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Holy God, We’re About To Lose Everything

A report from the Wall Street Journal. “Mark Calabria, who heads the Federal Housing Finance Agency, is resisting pleas for help from lenders seeking relief as millions of Americans stop payments on their home loans, sending tremors through the $11 trillion mortgage market. He has said he is willing to stand aside even if some of the mortgage lenders fail, and he says there is plenty of capacity to move business out of failing firms and into healthy ones, if necessary. Mr. Calabria says his first priority is to ensure that Fannie Mae and Freddie Mac are themselves strong enough to withstand the downturn. ‘Just like on an airplane, you’ve got to put your own oxygen mask on first,’ Mr. Calabria said.”

From National Public Radio. “More than 3.4 million homeowners are temporarily skipping their mortgage payments because they’ve lost income during the pandemic. Jasmine Esposito-Gullo lost most of the income she makes arranging concert tours for musicians. The coronavirus pandemic has shut down those tours. Like many other homeowners, she says her lender told her that if she skips mortgage payments on her Long Island, N.Y., home — as Congress says she can — the consequences will be punishing.”

“Esposito-Gullo’s husband, Frank Gullo, works for the Long Island Rail Road, which cut back his hours. ‘They told me, yes, you can skip three months’ payments,’ Gullo says. ‘But then they told me there was a balloon payment at the end of it.” He was told that after three months, they’d have to come up with all the money for those skipped payments. So they’d suddenly owe four months of mortgage payments all at once — $14,000. ‘$14,000 in one shot!’ he says. ‘It’s impossible,’ Esposito-Gullo says. ‘This pile of money is just going to magically appear from somewhere?'”

“Lynn Daniels, a massage therapist in Brighton, Colo., says she and her husband both have lost basically all of their income. And she says her mortgage company, which is called Mr. Cooper, told her much the same thing about the balloon payment. ‘It took my breath away,’ says Daniels, ‘that this was so unhelpful being unemployed. Where would I come up with that kind of money?'”

From CBS Bay Area in California. “‘I mean, who wants to move now? Nobody,’ said Patrick Carlisle, Chief Market Analyst for Compass Real Estate. He’s been watching as sales and new home listings have come to what he describes as ‘a screeching halt.’ Carlisle points out the housing market is usually about three to six weeks behind the stock market so the impacts are just starting to show. ‘It seems pretty clear that our up-cycle has come to an end,’ Carlisle said.”

From MSN Money on California. “Southern California tenants, long burdened by steadily rising rents, may get a breather as apartment rates show signs of leveling off and vacancies increase. And that began before the full impact of the coronavirus outbreak hit the market. Some landlords and analysts say the pandemic will weaken the rental market further as tenants losing their incomes double-up with friends or family. ‘Rents have already started to go down, and vacancies are very difficult to fill right now,’ said Larry Rubenstein, who owns more than 300 apartments in 20 buildings in the San Gabriel Valley and on the West Side of Los Angeles. ‘Rents had already peaked before this (pandemic) started.'”

“Fred Wolf, who has 1,200 apartments in the San Fernando Valley and on the West Side, thinks rents won’t just level off but will go down. ‘People can’t afford it. They were struggling before,’ Wolf said. ‘When the demand isn’t there, and there are vacancies, the rents are going to go down.'”

The Quad City Metro in North Carolina. “Mark Vitner, a senior economist at Wells Fargo, is forecasting a temporary glut of high-end apartment units in Charlotte, especially in Uptown, NoDa and SouthEnd. Vacancy rates, he said, may reach 12% for a time. ‘I think construction is going to ramp down pretty quickly after that,’ Vitner said. ‘The big problem is we’re not going to have as much net job growth for the next couple of years, so there’s not going to be a lot of absorption.’ In other words, fewer people moving here.”

From KSNV in Nevada. “The Nevada State Apartment Association says that trend might be on pause due to the coronavirus pandemic. ‘We’re anticipating an increase in vacancy,’ said Suzy Vasquez, director of the association. As summer picks up and new construction continues to rise, apartments will need to start filling units. ‘Where you’ll start seeing a lot of ‘two weeks free’ or discounts, $500 off your rent, [those kinds] of deals out there, versus actually decreasing the amount of monthly rent that you pay,’ she said.”

From Oan News in Alabama. “The city of Auburn issued a moratorium on new student housing earlier this year. COVID-19 would seem to make that glut of student housing worse. The city’s student housing task force has found 44,000 beds in the city designated for students — about 7,000 more than the city previously estimated — and only about 30,400 students. ‘Obviously, the owners depend on their money, and we don’t get paid if we don’t collect any rent. It could have a snowball effect,’ noted Auburn Realty owner Ray Huff.”

From OU Daily in Oklahoma. “The president of the nonprofit entity that owns Cross Village sent a letter Friday calling on interim OU President Joseph Harroz to make the luxury housing complex available to freshmen for the 2020-2021 academic year. In response to a request for comment from The Daily on the letter, a university spokesperson sent the following statement: ‘As for Mr. Hicks, his letter and actions are deplorable. He is attempting to use the crisis that faces us all as a litigation tool to line his own pockets – to relieve him of the debt he incurred while making millions for himself and his family members. This is consistent with his earlier tactic of hiring lobbyists to try to apply pressure to cause the University to pay money for his failed enterprise.'”

The Real Deal. “Dan Michaels, of the Los Angeles-based real estate investment firm Stockdale Capital Partners, had a gut feeling late last year that it was time to launch a commingled distressed debt fund. Older rental properties with lower-income tenants are ‘absolutely going to get hit,’ he noted. While the hospitality and retail sectors have already cratered, after tourism ground to a halt and many stores and restaurants shut their doors amid widespread stay-at-home orders, apartment building owners are beginning to feel the pressure as well.”

“Jerry Waxenberg, a multifamily landlord whose family firm owns 2,000 rent-stabilized units in the Bronx, Upper Manhattan and Brooklyn, said his collections in April were about 60 percent their normal level. If not for his Section 8 units, which are federally subsidized, and apartments rented by the city’s Department of Social Services for us as homeless shelters, the landlord estimated that his collections would have been 40 percent.”

“Waxenberg told TRD that his lender, JPMorgan Chase, and Freddie Mac were initially receptive — and even proactive — about entering into a forbearance agreement. But they have since gone quiet, leaving the financial future of his portfolio, which his family has managed for decades, uncertain. ‘I have learned very quickly two words in the English language that have the opposite meaning: forbearance and forgiveness,’ said Waxenberg. ‘I can’t forgive my rents this month, because no one is forgiving my mortgage payments.'”

The Wall Street Journal. “For years, Cheryl Dopp considered the ding on her phone from a new Airbnb Inc. booking to be the sound of what she called ‘magical money.’ A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month, she said, double what long-term tenants would pay. Now, Ms. Dopp associates the dings with cancellations and financial misery.”

“The 54-year-old information-technology contractor said she had about $10,000 in bookings evaporate overnight in March. She has $22,000 in monthly expenses for a largely Airbnb portfolio, she said, that included another Jersey City home and a house in Miami. In her mind, the promise of more rental income offset the growing debt, she said. ‘I made a bargain with the devil.'”

“‘Hosts should’ve always been prepared for this income to go away,’ said Gina Marotta, a principal at Argentia Group Inc., which does credit-risk analysis for real-estate loans. ‘Instead, they built an expensive lifestyle feeding off of it.'”

“Jennifer Kelleher-Hazlett of Clawson, Mich., spent about $380,000 to buy two Michigan properties in 2018. She said she and her husband cashed out their financial investments and borrowed $100,000 from employers to furnish them. Before the virus struck, the couple was considering buying more homes. Now, they can’t make mortgage payments because no one is booking, she said. ‘We’re either borrowing more or defaulting.'”

“Ms. Dopp, the IT contractor, bought two Jersey City properties in 2015 each with multiple apartments. She also bought a Miami house that she listed on Airbnb and other short-term rental sites under a pseudonym and used the anticipated revenue from the properties to support a six-figure loan for maintenance, she said. When states began locking down, Ms. Dopp said, ‘I thought, ‘Holy God. We’re about to lose everything.'”

“Though some of her properties had long-term tenants, she lost most Airbnb bookings through spring, she said, and can’t cover April’s mortgages, property taxes and insurance. A family rented her Miami home at a discounted rate on Airbnb, she said, providing some relief. She also plans to apply for a small-business loan, seek forbearance from banks, find long-term tenants independently of Airbnb and sell one property. She has begun shutting down her Airbnb account, she said. ‘I don’t want to bargain with the devil any more.'”

This Post Has 208 Comments
  1. ‘Hosts should’ve always been prepared for this income to go away…Instead, they built an expensive lifestyle feeding off of it’

    I won’t disagree. To me the bigger question is, who was giving these people loans?

    1. ‘Hosts should’ve always been prepared for this income to go away…Instead, they built an expensive lifestyle feeding off of it’

      I’ve often wondered how so many people could afford pricey vacations to places like Hawaii, Disneyworld, etc. You’d think they would use all that extra income to pay down the loans or build a nest egg, but that’s sooo 20th century.

      1. “…You’d think they would use all that extra income to pay down the loans or build a nest egg…”

        There is a real shortage in this USA alright, its a shortage of common sense.

        Just like Victor Chicas, a restaurant server in the Mandalay Bay casino-hotel [1] who is about to enter foreclosure.

        [1] [HBB, “We Were Expecting 2020 To Be A Really Great Year, And Then …” 27-Apr-20]

        1. a restaurant server in the Mandalay Bay casino-hotel

          A city that basically lives off of Angelenos burning their cash.

          1. And an excellent repository for coronavirus that Angelenos can pick up on their “night in Vegas” and bring back to their home communities in SoCal…

        1. The devil couldn’t be reached for comment as he was busy closing a sale to a FB…

    2. Love all the biblical references on this thread.

      Time to get right with the Lord, debt donkeys!

      1. Debt donkeys to HBB moralists:

        “…
        And forgive us our debts,
        As we forgive our debtors
        …”

  2. ‘Though some of her properties had long-term tenants, she lost most Airbnb bookings through spring, she said, and can’t cover April’s mortgages, property taxes and insurance’

    The inability to cover with regular rents shows these people were paying too much and speculating. How is lending so tight? An underwriter couldn’t see this was only one hiccup from disaster?

    1. These hosts can’t even survive one month of a downturn…how were these loans ever approved?

      1. ‘It’s impossible,’ Esposito-Gullo says. ‘This pile of money is just going to magically appear from somewhere?’”

        Yes, Franky, that somewhere is called savings. You know, like “saving for a rainy day”.

        Anybody got that picture of the guy playing the incredibly small violin?

    2. “The inability to cover with regular rents shows these people were paying too much and speculating.”

      Aka Ponzi finance

  3. ‘Waxenberg told TRD that his lender, JPMorgan Chase, and Freddie Mac were initially receptive — and even proactive — about entering into a forbearance agreement. But they have since gone quiet’

    Not quite what we’re hearing from the MSM.

  4. A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month, she said

    Who goes to Jersey City?

    It makes me think of an old Johnny Carson Tonight Show gag, a sweepstakes: first prize, a one week trip to Newark, second prize, a two week trip to Newark.

    1. The big banks – Citi, JPMC, CreditSuisse, Goldman have their IT operations across the river in Jersey City. I spent a lot of time with Citi – and some time with Goldman a few years back

      It was so busy with consultants etc. that (before the Westin opened) that it was much cheaper for me to stay in mid-town Manhattan and take the PATH to Jersey City every day, than to book at the Embassy Suites ($420-$480). I had a side deal with my boss that i could expense more (regular priced whiskeys) for my troubles.

    2. Ha ha…reminds me about what the old math professor supposedly said:

      “When I was a young man, I would rather have given a mathematics lecture than attend one.

      Now that I am older, I would rather give two lectures than attend one.”

    3. A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month

      I’m wondering if they were paying taxes on that income…

      1. I’m wondering if they were paying taxes on that income…

        Wouldn’t AirBnB send them a 1099?

  5. QUIOTE: Mr. Calabria says his first priority is to ensure that Fannie Mae and Freddie Mac are themselves strong enough to withstand the downturn.

    Am I understanding this correctly? Calabria is a libertarian-leaning person that is actually favoring protecting the taxpayer rather than have taxpayer-funded bailouts for the mortgage debt originators? I wonder how long this can last before somebody higher-up in the Trump administration explains to Calabria that Calabria’s job is to enrich Wall Street at the expense of the taxpayer?

    1. I don’t think you’ve been following this situation very closely. And note that the MBA, who are fighting tooth and nail for a bail-out, are also throwing out the “libertarian” line. What does that have to do with anything, except “abandon ideology or we’re all gonna die! We’re all in this together comrades!”

      The world will survive without Quicken and Lending Tree.

      1. The world could survive without Lehman too, but it’s the wave of aftershocks I’m worried about

        1. We can evidently survive those as well.

          Exhibit A: Look how well the Wall Street headline stock market indices are holding up against the backdrop of the deepest oil crater since oil was first used as an energy source.

          1. I guess most of the DOW can work from home, except MMM. You certainly don’t need to build a factory to create money and move it around.

      2. “…the MBA, who are fighting tooth and nail for a bail-out, are also throwing out the “libertarian” line. What does that have to do with anything, except “abandon ideology or we’re all gonna die! We’re all in this together comrades!”

        – Yes, I have seen the pro-MBA press, where the world will literally come to an end of the non-bank lenders don’t get a bailout.
        – I definitely have more respect for Mr. Calabria now than before I started to understand his position.
        – Non-banks can use the BK courts to restructure. This is how it’s done.
        – Every-freaking-body is asking demanding a (taxpayer-backed) bailout. What a bunch of whiners we’ve become! Oh, please!

        https://www.youtube.com/watch?v=Z0GFRcFm-aY
        R.E.M. – It’s The End Of The World (Official Video)
        27,581,139 views
        •Mar 16, 2009

        https://www.youtube.com/watch?v=OMAIsqvTh7g
        Stuck in the Middle with you – Stealers Wheel
        6,167,430 views
        •Nov 12, 2008

        1. – Every-freaking-body is asking demanding a (taxpayer-backed) bailout. What a bunch of whiners we’ve become! Oh, please!

          Well, if you see other people getting them, it only makes sense to screech for one. I mean, who wants to file for BK?

      3. “We are all in this together.“

        I keep hearing Bill Gates use this phrase whenever he is trying to impress upon us the need to allow him to be indemnified and inject us with his crappy-operating-system version of a vaccine. You’d think after inflicting Windows on us for all these years he’d be satisfied with the misery he’s created. How much do you think he paid the PR agency who told him to wear those pastel colored Mr. Rogers sweaters? It’s not working Bill…the mauve V neck sweaters just make you look even creepier.

  6. ‘I made a bargain with the devil.’

    Yes. Yes you did. And you and your peers screwed everyone else in the process. And laughed at them for not being as clever as you.

    Don’t expect sympathy. Live by the steamroller, die by the steamroller.

    1. Their only lamentation will be the loss of the unearned income. They probably put next to nothing down on the properties, so if they lose them, oh well. Of course, this means buh-bye Lexus, fancy vacations, expensive clothes and other luxuries, hello real world, low paying job, assuming they can find one.

    2. Probably got lots of selfie photos to show off her pretend rich & famous lifestyle to her FB friends.

  7. Help me out, Ben. What is Calabria’s vision of the endgame in the mortgage market? My understanding is that he wants the mortgage market to be free and open, with no government guarantees. How does his current stance rhyme with that?

    I’m all for Quicken Loans and Lending Tree going under myself. They are debt originators (not loan originators) that would not exist without taxpayer-funded Fannie and Freddie buying their loans.

    1. I only know what I read. This administration was doing everything it could to get rid of Fannie and Freddie without guarantees. Congress and the swamp fought it. They did what they could, telling congress (and everyone who listened) these outfits were levered to the eyeballs, loans were worse than last decade and they would fail when the market went south. They also implicated a reversal of risk layering. The virus just accelerated to collapse.

      All in all, I think the administration is fighting to not buckle to this ridiculous demand for bailing out servicers. The swamp just wants money, right Maxine? There’s not a more corrupt seam in DC than the shack lenders/guarantors.

      1. My impression was that Menuchin and company were trying to institute a giveaway and the profits of Fannie and Freddie to the remaining common shareholders rather than keeping the profits for the preferred shares owned by the taxpayer. Then the plan was to float new shares with a secondary offering, then remove Fan/Fred from federal receivership, and then let them crash again and let the taxpayer save them once more. That was the Menuchin plan. What I don’t understand is how the Menuchin plan rhymes with the Calabria plan as expressed in the above.

  8. ‘Thi$ pile of money is just going to magically appear from $omewhere$?’

    Oh, Mr. Banker, a new cu$tomer/ victim need$ you to give ’em a quick dotted.line$” learnin’ le$$on.

  9. New construction is boosting the supply of apartments in the region, slowing rent hikes as vacancies rise.

    Developers completed about 14,300 new apartments in the four-county region last year, Yardi Matrix reported, and are expected to open nearly 13,000 more this year in L.A.-Orange County alone.

    More than 38,600 apartments are under construction in the four counties, Yardi reported — 29,300 in L.A. County, 5,134 in O.C. and 4,177 in the Inland Empire.

    “The new inventory is helping,” said Nicholas Dunlap, senior vice president for Avanath Capital Management, which owns about 10,000 affordable and workforce apartments in the U.S., about 2,000 of them in Southern California. “I think that’s going to cause growth in pricing to slow.”

    Is this a lot? BTW, 99% of all new apartments are luxury Class A!!!

    1. ‘Rents had already peaked before this (pandemic) started’

      Yep.

      ‘People can’t afford it. They were struggling before’

      In the “good times”. These greedy apartment people set themselves up for this. If your customer base was struggling prior to recession, what do you expect? A recession was always coming. They didn’t care. Mel Watt feed this apartment monster with nearly a trillion $ in loan guarantees. It was all fun til somebody lost an eye.

    2. i am actually worried about the construction workers

      Q: If you are building a 100 unit building – is that 30 person years of work? Is that 80? I dont know – and cannot seem to research

      I really dont know – but there are going to be a ton of workers that are not getting salaries – and it will impact a bunch of cities

      1. workers that are not getting salaries

        The shame of bubble jobs lost is that they were ever created in the first place. They were from the start a waste of time, money, resources and lives that will never be recovered.

        1. “The shame of bubble jobs lost is that they were ever created in the first place.”

          Poetic right there. Truth has no agenda.

      2. Building shacks is a mere 15% of total construction dollar volume.

        The majority of the biz goes on without notice.

      3. I really dont know – but there are going to be a ton of workers that are not getting salaries – and it will impact a bunch of cities

        Very true, a lot of “little people” are going to get hurt. But since it was unsustainable the crash was inevitable. The virus just accelerated the crater, which is fortunate for the decision makers as they now have a convenient scapegoat: “No one could have seen it coming”

  10. ‘It seems pretty clear that our up-cycle$ has come to an end,’

    $ad. … what?, over.leveraged?, no $aving$, even $adder$.

    Jay Leno to Hugh Grant:
    “What the hell where you thinking?”

  11. So who loses when the non-banking mortgage lenders cannot pay. Is it the owners of junk bonds? Is it regional banks? Is it ???

    Who cares if it is the owners of junk bonds or others that took more risk that appropriate?

    Perhaps we need to get back to risk adjusted financial instruments

    —-
    “resisting pleas for help from lenders seeking relief as millions of Americans stop payments on their home loans, sending tremors through the $11 trillion mortgage market. He has said he is willing to stand aside even if some of the mortgage lenders fail, and he says there is plenty of capacity to move business out of failing firms and into healthy ones, if necessary.”

  12. The thing is that it will take 5-8 years to foreclose on all of this. Whats the prob folks —- other than a low credit score
    ————–
    ‘But then they told me there was a balloon payment at the end of it.” He was told that after three months, they’d have to come up with all the money for those skipped payments. So they’d suddenly owe four months of mortgage payments all at once — $14,000. ‘$14,000 in one shot!’ he says. ‘It’s impossible,’ Esposito-Gullo says. ‘This pile of money is just going to magically appear from somewhere?’”

      1. “0.03 [percent] chance of dying from COVID in the state of California,”

        That sounds about right.

          1. Time will tell. For those who are deaf and can’t hear what time tells them, it remains to be seen.

  13. even Zillow is predicting down prices
    AMH and other reits quit buying homes, so low end sfh are toast too

    1. Condos in vacation destinations are TOAST – I just saw one go on the market yesterday that closed its previous sale mid march (a month ago) and is listed for less!

      I’m thinking we easily roll back gains of the last 4 years, 6 in some areas.

      And I actually don’t have a problem with people renting out a spare property as a vacation rental when not used, that’s fine. Its these clowns that tried to become zillionaires playing that game like monopoly that need to end up in working the fields or some factory for the next 10-20 years.

      1. Its these clowns that tried to become zillionaires playing that game like monopoly that need to end up in working the fields or some factory for the next 10-20 years.

        Chickens coming home to roost. The global economy has changed so much in the last 4 decades that Rent Seeking has been one of the few ways for an average person to get ahead. Loyalty and Hard Work sure doesn’t do it anymore. So no point in being shocked to see more people doing what has been incentivized. Of course now it time man of them are realizing they are the ‘mark’ in Three-card Monte…

        1. So no point in being shocked to see more people doing what has been incentivized.

          +1

          Sometimes I’m surprised anyone still works for a living. I know guys who quit their STEM jobs to become realtors and I learn they own multiple rental properties.

          I know a couple. He’s an auto mechanic (not his own shop), she’s a waitress … and you guessed it … they own rental properties. She also resells “antique” China on Ebay and Etsy.

          Another couple I know also owns a rental property, and wished they didn’t, as the tenants have all been a pain in the rear. I haven’t seen them for a while, so maybe they unloaded the shack during the current bubble.

          Every established realtor I’ve met own rental properties. Those guys are triply fooked, as their realtor incomes are going “poof” and they might find themselves without the rental income and unable to sell the property.

          Hmmm … it might soon be a good time to pick up a nice, low priced used Lexus (forget the German cars).

          1. Every established realtor I’ve met own rental properties. Those guys are triply fooked, as their realtor incomes are going “poof” and they might find themselves without the rental income and unable to sell the property.

            I’ve got a realtor brother in law who also owns a chain of gyms so he’s gone for the trifecta. But he’s a smart guy who has been careful, got out of agent work a while ago. So far most of his rental income tenants are still paying, but even if they don’t he can probably last quite a while (like years). But nobody can last forever in this environment.

    1. Big Oil iffy, Small Oil no way; frackers gonna disappear
      Wait for COVID treatment before dipping into physical
      otherwise keep your powder dry

      1. Yeah. Just bought a electric rotisserie/spit thing for the Weber. Tired of just burgers and steaks. Although who knows what will happen to the meat supply in a few more months.

        1. I wonder if maybe there is meat piled up to the rafters in refrigerated warehouses and the decided to create a panic to unload it … at this point I don’t know what to believe.

          Anyway, I had a Wendy’s double for dinner today.

          1. We always keep a couple of Stouffer’s Lasagnas in the freezer as backup. I noticed Walmart’s frozen dinner aisle was getting picked clean, and I was there early. But, I did see disinfectant wipes, one per customer!

        2. a electric rotisserie/spit thing for the Weber

          Beer butt chicken is probably easier. 🙂

      1. My Las Vegas Walmart has had TP and paper towels in stock since at least the beginning of April. Though you might have to settle for a tiny pack of generic stuff.

  14. how long in your life did you live paycheck to pk ?
    2-4 months
    How old were you? 20s – 30s ?

    these are adults

    1. Most people have no savings and live pk to pk. IIRC, more than half can’t come up with $500 for an emergency.

    2. In grad school (1990s) I was paycheck to paycheck, but with a $1000 buffer and a $3500 credit card if I needed it. I was close to the edge for a few 2-3 month stints, I believe.

        1. I suppose I could count my year on unemployment. I spent about $12K in unemployment and another $10K in saved cash. But I don’t count that as paycheck to paycheck because I had plenty of cash to support myself without the unemployment. I won’t be getting a COVID check.

  15. That AirBnB speculator wants a small business handout from taxpayers? What entitlement! Let her lenders take a haircut.

    1. Let her lenders take a haircut.

      But that would imply you think she should lose her empire that she worked so hard for.

    1. Would the Fed have to run out of bubble creation ammunition for this gloomy forecast to pan out?

      Project Syndicate
      Opinion: The coming Greater Depression of the 2020s
      Published: April 28, 2020 at 9:45 a.m. ET
      By Nouriel Roubini
      10 trends that will make this a decade of despair for the global economy
      With their incomes way down, consumers will be saving and trying to pay down debts, not shopping at the mall.
      Getty Images

      NEW YORK (Project Syndicate) — After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable.

      And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lackluster U-shaped recovery this year, an L-shaped “Greater Depression” will follow later in this decade, owing to 10 ominous and risky trends.

      1. “Populist leaders often benefit from economic weakness, mass unemployment, and rising inequality. Under conditions of heightened economic insecurity, there will be a strong impulse to scapegoat foreigners for the crisis. ”

        Well, Dr. Doom got that one right. It was already going on last time I peeked at Fox News.

    2. Hwy50 Optimi$tic Gue$$timate

      L📉 📈L
      W📉 📈U
      Z📉 📈U
      VVVVVVVVVV

      Sargent Schultz to Colonel Hogan:
      “Eye know nothing$!”

          1. By George, methinks I’ve got it!

            O
            _L__________I
            ____L_____I____L
            _______V__________L
            ____________________ L
            _______________________L
            &cetera

        1. Hwy50 Optimi$tic Gue$$timate:

          ↘️L📉 🔁🔁🔁🔁🔁 🔁🔁🔁🔁🔁📈L↗️↗️
          ↘️↘️W📉 🔁🔁🔁🔁🔁🔁🔁🔁 📈U↗️↗️
          ↘️↘️↘️ Z📉🔁🔁🔁🔁🔁🔁🔁📈U↗️
          🔃🔃🔃🔃🔃VVVVVVVVVVV🔃🔃🔃🔃🔃
          🔃🔁🔃🔁🔃⬅️ 3+ year$ ➡️🔄🔁🔃🔁🔃

          Sargent Schultz to Colonel Hogan:
          “Eye know nothing$!”

          (Might need$ to hold phone landscape?)

          1. (👌👁 was trying to make a giant “V” using just the outside “black” letters $paning 3+ year$, … needs some fine adjustmemt$…sorry.)

            [ It kinda works in landscape on a phone ]

    1. Yeah, I had to googlemap that, thinking it was Door County or something. But who the heck rents AirBnB in the burbs of Destroit??

      1. I could see the STR potential in Birmingham, Royal Oak or downtown Detroit, and the other thing to keep in mind is folks coming into town for the automotive businesses and suppliers. But I doubt that they’d get two homes for $380K in any of them.

  16. ‘Obviously, the owners depend on their money, and we don’t get paid if we don’t collect any rent. It could have a snowball effect,’ noted Auburn Realty owner Ray Huff.”

    Gosh, that had never occurred to me, Ray. I sure hope we don’t see cascading defaults, cuz that could end up blowing out all the toxic waste that has built up in the financial system. Heck, that could even red-pill enough sheeple that we might see real reforms!

    1. Heck, that could even red-pill enough sheeple that we might see real reforms!

      Meh, didn’t happen last time. As soon as they resumed handing out loans, the sheeple lined up and reinflated the bubble.

      1. lined up and reinflated the bubble

        Much to my surprise, the echo bubble got bigger than the first peak. Two things, biggest credit expansion in human history right in China. Cheapest easiest mortgage credit in the US for a decade. I have no idea what the next big rabbit might be to rebubble this time. The hide under your bed while the government spends an insane amount of money doesn’t seem much of a trick pony.

      2. Which was the proof that the Fed failed to let the market teach the lessons that needed to be learned.

    2. “…snowball effect, noted Auburn Realty owner Ray Huff…”

      It’s hands down that Ray Huff is going to get the Captain Obvious award this year.

  17. Now, Ms. Dopp associates the dings with cancellations and financial misery.”

    Die, speculator scum. To the sound of dings, and busy signals from your lender.

    1. “The 54-year-old information-technology contractor said…”

      Fifty-four in IT is Cro-Magnon unless you own the place.

      1. Fifty-four in IT is Cro-Magnon

        I think that’s why so many STEM types (and many others) wind up selling real estate and “investing” in rental properties.

        No point in telling them to learn to code, they already know how.

        1. My experience so far is that it’s not that there’s no way for middle aged techies to find work, it’s that they have settled into a life with family and “stuff” and don’t want to change anything. So they set their own mental limits that result in the “no jobs for guys like me” lament, and the REIC life looks good to them so they don’t have to move or travel. Getting out of that rut was one of the best things that happened to me so far, and my employability seems fine as long as I don’t fall back in it. Different strokes I guess.

          1. I spent a career in an hydro-electric, irrigation and pumping operations setting, and the issue was the long hours and being on-call for evenings and weekend call-outs. The former military folks seemed to deal with it better than the rest.

          2. The former military folks seemed to deal with it better than the rest.

            Funny how that works…maybe that’s why I kind of like being one of the few expert/development engineer level problem solvers in my field that’s happy to go anywhere in the world at a moment’s notice for as long as it takes. I spent the first half of my career saying no to those things due to the ex and never had much job security.

          3. I spent the first half of my career saying no to those things due to the ex and never had much job security.

            I have also learned that saying “yes” to special requests has helped with job security. A lot of younger folk would say no if asked they would help out, take over something, etc. and curiously they were the ones who were let go when it was time to “right size”.

            I recall there was a project that had fallen way behind schedule and I was asked to help out. I worked several weekends to help get it out on time and that was not forgotten by management later when it was time to choose who to let go.

        2. why so many STEM types

          I have a foot in both worlds, pre-computer and the marvels of “apps”. Actually even pre-TV. Personally, I prefer social games like chess and cribbage over cartoon combat games. Just me.

          I know there are many here who have made bank doing “code”. It has replaced traditional technical fields as “tech”. IF THEN and all that. Ironically, I know how to make all the stuff in my world work efficiently and cheaply without code. If code took a vacation, it wouldn’t change for the worse my life by .01%.

          Well, I wouldn’t be posting here I guess.

          1. I have many similarities. Experienced the transition from roomsized mainframe to computers in your pocket, trying to adapt all along the way. Play acoustical musical instruments, but dabbling in computerized musical tools during the coronabug quarantine.

            But I’d be completely happy with my old-fashioned acoustical instruments, sans electrical enhancement.

  18. ‘Where you’ll start seeing a lot of ‘two weeks free’ or discounts, $500 off your rent, [those kinds] of deals out there, versus actually decreasing the amount of monthly rent that you pay,’ she said.”

    Sure, and when no one bites, then rents are going to start catching down to our oligarch-looted, COVID-19 ravaged economy.

  19. Now, they can’t make mortgage payments because no one is booking, she said. ‘We’re either borrowing more or defaulting.’”

    Hellova choice, Jennifer, except lenders won’t touch you with a ten-foot pole.

    1. lenders won’t touch you with a ten-foot pole Is now a good time to invest in manufacturers of 11-foot poles?

  20. She also bought a Miami house that she listed on Airbnb and other short-term rental sites under a pseudonym and used the anticipated revenue from the properties to support a six-figure loan for maintenance, she said.

    Sounds kinda dodgy, Ms. Dopp. Did you use your porn name?

    1. 🙂

      They never should have briefed him on his former staffer Tara Reade before that Biden bunker broadcast.

      1. The Biden Trump debates this fall are going to be spectacular, in a multi-car pileup can’t look away kind of way.

        1. It’s gonna be brutal, even if he has the greatest VP pick in the history of the world. They can’t help him at the debates.

          But speaking of VP, I see Hillary is about to endorse him. Does that mean she for sure is finished? Or do we have to stay ready with the wooden stake?

          1. “You’d better get yourself a garlic t-shirt, buddy, or it’s your funeral.” — Edgar, The Lost Boys (a good B-movie)

    2. “You’re going to not be able to have economic intercourse..”

      Just use protection.

  21. New York rent strikes must pose a quandary for the corrupt state and NYC party machines. On one hand, the Democrats are all about enabling parasitism and rejecting any notion of personal responsibility. On the other, an awful lot of greedy landlords and vulture funds that have been gouging New Yorkers are big Democratic Party donors. Tough call….

    https://www.vice.com/en_us/article/m7qme3/new-york-city-tenants-want-the-state-to-cancel-their-rent-so-theyre-going-on-strike

    “People don’t have the money to pay the rent, and what we’re asking them to do is politicize that experience,” said Tara Raghuveer.

    1. an awful lot of greedy landlords and vulture funds that have been gouging New Yorkers are big Democratic Party donors

      Or even politicians themselves.

      I’m sure the woke folks who own and run Disney can’t wait for the country to “reopen”, as they are losing their shirts.

    1. If you want to talk about hair on fire, the UK is really locked down. The cops there tweeted that anyone going out on a solitary picnic in a lonely field would be fined and possibly arrested.

          1. Yep, you can enact all kinds of bs when the people are disarmed. No red lines to cross, just progressive tyranny. Who’s buying pew-pews with their stimulus check? Hopefully plenty.

          2. Who’s buying pew-pews with their stimulus check?

            Not me, already made my purchase for the year. Still need to get it from Wyoming to California, though. Kinda tired of having nothing but bear spray here.

          1. “VIDEO: POLICE HARASS MOM FOR ALLOWING DAUGHTER TO PLAY AT NEIGHBOR’S HOUSE”

            Officer Bowlegs says “and that’ll be documented too that you were uncooperative.”

          2. Anyone old enough to remember Laugh-In might recall the skit where the guy going to sleep tears off the “do not remove this” tag from his pillow, and the cop immediately slides out from under the bed to slap the cuffs on him.

          3. Within the last week, I went on a five-day hiking and camping trip. Most of the time I was over the state line in California.

            I saw an unusually large number of CHP vehicles on the highways. Traffic was lighter than usual, and significantly the weekend rush from LA was non-existent.

            As usual, I was visiting obscure spots and “dispersed camping.” I was also completely self-contained, having brought everything I needed. Except I had to buy gas in Bishop, for which I paid at the pump with a card.

            Anyway, no one questioned or criticized me, including the cops.

    2. Oh dear…. This afternoon I saw one of my back-yard over-the-fence neighbors nursing her new baby while sitting on her back door stairs. I wonder which jurisdictions have outlawed that.

  22. Excellent candidate for headline of the year for this blog. At least until “Holy God, We Just Lost Everything” overtakes it.

    1. Excellent candidate for headline of the year for this blog. At least until “Holy God, We Just Lost Everything” overtakes it.

      +100000000

  23. Does anyone know someone personally who got Covid (not “know of”, but actually someone with whom they have contact) and if so, what was the outcome?

    1. got Covid

      PCR-based positive, antibody-based positive, presumed positive without testing, died with not of?

        1. No tests or confirmations, but I had an unusual number of elderly cousins pass away in December & January from respiratory illnesses. They weren’t tested and probably never will be.

          1. My step-mother, husband and I suspect we had it. PB suspects similarly in his family. Will we ever know?

          2. …and to describe my condition, it wasn’t bad enough to kill me, just enough to keep me awake coughing for several hours a night for a couple of weeks. But I was in pretty good shape going into it…three nights a week at the gym plus a weekly racquetball game. I could imagine that five hours of sleep a night for a couple of weeks in a row could have caused much worse problems if my system was unable to handle the stress.

          3. I had an upper respiratory infection in January was was diagnosed as bronchitis by the urgent care doctor.

        2. Doesn’t this assume that everyone who has/had it has been/will be tested? I don’t think we’re there yet or need to be.

          1. Yeah, I’m not too keen on having a swab shoved up my nose. Won’t get tested unless I absolutely have to.

    2. My nephew-in-law; tested, confirmed and was in the ICU for some days. He recovered. Don’t want to trip over HIPAA too much but he’s a bit under 40 and travels around the US a lot. Wife and kids tested positive but no symptoms. They’re all in lock-down at home.

      1. Tango, do you know if he has any residual difficulties after recovery? There was a thread on Reddit where younger folks discussed symptoms that just wouldn’t go away even after so-called “recovery”. Seems to hit younger folks hard.

        1. By his account he’s just “tired” but I felt like that for some time after having flu-based pneumonia. I think it’ll be some weeks before he gets an idea of any long-term stuff.

    3. xaoh.deeth👾, Nope.

      But then, eye also don’t know of ANYONE that has died because:

      “🎙📣it’s just.a.common.cold!”🤧

      🤔 … must bee @ a ☠⚰stalemate!

    4. A co-worker’s husband tested positive. She’s pretty sure she got it from him. She had the symptoms for 3-4 weeks but didn’t get tested herself. Makes me wonder if I ever got close enough to her to be exposed.

      1. Probably not, if you didn’t get any symptoms, although I guess you could be asymptomatic.

        I don’t know what to make of this whole thing. I’ve been reading a lot about stuff that allegedly makes people more susceptible, (like taking ACE inhibitors for high blood pressure, or having had flu shots) and stuff that makes people more resistant to it (like nicotine. Probably the first time smoking was actually a health aid, lol)

    5. Hi Palmy, I work/live in Tampa and have a coworker who was diagnosed with the Wuflu. He is late 20s and a bit over weight (non-smoker). He stated symptoms as; very tired, headache for the first few days, cough and then shortness of breath. He went to the hospital and I asked what his oxy level was and he said 92%. The wrote a scrip for Chloroquine and 2 other items I can’t remember and sent him on his way. He recovered fine and is back to work. No complaints of follow on symptoms. The hospital tested him and gave a positive. I am guessing this was a Tampa Bay Care facility but I didn’t ask.

      In other news we took a little boat to Anclote Island and were fully prepared to tell the rangers to go f’k themselves if they asked us to leave. There were probably around 8 boats and less than 10 on the Southern tip of the island. I did see the Coast Guard copter fly by twice and hover at about 2,000 ft AGL. No park rangers…

  24. Survey Finds 50 Million Americans Have Lost Their Job In Past 6 Weeks
    https://www.zerohedge.com/markets/survey-finds-50-million-americans-have-lost-their-job-past-6-weeks

    Best. Economy. Ever.

    On a more optimistic note, I was talking to a young woman the other day who had been a server at Outback Steak House. Lost her job in the blink of an eye, because they shut down. Within 48 hours she had another job at Aldi (grocery store), where she directs social distancing traffic for customers waiting outside to get in. It’s a lousy gig in the Florida sun and heat, but she does it with a smile and said she’s just happy to have work.

  25. “she does it with a smile and said she’s just happy to have work.”

    With that 🌞 attitude, looks like she’ll have a bright future!

    1. I think so, Hwy. She didn’t just sit there and moan about unemployment. She went out and made something happen for herself. She’ll never be a “victim”.

  26. As I said the other day, something very interesting is going on with homebuilding stocks.

    Exhibit A: HOV Hovnanian Enterprises, Inc. Stock Quote
    https://finviz.com/quote.ashx?t=Hov

    Exhibit B: NAIL Direxion Daily Homebuilders & Supplies Bull 3X Shares Stock Quote
    https://finviz.com/quote.ashx?t=NAIL&ty=c&ta=0&p=d

    Both of these homebuilding-related stocks are blasting their ways to the upside. Some very big bucks are making some very big bets.

    Stay tuned.

  27. Don’t worry kid you can still kneel during the national anthem and wear ‘Police Pig Socks’.

    Patriots kicker Rohrwasser will remove ‘shameful’ rightwing militia tattoo

    15 hours ago

    The 23-year-old initially said he would cover the tattoo but on Monday he told WBZ-TV in Boston that he would have it completely removed. “As soon as I saw what it was linked to on Saturday, it was exactly that time I knew I had to get it totally taken off my body,” he said. “I said [I would] cover it up, but I want to get it removed from my body. It’s shameful that I had it on there ignorantly.”

    The Southern Poverty Law Center and the Anti-Defamation League describe the Three Percenters as an anti-government extremist group. Members of the group were present at the Unite The Right rally in Charlottesville in 2017, although the Three Percenters have subsequently said they do not support white supremacy, and are not a militia.

    “We were celebrating and hugging [when I was picked by the Patriots],” Rohrwasser told WBZ-TV. “So happy. I went on to Twitter. I saw that someone had taken a picture of me and put it with my tattoo and linking me to some horrific events – obviously Charlottesville and these horrible things.”

    https://www.theguardian.com/sport/2020/apr/28/justin-rohrwasser-tattoo-new-england-patriots-three-percenters

    1. “As soon as I saw what it was linked to on Saturday,”

      He couldn’t have looked this up before he got a permanent body marking?

    2. The III’pers were never racist. I used to communicate with Mike Vanderboegh before he passed. He was the creator of the initial movement and was most decidedly not racist. He also invited Morris Dees (now the infamous) from the SPLC to various rallies and Morris did show up at least once. Remember, if you are right of Stalin, you are deemed a right wing extremist and most likely racist (even if you are a minority).

        1. But they got him to Obey.

          He hit the NFL jackpot. Had he struck out he’d probably be cold calling people to sell them insurance. Of course he’s obeying.

  28. A few pecentage calculations:

    1,004,908 / 5.6 million = 18% positive test rate.

    57,812 / 1,004,908 = 5.7% death rate out of positive test results.

    57,812 / 5.6 million = 1 death per 97 tests conducted.

    As of Tuesday, 5.6 million people had been tested in the U.S. for SARS-CoV-2. There were 1,004,908 confirmed cases, and 57,812 deaths, of which 17,682 were in New York City, the epicenter of the pandemic in the U.S. Worldwide, there were 3,094,829 confirmed cases and 215,461 deaths.

      1. In full irony, more Americans died of the seasonal flu than of the coronavirus (so far). More ironic still, we have a vaccine for the flu.

        1. Not ironic. One has to compare the rate of deaths over time to get the comparison right between causes of death, and also take into account the absence of quarantine measures for the flu.

          1. The comparison for Sweden to Norway provides the lock-down no lock-down comparison. And no epidemiological studies are likely to be found that advocate quarantine of a healthy population prior to this government/media induced shit-show.

            If anything the trend analysis of domestic abuse, suicides and ODs should be done in order to compare prior years to this time period on a month by month basis.

          2. There’s going to be plenty of cross country comparison data when the dust settles to compare approaches beyond just Sweden verses Norway. So far it seems like the countries that quickly adopted quarantine measures and intensive testing and case tracing are coming out better in terms of limited negative economic and health impacts than countries that dragged their feet and assumed the Chinese virus somehow wouldn’t affect them.

        2. In full irony, more Americans died of the seasonal flu than of the coronavirus (so far)

          CDC flu tracker currently showing a range of 24,000 to 62,000 deaths this season.

          https://www.cdc.gov/flu/about/burden/preliminary-in-season-estimates.htm

          It’s worth considering that social distancing, etc. measures undertaken vs. the coronavirus would also have the effect of limiting the transmission of flu viruses.

          Also remember, the seasonal flu shot doesn’t protect you from every strain. I had a flu shot in October but still came down with Influenza A (diagnosed by a test) in March.

  29. “…more American$ died of the seasonal flu than of the coronaviru$ (so far)”

    Really?, eye got a cousin, he’s from Misery, Missouri … show.me: a recent USA flu season (3 months data only) where 58,000+ died in < 60 days.

    Also, xaoh.deeth.👾killa.germs is knot the 🐷.gut.flu.bug, 🤧🤒👨‍⚕️🛌😃💃🕺

    It's been broadca$t to million$ of Americans as $imply:

    📣🎙"It's just the common.cold folks!"

    Now blow yer nose & get backs to work, & don't forgets to stop & play checkers with Grandma @ the senior center, it's her 88th birthday!

    1. “…show.me: a recent USA flu season (3 months data only) where 58,000+ died in < 60 days."

      Good luck with that!

    2. Yeah, and HCQ + Zn has been broadcast as an automatic heart attack due to one “study” designed by someone paid by Gilead and not even peer reviewed.

    3. show.me: a recent USA flu season (3 months data only) where 58,000+ died

      The CDC says up to 62,000 this past flu season, which goes from Oct to the beginning of April. Take it FWIW. Nobody cared about flu season. Nobody got hysterical. It’s not a big enough number to scare 325,000,000 people, right?

      As of March 20, when IIRC we started the lock downs, total COVID deaths in the US was 300. We didn’t lock down because of the deaths, but because of the fear. I never said it was “just a cold”. I cooperated with the requested isolation. I think so far that what we were afraid would happen, hasn’t happened.

      1. “I think so far that what we were afraid would happen, hasn’t happened.”

        Quarantined…

      2. Eye said “you did”, … eye said millions of Americans were told:

        “📢🎤it’s just the common.cold folks” …

        (Meaning, it’s nothing to be “concerned” about, just blow yer nose & visit as many elderly people as you normally would.)

        That was the Nationally Broadca$ted me$$age, from IRONICALLY enough, $omeone, who has their own lung.tissue.chewing.deeth.issues

      1. “there is wor$e to come”

        Un.possible!,
        (be$ides, it’$ a rumor that it is a know.fact, or is it a fact that it is an unknown rumor?)

        Okay eye’ll go with: Inconceivable!

        🤔, eye think$ eye just re.confu$ed myself somehow$.

    1. No, just some BS from Gilead saying they met government guidelines. According to them,

      “At least 52% of participants taking either dosing regimen were discharged from the hospital after 14 days of treatment, and at least 53% of those patients were reported as reaching “clinical recovery.”

      52% are out of the hospital and only 25% recovered. What does that mean? That after 5-14 days of thousands of dollars of IV, 75% of them are still sick? And that’s the positive spin coming from the company that makes it. If the DOW spikes on this, it’s time to sell.

      1. “…just some BS from Gilead saying they met government guidelines.”

        I was trying to think of the right interpretation of that news. You nailed it!

        The porcine beauticians always need some lame excuse to keep Wall Street’s UQE-fueled Keynesian beauty contest going.

        1. Bug$ (dressed in grandma clothes): “eh, what’$ up doc”

          Elmer Fudd: “Ha$ you seen a wrassikely.wabbit pass by?”

          Bugs: “eh, eye thinks he jumped into that dark hole”

          (Elmer $hoots his gun💥)
          Bugs:”eh, eye thinks ya got ’em doc!”

          $ell the rumor$, & buy the unknown fact$.

      1. Hope springs eternal! 🙂

        BTW, still waiting for gas to fall below $2/gal in Las Vegas.

          1. wow. I just filled up by Santa Clara Square last night @ $3.01. it sucks out here for everything. It was Shell Gas though… Still

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