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Unless They Have Debt Breathing Down Their Neck, They Don’t Say, Fine, Give It Away

A report from Bisnow on New York. “Developers in New York City with pricey luxury apartments to sell were facing an uphill battle in 2020, faced with a supply glut and waning demand. The hill has only gotten steeper the last two months. Buying activity has dropped by around 70% since mid-March, Corcoran Group CEO Pam Liebman told Bisnow. Sponsors who were already cutting deals and dangling incentives to buyers will be under even more pressure, particularly those with hefty loans coming due. ‘New York City is the dream, but right now it is in nightmare conditions. We just have to wait for it to pass,’ said Olshan Realty President Donna Olshan.”

“Compass broker Vickey Barron predicts a jump in ‘rent-to-own’ style offers at many luxury developments as economic conditions become more strained. ‘[Developers] are going to have pressure from their lenders,’ she said, adding that some will fare better than others. ‘None of them are worried because they always tell themselves it is all going to be fine. That’s how they get out of bed each day … [but] money has to come in somewhere.'”

“While sales volume increased in the first quarter of 2020, it was largely because sellers had begun to reduce their prices, according to appraisal firm Miller Samuel. The number of closed sales in the borough was up 14% year-over-year in Q1, but the pandemic only set in in the last few weeks of March and has not yet shown up in the sales volume figures. The median sale price was just over $1M, the third straight quarter of decline.”

“Miller Samuel CEO Jonathan Miller estimates it will take more than six-and-a-half years years to sell all of the new development inventory that is available in the city, even without taking the pandemic into account. At least 2,000 new condominium units will become available by the end of this year, most of which will be priced at the higher end of the market, according to Miller Samuel data.”

“‘He noted that the low number of transactions make it impossible to really figure out price implications. ‘We are in the period of price discovery,’ he said. ‘Logic says there is an impact on pricing, but there is literally no empirical evidence yet.'”

“Corcoran CEO Pam Liebman said there are buyers who are expecting a ‘COVID discount’ and making lowball offers. ‘Buyers are being very aggressive, they are coming in and bidding anywhere from 10 to 30% below the ask, claiming this is what they are calling a ‘COVID discount,’ she said. ‘Sellers are saying, pricing was already down, and it’s certainly not down another 20 or 30%.'”

“Liebman, whose company is marketing Hudson Yards’ luxury residential offerings, where a penthouse at 35 Hudson Yards is asking $59M, said not all developers are under pressure. ‘Unless they have debt breathing down their neck, which eventually may happen to some of them, they don’t just turn around and say, ‘fine, give it away,’ she said. ‘Developers are eternal optimists and many of them just [think] things will get better. I’ve had many people just say, ‘I’ll just wait.’ But nobody knows if waiting is going to work out well.'”

From Habitat. “Don’t stick a fork in the Manhattan co-op and condo market just yet. While listings and closings have plunged since the coronavirus pandemic led to stay-at-home orders, sellers are beginning to tiptoe back and put their apartments on the Manhattan sales market, Brick Underground reports.”

“For the last week of April, the number of new listings rose 39 percent from the prior week, marking the highest weekly level since New York’s shutdown order went into effect, according to UrbanDigs’ weekly report on total new listings, contracts signed, and listings being taken off the market for Manhattan.”

“The news was not altogether rosy. For the week April 27th through May 3rd, contracts signed were down 10 percent and listings off market were up 63 percent. ‘Buyers remain in wait and see mode, with only 40 contracts during the week, suggesting that until the stay-at-home order is lifted, the market will remain thinly traded’ with wide gaps between bidding and asking prices, says Noah Rosenblatt, chief executive at UrbanDigs.”

“Typically, during the spring selling season, there are weekly increases in both new listings and contracts signed, with a weekly decrease in listings being taken off the market, Rosenblatt says, adding that ‘with the market on pause, contracts signed are decreasing while both new listings and off market listings are increasing on a week-to-week basis.'”

From Crain’s New York Business. “Full-fledged property tax relief is unlikely to come to New York City landlords in July, according to the city’s Office of Management and Budget. A proposal in the City Council that aims to delay property-tax payments for small landlords and cover the loss with prepayments from large ones does not add up financially, Francesco Brindisi, OMB’s deputy director for city revenues, said Wednesday at a budget hearing.”

“But the city is already facing a massive budget crunch: It closed an $8.7 billion gap, largely created by tax revenue shortfalls, in its recent budget. But the likelihood of further losses is high. Landlords, of course, are facing their own shortfalls. The Covid-19 pandemic has rendered residential and commercial tenants increasingly unable to cover monthly payments, making it harder for property owners to cover bills they owe, like July property tax.”

“Right now the OMB has laid aside $180 million to cover property-tax delinquencies it expects to come in July, Brindisi said. That’s assuming 2% of taxes are delinquent, he said. The true number could be higher. Crain’s spoke to a handful of small landlords across the metropolitan area who said that with commercial rent shortfalls and residential rent an open question, they’re not confident they can cover their property-tax payment this summer.”

“‘My commercial tenants, I’ve received zero for the month of May, and I only received 30% in April,’ said Jan Lee, who owns a 28-unit rent-stabilized building in Chinatown that holds three commercial rents. ‘The commercial is what we use to subsidize the building, as the majority of my tenants pay a 10th of the market rate for comparable apartments.'”

“The difference in the drop-off between residential rents and commercial rents has more to do with government mandates and their effect on the broader economy. Although hundreds of thousands of New Yorkers have lost their job since the coronavirus shutdown measures were imposed by the state in March, many of those residents have received a Cares Act check or are receiving unemployment insurance. Others were furloughed or paid through Paycheck Protection Program provisions. Millions of other New Yorkers are now working from home and are thus able to make some, if not all, of their rent.”

“But commercial tenants, like retail stores and other small businesses, not only have been ordered to shutter their doors, many were already struggling to pay high rents. Many such businesses—including restaurants—simply do not have the foot traffic or consumer spending patterns to justify keeping their doors open. ‘Commercial’s still a disaster,’ said Jay Martin, executive director at the Community Housing Improvement Program. ‘That is dragging down multifamily owners who have commercial on the bottom floor and residential on the top floors.”

“‘This is a big problem for a lot of owners not collecting that commercial rent,’ said Frank Ricci, director of government affairs at the Rent Stabilization Association. ‘A lot of that commercial space winds up subsiding the rent-regulated space above.'”

From Brownstoner. “Another week, another look back at four of our featured listings from six months ago. How did they fare? Starting off in Bay Ridge, an early 20th century barrel-fronted brick-and-limestone row house has well-preserved woodwork, parquet, crown molding, a coffered dining room, and the original Arts and Crafts style staircase. This former Open House Pick is currently off the market.”

“This house at the corner of Fenimore Street and Bedford Avenue in Prospect Lefferts Gardens was designed by Slee & Bryson in 1916. It has a large, impressive living room with parquet floors and a brick fireplace (probably gas burning) bookended by built-in shelves. This former House of the Day sold in December for $1.525 million, which was $125,000 under ask.”

“A classic late Victorian limestone in the Park Slope Historic District with decorative door surrounds with ornate toppers, nine ornate wood mantels with carving and original tile, mahogany wainscoting, an intact butler’s pantry, and an elaborate staircase. This former House of the Day is still available with a new broker for $3.6 million, a price cut of $300,000.”

This Post Has 53 Comments
  1. ‘Crain’s spoke to a handful of small landlords across the metropolitan area who said that with commercial rent shortfalls and residential rent an open question, they’re not confident they can cover their property-tax payment this summer’

    What do you say mayor? Shot yourself in the fook.

  2. ‘the number of new listings rose 39 percent from the prior week, marking the highest weekly level since New York’s shutdown order went into effect, according to UrbanDigs’ weekly report on total new listings, contracts signed, and listings being taken off the market for Manhattan’

    ‘The news was not altogether rosy. For the week April 27th through May 3rd, contracts signed were down 10 percent and listings off market were up 63 percent’

    That’s some shortage New York.

    1. Would now be a good time to keep buying stocks?

      The Worst Stock Tip in History
      Messengers from brokerage houses crowd around a newspaper in New York City on October 24, 1929. Messengers from brokerage houses crowd around a newspaper in New York City on October 24, 1929.
      New York Daily News Archive / Getty Images
      By Jennifer Latson
      September 3, 2014 10:30 AM EDT

      At this time 85 years ago, Yale economist Irving Fisher was jubilant. “Stock prices have reached what looks like a permanently high plateau,” he rejoiced in the pages of the New York Times. That dry pronunciation would go on to be one of his most frequently quoted predictions — but only because history would record his declaration as one of the wrongest market readings of all time.

      At the time he said it, in early October, he had good reason to believe he was right. On Sept. 3, 1929, the Dow Jones Industrial Average swelled to a record high of 381.17, reaching the end of an eight-year growth period during which its value ballooned by a factor of six. That was before the bubble began to burst in a series of “black days”: Black Thursday, October 24, when the market dropped by 11 percent, followed four days later by Black Monday, when it fell another 13 percent; and the next day, Black Tuesday, when it lost 12 percent more.

      Fisher, consistently bullish, pronounced the slide only temporary.

      1. “Fisher, consistently bullish, pronounced the slide only temporary.”

        Yeah, well he was correct if you define the term “temporary” as something that didn’t get you even until 1954.

        1. As is often noted, the stock market always goes up, in the long run. And I guess the 1929-1954 period is proof of concept!

      2. “Would now be a good time to keep buying stocks?”

        Jerome Powell seems to think so.

          1. Stock market HODLers seem to be assuming the Fed will backstop the market. After all, they did so last time…after standing clear during a 50% market wipeout from September 2008 through March 2009.

            Motley Fool Issues Rare “Double Down” Buy Alert
            The Motley Fool
            Will the Fed Buy Stocks to Prop Up Markets?
            April 6, 2020, 1:56 PM PDT

            In the face of mass economic and social disruption from the coronavirus epidemic, the Federal Reserve has been hard at work trying to shore up investor confidence and maintain liquidity in capital markets. The central bank has pumped liquidity into the repo market and has slashed interest rates to zero. Unfortunately, the Fed’s traditional tools have proven insufficient. Consequently, it has started to turn to more unorthodox strategies.

    2. The market is overvalued, warns veteran strategist
      Ines Ferré
      Markets Reporter
      Yahoo Finance
      May 8, 2020

      The market is being “driven by sentiment” and is overvalued, warns one veteran strategist.

      “The rally that has happened, it always happens after big crises, but going back to the beginning of time, we’ve never seen a bottom in a stock market within six months after a 30% sell-off leading into a recession,” James McDonald, CEO of Hercules Investments tells Yahoo Finance.

      On Friday the markets rallied on the same day as the worst monthly jobs report since the Great Depression as businesses cut jobs amid the coronavirus pandemic. The Dow and S&P 500 and Nasdaq each rose more than 1.5% during the session and ended the week higher.

      1. I made a quick 10% on VDE at the inflection point, but got cold feet and got out. Predicted that oil would continue dropping, and it did, even went negative. VDE Sailed majestically on. I left another 40% on the table because I didn’t BELIEVE!

        It’s almost as if some nefarious force wants the stock market to stay up, come hell or high water, at least until november….

    3. Grrrrrr…

      In One Chart
      Beware, the stock market’s being supported by ‘nothing more than an ideological dream,’ economist warns
      Published: May 9, 2020 at 8:44 a.m. ET
      By Shawn Langlois
      Bears are still growling over valuations. iStockphoto

      Not breaking news: Albert Edwards is bearish on the stock market.

      Yes, the Société Générale economist who refers to himself as an “uber bear,” once again, lived up to his self-billing in his gloomy note to clients on Thursday.

      “We are in the midst of a monetary and fiscal ideological revolution. Nose-bleed equity valuations are being supported by nothing more than a belief that a new ideology can deliver,” he wrote. “Meanwhile the gap between the reality on the ground and expectations grows wider.”

      1. ‘nothing more than an ideological dream,’

        I guess in his world, trillions of dollars in stimulus have no effect on asset prices?

    4. “That extraordinary jump means Wall Street believes that future earnings are looking a lot better now than they did three weeks ago.”

      What a bunch of dumbshits!

      Stock market
      Stocks are now overpriced by 22%, according to this rule
      By Shawn Tully
      April 21, 2020 7:48 AM PDT

      Investors are brimming with fresh optimism that’s brought one of the greatest rallies ever. But if they’re right, then future earnings will need to be to be terrific. Don’t fall for the wishful thinking. The coronavirus crisis will hammer profits that were already in a bubble, and due for a fall.

      Since hitting a low of 2237 on March 23, the S&P 500 surged 638 points or 28.5% by the close on Friday, April 17, regaining well over half of its drop from the record high of mid-February. That extraordinary jump means Wall Street believes that future earnings are looking a lot better now than they did three weeks ago.

          1. Earnings were on a weak footing long before the beer virus showed up.

            The Financial Times
            Coronavirus business update 30 days complimentary
            Corporate earnings
            Wall Street slashes forecasts for US corporate earnings
            S&P 500 companies set for just 0.8% growth in fourth quarter
            Peter Wells in New York November 6 2019

            Wall Street has significantly scaled back earnings expectations for US companies for the final three months of 2019, putting the S&P 500 on track for its slowest annual pace of earnings growth in four years.

            With nearly four-fifths of America’s largest companies now having reported their third-quarter figures and updated investors on the outlook, earnings are forecast to rise just 0.8 per cent in the final three months of the year. That is down from a forecast of 4.1 per cent at the start of October, according to Refinitiv, and a far cry from the 7.2 per cent expected as recently as July.

            A shallower-than-expected decline in third-quarter earnings has helped shares grind their way to record highs in recent days, despite the prolonged global trade war and the uncertain direction of US interest rates.

          2. The Financial Times
            Coronavirus business update 30 days complimentary
            US equities
            US on track for worst corporate quarter since financial crisis
            Lockdown impact weighs on company earnings but stock markets look for optimism
            Apple reported sales and earnings that beat expectations, despite the pandemic forcing store closures and factories to shut
            Richard Henderson in Melbourne 13 hours ago

            A drop in US corporate profits in the first quarter underscores a dire year for blue-chips but has failed to dent the optimism underpinning a bumper rally in the stock market.

            Companies in the S&P 500 are on pace to trim earnings per share by 14 per cent for the first quarter, which would be the largest annual decline in the index since the third quarter of 2009, according to FactSet.

            Despite the drop, bright spots have emerged. Two-thirds of companies that have reported so far have exceeded analyst estimates, with technology and healthcare companies among the best performing, according to Financial Times analysis.

            “Paradoxically, first-quarter US earnings season has been marginally better than expected,” said Sean Darby, head of global equities for Jefferies. “The caveat is that both forward earnings and sales estimates are still being dropped globally.”

            IPhone maker Apple reported sales and earnings that beat expectations, despite the pandemic forcing store closures and factories to shut. Microsoft exceeded Wall Street forecasts by revealing a huge surge in demand for its cloud business.

            Goldman Sachs anticipates earnings per share for US blue-chips to crater by a third this year before rocketing back in 2021 to levels beyond those reached last year, driven by a robust recovery to the downturn caused by coronavirus. This rosy outlook helps explain the swift rally in the stock market that has added a quarter of value to the S&P 500 since the recent low in March, partially retracing the dramatic fall earlier this year as the health crisis swept the globe. However, not all analysts share the optimism implied by the recent increase in stock prices.

            “There seems to be a disconnect — the markets are not looking at the current fundamentals, they’re looking out to the second half of the year and 2021,” said Nela Richardson, investment strategist with Edward Jones. “The market is ahead of the recession and is already anticipating a recovery.”

            Expectations for US company profits should come down as forecasts for economic growth fall, said John Vail, chief global strategist at Nikko Asset Management. “There will be several industries that will be shadows of their former selves.”

            The drop in the price of oil, which has dragged energy companies down 40 per cent this year, making it the worst-performing sector in the S&P 500, will also weigh on future corporate profits, said Mr Vail. “The oil price will be a major swing factor in what happens to earnings next year. The outlook is very challenged, especially for the airline industry.”

          3. “Expectations for US company profits should come down as forecasts for economic growth fall, said John Vail, chief global strategist at Nikko Asset Management.”

            That’s great news for investors, as falling expectations will make it easier for companies to beat them, which will add further support to Wall Strret’s infinitely-lived bull.

    5. Warren Buffett’s favorite stock-market indicator hits record high, signaling a crash could be coming
      Theron Mohamed
      Apr. 30, 2020, 01:00 PM
      Getty Images / Bill Pugliano
      – Warren Buffett’s preferred stock-market gauge hit a record high, signaling that stocks are overvalued and that a crash could be coming.
      – The “Buffett indicator” divides the total value of publicly traded stocks by quarterly GDP.
      – “It is probably the best single measure of where valuations stand at any given moment,” Buffett wrote in a Fortune magazine article in 2001.
      – The famed investor and Berkshire Hathaway boss said it was “a very strong warning signal” when the indicator peaked just before the dot-com bubble burst.

      Warren Buffett’s favorite stock-market indicator has climbed to a record high, signaling that stocks are overvalued and that another crash could be coming.

      The so-called Buffett indicator takes the combined market capitalizations of a country’s publicly traded stocks and divides it by quarterly gross domestic product. Investors use it to gauge whether the stock market is overvalued or undervalued relative to the size of the economy.

      Buffett, a billionaire investor and the boss of Berkshire Hathaway, described it in a Fortune magazine article in December 2001 as “probably the best single measure of where valuations stand at any given moment.”

    6. The Financial Times
      Coronavirus business update 30 days complimentary
      US employment
      Few precedents for grim US jobless numbers
      Economists look back to the Great Depression for clues on the scale of the economic crisis
      A homeless man carrying his bedding walks past the Miami Jewelry Pawn Shop during the new coronavirus pandemic, Thursday, May 7, 2020, in Miami. The economic catastrophe caused by the viral outbreak likely sent the U.S. unemployment rate in April to its highest since the Great Depression and caused a record shattering loss of jobs. Most retail stores remain closed throughout Miami-Dade County. (AP Photo/Lynne Sladky)
      The US unemployment rate has not been as high as it is currently since collection of the data began in 1948
      © AP
      Brooke Fox in New York and Steven Bernard in London 12 hours ago

      Behind Friday’s grim unemployment rate of 14.7 per cent is an even crueler number: there were 42.9m people who were unemployed or underemployed in the US in April, versus 14.8m at the same time last year.

      The larger number includes not only the 22m additional people designated as officially unemployed that month, but also the 10.7m working part time for economic reasons and the 9.7m who want a job but have not actively searched for one in the past four weeks. The cumulative number of people officially designated as unemployed since lockdowns began in mid-March is 33.5m.

      The unemployment rate has not been this high since collection of the data began in 1948. But more telling is the employment to population ratio, which posted a record decline from 59.7 per cent to 51.3 per cent. While the unemployment rate only captures workers actively seeking a job, the employment to population ratio measures the proportion of the working-age population that is employed.

      “All labour market data is just orders of magnitude different than anything we’ve seen before,” said Robert Shimer, Alvin H Baum Professor in economics at the University of Chicago.

  3. Welcome to globalism, farming communities. You were bedrock America once. Now the globalists just want to clear you off the land by any means necessary so they can sell off prime farmland to the highest bidder.

    American soil.

    Those are two words that are commonly used to stir up patriotic feelings. They are also words that can’t be taken for granted, because today nearly 30 million acres of U.S. farmland are held by foreign investors. That number has doubled in the past two decades, which is raising alarm bells in farming communities.

    1. Is there any possibility of popping the farmland bubble to take out the foreign speculators? Or maybe just nationalize our farmland as a basic food security concern?

    2. Not just our soil but our food supply. This following report is from 2014.

      Smithfield Foods, the world’s largest pork producer, was acquired by a Chinese firm in 2013 for nearly $5 billion — more than the company’s market value. The surprising purchase caused some lawmakers to wonder if there might be a hidden player. As part of the series Food for 9 Billion, Nathan Halverson of the Center for Investigative Reporting examines how the Chinese government is involved.

      1. Recent article.

        Smithfield Foods was founded in Virginia in 1936, and its pork products are ubiquitous in U.S. supermarkets, but the company was actually bought by WH Group, formerly known as Shuanghui International, for $4.7 billion in 2013.

        Smithfield became a subsidiary of the publicly traded Chinese corporation after the Committee on Foreign Investment in the United States (CFIUS) said the acquisition would not endanger national security.

        But critics of the deal pointed out the Chinese government’s heavy involvement if not outright control of the country’s industries.

        “Food security is national security,” Michigan Sen. Debbie Stabenow told PBS NewsHour in 2014. “And I can’t imagine that the American people will feel comfortable if they wake up someday and find that half of our food processors are owned by China. And I think there are some very, very tough questions that need to be answered.”

        Smithfield’s CEO at the time, C. Larry Pope, said the company would continue with “business as usual — only better.”

        “We have established Smithfield as the world’s leading and most trusted vertically integrated pork processor and hog producer, and are excited that Shuanghui recognizes our best-in-class operations, our outstanding food safety practices and our 46,000 hard-working and dedicated employees,” Smithfield’s CEO at the time, C. Larry Pope, said in a statement. “We do not anticipate any changes in how we do business operationally in the United States and throughout the world.”

        WH Group is headquartered in Hong Kong. The company says its main business is packaged meats along with fresh pork and hog production. It owns both Smithfield, the biggest U.S. pork food company, and Henan Shuanghui Investment & Development Co., Asia’s biggest meat processing company.

        WH Group recorded sales of more than $24.1 billion in 2019, according to its website. Its CEO, Wan Long, is one of China’s richest men, with a fortune of more than $1.8 billion according to Forbes.

        These days, Smithfield has been in the headlines after its CEO warned of a meat shortage when the company’s Sioux Falls, South Dakota, facility was one of the first to temporarily close because of a coronavirus outbreak.

        “What’s happened in this pandemic is we still have that bounty of livestock,” CEO Ken Sullivan told “Mornings with Maria” in April. “The linchpin in the middle is the harvest facilities, and there’s a relatively small number … of plants that actually harvest all those animals and turn it into food.” (emphasis added)

  4. ‘Unless they have debt breathing down their neck, which eventually may happen to some of them, they don’t just turn around and say, ‘fine, give it away,’ she said.

    Unless the Fed shovels free money directly at them I’m guessing we’ll see more than just “some” soon enough…

  5. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
    ― Ronald Reagan

    1. And if it’s drowning, use Unlimited Quarantinive Easing to further submerge it under a tsunami tide of liquidity.

  6. The Real Hype Was About the Flu
    Flu deaths never overwhelmed the healthcare system because the numbers were always fake.

    By Dennis Saffran • May 8, 2020

    COVID-19 is not the 1918 Spanish Flu, which killed 50 million people—the lurid fear-mongering of some media outlets notwithstanding. But it’s not the regular flu either, and a lot of people across the political spectrum erred in making that comparison at the outset.

    Scientific American last week published an important article by Jeremy Samuel Faust, a Harvard Medical School instructor and emergency room doctor, which helps explain why so many did, and why they weren’t wrong to distrust the health “experts.” Unfortunately, the headline, “Comparing COVID-19 Deaths to Flu Deaths Is like Comparing Apples to Oranges,” which suggests yet another “It’s not the flu, you dumb deplorables” lecture, and the obligatory digs at Donald Trump, obscure the lede.

    Faust buries that lede in the sixth paragraph, after discussing how Trump and others had sought to put early COVID-19 death projections in perspective by comparing them to figures issued by the Centers for Disease Control and Prevention purporting to show that the flu kills upwards of 70,000 Americans (or more) each year:

    It occurred to me that, in four years of emergency medicine residency and over three and a half years as an attending physician, I had almost never seen anyone die of the flu. . . . Most of the [colleagues around the country] I surveyed couldn’t remember a single one over their careers. . . . For too long, we have blindly accepted a statistic that does not match our clinical experience.

    He goes on to note that the CDC estimates of annual flu deaths are based on highly dubious (to say the least) algorithms that overstate the actual number of deaths by six times. The CDC applies multipliers of between 2.1 and 5.2 (depending on age group) to reported flu-related hospitalizations, further extrapolates estimated flu deaths based on these multipliers, then adds in an estimate of at-home flu deaths for good measure—all regardless of the stated cause of death on the death certificate. In so doing, it classifies not only many patients who were never tested for influenza as flu-related fatalities, including patients who tested negative.

    The result has been a statistic that flies in the face not only of the clinical experience of Faust and other doctors but of the everyday experience of the average person. How many people do you know who’ve died of the flu? (In my case the answer is two in 60 years: a young girl when I was a child, and Federalist writer Bre Payton in 2018. But the very shock of Payton’s tragic death at 26 emphasizes what a statistical outlier it was.)

    Yet, like Faust, we blindly accepted the CDC figures.

    What we’d gotten wrong in comparing the coronavirus to the flu was that the real hype was not about COVID-19 but about the flu.

    I think this is a big reason why many of us initially underestimated the coronavirus. Ignoring Groucho Marx’s rule of social science methodology, “Who are you going to believe, me or your own eyes?” we believed the CDC—perhaps assuming, as Faust notes, that such a large death toll would be barely noticeable in a country of 300 million. Yet, as he points out, the claimed flu death figures are higher than the number who die each year in auto accidents or from opioid overdoses or gun violence and we’re all aware of those kinds of fatalities.

    Having accepted that 70,000 flu deaths per year were a statistical drop in the bucket with no significant impact on American life, political figures as disparate as Trump and Andrew Cuomo and Bill de Blasio were not wrong or stupid or “scientifically illiterate” (as charged by some people who couldn’t tell you the chemical formula for water) to make the obvious comparison when faced with initial COVID-19 death projections in the same range, or even several times higher.

    “Why would COVID-19 ‘overwhelm’ the healthcare system when the flu doesn’t?” was not a dumb question, and the health establishment never satisfactorily answered it.

    The typical responses concerning the concededly greater mortality and severity of the coronavirus were not an answer, since the question was only about those patients who did become sick enough to die of either disease. Don’t all those people who allegedly die of the flu become critically ill before dying (the way just about every other patient who doesn’t die suddenly does), and often require ICU beds and ventilators?

    The answer to these questions began to dawn on me when COVID-19 did begin to overwhelm some New York hospitals in early April even while total deaths were still well below the claimed number of flu deaths. What we’d gotten wrong in comparing the coronavirus to the flu was that the real hype was not about COVID-19 but about the flu.

    Flu deaths never overwhelmed the healthcare system because the numbers were always fake. Public health “experts” who are both philosophically and bureaucratically inclined towards excessive fearfulness have cried wolf about a host of wolves in recent years. And the flu has been the biggest wolf of all.

    As in the original story, these bogus warnings understandably contributed to complacency. If we’re parceling out blame for being underprepared for COVID-19 at the beginning (I don’t think we should be, but if we are) a lot of it needs to be parceled there.

    1. Nice going reposting an entire article.

      It is poorly reasoned, and poorly written.

    2. “…..the real hype was about the flu.”

      So, these Doctors are saying flu deaths have been hyped for years. Looks like you can sell more vaccines if you scare people.

      So the medical system lies about flu deaths, but not about Covid-19? If you lie about one than you lie about the other.

      1. Yes, you can sell more vaccines if you scare people.

        I think the article is saying the greater hype was with the flu, not that there was no hype with Covid-19.

  7. So what? You bought the building with rent control & stabilized tenants at a huge discount from what it would have sold for with market rate tenants. This is your retirement when these tenants Move to FL, or die after 30-40+ years in the same apartment then you can spend $30,000 and luxurize each apartment and legally raise the rent 1/40 per month forever.$750 plus a 20% vacancy bonus
    ‘The commercial is what we use to subsidize the building, as the majority of my tenants pay a 10th of the market rate for comparable apartments.’”

    1. That’s been going around FB for a few weeks now. My take on it was that if they won’t take it back don’t give it back. But stop paying when the lease is up. Use it like normal. THEN when the inevitable happens sometime later and they take you to court to get more money from you first present evidence that they wouldn’t take it back. When they say OK, fine, just pay X additional lease and mileage money say “fine, and here’s my bill for storage at the same rates the tow places charge”. If you do it right it should work out I would think. Of course they’re not going to willingly pay up for $50-100 a day for storage or whatever it is, but I bet they offer a deal to waive all the additional charges and just forget the whole thing. Especially if you offered to buy the car for a depreciated amount.

    2. I suppose you could call the finance company and ask them where you can return the car.

      This makes me wonder if new car dealers would prefer that you NOT trade in your old car when you buy a new one.

        1. I suppose that if the offered trade in value is low enough it would reduce most of the risk.

          But why would they not take the lease return? AFAIK the dealer doesn’t get stuck with it. Unless the finance company has instructed dealers to not accept lease returns.

          1. But why would they not take the lease return?

            They were implying no room at all on the lot. But it did make me wonder if the dealer that accepts the return has also accepted responsibility to sell the used car?

          2. Searching on Manheim Auto Auctions or Cox Automotive and “lease return residual value” yield lots of reading about a huge industry in most countries that frequently receives government support.

          3. 20 years ago I had a lease (the last one I ever had). As the end of the lease approached I liked the car and considered buying it. The only problem was that the residual was considerably higher than blue book. I contacted the lease company and told them I would pay blue book for the car. They refused to talk to me.

            So I turned it in at the end of the lease. A few months later I received a letter stating that it was sold at auction (there was a clause in the lease that would give me any excess over residual the car fetched). The car sold for even less than blue book at the auction, so they could have cut their losses had they accepted my offer. Oh well.

      1. ‘Railing against the ongoing 6-week shutdown of non-essential businesses ordered by Gov. Gavin Newsom on March 15, local merchants and concerned citizens gathered at Solvang Park on Friday afternoon in what was described as a peaceful public rally to support reopening the Santa Ynez Valley.’

        ‘Despite the warm weather a group of over 100 protesters dressed in red, white and blue and some wearing masks, lined Solvang Park facing outward toward Mission Drive and waved handmade signs reading “Freedom is Essential” and “Freedom Over Fear,” for passing vehicles who in response honked in support.’

        ‘Local resident and rally organizer Breann Hollon, standing in front of an over-sized U.S. flag waving in the breeze, said there are more people out of work than have come down with COVID-19.’

        “We’re out here because the numbers just don’t add up. If we don’t get back to work, we’re going to have a serious, serious problem on our hands,” Hollon said. “The states are running out of money. We can’t put everyone on unemployment, and even at that they’re not getting their unemployment.”

        “As a very concerned local Solvang merchant (The Mole Hole), we strongly feel the need for everyone to be able to reopen business now,” Munneke stated.’

  8. rent-to-own

    Does that mean it ends up costing four times as much than if you just bought it outright?

    1. Yes. Kind of like with a 30 year mortgage at 8%, like back in the pre-QE era.

  9. Forgotten Babies (1933)

    An Our Gang Comedy.

    Stymie: [referring to his little brother, Cotton] Believe me, brother, this guy is the last baby I’m ever gonna have.

    Spanky: Where did you get your baby brother in the first place?

    Stymie: Oh, I just prayed for a little baby brother, and the stork brought him.

    Spanky: Hey, what’s a stork?

    Stymie: It’s a goofy-lookin’ duck on stilts.

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