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I Thought I Was In The Box Seat, And Now The Buyer’s Got Most Of The Power

A report from CBC in Canada. “When the pandemic hit Ontario, Kristina Barybina’s income as a real estate agent dried up and she knew the writing was on the wall — she’d have to sell her own house. She also knew there’d be a penalty for getting out of her five-year mortgage with TD Bank early — she just wasn’t expecting it to be almost $30,000. ‘I thought my eyes were going to pop out,’ said Barybina. ‘It’s insane.'”

“Barybina says she had considered selling her home before. She put it on the market in November, then took it off when no buyers expressed interest. But by mid-March, she says, selling her house became a necessity, not a choice. Almost overnight, the real estate agent based in East Gwillimbury — 50 kilometres north of Toronto — lost all her clients. ‘People are not listing,’ she said. ‘And nobody knows when the end of it is coming.'”

“Compounding her problems, two tenants who had been renting rooms in her house moved home to be with their families. Income from a mortgage-helper Airbnb suite also dried up. Scrambling to look after her elderly mother, who lives with her, and a 12-year-old son, the single mother says she started taking medication for anxiety. ‘They’re perfectly within their rights under the agreement, but we’re in a pandemic,’ she said. ‘I’m not selling this house because I love to move.'”

The Huffington Post on Canada. “While new home sales in Toronto took a tumble last month, recently finished investor-owned condos in the city’s rental market have also been seeing negative numbers as a result of COVID-19. Authored by TorontoRentals.com and Bullpen Research & Consulting, the report explained that units in several freshly finished condo buildings have seen between $200 to $600 in monthly negative cash flow, based on local listing data.”

“‘This pandemic could have a real impact on the supply of new housing in the GTA in the long term, as missed payments by tenants and lower rents could have many investors rethinking future pre-construction condo purchases,’ explained Ben Myers, president of Bullpen Research & Consulting.”

The Times of London in the UK. “Fiona Chow is down more than £3,000 in rent. The tenants of her three-bedroom cottage in Hertfordshire moved out in mid-March and lockdown has left Fiona, 41, struggling to find new ones. The mother of one, who lives in Cheshire and works in PR, has a buy-to-let mortgage on the house, and while she has been able to use her savings to meet the £1,000 monthly repayments, she admits that it has been a struggle.”

“She thought about applying for a mortgage holiday, but decided against it because she would still incur interest. Fiona is also worried that her insurance premium will increase if the property has been vacant for 90 days. ‘There’s no movement in the market — it makes you feel very powerless,’ she said.”

“Many buy-to-let landlords are in a similar situation. If the market continues in a similar vein, with supply outweighing demand, landlords will be forced to reduce their rent.”

The Daily Mail. “Australians are being urged to avoid buying property in suburbs where the majority of residents are renters – and have also been warned about off-the-plan purchases. It ranges from the demographics of an area to avoiding off-the-plan apartments, with data showing sharp prices falls in pockets of Sydney, Melbourne and Brisbane. At Bowen Hills, in Brisbane’s inner north, 80 per cent of residents are renters, going by Census data. Median unit prices there plunged 13 per cent in five years, falling from $504,666 in 2014 to $438,482 in 2019, CoreLogic data showed.”

“Bowen Hills has a glut of off-the-plan apartments. So does Sydney Olympic Park, the home of the cracking, two-year-old Opal Tower, where 66 per cent of residents are renters. In this pocket of western Sydney, median unit prices went backwards, falling from $721,192 in 2014 to $719,516 last year.”

“In Melbourne’s city centre, mid-point unit prices at Docklands have fallen by 6.1 per cent, from $624,115 in 2014 to $585,925 last year, in an area with a glut of off-the-plan apartments. Michael Yardney, the director of Metropole Property Strategists said off-the-plan apartment investments were particularly risky. ‘More investors in off the plan high rise apartments have lost money than have made money,’ he said. ‘Of course there are all those investors sitting on the apartments which are continuing to fall in value, but they haven’t crystallised their loss yet.'”

From ABC News in Australia. “Peter Giutronich decided it was time to sell his family home of three decades in Sydney’s eastern suburbs and downsize. ‘The biggest driver for us now is we have plans for the future,’ he said. ‘We sell this, then we can get on with them. We don’t sell this, then those plans are put off.'”

“The day Mr Giutronich’s house was meant to go to auction was supposed to be the busiest Saturday ever for Sydney’s property market. More than 1,200 auctions were set to go under the hammer in the city on April 4, but Mr Giutronich and hundreds of other vendors pulled the pin. More than half of the properties scheduled for auction in April were withdrawn.”

“It was a response to the Government banning of onsite auctions. It was also a hint of what was to come: months of uncertainty for homeowners across Australia’s property market. Although he has now put the property back on the market, Mr Giutronich knows there has been a big shift in the power dynamic.”

“‘When I put it on the market, I thought I was, as a seller, in the box seat, and now really the buyer’s got most of the power in that relationship,’ he said.”

“Mr Giutronich and his wife bought in Bronte 33 years ago and slowly renovated the home while raising three kids. Now empty-nesters, the pair had hoped to downsize to a smaller property and use the capital to fund their retirement and prop up their super balances. ‘What I get for this house has a significant impact on those calculations,’ Mr Giutronich said.”

“After listing the home in March, two weeks into the campaign, auctions were banned. The couple took the property off the market and postponed the sale for six weeks. They have since relisted the home as a private sale. They plan to wait another month to see where the market is heading, but say their expectations have fallen from what they were in March by about 5-7 per cent.”

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This Post Has 125 Comments

  1. ‘Now empty-nesters, the pair had hoped to downsize to a smaller property and use the capital to fund their retirement’

    Here we go again.

    1. You would have thought everyone learned their lesson about this last time around, but no…

      If you’re not unloading something like Thomas Friedman’s home to move into a trailer park, how much do you exactly expect to clear from such an exercise? You set nothing else aside for your retirement but that?

  2. ‘she started taking medication for anxiety. ‘They’re perfectly within their rights under the agreement, but we’re in a pandemic…I’m not selling this house because I love to move’

    Either way Kristina, better get some boxes.

    1. “Either way Kristina, better get some boxes.”

      She need to get two types of boxes: One type is for her to pack up her belongings and the other type is for her to live in.

    2. “…the single mother says she started taking medication for anxiety.”

      So this is how these Murphy Brown types “pull themselves up by their bootstraps?” Rugged Individualism!

  4. We all knew there were a lot of people making their living picking up nickels in front of steam rollers over the last 10 years. But it’s still a little breathtaking to see how many people it really is…

    2. “We all knew there were a lot of people making their living picking up nickels in front of steam rollers over the last 10 years. But it’s still a little breathtaking to see how many people it really is…”

      That’s because it’s been ten years. People’s attention span, their memory, does not extend that far out.

      Besides, it’s different now and protections have been put in since the last time this happened and … and whatever.

    4. Until the tide goes out, you don’t know who’s swimming naked. Our country is a nudist colony. And not a pleasant one to look at, either.

  5. Question: What’s the most reliable index of apartment rents in the US? I want to do some comparisons among different cities.

  6. Single real estate agent, in the far suburbs, buys large house she could only afford by renting out three of the four bedrooms.

    What could go wrong?

    “Compounding her problems, two tenants who had been renting rooms in her house moved home to be with their families. Income from a mortgage-helper Airbnb suite also dried up.”

  7. Any bets the place isn’t paid off?

    And was used as an ATM?

    “Mr Giutronich and his wife bought in Bronte 33 years ago and slowly renovated the home while raising three kids. Now empty-nesters, the pair had hoped to downsize to a smaller property and use the capital to fund their retirement and prop up their super balances. ‘

    1. FYI, “super balances” refers to superannuation, the Australian variation of Social Security.

      I don’t see anything wrong with selling a big house, downsizing, and taking the money for retirement. In fact that’s the primary reason to buy a house.

      I get the impression they aren’t underwater. They don’t seem to be in a hurry to sell. If they have a mortgage (cash out or otherwise), they can handle the payments. But I also get the impression that the house is their *only* retirement outside the super, because he says that what they get from the house will significantly impact their retirement. If he had other assets, the profit from the house would be a much smaller piece of the puzzle.

      1. “In fact that’s the primary reason to buy a house.”

        LOL.

        Since when. Says who?

      2. that’s the primary reason to buy a house.

        Grampa said a mortgage is a kind of forced savings, a really bad kind. “You put in dollars each month and in the end you get back pennies.”

        The rest went to taxes, interest and maintenance of course. He didn’t even know about paying bubble prices. The first step in saving for retirement is not to go into debt.

        1. Your grandpa was a wise man. His advice brings to mind the recipe for making a small fortune: Start out with a large fortune, and use it to purchase an oversized house.

        2. I don’t agree with your grandpa. The way my loan is set up, I put in a dollar every month and in the end I get 66 pennies back. If I had rented, I would get 0 pennies back. Sure, mortgaged houses have maintenance costs, but for rental houses the rent goes up. In the end, which is more?

          Note that we’re talking 30 years, not 6 or 7. This couple in Australia has been in the house 33 years. How much would they have paid in rising rent?

          1. the rent goes up

            Only because your whole experience is the Housing Bubble (so far).

            If you pay 3% interest, 3% taxes, 3% maintenance and 1% insurance, after 30 years you will have paid for your house 4 times. You will only get back 23c on the dollar, if there is no bubble or collapse. If you rented the place for 50c you’d be way ahead.

            Some people go for a smaller place when they rent and aren’t hoarding furniture. In my case it was on average half the space. So, I paid 25c and pocketed the other 75c.

      3. I don’t see anything wrong with selling a big house, downsizing, and taking the money for retirement. In fact that’s the primary reason to buy a house.

        This may have been true in years / decades past, but I don’t think that this is viable as an investment strategy any longer.

        It worked when people’s incomes were able to keep up with home price appreciation, but that is is no longer the case today.

        1. Nonsense. Prices tracked wages. In other words, housing prices were flat for the better part of a century until rampant appraisal and mortgage fraud was introduced in the 1980’s.

          1. No, no, you come in here all of the time and screech that houses are rapidly depreciating assets.

            Try to keep your data-deficient bullshit consistent.

          2. No, no, you come in here all of the time and screech that houses are rapidly depreciating assets.

            Why don’t you just Joshua Tree him?

          6. None of you have the guts to ignore me.

            Hahah. I tried once a long time ago but it hid every thread you commented in. Which was all of them. So I accepted the pain and went on. 🙂

          7. I tried once a long time ago but it hid every thread you commented in.

            It works better now. Now it just hides his puerile remarks.

          9. Good to know. But that’s ok, over the years I’ve gotten kind of used to the way I see it now and enjoy the good parts and hardly even notice the things I don’t care for any more. That includes some useful nuggets of wisdom from Exeter as well.

          10. It works better now

            Yeah, props to whomever it was that pushed me to change the behavior several years ago

          11. All the threats… all the foot stamping…. Yet not a one of you have the will to ignore falling housing prices……. and everybody knows it.

            For your evening reading pleasure…

            San Ramon, CA Housing Prices Crater 15% YOY As Bay Area Housing Market Turns Toxic On Rampant Appraisal Fraud

            https://www.zillow.com/san-ramon-ca-94582/home-values/

            *Select price from dropdown menu on first chart

            As a noted economist stated, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable.”

      4. “In fact that’s the primary reason to buy a house.”

        No, the primary reason to buy house should be to have a place to live. If you’re buying it for other reasons, you’re probably a speculator and therefore part of the problem.

  8. So, with the mass looting and riots in most major cities…

    Any bets how fast they hollow out just like in the late 60s and early 70s?

    The real estate in those place is gonna be in for a world of hurt. I hope no sjw purchased a house they could barely afford in a possible gentrification neighborhood for a big equity payoff.

    1. Governors, Mayors and now state attorneys are ignoring the lawlessness.

      A bronx NYPD officer was mowed down last night, on videotape. That piece of shit DiBlasio’s response? “This is unacceptable.” Then proceeded to release 490 of 500 looters who were arrested the night before.

      1. A couple people on the TV were calling these bogus protests what they really are.

        These people said in summary that class warfare is the real problem, not racism. If the global Oligarchy ,who is robbing the working class, can keep the discontent distracted by a false racism narrative than they laugh all the way to the bank. The systems are riddled with corruption and God forbid that the culprits want this exposed.

        1. Hence the provocations and incitement to loot . The Government will use it to dismiss all the protesters as just a bunch of vandals and thieves, presenting The Government as the savior of The People when it slaughters the vermin. The Government was right all along, don’t you see? Forget about those 3 murdering cops that never got charged. Forget about all the other unarmed, handcuffed or sleeping people the police have killed. Forget about the rich looting the country while its infrastructure collapses and it’s people drown in debt for what they should be able to afford without it. Forget that your children have no future. The vermin were vanquished!

          It’s a trick as old as civil disobedience.

          The only place Trump can deploy troops without the approval of a Governor is DC. He’s got 2000 of them close by. If he gets spooked again, we could be looking at our own Tianimen Square. If that happens, the protests everywhere else are going to get much bigger, and the opportunists doing the looting and destruction will follow closely behind. At that point, some Governors won’t have any choice but to accept military intervention.

          I think there’s a good chance we’ll have martial law by the time the election rolls around.

          1. we’ll have martial law

            Because that’s exactly what happened every time we had riots since 1968?

          4. The left wants martial law to be declared — they are attempting here to goad DJT into doing so. It fuels the narrative.

    2. And now COVID has tossed in an extra wild cards: work at home. If you and your spouse/SO have the option of working from home, then why live in an ultra-expensive luxury apartment/condo in the high-density, disease-ridden, riot-prone city? You can move to any suburb, or even small town, and get an extra bedroom and a little yard. Get a little car and drive to the grocery store with big parking lot.

      [And another point I don’t often see — to be effective working at home, you usually have to convert some home space to office space. Can’t do that with a 2-bed apt. And no, I’m don’t buy that these Millenials can do actual work on their phone in an SBUX.]

      1. Can’t do that with a 2-bed apt

        I don’t know why not. It worked out OK for me using my boat as a WFH office for a decade. That’s a zero bedroom environment.

          1. Or kids, or dogs? Or a spouse who is also working from home?

            Most people can’t just take their laptop off the dining room table each day. A lot of these jobs require libraries of books and files. Yes, I know a lot of material is online, but in order to work effectively, a lot of people still like printouts. Or at least they’ll need two monitors and a ton of cords, earphones, microphones, etc.

          2. From time to time, but she and the dog were generally well behaved.

            Things were usually quieter on my end than when I was talking to colleagues who were in an open office setting. I was only on the phone about 10% of the time. It was mostly emails and design work on the computer.

          3. libraries of books and files

            We got rid of those almost two decades ago and started using a server with electronic files. Wireless internet was also a game changer. I had a scanner/printer on board but no books.

            I didn’t bring kids. Some of my friends who have been working from home with kids say it is a real nuisance!

      2. It is still uncertain when we will go back to our offices in Salt Lake City, so we’re staying in our apartment for now.

        But if this becomes permanent, I’d love to move a few hours outside the city.

  11. Health
    The Protests Will Spread the Coronavirus
    The country should expect a spike in less than two weeks, public-health experts say.
    Robinson Meyer
    June 1, 2020
    Coronavirus particles and scenes of protest
    Tasos Katopodis / Getty / The Atlantic

    The wave of mass protests across the United States will almost certainly set off new chains of infection for the novel coronavirus, experts say.

    The virus seems to spread the most when people yell (such as to chant a slogan), sneeze (to expel pepper spray), or cough (after inhaling tear gas). It is transmitted most efficiently in crowds and large gatherings, and research has found that just a few contagious people can infect hundreds of susceptible people around them. The virus can spread especially easily in small, cramped places, such as police vans and jails.

    As such, for the past several days, the virus has found new environments in which to spread across the United States. At least 75 cities have seen widespread demonstrations and social unrest as Americans have gathered to protest systemic racism and the killing of George Floyd, the black man who died last week under the knee of a Minneapolis police officer. Dozens of cities imposed curfews over the weekend amid widespread looting. It has been among the most turbulent moments of societal upheaval in the U.S. since the assassination of Martin Luther King Jr. in 1968.

    Read: Trump is terrified of protest

    The pandemic and unrest together have trapped the country in a bind. The demonstrations oppose police brutality. But peaceful, masked protesters—and the journalists covering them—have sometimes been met with an overly aggressive police response.
    …

    1. Adam Carolla
      @adamcarolla
      ·
      Jun 1
      CNN last week, “How are we going to stop these sunbathers on California beaches?!!!” CNN this week, “Masses in the streets walking arm in arm. Good for them.”

      1. Exactly.

        The heavy hand of power hungry government crushes independent mercantilism and capitalism by issuing unlawful orders to shutdown. Then fails to protect the private property by doing nothing and in some cases encouraging the destruction and looting of property.

        This is nuts.

        1. ” This is nuts..”

          They are all lying down in the road in Portland.
          They are cult like, mentally ill, chanting and braindead . There is no decernment with these brainwashed protesters.

      2. CNN last week, “How are we going to stop these sunbathers on California beaches?!!!” CNN this week, “Masses in the streets walking arm in arm. Good for them.”

        Right?!

    2. I have been waiting for a spike for the last 3 weeks since things started opening up, and I just don’t see any solid data that supports it. There are some noisy looking little spikes, but the trend still seems to be gradually downward.

      1. I think it’s going away. There is a doctor in Italy that said the virus has considerably weakened and so its effect is much less deadly than even a month ago.

        1. Peak Prosperity talked about this last night. PP is pretty convinced that this is a man-made virus (probably experiments that escaped, not a weapon). That’s important because engineered gene sequences are forced evolution. Forced evolution tends to be unstable, and is therefore more likely to mutate back to something more natural. The forced sequences which made this virus contagious and deadly would be the first sequences to die out. This virus may well “disappear.”

          But that might be just wishful thinking. Iran has showed a massive spike in cases in recent weeks. The slowdown in Italy might just be an effect of their strict lockdown. We just don’t know yet.

  12. “‘This pandemic could have a real impact on the supply of new housing in the GTA in the long term, as missed payments by tenants and lower rents could have many investors rethinking future pre-construction condo purchases,’ explained Ben Myers, president of Bullpen Research & Consulting.”

    Amazing how much of a pretzel they’ll twist themselves into to keep that “shortage” bullshit going.

  13. – “This is fine.”
    – Translation: “We’re so screwed,” and this is only Canada.
    – Asset bubbles pop. We’re popping.

    https://www.greaterfool.ca/2020/06/01/something-has-to-happen/
    ‘Something has to happen’
    June 1st, 2020

    Selected excerpts:

    Let’s be realistic. Unemployment of 13-17% now (depending on methodology) will not be 5-7% in 90 days. It could actually increase. So if households needed mortgage deferrals to stave off insolvency in May, what will have changed in November? Is this massive problem of over-borrowing, uber-leveraging and house-horny over-buying not just being kicked down the road? Is this why the Big Five banks just set aside $11 billion to cover bad loans in the coming months? Is that even enough?

    Remember it took only 8% of American homeowners to run into financing problems in 2005-6 to crash US average real estate values by 32% and plunge the world into a credit crisis. Canada’s too middling a place to cause any global issues, but a wave of foreclosures or a surge in listings by people in financial distress would be more than enough to tip markets. Bottom line: now could be a horrible time to buy. A good time to sell.

    There’s more.

    Rents are falling and amateur landlords are in a vice. Since the virus came to town, rental rates in the big cities like Toronto have steadily snaked lower. Last year an estimated 40% of condo owners with tenants were in negative cash flow, but anticipating capital gains on their units. No more.

    Now condos are rapidly falling out of favour (germy elevators, yucky garbage rooms, suspect common areas), while lease rates are fading (2.7% so far). Losses-per-month are piling up for all those thousands of people (12% of Toronto homeowners also have rental units) who bought concrete sky boxes, usually with big leverage against their houses.

    Yup. More listings coming as many of these sad, deceived and delusional people exit an asset class whose time has passed.

    There will be more forced sales in the months ahead. More households in distress after pushing their problems into the future. More listings. More condos vacated. More defaults and foreclosures. More sob stories. More calls for bail-outs, hand-outs, deferrals, extensions, reprieves and forgiveness as the sins, greed, avarice, speculation and property lust of the last few years find their inevitable harvest.

    This has only begun.

    1. I’ve posted Garth blurbs here before as well-glad to see other HBBers appreciating Greaterfool.ca -this blogs kindred spirit in Canada 😊 Garth tends to sum things up pretty dang well though we don’t always fully agree. Dual citizen myself, happy to be in USA right now

    1. Ok, I just saw a tape of a Police Officer dying on the ground after getting shot defending a building.

      This tape was just as disturbing as the death of Mr Floyd, if not more.

      1. I know people are scared to admit this, but had he paid with a real $20 bill he would have just gone home to watch netflix.

      2. I’m surprised there isn’t more of this. There are a LOT of guns out there.

        2. Same thought. My guess is all of this will just bring in more anti 2nd amendment laws/sentiment, at the best. Total disarmament at the worst.

      4. Listen to your betters.

        David Dorn’s life does not “matter” and the story of his murder will be summarily ignored by all Real Journalists.

        1. As a black police officer trying to help preserve the fragile veneer of civilization, David Dorn’s story doesn’t fit the liberal MSM narrative.

  17. Who was “the gentle giant?” According to court documents, George Floyd was charged in 2007 with armed robbery in a “home invasion.” He was sentenced to five years in prison after a plea deal in 2009.

      1. “It still doesn’t justify his death.”

        Hopefully no one would dispute that. However he also doesn’t deserve to be deified.

        1. “It still doesn’t justify his death.”

          Resisting arrest, even for a small infraction of the law, turns one’s risk of harm inside out.

          1. Indeed, even though I have “white privilege” I know that resisting arrest is dangerous and am always polite on the rare occasions when dealing with the boyz in blue.

          2. Indeed, even though I have “white privilege” I know that resisting arrest is dangerous and am always polite on the rare occasions when dealing with the boyz in blue.

            Yup. Middle-aged white woman here. But if I even mouthed off to a cop, let alone instigated something physical, I wouldn’t expect anything good to happen.

          3. “Yup. Middle-aged white woman here. But if I even mouthed off to a cop, let alone instigated something physical, I wouldn’t expect anything good to happen.”

            And that is the problem, a large percent of the population are ok with the “comply or die” mentality of Policing in the US today.

            I don’t care about George Floyd’s past, no one deserves to die over a fake $20 bill. He was restrained and on the ground. There were 4 cops.

            The fact that you expect cops to beat the piss out of you for “mouthing off” is sad.

          4. I don’t accept it, but there is little I can do about it. One thing I did was to not live in a metro area.

            We have a cop problem, which politics and unions prevent solving.

          5. And that is the problem, a large percent of the population are ok with the “comply or die” mentality of Policing in the US today.

            A lot of what is considered racism today is actually a difference in social norms. You’re right that a lot of people of European ancestry tend toward too much deference to authority. But that doesn’t mean those who approach authority in the opposite way are right either. Smart people read the room and adjust to the social norms of the society they are trying to participate in until it’s time to stop. Speak softly and carry a big stick is actually a pretty good strategy, IMO, even if that’s not the default for whatever culture you come from. Keep the stick hidden if necessary.

          6. The fact that you expect cops to beat the piss out of you for “mouthing off”

            Nobody said that Mike. I would never expect anything of the sort.

          7. “The fact that you expect cops to beat the piss out of you for “mouthing off” is sad.”

            Maybe you don’t understand lesson #1 in dealing with cops. They’re always going to win and you’re always going to lose. The fight takes place in the courtroom.

            Smarten up.

          9. “Maybe you don’t understand lesson #1 in dealing with cops. They’re always going to win and you’re always going to lose. The fight takes place in the courtroom.
            Smarten up.”

            That is irreverent. The problem is the Police now escalate violence instead of deescalating it. I don’t care what his toxicology report says. If you are a cop and 4 of you and your co workers can’t subdue one suspect (of a non violent crime) without killing him you need a new job and you belong in prison. Comply or Die is not a policing motto and should not be our policy.

            The Police shouldn’t have the power of life and death over a f**king fake $20 bill.

      2. Ox they worked in the same place, no police officer in his right mind would do this as a professional, so it became personal. lets get the background and toxicology report.

          1. Yup preliminary report his heart stopped the clerk reported he was high and out of his mind

    1. US Treasury bonds
      US yield curve steepens as 30-year Treasury falls from favour
      Traders eye Fed policy shift, ballooning government spending and stabilising economy
      The yield on the 30-year Treasury hit 1.5 per cent for the first time since mid-March
      © Bloomberg
      Colby Smith in New York
      4 hours ago

      Long-dated Treasury bonds have lost favour among investors, sending yields to their highest since March, following a jump in borrowing to fund a massive economic stimulus and signs of shifting policy by the Federal Reserve.

      The increase in rates on 30-year debt in recent days has been sharper than on shorter-term Treasuries, to such an extent that one part of the US yield curve is now steeper than at almost any point in the past three years.

      Traders said the move reflects a combination of factors, including a stabilising economic outlook and the expectation that while the Fed will continue to hold short-term Treasury yields low, it will be less aggressive in its interventions in the market for long-dated government debt.

      “The longer-term trade is going to be for the curve to gradually steepen,” said Subadra Rajappa, head of US rates strategy at Société Générale.

      The difference between the yields on five-year and 30-year Treasuries widened to almost 118 basis points on Tuesday, the highest at any point since 2017 save for a brief intraday spike during the Treasury market disruption of mid-March.
      …

    1. The body count doesn’t matter to this narrative. The only relative details are the tribal identities of the perpetrator and the victim of a killing.

    2. Apparently black lives don’t matter when other black people are doing the killing? 🙁

      BTW, I like your new username.

    3. “That’s irrelevant. Please, please, please give us another black killed by a cop. We want this sitch to go nuclear.”

      Regards,

      The MSM

    4. Clack lives only matter when taken by Cops. When Blacks kill Blacks the collective yawn can be heard across the country.

  23. You needn’t be concerned about the dangerous disconnect between complacent markets and weak fundamentals.

    Always bear in mind the sage advice I first learned upon reading a placard on my grandmother’s kitchen wall: “A closely watched pot never boils.”

    1. Need to Know
      There’s a danger in the disconnect between complacent markets and weak fundamentals, analyst warns
      Published: June 3, 2020 at 8:19 a.m. ET
      By Steve Goldstein
      Protesters march across the Brooklyn Bridge as part of a solidarity rally calling for justice over the death of George Floyd, June 1, 2020, in the Brooklyn borough of New York

      All roads seem pointed in one direction at the moment. The S&P 500 (SPX, +0.74%) closed up on Tuesday for the third-straight session, extending the rebound from the March lows to nearly 38%. Investors continued to flock to the hard-hit cyclical sectors, including energy, industrials and materials.

      Mike Larson, senior analyst at Weiss Ratings, said he has never seen anything like it.

      “It’s the biggest disconnect I can remember in the almost-quarter century I’ve been active in the markets,” he said. “I can’t recall a time when we’ve seen a large disconnect between, not just what’s going on in Main Street versus what’s going on in Wall Street, but what’s going on in the underlying fundamentals that would normally impact Wall Street.”
      …

    2. So many analysts sounding the clarion call over the disconnect between a complacent stock market and a collapsed economy reminds me of one of Aesop’s fables:

      The Shepherd Boy & the Wolf

      You might want to review the story to get an idea of how the present financial episode is likely to end.

    1. Corona is over, time to go back to work:

      Not until the free double cheeseburgers expire in July.

    2. Yup. With an unlimited balance sheet and control of the printing press, you can paper over anything.

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