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People Are Going To Offer Fractions Of What They Offered Before

A report from the Wall Street Journal. “Corporate travel was the be-all for Mint House Inc., a provider of short-term upscale apartment rentals. As the pandemic hit in March, Will Lucas, the chief executive of the New York-based startup, watched with horror as revenue evaporated. ‘We saw cancellations go way, way up to levels we’ve never even contemplated before,’ Mr. Lucas said. As bookings for April and May disappeared with equal speed, Mr. Lucas said that he and his executive team realized, ‘You’ve got to rethink everything.'”

“At around the same time, Mint House saw a more than $4 million line of credit fall through a week away from the expected closing because of the pandemic, Mr. Lucas said. Mint House was forced to furlough about 20% of its team. Even as it was filling apartments, the company still was generating less revenue, as room rates declined. As the company works on expansion again, it is finding that landlords are more willing to negotiate management agreements because they are having trouble filling new apartment buildings.”

From Housing Wire. “As travel has been significantly minimized and less people are renting out Airbnb‘s, it leaves vacation rental owners in a bind, with some paying multiple mortgages. ‘I think that for many owners, particularly those who have multiple properties, the road to recovery will be challenging,’ said realtor.com’s Senior Economist George Ratiu. ‘Especially so because for most owners of multiple properties, they have financing so they have to meet mortgage obligations. These are investment properties. For many of them, the ability to leverage the option of selling them in the current environment is less desirable.'”

“45% of hosts won’t be able to sustain operating costs if the pandemic lasts another six months, as 16% have already missed or delayed a mortgage payment on one or more of their properties. On average, hosts have lost $4,036 since Covid-19 began to spread in the US, a survey said.”

The Commercial Observer on New York. “The spread of coronavirus through New York City and the ensuing lockdown measures have shaken the city rental market in a way that has not been seen since the Great Recession, with New Yorkers fleeing the five boroughs to avoid the virus or save money after losing their jobs. StreetEasy released data showing that new rental inventory has risen from 1,750 listings during the last week of March to nearly 5,000 listings the week ending May 10.”

“Asking rents on new listings have been declining since lockdown began in the city. Of rental listings that were on the market when the governor issued the PAUSE order and are still available, 70 percent of them have slashed their prices, according to listings site Localize.city. The lower end of the rental market could ‘get hollowed out’ as low-wage workers struggle to pay their rent amid staggering job losses, Localize CEO Steven Kalifowitz speculated.”

From Bisnow on New York. “New reports released Wednesday reveal an increasingly stagnant deals market and a dire financial situation for the government budgets that rely on the commercial real estate industry. Tax revenue brought in to the city and state from real estate sales declined 48% year-over-year in April and 64% year-over-year in May, the Real Estate Board of New York said. Meanwhile, landlords are struggling to stay afloat and advocates are beseeching the federal government for some type of relief.”

“‘There are hundreds of buildings in New York City operating at a loss because of COVID-19, and many of them will not be able to survive another month without help,’ CHIP Executive Director Jay Martin said.”

The New York Times. “In Brooklyn, a nightclub has been closed for two months. In Manhattan, a travel agency says it is unlikely to ever reopen. Both have not paid rent since the coronavirus shutdowns began. As a result, their landlord, Jane Lok, collected roughly 50% of her monthly rent from her six commercial tenants in April and May, a drastic drop-off from normal times. She owes a $20,000 insurance premium this month and a much higher annual property tax bill in July, both of which have caused her to lose sleep over how she will pay.”

“‘I’m just running my numbers and seeing when I will run out of money,’ Lok said. ‘We are already dipping into savings.'”

From Patch Santa Monica in California. “It took a pandemic to make it happen, but Los Angeles rental prices appear to be on the way down for the first time since the Great Recession, according to a new report from real estate data tracker CoStar. Brand new units in particular could be difficult for property managers to fill at a time when public health officials have urged residents to avoid contact with those they don’t live with, and stand at least six feet apart. The report notes that prices for newly built apartments in the Santa Monica area were on the way down prior to the outbreak; rents there have declined 4 percent since the beginning of the year.”

From Bisnow on Texas. “The swift economic impact of the coronavirus pandemic pulled the brakes on a wide range of real estate transactions around the country. Value-add acquisitions, which have been a hot target for investors in the multifamily and office sectors for years, have tapered off, reflecting investor uncertainty around property values, projected rental income and leasing activity. Houston, which is dealing with the double blow of the pandemic and falling crude oil prices, could become a ripe market for value-add deals. But those opportunities could be as far as two years away, depending on how long economic recovery will take and when assets become distressed enough to be a good deal.”

“‘The big short-term question — for the U.S. or Houston — is: Can an owner get the rent growth needed to justify the upgrade to the product? The answer is probably not. That uncertainly leads to difficulty in pricing an asset by the buyer or lender,’ said CBRE Americas Head of Multifamily Research Jeanette Rice.”

The Houston Chronicle. “The coronavirus pandemic and the resulting economic crisis is driving dramatic and long-term changes in the commercial real estate industry as e-commerce adds to its dominance and companies cut overhead costs by keeping employees working from home. These changes not only pose threats to the companies that build and lease office towers, retail centers, industrial complexes and apartment buildings, but also to the banks, life insurance companies and pension funds that invest in them.”

“Ultimately, how far the crisis and the disruptions it causes reach into the financial system could determine how quickly the commercial real estate sector recovers from the downturn. Commercial real estate investors are confronting issues similar to those faced by investors in residential real estate in the years leading up to the housing bust of more than a decade ago. As with homes, most commercial properties are purchased with mortgages, which are then bundled into securities and sold to investors, whose returns depend on property owners making their monthly payments.”

“If the debt goes bad, it could blow a hole in the balance sheets of investors, dry up the capital needed to revive the commercial real estate market, and hurt the returns of institutions, such as pension funds, on which millions of Americans depend. Private pension funds own about $30.3 billion in commercial mortgages, according to the Federal Reserve.”

“‘How bad it’s going to be — I don’t know,’ said Jeff Davis, managing director of the financial advisory firm Mercer Capital. ‘It’s a stinking mess is what it is.'”

“While all commercial real estate debt is at risk, mortgages that are packaged into securities tend to cover a larger percentage of a property’s value. What’s more, many of the mortgages are interest-only, meaning borrowers never pay down the principal amount of money they borrowed. That’s a risk if rental incomes dry up and property values fall, because the foreclosure on the asset may not recoup the money that was lent, leaving a hole in the balance sheets of those who own the debt.”

“The situation has echoes of the collapse of the market for residential mortgage-backed securities, which was at the heart of the financial crisis that began in 2007. A 2019 whistleblower complaint filed with the Securities Exchange Commission alleged lenders and security issuers have artificially inflated financial data in order to make larger loans, according to a ProPublica report. That would mean those mortgages cover a larger percentage of the properties’ values – and hold a higher risk – than investors had realized.”

“Because commercial real estate derives much of its value from the rents, values could fall if tenants fail and remaining businesses have less need for physical space. ‘People are going to offer fractions of what they offered before for properties,’ said Manus Clancy, senior managing director at Trepp. ‘You’re going to see values go down — for offices, retail, hotels, etc.'”

“If enough businesses go under to drive up vacancy rates and a pivot to a digital economy means companies that remain need less retail and office space, there will be a glut of commercial space on the market, driving down prices at the same time that landlords are likeliest to default.”

“‘In that scenario, the value of the underlying collateral for commercial mortgages is meaningfully impaired, meaning it has fallen dramatically because the cash flows from a given development have just declined,’ Davis said. ‘The bottom line is what’s going on is not good for the commercial mortgage industry.'”

“Different companies manage loan payments, and securities are split into various pieces, known as tranches, that represent a pecking order of who gets repaid first. The tranches that will only be repaid after other investors are known as B-pieces in the finance world, and the largest holders of that high-risk debt include asset managers and special servicers such as Rialto Capital Advisors, KKR Real Estate Credit, Eightfold Real Estate Capital and Prime Finance, according to Trepp data.”

“Landlords with loans packaged in commercial mortgage-backed security could also face challenges because the loans were riskier to begin with. ‘Those are loans that are typically more aggressively underwritten,’ said Brian Stoffers, global president of debt and structured refinance at commercial real estate firm CBRE. ‘They have higher loan values, higher rates, and they’ll lend on a broader array of property types and qualities.'”

“As a result, few are currently willing to buy commercial mortgage-backed securities, essentially freezing the market, he explained. ‘That market has seized up,’ he said. ‘If you’ve aggregated it pre-COVID and the market turns, you’re now holding a portfolio of returns that are worth a whole lot less than what you originated.'”

“Commercial mortgage-backed securities are currently reporting how many of their loans missed their May payments. Of the roughly 70 percent that have already reported, 7.3 percent of loans – and 19 percent of hotel and retail loans — are at least 30 days delinquent. ‘All those statistics are front and center right now, kind of the same way subprime mortgages were front and center during the last financial crisis,’ Clancy said.”

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This Post Has 67 Comments

  1. As Fred Sanford said, this is the big one. It’s across all asset types. The situation has exposed many poor “investments” and manias. Let the vulture feast begin.

      1. The Fed’s Unlimited Quarantinive Easing is going to make sure the creature keeps writhing, even if into the afterlife.

  3. ‘Houston’s Energy Corridor experienced a major economic shock during the 2014-2016 oil downturn, when the energy industry shed more than 90,000 jobs and vacancy rates in that market went from around 5% to 21%, exacerbated by the delivery of new office inventory. Not fully recovered from the last downturn, the submarket is now contending with the latest decline in crude oil prices, which could elevate the vacancy rates and dampen absorption in the Energy Corridor for the next two years.’

    “In our current forecast, so far, we have vacancies going up by the middle of 2021 to around 23%, from where they are at 21%,” CoStar Advisory Services Senior Consultant Juan Arias told Bisnow.’

    ‘Including sublease listings, availability is already around 25% in the submarket, and likely to grow as absorption potentially turns negative this year.’

    https://www.bisnow.com/houston/news/office/about-one-quarter-of-energy-corridor-office-space-is-available-and-that-will-grow-104467?rt=76174

    We are witnessing many billions of Yellen bux flying off to money heaven. As I’ve mentioned before, it was CRE that sank the oil states in the 80’s. Millions of shacks got foreclosed, but that was mainly job loss. Now we’ve got bubbles in more than CRE and housing.

    http://www.rstreet.org/2017/07/24/is-the-real-estate-double-bubble-back/

    1. how quickly the commercial real estate sector recovers from the downturn

      The downturn is the recovery. The only shame in the downturn is that the bubbles were allowed to get ridiculous in the first place.

  4. ‘I think that for many owners, particularly those who have multiple properties, the road to recovery will be challenging,’ said realtor.com’s Senior Economist George Ratiu. ‘Especially so because for most owners of multiple properties, they have financing so they have to meet mortgage obligations. These are investment properties. For many of them, the ability to leverage the option of selling them in the current environment is less desirable’

    ‘45% of hosts won’t be able to sustain operating costs if the pandemic lasts another six months, as 16% have already missed or delayed a mortgage payment on one or more of their properties’

    It would be difficult to concoct a bigger gotdam RE disaster than what we have here. As private individuals, go ahead, throw your money away. But we had the guberment backing these “investment” loans.

    I’ll have more STR crater today. But consider what has emerged: even though these FB’s were charging way more than regular rents, many were cash flow negative. That’s how intertwined STR were with the housing bubble. These fools were bidding up higher than even regular shack and airbox speculators.

    1. ‘45% of hosts won’t be able to sustain operating costs if the pandemic lasts another six months…

      This sounds optimistic. I have a vacation rental in another country in a popular tourist destination. I bought it with cash to eventually use as a retirement location. My calendar was wiped clean March through to September where normally I’d have 80-90% occupancy. Anyone with a mortgage on a vacation rental is in deep water now. Not six months from now.

      1. I think they said if the crisis last 6 months, these FBs are fooked. However, for most they are fooked even before then. How many superhosts have 6 month cash reserve?

        1. How many superhosts have 6 month cash reserve?

          If they did, wouldn’t they have used it to buy another place?

          2. If they did, wouldn’t they have used it to buy another place?

            Gotta take risks to be a “winner”. And if it falls apart, stamp your feet and demand a bail out.

    2. “Especially so because for most owners of multiple properties, they have financing so they have to meet mortgage obligations.”

      Ah, come on George. Just pony-up some lobby cash, and get the law changed so that multiple properties can be claimed as a primary residence. Maybe one for each day of the week?

  5. ‘There are hundreds of buildings in New York City operating at a loss because of COVID-19, and many of them will not be able to survive another month without help’

    I’ve said before, when you think about how this is going to play out, I could see NYC becoming a smoldering black hole.

  6. ‘Mint House was forced to furlough about 20% of its team. Even as it was filling apartments, the company still was generating less revenue, as room rates declined. As the company works on expansion again, it is finding that landlords are more willing to negotiate management agreements because they are having trouble filling new apartment buildings’

    The deflation builds upon itself. Self-reinforcing. In even a normal recession, it would be a challenge. But the idiot central bankers and governments used ever “tool” to prevent things from stabilizing. So with year after year or soaring prices, what would have been oversupply has become carnage. Take NYC hotels. They were over-built years ago. High rates, high taxes, $33 billions in shadow condo inventory, most of so expensive it will never be purchased except in foreclosure.

  7. George gammon just did a video talking about the different things that could help crush housing. 1. The boomers selling (Some not being hired back and needing to downsize), millennials not in a position to buy at inflated prices. 2. Airbnb 3. Private equity firms that bought up foreclosures after 2008 having to sell off. What he doesn’t mention is backlash from renters going on rent strikes, particularly those renting from PEF.

    After seeing his video, I was wondering also about how for several years I kept hearing that buyers from China were also buying a lot of real estate for several years, but then they started to back off buying. I googled Chinese selling and came across this article in feb from the wsj, published February 2020. ‘Chinese lead foreign investors in selling commercial real estate.’
    https://www.google.com/amp/s/www.wsj.com/amp/articles/chinese-lead-foreign-selling-of-u-s-commercial-property-11580812201i

    The article suggests that the Chinese government was urging investors to bring money back home, and that there was a concern about prices getting too high. I know we’ve been in the middle of a trade war, but it would be interesting to know what time frame most of the selling happened. It seems the writer of this WSJ article was so focused on real estate they weren’t thinking much about the pandemic that was already starting at that time.

    1. It wasn’t just urging. It was telling. And remember the Canadian money laundering lawyer/expert saying they were handing out life sentences for people who exceeded the $50,000 a year limit for taking cash out?

  8. ‘Phoenix multifamily maintained its vigor going into 2020, with rents rising by 0.5 percent in the first quarter, ahead of the 0.2 percent national rate and again leading all major markets. The cycle ended on a high note for Phoenix, with transactions and completions marking cycle peaks last year. The strong performance extended into the first quarter of 2020, when $1 billion in multifamily assets traded and developers brought 1,399 units online, with another 17,898 underway.’

    ‘Phoenix has shown exceptional performance in recent years, turning into one of the nation’s fastest-growing economies and ending 2019 with a 2.8 percent year-over-year job increase—100 basis points above the U.S. rate. Phoenix gained 68,800 jobs in 2019, with all sectors except information expanding. The novel coronavirus health crisis, however, is putting nearly one-third of the metro’s employment at risk. In the first five weeks since the state shutdown, nearly 580,000 unemployment claims were filed in Arizona, amounting to more than 10 percent of the state’s workforce.’

    https://www.multihousingnews.com/post/phoenix-multifamily-report-spring-2020/

  9. ‘While all commercial real estate debt is at risk, mortgages that are packaged into securities tend to cover a larger percentage of a property’s value. What’s more, many of the mortgages are interest-only, meaning borrowers never pay down the principal amount of money they borrowed. That’s a risk if rental incomes dry up and property values fall, because the foreclosure on the asset may not recoup the money that was lent, leaving a hole in the balance sheets of those who own the debt’

    There’s the interest only loans the industry bragged about as they took cash out refis year after year.

    ‘A 2019 whistleblower complaint filed with the Securities Exchange Commission alleged lenders and security issuers have artificially inflated financial data in order to make larger loans, according to a ProPublica report. That would mean those mortgages cover a larger percentage of the properties’ values – and hold a higher risk – than investors had realized’

    ‘lenders and security issuers have artificially inflated financial data in order to make larger loans’

    The fraud only appears when the bottom falls out.

    1. I remember stating here in 2006 that I was worried there was going to be an economic collapse and many on the blog told me not to panic. Now we’re going to see an economic collapse and I am absolutely not going to panic. I’ll be a buyer when the dust settles. Slightly used, high quality stuff will be available in abundance.

      1. ‘Nearly 60% of Hawaii households lost income since March 13, the highest rate of any state, according to a new survey by the U.S. Census Bureau that aims to gather data on the effects of the COVID-19 pandemic and associated economic shutdowns. Nationally, 47.5% of households lost income during that time period. Hawaii also tops the list of states where residents expect to lose money in the coming weeks.’

        ‘Hawaii was fifth in the nation for housing insecurity. Nearly a third of respondents said they missed their last rent or mortgage payment or are not confident that they can pay next month’s. Hawaii’s seasonally adjusted unemployment rate shot up to 22.3% in April as hotels closed and multiple industries collapsed due to statewide stay-at-home orders. That’s nine times higher than the state’s unemployment rate of 2.4% the previous month. Rural areas in Hawaii have been hit particularly hard, especially on the neighbor islands. Widespread job loss is causing people to lose their health insurance, wait in line for food and wait weeks for unemployment checks.’

        https://www.civilbeat.org/beat/59-of-hawaii-households-lost-income-since-march-13/

        But we won’t see soup lines.

        1. “Nearly 60% of Hawaii households lost income since March 13, the highest rate of any state, according to a new survey by the U.S. Census Bureau that aims to gather data on the effects of the COVID-19 pandemic and associated economic shutdowns.”

          They hate their tourists but love the dollars they bring and leave behind.

          1. i am on a bunch of HI housing/moving facebook groups. It is amazing how many just dont want tourists – and just a few are worried about the long term impact

          2. They hate their tourists but love the dollars they bring and leave behind.

            Sounds like the Indian reservations. They love whitey’s dollars, but hate whitey.

          3. They hate their tourists

            That’s fine, they can come up with a new way to earn a living. That will get rid of the haoles.

          4. One friend who works at a restaurant said he’s making more on unemployment. Another has a metal fabrication biz and said he heard the dad of one of his guys he gives work to from time to time was out of work so he felt he’d give him something to help his household out. Come to find out he and his dad are pulling in about 5K/mo from uncle sugar, didn’t feel like he needed to give more charity work after learning that.

            Also heard that the feds are scrutinizing the banks doing the PPP “loans” pretty closely and at least some are opting not to apply because they have so much unreported income. One is shopping for a house in the 1.2M range right now. And I gotta pay like crazy and get nothing in this lolo state!

            And I think people are just enjoying the slower pace. Traffic is brutal. Part of that is due to the number of tourists, but its also due to those tourists being concentrated in certain areas making everyone have to commute in and out of those concentrated areas – 2+ hours a day in some cases. That’s why when Airbnb started up I was initially for it, to lighten the burden on those areas but of course it got ruined by pakes like everything else. Plus all that money flowing through the state and infrastructure remains so run down in places, just stupid and our pols just fiddle. Cant even remember their password when the fake missiles fly, lol.

          5. One friend who works at a restaurant said he’s making more on unemployment.

            It’s funny how the recipients forget that the largess runs out in July and the GOP is in no mood to extend it.

            But people have a hard time thinking about the future. They live only in the present.

        2. Housing prices were cratering long before CoronaScam.

          Kaawa, Hawaii Housing Prices Crater 15% YOY As West Coast Housing Market Turns Radioactive On Rampant Mortgage Fraud

          https://www.movoto.com/kaaawa-hi/market-trends/

          As a noted economist said, prices of all kinds are plunging…. and there is nothing you can do about it.”

      2. I’d be careful with that attitude. We don’t have a bunch of old-school Scrooge bankers at the Fed any more. The idea of central bank restraint has been retired and the new-school folks will not hesitate to print until it doesn’t work. The $3T of “stimulus” hasn’t worked its way through the US yet but we’re starting to see its effects. The equities markets seem to think highly of all that free cash…

        War with China might help with your quest of finding fire-sale bargains.

  10. “While all commercial real estate debt is at risk, mortgages that are packaged into securities tend to cover a larger percentage of a property’s value. What’s more, many of the mortgages are interest-only, meaning borrowers never pay down the principal amount of money they borrowed. That’s a risk if rental incomes dry up and property values fall, because the foreclosure on the asset may not recoup the money that was lent, leaving a hole in the balance sheets of those who own the debt.”

    Airtight lending standards

  11. I went and looked up census data for LA county and observed the per capita housing units available in 1980 was .383. As of July 2018 it was .354. Not exactly a shortage in housing.

    1. The notion that there was a housing shortage in Los Angeles was a lie. The problem was a massive housing disaster created by ultra-low interest rates that distorted the value of both residential and commercial real estate. I knew this whole real estate boom was a farce from a mile away.

      I sold yesterday my mREITs that had commercial real estate exposure and booked my 4% profit. I always take my profits when they come along because I do not want to be on the bad side of the commercial real estate meltdown.

    1. May 22, 2020 / 10:13 PM

      “…the general sales manager at Lifestyles RV in Grain Valley didn’t expect to see every parking spot in their lot taken up by customers when the dealership reopened last month after a brief shutdown.

      “Not really, it was a surprise,” Wayne Brown said.

      But it’s stayed that way ever since, with the RV industry as a whole reporting shattered sales records.

      “Right now we are doing three times the normal deliveries we do in a week,” Brown said.”

      2. The neighbor next door just spent 30K on an RV. And he bought a new pickup late last year.

    3. The RV industry hasn’t reported April or May numbers.

      It is what it is my good friend… it is what it is.

      Centreville, VA Housing Prices Crater 29% YOY As One Fairfax County Housing Demand Tanks As Rental Rates Plunge

      https://www.movoto.com/centreville-va/market-trends/

      As a distinguished economist questioned, “Why buy a house when you can rent one for half the monthly cost… Buy it later after prices crater for 70% less.”

  14. “As travel has been significantly minimized and less people are renting out Airbnb‘s, it leaves vacation rental owners in a bind, with some paying multiple mortgages.

    Die, speculator scum.

  15. StreetEasy released data showing that new rental inventory has risen from 1,750 listings during the last week of March to nearly 5,000 listings the week ending May 10.”

    Better get to sawin’ and slashin’ those rents, greedy landlords.

  16. The lower end of the rental market could ‘get hollowed out’ as low-wage workers struggle to pay their rent amid staggering job losses, Localize CEO Steven Kalifowitz speculated.”

    Between the Fed’s asset price inflation (for the sole benefit of its Wall Street cohorts) and the oligarchy’s looting and asset-stripping of the productive economy, the middle and working classes were “hollowed out” long before COVID showed up. Now we’re going to be needing affordable boarding houses.

  17. As with homes, most commercial properties are purchased with mortgages, which are then bundled into securities and sold to investors, whose returns depend on property owners making their monthly payments.”

    The very sexy Margot Robbie explains subprime lending and toxic-waste mortgage backed securities while taking a bubble bath and drinking champagne in “The Big Short.”

    https://www.youtube.com/watch?v=anSPG0TPf84

  18. “If the debt goes bad, it could blow a hole in the balance sheets of investors, dry up the capital needed to revive the commercial real estate market, and hurt the returns of institutions, such as pension funds, on which millions of Americans depend.

    ‘Muricans are going to pay a terrible price for disregarding Ron Paul’s warnings in 2008.

      1. Would a sane and honest person be welcomed and supported by our congress people, their corporate sponsors, the media or the people?

        1. You see what they did to Gabbard. As far as I could tell she was the best combo of sane and honest this cycle.

  19. A 2019 whistleblower complaint filed with the Securities Exchange Commission alleged lenders and security issuers have artificially inflated financial data in order to make larger loans, according to a ProPublica report.

    Our ever-vigilant, scrupulously honest regulators and enforcers will get right on that.

  20. ‘In that scenario, the value of the underlying collateral for commercial mortgages is meaningfully impaired, meaning it has fallen dramatically because the cash flows from a given development have just declined,’ Davis said.

    The Keynesian fraudsters at the Fed started pumping tens of billions of dollars A DAY into repo markets back in October, when interbank lending started locking up. Why? Because the banks knew that underlying collateral was toxic-waste crap and refused to take it as collateral. Enter the Fed and its printing press. Last time around the Fed took $2.3 trillion in mortgage-backed securities from the TBTF banks and transferred them to the public ledgers – at par. This time around the magnitude of the swindle (and socialization of bankster gambling losses) will be even greater. Bernanke, Yellen, and Powell are exactly what the Founding Fathers warned was going to happen to us.

  21. ‘People are going to offer fractions of what they offered before for properties,’ said Manus Clancy, senior managing director at Trepp. ‘You’re going to see values go down — for offices, retail, hotels, etc.’

    And shacks, Manus. Let’s not forget those.

  24. Poor Uncle Warren!

    Howard Gold’s No-Nonsense Investing
    Opinion: Warren Buffett has lost at least $7 billion from his last 3 big investments
    Published: May 23, 2020 at 8:58 a.m. ET
    By Howard Gold
    Berkshire Hathaway’s recent track record is really, really bad
    Warren Buffett Photo by Paul Morigi/Getty Images for Fortune/Time Inc

    Last week I wrote that this was the end of the Warren Buffett era as Berkshire underperformed the S&P 500 over the entire 2009-2020 bear market. Even Buffett himself recommends investors buy the S&P.

    Many Buffett fans responded by saying don’t count Buffett out yet because when (not if) the market tanks again, he’ll have more than $130 billion in cash to scoop up bargains. My MarketWatch colleague Mark Hulbert noted that top advisers often come back from losing streaks to post big gains.

    So, what have the nearly 90-year-old Buffett and his 96-year-old business partner Charlie Munger done for us lately? Based on Berkshire’s SEC filings, three of Buffett’s biggest recent investments—Kraft Heinz, Occidental Petroleum, and airline stocks—have lost at least $7 billion altogether out of an investment of roughly $10 billion in each.
    …

    1. Boo,
      i am a little confused. Yes Argentina is screwed – but how is the US middle class screwed

      Not questioning your thinking – i want to understand

    2. The Jubilee Debt Campaign UK is mentioned in that article: https://jubileedebt.org.uk/#0

      “What is a “debt jubilee”?

      A “debt jubilee” is a celebration when unjust debts are cancelled. The word ‘Jubilee’ comes from the Jewish sacred writings (the Old Testament of the Christian Bible). It was a periodic celebration in ancient times when debts were cancelled, slaves freed, land returned to its original owners and fields left fallow.

      All of these actions were linked. For peasants in the Middle East at the time, if they had a bad harvest, they would get into debt. Then in order to pay this debt they would be forced to sell their land. And finally they would have to sell themselves and their family into slavery. Cancelling debt and freeing slaves was undoing this injustice.

      There is historical evidence for debt jubilees – cancellations – in Babylon, dating back almost 4,000 years. Such cancellations happened in response to peasant uprisings.

      The idea of a debt jubilee has continued to inspire people through history. In the 1990s, campaigners for debt cancellation for countries in the global south decided to call for a Jubilee for the year 2000. Jubilee Debt Campaign is the organisation in the UK which has continued and evolved that campaign. “

    3. “City economists said missing bond payments on Friday would result in the country’s ninth sovereign debt default.”

      Serial deadbeat, indeed. Argentina reminds me of my older brother. Perpetually broke, and at times foreclosed or in court being sued for nonpayment of debts, property under lien, etc.

      Oddly, we had the same career, from which we both retired, and received the same portion of inheritance from our parents. Maybe the difference is I also inherited the financial habits of our Depression-era parents.

  27. Four years after FBI agents with an agenda set out to lay Flynn low and railroad him on trumped-up charges, FBI Director Wray has ordered an internal investigation. Expecting the DNC’s Chekists to investigate themselves is a joke. Trump needs to replace Barr with someone who will start purging the corrupt Deep State enforcers at the DoJ and FBI.

    https://www.bloomberg.com/news/articles/2020-05-22/fbi-director-orders-internal-review-of-its-flynn-investigation?srnd=premium&sref=5CqwjcI3

    1. I can’t imagine that they’ve been renting a lot of cars lately.

      Will they be liquidating a large portion of their fleet?

      1. “…Will they be liquidating a large portion of their fleet?..”

        Heard on the radio a few hours ago that Hertz Fleet is 700,000.

        In Colorado

        If you come across any liquidation news, please post.

        (Just might be lookin’ for an inexpensive truck)

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