whitmer’s 2018 gubernatorial campaign, according to state records.

    https://www.detroitnews.com/story/news/local/michigan/2020/04/21/michigan-covid-19-contact-tracing-project-use-democrat-connected-firm/2999267001/

    Judge Jeanine: Michigan Gov. Whitmer was taking advantage of the COVID-19 crisis until she got caught
    Apr. 22, 2020

    https://www.foxnews.com/media/jeanine-pirro-michigan-gov-whitmer-leftist-operative

    1. Ha, jeff, brought up an old memory. When I was a kid I used to work for JCPenney in their offices in midtown Manhattan. I worked for a department head who didn’t have much to do, and I was his secretary. Whenever I got an angry phone call and the person complaining demanded my name, I’d answer “Eva Braun”.

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