skip to Main Content
thehousingbubble@gmail.com

A Number Of Properties Are Now Listed With ‘Urgent Sale’ And ‘Priced To Sell’ Descriptions

A report from ThinkPol in Canada. “Metro Vancouver detached home prices are in free fall in May as economic turbulence caused by COVID-19 related lock down measures continue to rock the region’s housing market. The OpenHousing House Price Index for detached properties – calculated using the generally-accepted and transparent repeat sales or Case-Shiller method – fell 12.34% year-over-year, the May mid-month projection update shows. This represents a 7.90% month-over-month contraction.”

The Financial Post on Canada. “Rents in Canada’s big cities appear to falling fast and that poses a risk to home prices, says a new report by Capital Economics. Capital said a report from Rentals.ca suggest that rents for two-bedroom units fell 8% in Toronto, 9% in Ottawa and 16% in Vancouver in April. Toronto and Vancouver, which receive the most new arrivals and have the highest share of short-term rentals, face the worst declines, Capital said. Toronto normally gets an average of 12,000 new residents a month; the absence of those arrivals could leave at least 3,000 apartments vacant.”

“Rental prices are typically tied to the vacancy rate, Capital said and it calculates that a 4.5% vacancy rate for Toronto could translate into a ‘whopping 15% drop in rents.’ ‘That represents a big risk for house prices,’ said Capital economist Stephen Brown. ‘Many recent investors reportedly already faced negative cashflows as rents were too low to cover all their expenses. With rents now falling, some may sell properties, which could cause a drop in house prices in excess of the 5% we have pencilled in.'”

The Daily Mail on the UK. “Britons could see their dreams of getting on the property ladder dashed as banks demand ‘unaffordable’ mortgage deposits amid fears house prices could tank by levels not seen since the financial crisis in 2008. The number of mortgage deals for customers with a 10 per cent deposit has dropped from 780 in March to just 87, Moneyfacts revealed today. Meanwhile, the number 5% deals stands at just 30 – less than a tenth of the figure two months ago.”

“Jonathan Roland, from property investor House Buy Fast, warned the banks’ actions was storing up problems for the future. ‘Holding back on lending causes problems for the market,’ he said. ‘If that’s replicated in the mortgage market banks could be personally responsible for the collapse of the property market and we could even have another 2008 situation. Banks must lend cautiously and sensibly, yes, but also freely.'”

“Simon Gammon, a managing partner at Knight Frank, said: ‘It’s very difficult to get a mortgage above 95 percent now, and they were very much the norm back in February. It will result in a lot of first time buyers who just can’t get a mortgage because they are unable to afford a deposit. So it’s going to stall a number of people who want to buy this year. It will leave them stuck.'”

The Business Insider on South Africa. “The coronavirus crisis is expected to have a particularly nasty impact on house prices in South Africa. Widespread job and income losses do not bode well for demand and the supply of for-sale properties is expected to rocket as households can’t afford their mortgage payments anymore. Pricier properties are expected to be worst affected, with high-end home prices already under pressure even before the crisis.”

“The latest property listings show large price reductions in many of these properties, particularly where most of South Africa’s priciest homes are situated: the Atlantic Seaboard in Cape Town. One Fresnaye mansion – originally listed for R50 million – is now on the market for R10 million less. A 5 bedroom house in Bantry Bay previously on sale for R39.5 million is now available for R29 million, while a two-bedroom house on Clifton’s Third Beach (once listed as R37.5 million) has an asking price of R29.9 million.”

“Price reductions are also evident across other upmarket areas, including in Gauteng, where a number of Sandton properties are now also listed with ‘urgent sale’ and ‘priced to sell’ descriptions.”

From Money Control in India. “Such has been the discreet and indirect nature of price cuts by developers, that even their prospective customers aren’t aware of it. So why don’t developers just do that and clear their massive inventory through price cuts? There is no easy way to say this – but the industry is a prisoner of its past with regards to its consumer base. Unlike airlines, FMCG companies, automakers, etc. who are able to promote sales by announcing price cuts, in real estate it is almost considered a sin.”

“The logic goes like this: If I cut prices for new customers, what will my existing buyers think and do? That premise held true previously when the investor audience was a substantial portion of the entire clientele and sales were robust. In recent years the investor segment has dwindled sharply as prices have largely stagnated or fallen.”

“I am aware that suggesting such moves will have implications on the funding structure that currently exists for most developers. But that is a structure which is anyway seeing change. I am not espousing the case for a dump sale across real estate either. For many, even a price cut will not work today.”

The Hong Kong Standard. “Centaline Property Agency recorded 19 secondary transactions at ten major housing estates over the past weekend, down by 13.6 percent week-on-week, as developers continued to launch new home sales in the primary market, while rents of nano flats came under downward pressure. Laguna City in Kwun Tong and Metro City in Tseung Kwan O recorded no secondary transactions at all.”

“There were also two cases of forfeited deposits of around HK$220,000 and HK$300,000 after purchases of two flats at Emerald Bay in Tuen Mun were canceled. In the rentals market, rents of micro flats came under downward pressure. A 166-sq-ft studio at AVA 55 in Kowloon City was rented for only HK$8,000 a month, or HK$48 per sq ft. And in Pak Shek Kok, a 248-sq-ft studio flat at Solaria was let for only HK$8,900 last month, or HK$36 per sq ft, after HK$2,100 was cut from the asking price. The rental yield was only 2.1 percent per annum, as the owner purchased the unit for HK$5.15 million in 2018.”

From 7 News in Australia. “The housing market is predicted to suffer due to the economic downturn from COVID-19. However, there’s plenty of debate around just how much damage will be done – with prices expected to take a real dip once loan deferrals expire and JobKeeper payments end. ‘A strong economy and a strong jobs market generally leads to house price growth, when buyers are feeling confident and banks are happy to lend,’ said finance editor Gemma Acton. ‘We’re seeing the exact opposite of that at the moment.'”

“‘The only people who are selling right now are people who have to sell – and you wouldn’t sell if you didn’t have to because buyers know they can take their time,’ Acton said. ‘The real question is how many people are going to feel like they have to put their house on the market over the coming months? A lot of people’s financial situations have changed. Many investors who are relying on rents to pay off the mortgage are seeing rents fall or are struggling to get tenants in.'”

“At the moment, there is a bit of a reprieve because banks have been offering mortgage repayment deferrals for six months. ‘A staggering amount of homeowners are taking this up. One in 14 mortgages is now having their repayments deferred. That’s 429,000 home loans. This just shows the amount of trouble that they’re in.'”

From ABC News in Australia. “Property managers in different states, with thousands of properties on their books, have told the ABC up to 10 per cent of tenants have requested rent reductions due to a loss of income. Half of the nation’s workforce are on income support through an increased JobSeeker payment or the JobKeeper wage subsidy. Both expire after six months. In addition, the eviction ban and the big four banks’ offer to pause mortgage repayments for landlords expire around the end of September too.”

“Shelter WA chief executive Michelle Mackenzie dreads to think about what will happen when all those supports end within days of each other. ‘The world’s going to collapse.’ One of the busiest property managers in Sydney, Ewan Morton, is concerned about a grim springtime. ‘The whole world is starting to ask the question about September, October. That may be when the real carnage hits,’ the joint managing director of Morton Real Estate said.”

“The changes made rapidly at the end of March — an eviction ban, mortgage pausing and income support for renters — took the heat out of the situation. But he said they have not solved the problem. ‘Banks can’t keep doing it forever,’ he added.”

“Most landlords are small investors with only one or two properties. If they are among the 1.3 million investors who use negative gearing, they were already losing money on the properties before the crisis. (Although many would do this deliberately because it reduces their taxable income).”

“Emma Allen helps clients buy properties to then rent out. The director of Active Property Investing said it is in the best interests of landlords to keep their tenants, but that non-payment or reduced rent cannot go on forever. ‘We have landlords with the ability to be able to be flexible on their rents, but we also have landlords that just won’t survive it,’ she observed. Beyond mortgages, landlords must still pay council rates, insurance, strata fees and land tax as well as maintain the properties.”

“‘In one case, the tenant had lost 20 per cent of her income but little did she know that she still earned more than the landlords — so it’s not always as it seems,’ Ms Allen added.”

This Post Has 61 Comments
  1. ‘Metro Vancouver detached home prices are in free fall in May’

    Another day, more free fall. Check out some of those sales versus listing prices.

  2. “Jonathan Roland, from property investor House Buy Fast, warned the banks’ actions was storing up problems for the future. ‘Holding back on lending causes problems for the market,’ he said. ‘If that’s replicated in the mortgage market banks could be personally responsible for the collapse of the property market and we could even have another 2008 situation. Banks must lend cautiously and sensibly, yes, but also freely’

    House Buy Fast? Hey ass-hat, stamp your little feet and next time spend more than 30 seconds coming up with a name.

      1. Banks must lend cautiously and sensibly, yes, but also freely’

        Apparently heads are exploding.

        Figure out how to live without cheap easy credit.

        1. Apparently heads are exploding.
          Figure out how to live without cheap easy credit.

          +1

          – Great image!
          – Yes, the financial heroin addicts are going to have to go a) cold turkey, or b) to rehab. The Fed (pusher) is trying to re-establish the drug supply chains (think Mexican cartels), but things are broken now (think Fentanyl and China).

        1. “WeTooLow” Proper Pinyin is, IIRC , “Wei Tu Lou” — sounds almost exactly the same as English “way too low”

          1. That’s the kind of business name you’d see at the San Jose Flea Market off of Berryessa road where the region’s diverse population had the Bazaar style shopping experience.

  3. ‘The rental yield was only 2.1 percent per annum, as the owner purchased the unit for HK$5.15 million in 2018’

    Lovely, less than inflation.

  4. Vancouver, WA Housing Prices Crater 19% YOY As Portland, OR And Seattle Housing Markets Meltdown Under Weight Of Toxic Mortgages

    https://www.zillow.com/vancouver-wa-98684/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist stated so eloquently, “A house is a rapidly depreciating asset that empties your wallet it every day you own it.”

    1. (the current crisis) “tells you the importance of getting your fiscal house in order . . . ideally, you would go into an unexpected shock like this with a much stronger fiscal posture.”

      Jerome Powell, Chair U.S. Federal Reserve (April 29, 2020)

      – Ha! The arsonist working for the fire department making his statement about the cause of the fire! The Fed created this mess (again) with cheap credit (ZIRP) for 10 years; never normalizing their balance sheet. Now they can’t. Forever ZIRP/NIRP and (exponentially) growing balance sheet. Think Japanification and you won’t be far off.

      The CCP virus pandemic is only accelerating the collapse of “The Everything Bubble,” which was already deflating under the immense burden of enormous debt as enabled by the Fed, and the resulting and debt saturation.

      – We’re so screwed. Recall that markets collapsed after the last two bubbles in 2000 and 2008-09, despite record easing and massive unconventional policy interventions by the Fed. Not different this time, only bigger numbers and worse outcomes. Humpty Dumpty.

  5. Where’s AlbuquerqueDan when you need assurances that China’s 8 percent GDP growth rate is forever?

    1. The Financial Times
      Alice Woodhouse 3 hours ago
      China drops GDP target for first time in history
      Don Weinland in Beijing

      China’s National People’s Congress has not set a gross domestic product target for the first time as the country faces its most severe economic downturn since the 1970s in the wake of the coronavirus outbreak.

      The growth target has in the past been included in the work report presented at the political event, which was delayed by almost three months this year due to the outbreak. The work report this year does not contain the target.

      While many experts do not trust China’s reported economic figures, the target often provides guidance on the central government’s confidence in underlying economic conditions.

      Growth in the first quarter of the year contracted by 6.8 per cent after China’s economy ground to a halt during the coronavirus outbreak. Many economists’ outlooks for 2020 are less than half of the rate of growth posted last year.

    2. Where’s AlbuquerqueDan when you need assurances that China’s 8 percent GDP growth rate is forever?

      LOL, the good old days. IIRC, those assertions preceded his first “sabbatical” from the HBB.

  6. ‘China has paid a steep price for the pandemic that began within its borders and it is now abandoning specific economic targets for the coming year, providing the strongest signal yet that government planners do not expect economic difficulties to ease any time soon.’

    ‘What Beijing has put forward “is certainly not an expansionary budget,” said Andy Xie, a prominent independent economist. It is instead a plan to ”force the people to absorb all of the economic adjustment,” he said. He pointed to deflationary signals that have already emerged in wages, food prices and rent.’

    “China is just getting the people to adjust. And the adjustment is really accepting a lower living standard,” he said. Officially, China expects to see a 3.5-per-cent rise in its consumer price index this year. But, said, Mr. Xie, “it is possible we’re going to see double-digit deflation.”

    ‘That’s on top of what already amount to straitened circumstances for large numbers of people in a country with high rates of inequality.’

    ”Over 560 million people have no bank savings. Based on Marxist economic theory, under such a condition, people neither have enough motive to consume nor sufficient material to invest,” said Ding Changfa, a professor of economics at Xiamen University.’

    “It’s definitely going to be a year full of difficulty for China — that’s not merely a warning in the work report, it’s a fact we have to face.”

    ‘China’s total debt already stands at nearly 300 per cent of gross domestic product, and the spending plans released Friday will only add about another five percentage points to that tally, Ms. Pang said. But, she said, mid-year adjustments are likely to drive the real borrowing number above current forecasts.’

    https://www.theglobeandmail.com/world/article-china-abandons-economic-figures-signals-grim-future-for-workers/

    It’s all fun til somebody loses an eye.

    1. ‘China has scrapped its annual growth target for the economy for the first time in three decades as it battles to recover from the impact of the coronavirus pandemic. The premier Li Keqiang said at the start of the annual parliament meeting: “We have not set a specific target for economic growth for the year, mainly because the global epidemic situation and economic and trade situation are very uncertain and China’s development is facing some unpredictable factors.”

      ‘The economy shrank by 6.8 per cent in the first quarter, the first contraction since at least the early 1970s.’

      https://www.thetimes.co.uk/edition/business/china-drops-gdp-growth-target-jcljg7706

    2. Does it seem like Winnie the Pooh is fomenting trouble in Hong Kong to take away attention from his own troubles at home?

      The Financial Times
      Coronavirus business update 30 days complimentary
      Opinion Instant Insight
      Xi distracts from own failings with Hong Kong security law
      Chinese leader’s crackdown on city will divert attention from his handling of coronavirus
      Tom Mitchell
      Masked delegates applaud Xi Jinping as he arrives at the opening session of the National People’s Congress, the annual meeting of lawmakers, where officials revealed
      © AP
      Tom Mitchell yesterday

      Poor Li Keqiang, China’s long-overlooked premier.

      Ever since President Xi Jinping and Mr Li ascended to the top two slots in the Chinese Communist party’s hierarchy seven years ago, the latter has lived in the shadow of the former.

      Friday, May 22 was supposed to be the day that Mr Li got to share a bit of the limelight. After all, it remains his job to deliver the Chinese government’s annual work report to the National People’s Congress, the annual rubber-stamp session of parliament.

      The work report always moves global markets because it usually reveals Beijing’s economic growth and fiscal deficit targets, as well as other important information about the world’s second-largest economy.

      And this year’s work report is easily the most consequential Mr Li has delivered. As China was the first country to tame the coronavirus pandemic, the revival of its wounded economy is even more critical than usual to the global economy’s prospects.

      But just like Lucy and Charlie Brown, Mr Xi snatched away the football before Mr Li could kick it.

      On Thursday night it was revealed that the NPC would impose national security legislation on Hong Kong, rather than keep waiting for the semi-autonomous city to pass its own law on the subject.

    3. Over 560 million people have no bank savings

      If accurate, or even nearly accurate, that’s a sobering statistic. And I thought people here in the US were broke, sounds like half or so of China is living hand-to-mouth.

      1. And I thought people here in the US were broke, sounds like half or so of China is living hand-to-mouth.

        Sort of. But it’s a different kind of broke. Even the half of China that has no money in the bank usually has no debt as far as I know and has long term claim to their living arrangements if they are out in the sticks (which I think is who we are talking about). So while they don’t have much, they still aren’t “American broke”, they don’t owe their soul to the company store.

    1. Seems like Xi is trying to hose international investors in Hong Kong and end the city’s status as a global financial hub.

      Stupid is as stupid does.

      Global stocks dive after China sets up a fresh showdown with Trump and shocks investors by announcing a new Hong Kong security law
      Saloni Sardana
      May. 22, 2020, 12:27 PM
      AP Photo/Wally Santana
      – Global stocks dropped Friday after China imposed new rules that seek to extend its powers over Hong Kong and allow it to crack down on dissent in the semi-autonomous region, setting Beijing up for a showdown with the US.
      – Hong Kong’s Hang Seng index shed more than 5% on the day, while European stocks also dropped, and US futures pointed to a fall of 0.7% on the Dow Jones Industrial Average.
      – Both US and international oil benchmarks also tumbled on the news.
      – “If it happens we’ll address that issue very strongly,” US President Donald Trump said on Thursday when asked about the possible imposition of a law such as the one introduced Friday.
      – “The very real threat now, is the return of mass protests to the streets of Hong Kong, a downgrade in trade status with the US,” one analyst said.

      Global stocks dropped on Friday after China imposed new rules on Hong Kong, effectively allowing Beijing greater control over the semi-autonomous region and allowing it to crack down more strongly on pro-democracy protests, setting the government up for a showdown with the US.

      At the close of markets Friday, Hong Kong’s Hang Seng Index was down 5.7%, while in morning trade in Europe, all major indexes fell.

      The central government in China said China’s ceremonial parliament is exploring a bill that could surpress opposition in Hong Kong and ban “treason, secession, sedition and subversion” in the former British colony.

      1. Is it too late now to dump your Hong Kong risk asset HODLings?

        The Financial Times
        Hong Kong politics
        US slams China’s plan for Hong Kong as ‘death knell’ for autonomy
        Secretary of state Pompeo urges Beijing to abandon push for new security legislation
        Pan-democrat lawmakers and activists rallied in Hong Kong on Friday against the proposed new security law
        © JEROME FAVRE/EPA-EFE/Shutterstock
        Demetri Sevastopulo in Washington 54 minutes ago

        Mike Pompeo, US secretary of state, slammed China’s decision to impose a new national security law on Hong Kong, saying the move would be a “death knell” for autonomy in the Asian financial hub and former British colony.

        Mr Pompeo said the Trump administration condemned the move by the National People’s Congress, the Chinese rubber-stamp parliament, to “unilaterally and arbitrarily impose national security legislation on Hong Kong”.

        The controversial plan, which would bypass Hong Kong’s own legislature, marks the latest effort by China to clamp down on political expression in Hong Kong, which was guaranteed a high degree of autonomy under the “One Country, Two Systems” model agreed by London and Beijing when Britain returned the territory to China in 1997.

        “The decision to bypass Hong Kong’s well-established legislative processes and ignore the will of the people of Hong Kong would be a death knell for the high degree of autonomy Beijing promised for Hong Kong under the Sino-British Joint Declaration,” Mr Pompeo said in a statement urging the Chinese government to reverse course.

        “Any decision impinging on Hong Kong’s autonomy and freedoms as guaranteed under the Sino-British Joint Declaration and the Basic Law would inevitably impact our assessment of One Country, Two Systems and the status of the territory,” Mr Pompeo added.

        Hong Kong’s stock market suffered its worst one-day fall in almost five years on Friday after Beijing’s move blindsided traders and prompted concerns over the Asian financial hub’s future.

      2. Seems like Xi is trying to hose international investors in Hong Kong and end the city’s status as a global financial hub.

        That’s too bad. When I was trying to start a business over there I incorporated in HK because that was the best place to move money to/from the USA AND to/from mainland China. If that link disappears it will significantly fracture the business connection between the countries, I think.

  7. RE: “The OpenHousing House Price Index for detached properties – calculated using the generally-accepted and transparent repeat sales or Case-Shiller method – fell 12.34% year-over-year, the May mid-month projection update shows. This represents a 7.90% month-over-month contraction.”

    Even the true believers are saying that prices have dropped – but they are now calling it a balanced market: “Canada Moves Into Balanced Market Territory, From Sellers’ Market”
    1. Greater Toronto
    April 2020 price: $821,392
    Change in price from Feb 2020: -$88,898 (-10%)
    April 2020 sales: 2,975
    Change in sales from Feb 2020: -4,281 (-59%)
    3. Hamilton-Burlington
    April 2020 price: $614,412
    Change in price from Feb 2020: -$32,255 (-5%)
    April 2020 sales: 482
    Change in sales from Feb 2020: -516 (-52%)

    https://www.zoocasa.com/blog/covid-19-canada-home-prices-april-vs-feb-2020/?utm_source=Zoocasa+Newsletter&utm_campaign=5629375f2d-ZC_Newsletter_2020.05.21&utm_medium=email&utm_term=0_40e0392bf2-5629375f2d-294612201

    1. April 2020 price: $821,392

      Only needs to come down 75% more to align with household incomes.

    2. “…Case-Shiller method – fell 12.34% year-over-year, the May mid-month projection update shows. This represents a 7.90% month-over-month contraction.”

      A one-month decline of 7.90% occurs at an annualized rate of
      (1-0.079)^12-1 = -62.8%.

      Enjoy riding your falling knives, HODLers!

  8. https://calmatters.org/newsletter/ca-spent-millions-on-hospitals-for-few-patients/

    ‘That’s more than $26 million for about 426 patients (not counting the USNS Mercy). In hindsight, some may wonder if the state squandered resources. But at the outset of the pandemic in March, when predictions swirled that 56% of Californians could be infected with coronavirus in a few months, the state was scrambling to ensure it wouldn’t end up with overflowing hospitals.’

    Why are we still listening to those who made these stupid “predictions”? And why don’t we wear masks for flu season?

    1. And why don’t we wear masks for flu season?

      Good question. I lived/worked in Japan some years ago. It was not unusual to see people in public wearing surgical masks. I understand it’s the same throughout Asia. And this was not during any sort of epidemic.

    2. Why are we still listening to those who made these stupid “predictions”? And why don’t we wear masks for flu season?

      Citizen Jones! You should be clamoring to be led to safety along with the other sheeple! Your role is not to think – we globalists have done that for you! This is straight-up obedience training, Mr. Jones, and you are starting to incur the displeasure of our overlords for questioning The Narrative or the junk science behind it.

    3. Why are we still listening to those who made these stupid “predictions”? The public has a short, almost non-existent memory for the track records of its over-esteemed “experts”.

  9. Topic for thought.

    [Background – i was on a bike ride from downtown Toronto through Etobicoke through Mississauga through most of Oakville on a combination of the Waterfront Trail, Lakeshore Drive and other suburban streets. The amount of teardowns / rebhabs that were happening was ridiculous. A lot of designs were now the fancy square with massive floor to ceiling, or fake mansion edifices]

    So – how much is happening in other cities. I can speak to:
    1. Seattle – much in Queen Ann, Magnolia, old Bellevue, West Seattle and even some areas of Shoreline
    2. Denver – a lot in WashPark, Cherry Creek, near the Denver Country Club, some of Stapleton

    So has this been happening in – Say Boston, Queens NY, Maryland near DC, old Dallas etc.

    Did the buyer have a lot of equity – or are are the 20% downpayment level? Who can afford these $1.5 to $4 M homes in this case

  10. Asset Management
    World’s biggest investors fear second virus wave will derail stock rallies
    More than 30% of professional money managers said they do not expect a vaccine to be ready on a global scale until 2022 at the earliest
    Coronavirus vaccine research in Russia Getty Images
    By David Ricketts and
    Shruti Tripathi Chopra
    May 22, 2020 1:01 am GMT

    Some of the world’s biggest investors are worried that a second wave of coronavirus could derail the global stock market recovery, with many anxious about further lockdowns being put in place as a result.

    A poll of global investors, which manage more than $17tn collectively, found that 70% of hedge funds and long-only investors are “somewhat worried” or “very worried” about another outbreak of the disease, which has so far killed more than 320,000 globally and caused near economic paralysis.

    1. More than 30% of professional money managers said they do not expect a vaccine to be ready on a global scale until 2022 at the earliest

      I’m in good company then, because I can’t imagine one being available until late 2021 at the earliest. And 2022 sounds more realistic.

      But today we get this headline:

      “Fauci says it’s still possible that a coronavirus vaccine will be available in the U.S. by December”

      https://www.cnbc.com/2020/05/22/dr-fauci-is-still-confident-us-could-have-a-coronavirus-vaccine-by-december.html

      1. Fauci says it’s still possible

        There might be a river of money to be had to just be working on it.

        1. Especially if you loaded up on call options on your company stock, then leaked hints to the MSM that you are about to announce a coronacure “any day now.”

          Not to suggest that anyone would actually do anything this underhanded…

          1. Our ever-vigilant regulators would swoop down on such scofflaws, just like they did on all the Fed’s Wall Street insider cohorts who front-run every single Fed decision.

            Oh, wait….

  11. Dumb question of the day:

    What will become of all the many ginormous piles of debt that are rapidly piling up all over the planet, once the dust settles on the end of the COVID-19 pandemic?

    1. There have always been calls for China to diversify its US$3 trillion in foreign exchange reserve holdings, around one-third of which are held in US Treasuries. Photo: EPA-EFEThere have always been calls for China to diversify its US$3 trillion in foreign exchange reserve holdings, around one-third of which are held in US Treasuries. Photo: EPA-EFE
      Economy / China Economy
      Coronavirus: China could cut US debt holdings in response to White House Covid-19 compensation threats, analysts say
      – US news reports suggest White House officials have already considered the idea of cancelling all or part of the US$1.1 trillion debt owed to China
      – In response to the debate over the highly unlikely ‘nuclear option’, China could cut its holdings as the US ramps up borrowing to pay coronavirus-related costs
      Topic | Coronavirus pandemic
      Karen Yeung
      Published: 6:00pm, 6 May, 2020
      Updated: 8:39am, 7 May, 2020
      Why you can trust SCMP

      China may move to reduce its vast holdings of US Treasury securities in the coming months in response to a resurgence in trade tensions and a war of words between the world’s two largest economies over the origins and handling of the coronavirus outbreak, analysts said.

      US news reports indicated that White House officials have debated several measures to offset the cost of the coronavirus outbreak, including cancelling some or all of the nearly US$1.1 trillion debt that the United States government owes China.

      While analysts added that the US was highly unlikely to take the “nuclear option”, the mere fact that the idea has been discussed could well prompt Beijing to seek to insulate itself from the risk by reducing its US government debt holdings.

  12. One in 14 mortgages is now having their repayments deferred.

    This made me wonder: who is funding the payments to mbs bondholders then? Cause we have seen articles about those payments being missed ..

    1. Probably the servicer. Which is often the shadow bank that originated the crap loan in the first place.

    2. Well home owners got a free 12 month pass to avoid paying their mortgage due to the stupid CARE 2.0 ACT. That would explain why prices are not dropping in the Sacramento, California area and why homes are pending in a week and also low inventory. Note: LOOMIS is NOT Sacramento since one guy here keeps insisting that Loomis is Sacramento.

      1. Will the CARES Act apply to new buyers as well? Or is it only for those who bought their homes before the coronavirus outbreak?

      2. That would explain why prices are not dropping in the Sacramento, California area

        I think that is by design.

  13. Well in Sacramento, California the real issue has been lack of inventory! That with demand is keeping prices SKY HIGH and homes are still selling in less than a month. And to the dude that keeps telling us that LINCOLN is Sacramento, nope that is 30 miles north outside of the area.

  14. Will the CARES Act apply to new buyers as well? Or is it only for those who bought their homes before the coronavirus outbreak?

    1. Loan forbearance due to the epidemic on a loan taken out after the epidemic is practically over?

      1. Well, I think the recession will continue whether or not the outbreak is over. What covid did was to prick the 10-year old “everything bubble”. The balloon will continue to deflate even if the pin goes away.

        1. 10-year old

          You must be pretty young. That’s only the most recent leg of this thing.

          1. Wish that was true! I do know that it has morphed from a stock bubble to (housing+stock) bubble to a (bond+stock+housing) bubble over the last 25 years…

Comments are closed.

Back To Top