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The Losses Were Devastating Because Speculating Had Been So Popular

It’s Friday desk clearing time for this blogger. “‘If you’re thinking about selling your home, now is a great time to do it, work with a professional to make sure you get through it,’ explains Rachel Sartain a Pinellas County Realtor. ‘We’ve got stories of 200 viewings in two days, 10 offers coming through.’ Also, if you’ve been laid off or have lost your job and need help paying the mortgage, furloughing payments is an option.”

“Editor: Thank you for allowing me to write a follow-up to your article titled: ‘Report: Havasu housing values most at risk.’ As Chad Nelson states we have seen a 12.7% increase from last year in values. I agree with Mr. Nelson and would opine that we are currently in a bubble, which we all know will pop at some point. Jeanne Ketch: Mohave County Assessor.”

“After setting a new California price record in February with the $165-million sale of his Beverly Hills mansion, media mogul David Geffen paid about half the original asking price — $125 million. On Beverly Park Circle, the onetime home of baseball home run king Barry Bonds sold or $4 million less than the $30-million asking price. Rapper Travis Scott, who bought a Beverly Hills Post Office-area home with partner Kylie Jenner last year, paid $18.5 million less than the original asking price. On Beverly Park Lane, developer and restaurateur George Santo Pietro sold his home to a trust for about half the original asking price — $38 million.”

“Two-bedroom units selling for close to $2 million ‘are a little soft.’ Jing Fang, a broker associate with the Compass real estate firm who works mostly with condo buyers in San Francisco, added that ‘sellers are pretty motivated. Otherwise they wouldn’t put their home on the market right now.’ Patrick Carlisle, chief market analyst for Compass added that the San Francisco rental market ‘has been hammered by declining rent rates and increasing vacancy rates as newly unemployed residents leave the most expensive apartments in the country. Unemployment typically hits the rental market much harder than the for-sale market.'”

“If unemployment continues to rise, the ‘ripple effect’ will be felt throughout the housing market, Levine said.”

“Whad’ya know: The rent was too damn high. Not only did 34.7 percent of all Manhattan rentals get a discount — a new high for that metric — but landlords in the borough also slashed a record 6.7 percent off asking rents. For instance, a studio at 145 W. 12th St. in the usually coveted neighborhood of Greenwich Village listed at the end of June for $2,700 a month, then decreased its price by 8 percent to $2,495 five days later. (It is still on the market for $2,000 following two further price chops.) “

“Colorado is seeing a surge of residents who can’t pay their rent because of layoffs, furloughs and pay reductions. Hundreds of tents are lined up behind the Stout Street Health Center at 21st and Stout streets, notes Cathy Alderman, vice president of communications and public policy at the Colorado Coalition for the Homeless, while immediately behind them are two empty, brand-new, market-rate luxury apartment buildings. ‘It’s so striking,’ she says.”

“In March, when I first searched through hundreds of Portland rentals, I noticed multiunit hosts were offering eye-popping discounts for long-term stays, as high as 50 percent or more off the nightly rate for month-long reservations. When the checkout dates neared at two of our rentals, I got similarly desperate-sounding calls from both hosts asking if we’d like to ‘take things off Airbnb’ and stay for another month. ‘These hosts still have mortgages to pay on those homes, but they’re not making the revenue they otherwise would have through Airbnb,’ says Makarand Mody, assistant professor at Boston University’s School of Hospitality Administration.”

“‘This lack of travel and tourism is already causing Airbnb hosts to slash their prices by more than 80% in some cities. If this goes on for much longer, a lot of these cash-strapped hosts will be forced to sell their properties,’ financial analyst Austin Hankwitz told Money magazine.”

“‘We are definitely seeing more on the market than I have ever seen at this time of year,’ said Claire Flewelling-Wyatt. The managing broker for the property management division of Pemberton Homes in Victoria, Flewelling-Wyatt says the shift in the market is due to a number of factors, including a flood of Airbnbs transitioning to long-term rentals. ‘What we are seeing is there are more properties for rent and the rental rates are going down,’ she said. ‘We are seeing a lot more stressed out clients where they expected to purchase an investment property and get a pretty decent rent. And those rents, we are just not able to get them.'”

“Lenders are set to reduce the availability of mortgages, loans and other credit in the coming weeks despite greater demand from consumers. Mortgage and loan providers have told the Bank of England that the supply of these products will fall in the summer months owing to coronavirus pressures. ‘Since we were hit by the Covid crunch, lending has dried up faster than it did during the financial crisis – and things are only going to get worse,’ said Sarah Coles, from investment firm Hargreaves Lansdown.”

“Rents in Dublin fell in April, May and June, with drops in costs also recorded outside Dublin, according to the Residential Tenancies Board. There is also some anecdotal evidence of properties that were being offered for short-term holiday hire more recently being offered for rent instead, increasing supply.”

“The real estate sector is in the doldrums. Low foreign investments and pending projects are expected to slow growth by five to six per cent this year compared to 10 to 15 per cent a year ago, said Cambodia Valuers and Estate Agents Association president Chrek Soknim., ‘The Covid-19 outbreak has resulted in unprecedented demand shocks, while the property market already appears well-saturated after almost a decade-long [of] construction and real estate boom,’ the World Bank said in its latest economic update.”

“In Mumbai, the G Block in the Bandra Kurla Complex, which has around 150 marquee residences, rarely had any vacancies before the Covid outbreak. Today, in the wake of expats packing their bags and heading home, it is witnessing a vacancy level of about 30 percent — nearly one in three homes is empty. ‘The expat rental business is almost dead,’ said a broker active in Delhi’s tony Vasant Vihar area.”

“In some markets, such as inner-city apartments in Melbourne, rents are being cut because of rising unemployment, oversupply, Airbnb property owners abandoning longer term leasing, and growing fears about long-term capital growth and income prospects. Danielle Chetcuti, City Residential’s senior property manager, says she is negotiating with landlords every week to reduce the rent of tenants no longer able to afford the original costs, which has the unintended consequence of encouraging other tenants to demand their landlords match the cut.”

“One landlord, whose two-bedroom, one bathroom Docklands property has been on the market for about eight weeks, cut the weekly asking rent from about $540 to $200 for the next three months in a bid to attract a new tenant. ‘It is getting worse because more tenants are losing their jobs,’ she says about inner Melbourne’s rental and apartment investor outlook.”

“In simple words a real estate bubble is a run up or upward trend in the pricing that is fuelled by demand, speculation and exuberant spending to the point of collapse. Here the position is exploited by speculators who create a fake demand in the market and make profits. This is the current scenario in Kashmir. In last five years the commercial real estate has grown many fold but the problem is that it is not backed up by demand.”

“The commercial property prices are not fuelled by demand and the fundamentals of the business are not strong. Mostly these commercial projects are financed by these distressed banks. From even a investment point of view the commercial property in this business scenario will show no appreciation rather chances are more of depreciation. My apprehensions are that this is a bubble and it will burst soon in the manner there was housing bubble in America in 2000’s.”

“In the summer of 1720, shares in the South Sea Co. and other leading stocks roared to all-time highs as speculators chased instant profits. Ever since, this sudden outbreak of stock trading has been known as ‘the South Sea bubble.’ Even faster than it inflated, it burst—and left us with lessons about human nature that reverberate today. By the end of 1720, these leading stocks had fallen between 81% and 96% from their peak.”

“The losses were devastating because speculating had been so popular. King George I, half the members of Parliament, Sir Isaac Newton, the poet Alexander Pope, and countless merchants and tradesmen had speculated on the South Sea and other companies. They all were sucked in by a perfect magnetic storm: the rapid advent of newspapers, ready loans at low interest rates, and exciting narratives about technological innovation.”

“Above all was the eternal human desire to be part of the in crowd, or what we today would call FOMO, fear of missing out. ‘Our species is really a herd animal,’ says Andrew Odlyzko, a mathematician at the University of Minnesota who researches financial bubbles. In 1720, ‘the scent of money was in the air like the breath of spring,’ as the historian John Carswell put it. That June alone, 88 startups, most of them publicly traded, were launched in London. Fistfights broke out over the right to buy stock while it still could be had; speculators thronged London’s financial district to buy shares in any company, desperately pleading, ‘we don’t care what it is.'”

“Financial bubbles are often cited as proof of irrationality, but what they prove is that investors are human. As one formerly cautious banker, throwing some of his own money into the South Sea, pointed out on June 18, 1720: ‘When the rest of the world is mad we must imitate them in some measure.'”

“Two centuries later, the financial analyst Benjamin Graham wrote about the bull market that ended in the crash of 1929: ‘Countless people asked themselves, ‘Why work for a living when a fortune can be made in Wall Street without working?’ Graham added wryly, ‘The ensuing migration from business into the financial district resembled the famous gold rush to the Klondike, with the not unimportant difference that there really was gold in the Klondike.'”

This Post Has 169 Comments
  1. ‘The losses were devastating because speculating had been so popular…They all were sucked in by a perfect magnetic storm: the rapid advent of newspapers, ready loans at low interest rates, and exciting narratives about technological innovation’

    Sound familiar? Speculation is the key. It has many indicators. Negative cash flow, second shacks. Over the top shacks. Nobody needs a $7M shack. The only reason you would pay that much is you expect to sell it for 10.

    1. I dunno, I think I could tolerate a $7M shack. Do it up real nice and have awesome parties.

          1. I’m glad oxide brought this up, because there’s some fine points to speculating. As usually, this is stuff we’ve talked about before but is worth revisiting. Around 2005 or 6, I was living in Sedona. There were always a ton of rent houses available, but more luxury stuff was put up for rent as FB’s were getting pinched. There was one that had 6 bedrooms, great views and a pool for $2000/month. I was paying about $900 I think. I considered it. I could afford it. I’d like a pool. Then I started actually weighting the consequences. I didn’t need 6 bedrooms and didn’t want roommates either. You can only use a pool for a few months a year. And for the extra rent I’d be paying, I could do other things like go out to eat every day. I came to the conclusion it would be a waste of money.

            How many bedrooms does a $7M shack usually have? A bunch. Do people need those bedrooms – not likely. What are the carry costs? What alternative lifestyle could people spend on if they lived in a modest shack that truly fit their needs? This idea of “I’ll throw great parties” is justification of speculation. And you see it all the time.

          2. “I’ll throw great parties”

            The best parties I’ve been to over the years were in the low rent district, or on the beach. People who spend a ton on big houses throw the most boring parties ever.

          3. big houses

            Become mausoleums. I certainly wouldn’t want someone damaging my big expensive home. But then, I’m known to buy purses and not use them for months or years.

          4. How many bedrooms does a $7M shack usually have? A bunch.

            I don’t think the bedroom count is a real factor in a “luxury” house’s price. The view and location is a bigger factor, if not the main factor. A 3 bedroom house with an unobstructed ocean view in La Jolla will fetch a lot more than a 6 bedroom house in an El Cajon cul de sac.

            Crazy amenities (private bowling alley, 10 car garage with huge windows to showcase your cars, etc.) are a lesser factors, as are trim, facade, fixtures and finishes.

          5. I came to the conclusion it would be a waste of money.

            That’s because “image” isn’t important to you. Hollyweirdos need to be seen and noticed if they want to remain relevant. And posers imitate them.

          6. It’s different in ocean view places like La Jolla. In the rest of the world, size matters.

            But even in La Jolla ocean view cases, I noticed that certain houses were undergoing endless renovation to build ever more house at the top of the cliff over the past few years.

            Some of these folks who didn’t manage to sell before covid got stucco.

          7. “People who spend a ton on big houses throw the most boring parties ever.”

            Jeffrey Epstein would disagree with you.

          8. But even in La Jolla ocean view cases, I noticed that certain houses were undergoing endless renovation to build ever more house at the top of the cliff over the past few years.

            What I noticed the last time I was in La Jolla was that ordinary, older houses were being torn down and replaced with a more opulent structure. If you’re gonna drop $5 mill for a shack in La Jolla you probably want something nicer that an 1960’s track home. And you won’t tear down a shack in La Mesa to replace it with a mansion.

          9. If you’re gonna drop $5 mill for a shack in La Jolla you probably want something nicer that an 1960’s track home.

            It’s why tear downs up the coast are still selling for $1M+.

          10. When I worked in La Jolla at an unnamed Institute of Oceanography (lol), I refused to pay my employer for the privilege of parking, instead parking in the shores area (sometimes almost to Cotijas with the dankest of burritos – it was all about the hot sauce) on Avenida de la Playa or sneaking into the aquarium lot after it was built and leaving after the parking attendant had left for the day (KMA!). Many beach side homes were torn down and replaced with ginormous spreads. A number of people were from Texas based on the license plates. The house next to the pier parking lot stairs was not one of those but there was always a small army of workers remodeling, washing the cars, setting up/breaking down party decorations. It never stopped. Has to be exhausting always dealing with that. Not a very good location either with hundreds of surf bums like me walking by daily and throwing the paper wrapper from your surf wax into their yard 😉 I’ve even seen surfers waxing their boards in peoples front yards like they owned the place, lol.

            The house directly across LJ shores drive from the parking lot was a shack back when I was in school and I remember a rager there (skated down LJ shores and made it in 1 piece, stoked) where about 6 dudes lived in the house and another 6 in tents in the backyard and we all thought that was heaven on earth. Probably just after 2000 that shack got replaced with a behemoth that looks to be 3 stories high. I guess thats progress?

          11. I have a property currently on the market in Encinitas west of I-5 competing with ocean view homes. What good is an ocean view if the home is tiny and has no parking? It’s not like you live on the deck staring at your ocean view. Case in point: 2084 Oxford Ave, Cardiff By The Sea, CA 92007 It’s a 2BR/1BA house with a 1BD/1BA ADU.

          12. on the deck staring at your ocean view

            Very nice. I do spend a lot of time sitting on the deck staring at the ocean view on my boat.

            Not a big deal, but the painting over the fireplace would make me leave the room.

          13. “What good is an ocean view if the home is tiny and has no parking? It’s not like you live on the deck staring at your ocean view.”

            Vanity, in a word.

          1. An apt analogy as she, allegedly, in a London courtroom last week, like the housing market, which did factually, sh*t the bed 🙁

        1. Actually some of the old houses on Mt Helix in La Mesa are getting torn down and replaced with mansions. Not like Rancho Santa Fe mansions but mansions nonetheless.

    2. Nobody needs a $7M shack.

      Nobody “needs” a shack (house) at all. We can all be crammed into apartments.

      1. REALTOR, I have so much money after “throwing money away on rent” every month that I don’t know where to throw it.

      2. “We can all be crammed into apartments.”

        What about the 20-ft long hang gliders, the Harley Davidson and the Snap-on roll-away toolbox with the Ridgid Tool girl calendar?

  2. ‘The Covid-19 outbreak has resulted in unprecedented demand shocks, while the property market already appears well-saturated after almost a decade-long [of] construction and real estate boom’

    Like Krugman and globalism, look in the mirror World Bank a$$-hats.

    1. SoUtah:
      I was looking to get a small granite counter in the laundry room last year but the prices were higher than what I wanted to pay and it was quoted with a long wait time because “we’re so busy”.

      Last week I tried again and found that one store had closed and the other 2 places were quoting me a price that was 50-60% less than what they wanted last year. Both stores were devoid of customers and willing to start on my project “right away”.

      Washington County, Utah unemployment is sitting at 9.3% after hitting the 12% range in April. The crash that occurred here 10 years ago kicked local unemployment up to 15% setting a record for the county.

      Many local projects (Commercial and large high density, multi-family), that were conceived last year, are presently being completed around the County. However, there doesn’t appear to have been any notable new construction starts for 2020.

      I’m guessing that it’s impossible to get new capital at this point and that the local construction biz along with the other related trades will eventually collapse later this year as the larger projects are completed and sit, unsold and empty.

      Most jobs, that pay well, here (other than the Hospital and local government) are housing related in one way or another and I wouldn’t be surprised to see us get into the 20% unemployment range by Christmas.

      1. “Washington County, Utah unemployment is sitting at 9.3%…”

        And that’s on the good side of town!

      2. Most jobs, that pay well, here (other than the Hospital and local government) are housing related in one way or another

        I’ll bet that a lot of those guberment jobs also depend on housing, as in depend on the fees and property tax they generate.

  3. ‘Hundreds of tents are lined up…while immediately behind them are two empty, brand-new, market-rate luxury apartment buildings’

    There’s a lot of people who thought they would be retiring who will be collecting shopping carts in parking lots to the day they die. I said this was going to happen in late 2014. No crystal ball. I could see they were speculating – building for a greater fool. It’s that simple.

  4. LOL@ the “coin shortage” as a forced narrative to bring about the cashless society (I warned about this here a few weeks ago).

    It’s in the book of Revelation, it’s called the Mark of the Beast.

    1. I wonder what alternative form of cash will spring into use when the gubmint tries to force electronic payments on us, against the will of the people?

      1. I can’t get quarters to do laundry.

        I’m supposed to download a laundry “app” that probably requires something retarded like logging in via Facebook and data mining all my contacts and email.

        And all cash purchases in stores have to be rounded up to the next dollar, for charity, or so our betters inform.

        1. Indeed. I had my change unceremoniously confiscated last night at a Smith’s.

          There was a 70¢ “change shortage” charge on the receipt. Cashier said that it would be credited to my “loyalty card”. As it turns out, not true. Could “Donation Disaster Relief” be any more vague?

          1. Hey RR! Yeah, all quiet on the western front, no more fires.

            Vegas is critically ill though. Might already be dead but not know it yet. I was driving around the other night and it reminded me of 2010-2011 – everything closed or shut down altogether.

            Sorry that your boy is suffering with the interruption of therapy (ies). My daughter, even at her age, has been saying the lack of routine and interaction with people is making her feel like she’s backsliding a bit.

          2. I’ve been considering whether to start a class action lawsuit but not sure how effective it would be.

          3. God knows it’s not without merit. So many more victims than any bogus positive test counts.

      2. I wonder what alternative form of cash will spring into use when the gubmint tries to force electronic payments on us

        None. The power elite will find out that a cashless society is just about impossible to force on us. They could probably force us to use much less cash though. And they might even be satisfied with that.

  5. BTW, I’m not here to moderate TDS posts day and night. I allow long time readers to go off topic, but not newbies. If you are wondering where your comments are going it’s into the trash. I don’t need new readers, nor more comments. I do this so I know where real estate is headed.

    1. Thanks for tolerating my seemingly off topic posts over the years. I don’t always draw out the connections to real estate, but they are lurking there, waiting to add to the CR8R that is already baked into the cake by decades of bubble support policy from Uncle Sam, with lotsa help from Uncles Fed and Freddie plus Aunts Fannie and Sallie.

    2. I do hope that new posters are at least allowed to participate in off-topic conversations as long as they add value to the discussion. But I agree, mindless talking points are tiring.

    3. I really hope he is reelected, if anything just to see the reactions of all the TDS afflicted. They threatened to move out of the country last time. They never did, of course, it was just more attention-seeking nonsense.

      1. I really hope he is reelected, if anything just to see the reactions of all the TDS afflicted.

        I kind of fall into that camp this time. I voted L last time because I didn’t want to support him (no a-hole rule). But my hopes that he would inspire the Ds to really step up and nominate someone who would champion the American worker were completely dashed. They deserve to be blown out. I’ve never seen people complain so much and then make no effort to offer something better.

        1. It is still too early for a real hero. We will have to do with the bad manager of Luke 16.

        2. If the Libertarian party was smart, they would not field a candidate, and instead implore their members to vote Trump. I’m sure they realize that they don’t have the luxury of purity this year. The threat of globalism and UBI is becoming all too real.

          1. Not everyone has to like Trump.
            But they do have to vote for him.
            The alternative is too horrible to contemplate.

      2. I think a lot of them try to move out of the country, only to find that other countries, including Canada, don’t want them. (Isn’t Mexico pretty strict too?) Sorry, you can’t just walk in and start collecting cheese like you can here.

        1. The Hollyweirdos who threaten to leave are typically financially independent, so they could get a a non work visa to live in Mexico. I don’t think they would like living there, though.

  6. Coeur d’Alene, ID Housing Prices Crater 16% YOY As Sellers Flood Market And Slash Prices Double Digits

    *Select price from dropdown menu on first chart

    As a noted economist said so eloquently, “liquidate whatever you’ve got to eliminate all debt and hold onto every dollar you’ve got…. You’re going to need every last one of them.”

    1. If the fabled rush into precious metals ever happens, a bargain shack in Coeur might be a good asset. The silver mines still support much of the economy there.

  7. “…explains Rachel Sartain a Pinellas County Realtor….”

    “…if you’ve been laid off or have lost your job and need help paying the mortgage, furloughing payments is an option….”

    Furloughing payments? Is Rachel kidding? Whats next? Street people welcome? Closing documents delivered right to your sidewalk location?

    Me thinks Rachel Sartain is getting a little desperate.

    1. The banksters are so desperate to keep the whole sham going that they are happy to defer payments for anything – houses, cars, RVs, you name it. If they can just get people to sign up to agree to the purchase price, they’ll worry about the actual payments later.

      1. If they can just get people to sign up to agree to the purchase price, they’ll worry about the actual payments later.

        Sounds like they have high confidence that the Fed will make them whole one way or another.

        1. He does some good independent journalism

          Yes, he does. And he’s got a great attorney.

          1. And the left DESPISES him despite him being a gay minority. He damages the narrative and they want to see him dead. His latest hijinks is showing that the “unidentifiable” Feds who are arresting antifa without reading their rights actually do have identifying insignia on their uniforms, they are just subdued rather than bright and shiny. People get really angry when he points stuff like that out.

          2. And the left DESPISES him despite him being a gay minority. He damages the narrative and they want to see him dead.

            “They” = George Soros and all his globalist brethren.

    1. There are plenty of places in the DTLA core where the windows remain boarded up. Part of it is that the establishments behind the boards are no longer functioning but some of it is because there’s still fear that things could get heated again.

  8. Don is getting re-elected. Imagine the TDS post election. Especially when Covid is revealed as a hoax.

    …. And Im underwater and sinking.

    1. I’m not so sure. I’m guessing we’ll get a high turnout of young socialist Millenials.

      1. Keep dreaming Karentine. Young are generally too lazy and stupid to vote and this current crop can’t even figure out what gender they are. Unless they’re handing out free avocado toast, 80%+ wont show up, preferring instead to stare at their smart phone getting ideas for their next tattoo.

    2. And this may be the reason Joe hasn’t been able to recruit a running mate. No one wants to go down in history as Geraldine Ferraro (who?).

    3. Ok Got it TDS = trump derangement syndrome .

      The COVID19 testing station by my house is busier than ever its been expended to 3 lanes. Moorpark Junior College parking lot .

      At first nobody now lines of cars all day .

  9. ‘Just a few days after California Gov. Gavin Newsom introduced rules to make wearing a mask outside the home mandatory in most situations, a sheriff’s deputy here in the state capital watched people in a grocery store walk by with their faces uncovered and did nothing.’

    “It’s pretty minor in the great scheme of things,” said the deputy, who was working off-duty as a security guard in the store and declined to give his name.’

    ‘Some of the defiance is driven by political opposition and even disbelief of public-health officials’ advice that masks help prevent the spread of the virus. But many police departments say going after people who don’t wear masks simply isn’t a priority.’

    “Enforcement of people not wearing face-coverings in public would be very challenging and detract the few crucial resources we have,” said Ronald Lawrence, the police chief of Citrus Heights, Calif., a Sacramento suburb. His agency is one of many in the area, including the Sacramento County sheriff, to announce it wouldn’t enforce Mr. Newsom’s mandate.’

    I was in a Walgreens yesterday. This guy in his 60’s probably, walked in without a mask and was talking with the pharmacist, who he obviously knew. He said, “you’re looking pretty good, except for that stupid mask. You know, those things don’t do anything.”

    That this has come down to ridiculous mouth hankeys screams Farcei!

        1. Old news. Turns out that ventilators were contributing to the deaths. Now it’s all prone positioning, oxygen, and cocktails of anticoagulants and steroids. And with any luck, HCQ and Ivermectin.

          As to whether masks are constitutional, here is an argument to put forth:
          1) Case law establishes that quarantine of the infectious to prevent spread is constitutional.
          2) everyone is infectious with COVID.
          3) masking, by preventing spread, is a form of quarantine.
          4) Requiring masks of everyone is equivalent to quarantine of the infectious.
          5) Therefore, mandatory masking of everyone is constitutional.

          I wonder if that would stand up in court.

          1. Huge difference between testing PCR vs. antibody positive and transmissibility.

          2. Yes, that’s the weak link in the chain. However, with asymptomatic cases shedding virus for upwards of 14-21 days, it’s not an impossible argument.

            Maryland has required masks indoors since mid-April. Case count went way down. It’s now on the way back up, likely because the governor loosened a few restrictions on unmasked outdoor activities. And yes, there were protests. Being outdoors is not a guarantee.

          3. You don’t have to prove that everyone has COVID-19.

            You have to prove that nobody has it. Good luck with that.

          4. likely because the governor loosened a few restrictions on unmasked outdoor activities

            Quite a bit of speculation there, no?

  10. On eve of bankruptcy, U.S. firms shower execs with bonuses – Reuters



    Nearly a third of more than 40 large companies seeking U.S. bankruptcy protection during the coronavirus pandemic awarded bonuses to executives within a month of filing their cases, according to a Reuters analysis of securities filings and court records.

    Under a 2005 bankruptcy law, companies are banned, with few exceptions, from paying executives retention bonuses while in bankruptcy. But the firms seized on a loophole by granting payouts before filing.

  11. ‘China’s goal is to replace you’: Barr warns leaders of America’s biggest businesses


    U.S. Attorney General Bill Barr delivered a blistering critique of the Chinese Government Thursday and singled out U.S. business leaders as complicit in the country’s rise.

    Speaking at the Gerald R. Ford Presidential Museum in Grand Rapids, Michigan, he pointed to tech companies like Apple (AAPL) and Cisco (CSCO), as well as Disney (DIS) as examples of American firms “bowing to Beijing.”

    Barr then offered this warning to corporations doing business in China.

    “The ultimate ambition of China’s rulers isn’t to trade with the United States. It is to raid the United States,” Barr said. “If you’re an American business leader, appeasing the PRC may bring short term rewards, but in the end the PRC’s goal is to replace you.”

    Barr’s comments are the latest salvo in a concerted effort by the Trump administration to ramp up pressure on Beijing, from Hong Kong to national security concerns tied to tech firms TikTok and Huawei.

    1. I don’t think you can get these Vibers to pull from China unless a greater penalty is leveraged. A lecture isn’t going to do it.

      1. I posted an article from the WSJ recently that went into how the Chinese turned to their previously reliable bunch of corporate types to help stop the tariffs. These CEO’s, etc, refused. The Chinese offered a finance company some goodies. He replied they made the same offer in 2011 and nothing came of it. The root of this sea-change is China’s 2025 initiative. The corporations could see that China was going after all their market shares, mostly tech. By stealing, however they could get it. Look at the 5G business: China isn’t content with manufacturing anymore. They want it all. From Canada to Australia, even the EU, the tide has turned against the CCP.

        1. “From Canada to Australia, even the EU, the tide has turned against the CCP.”

          Indeed. Xi’s “President for life” dictum didn’t impress.

      2. “The corporations could see that China was going after all their market shares, mostly tech. By stealing, however they could get it.”

        It must be nice to let others invest in R&D, then steal the technology and profit from it.

        1. The company I used to work for made a huge investment opening a plant in China. A few years later they firewalled it from accessing any company data and then closed it a year after that because it was leaking proprietary company information like sieve.

      1. “She’s previously had colon, pancreatic and lung cancer, now it’s in the liver.” 5-yr survival rates for the first three are really low. Multiply those probabilities to see how much effort is made keeping her alive.

        1. Imagine how the poor leftists would feel, if, as they were frantically trying to save Ginsberg, they looked over their shoulder and saw Breyer quietly slip away.

        2. Good point. Cancer treatments have certainly improved since Johannes Brahms succumbed to liver cancer in the late 19th century.

        3. I read years ago in a legal blog they go through extraordinary means to keep them alive because they have cases so important to them ,they want their names and opinion on it for their legacy.

        4. Elder abuse: it’s the democrat party’s new strategy. Ginsburg and Biden should have gone out to pasture long ago.

          1. If you saw that the likes of AOC and her ilk were occupying the lower-middle-management positions of your enterprise you’d probably want to keep the olds around longer, too. This goes for both parties.

            It used to be that elected or appointed government service was something you did after you had made your place in the world doing more mundane business-style (or subject-matter-expert) stuff. Now it seems like its become either a family business or an alternate form of welfare.

          2. Now it seems like its become either a family business or an alternate form of welfare.

            Farmers always try to leave the farm to their kids if they’ll have it.

    1. Brett Arends’s ROI
      Opinion: The hidden risk in your S&P 500 index fund
      Published: July 17, 2020 at 9:57 a.m. ET
      By Brett Arends
      You’re taking a bet you may not fully realize
      Jason Statham as That Surprised Index Fund Investor Warner Bros. /Courtesy Everett Collection

      How much of your retirement savings are you now gambling on the fortunes of just six companies?

      If you’re holding them in an S&P 500 stock market index fund, the answer is: About a quarter.

      That’s how much the so-called “FANMAGs”—Facebook, Apple, Netflix, Microsoft, Amazon and Google (“Alphabet”) — now account of the blue chip U.S. index by value. And that’s how much of each $1 you hold in an S&P 500 index fund, like the State Street SPDR S&P 500 Trust, you are investing in just this half dozen enterprises.

      1. The expense ratio on FXAIX in 0.015%, yes I bought some.

        Don’t fight the FED unless you wanna loose money.

  12. I don’t think the masks prevent transmission, but in California you can’t even go into stores without the mask on. My grocery store has a security guy at the entry checking. Some places are a little more lax.

    I have read more experts that say the mask is useless because of the size of the virus. Maybe a 95 mask works. I don’t know,

    But, how can real estate not crash in most places under conditions like this?

    1. It’s not the size of the virus, it’s the size of the droplets it rides on. The jury is still out on whether an airborne naked virus is infectious. We have the case of the COVID-infected hairdressers who served 60+ clients while showing symptoms and none of the clients were infected. All were masked.

      1. The jury is still out on whether an airborne naked virus

        Imagining tiny little flapping wings.

        1. Heh, I’m imagining those droplets. Does the virus pilot the droplet from the inside, like Wonder Woman in her invisible jet?

        2. Here’s what I’m imagining about those droplets:

          1) The big ones drop to the floor and don’t have much chance to spread the disease, unless they stay there for long periods due to a lack of regular cleaning and much foot traffic, like at one of the gas station men’s rooms I visited yesterday while travelling through NV. In case of infrequent cleaning of high traffic areas, the big globs may help COVID-19 hitch a ride on your shoes.

          2) The tiny droplets have wings in a similar sense to Buzz Lightyear’s. Although unable to literally fly, they can remain airborne for much longer than the big droplets, and infect individuals who breathe them in sufficient concentrations. And fashion masks or face shields won’t protect you from breathing them in; the only ample protection is to avoid spaces with a high concentration of the aerosol droplets containing the virus. Medical masks may help, but I have heard stories about them failing.

          1. However, a fashion mask or face shield WILL prevent most of those aerosol droplets from breathing OUT.

          2. Yes. Which reminds me, it seems like wearing the fashion mask creates breathing problems for me during and after wearing it.

      2. Ok, I keep wearing the mask as you know, but I have lost all confidence in the motives behind any of these health mandates.

        1. The only time and the only reason I wear one is to respect that businesses are trying to stay open amidst whipsawing guidance and regulations. The mask comes off the second I’m off their premises.

    2. Asymptomatic people can spread the virus but wearing a mask would at least help to lessen the spread. Even if it’s not 100% the less of the virus you are exposed to the more likely the immune system can mount a better defense. It shouldn’t be a big deal to wear one but everything is now political.

      1. Maybe I am missing something, but I don’t see how wearing a scarf over your face can prevent breathing in COVID-19 bearing aerosols. Judging from photos, I do believe many of the BLM protesters gave themselves a false sense of security by wearing makeshift masks, with no actual protection against spreading the virus.

  13. This one goes out to the citizens of Mayor Bill de Blasio’s New York City as they prepare to go through another weekend.

    Let It Bleed

    16 July 2020

    New York City Mayor Bill de Blasio is facing criticism after saying emptying jails had made the city ‘safer’ even as violent crime surges.

    De Blasio made the remarks on Wednesday while signing a new ‘police accountability’ law that included a slew of measures that have come under fire from police unions and officials.

    At the bill signing, de Blasio bragged about policies that have seen suspects and offenders released by the hundreds from Rikers Island, including the elimination of bail for many categories of crime.

    ‘We now have fewer people in our jails than any time since World War II, and we are safer for it and better for it,’ the mayor said.

      1. Something that I have been noticing for a long time is that the left thinks criminals are victims.
        Most normal people want to be protected from criminals.
        This current bizarre twist that it’s the Police that are bad, the USA is bad, white people bad is just nonsense.

        And if you challenge any bazarre thing they say they go after you with a bat and call you a rac__t. This is a weird form of brainwashing in which they are the Judge,jury and Executioner.

      2. CA is releasing another 18000 inmates.

        I guess they really want the few sane people left to leave.

  14. The Economy/////source
    June 25, 2020
    U.S. Mortgage Delinquency Rate Jumps to 7.76%
    More mortgages were past due in May than at any time since 2011…

    …according to property research firm Black Knight.

    …However, Black Knight also noted that “a higher share of payments have been made thus far in June than at the same time in May, suggesting the rise in delinquencies may be leveling off.”

    Mississippi had the worst delinquency rate, at 12.73%, according to Black Knight. Louisiana was next, at 11.79%, followed by New York at 11.28%, New Jersey at 11.03%, and Florida at 10.52%.

    The states with the lowest delinquency rates were Idaho at 4.4%, Washington at 4.91%, South Dakota at 5.02%, Oregon at 5.12%, and Montana at 5.13%.

    Is, BlackKnight-considered reliable sources? With the moratoriums still set only through August (correct?), these are likely to be private mortgage numbers? What does the data “say” about the areas with the highest rates and the ones with the lowest?

  15. I am waiting for housing inventory and foreclosures to rise in Sacramento and Placer counties in northern California for homes under 600k. I looked at few with pools and they went pending days later. So it appears only low wage service workers who cannot afford a home anyhow lost jobs in COVID-19 and high income white collar workers just work at home now. The low inventory and low low interest rates below 3% plus renter/mortgage bailouts and pent up demand from at home workers could explain why we see prices increasing and homes selling days when they first go on the market now.

    1. We’re in a fake economy right now. Those 6+ trillion dollars between .gov and the FED have distorted everything. There is no “market” right now, only a fictitious situation where millions of people are not paying mortgages, rent, car payments, etc. Until this is all figured out, there will be no “deals” on anything.

      Now we’ve got a shortage of new cars since the factories were closed, so no great prices there, either. I had posted several weeks ago how the local Toyota dealership sold completely out of their Tacomas and 4Runners. Well, looks like Toyota’s numbers weren’t so hot last month because they don’t have the cars on the lots for people to buy.

      All this tells me that we have a long way to go until we even approach price discovery on any of these distressed assets that are mired in extend and pretend.

          1. He’s young. And if he’s patient, he’ll eventually join you and the ranks of others who timed a home purchase to avoid catching themselves a falling knife at a bubble peak in prices.

          2. I heard from an old friend and former colleague a couple of days ago that I saved her many thousands of dollars by convincing her not to buy a SoCal condo circa 2007. The story warmed my heart.

          3. you … timed a home purchase to avoid catching themselves a falling knife

            I’m gonna frame that. Because that’s a whole lot different than what I got when I revealed that here on HBB in 2012. 🥴

          4. I hope I wasn’t among those piling on. Of course 2012 was before The Bernanke announced his housing bubble reflation program. So in hindsight, your timing was spectacular.

  16. “It says something when you’re at a Black Lives Matter protest and you have more minorities on the police side than you have in a violent crowd,” he explained. “You have white people screaming at black officers, ‘you have the biggest nose I’ve ever seen!’ You hear these things and you go, ‘are they gonna say something to this person?’ No.”

    Black Portland Cop Details Racist Abuse Dished Out by White BLM Protesters

    Jul 17, 2020

    KGW: What it’s like to be a Black officer policing Portland protests | Raw interview

    1. ‘Terrifying For Citizens’: Oregon Gov. Reacts To Trump’s ‘Invasion’ Of Portland

      I’d be more worried about the roaming gangs of thugs, but then again, I’m not a crazy person or a Democrat.

  17. Effective today, my son’s in person learning has been reduced from 32 hours to 16 hours for 5.5 months. I’m pissed.

    1. That seems odd. Once he’s in-person and at risk for infection anyway, why not go the whole hog? It’s not as if the infection risk is that much greater at 32 hours than 16 hours.

      1. Could have to do with California Democrats handing over a fortune in tax monies to illegal immigrants, instead of using the money to provide educational services to those of us who pay a fortune in state taxes.

        And perhaps the $54 billion post-covid state budget gap is a factor.

        1. 25 years ago I came to the conclusion that California was becoming uninhabitable and I left. I can only imagine what sort of nightmare it has become now.

  18. Are you concerned about getting caught long in stocks at their point of no return?

    1. Editors’ Pick | 789,210 views | Jul 16, 2020, 11:58am EDT
      Stock Market Crash 2020: Welcome To The End Game
      Clem Chambers
      Senior Contributor
      Intelligent Investing Contributor Group
      Red Graph moving down on chart as recession or financial crisis 3d animation

      If this chart doesn’t make you think the crash is coming soon, then probably nothing will:

      The Nasdaq is going vertical

      The Nasdaq is on its final run and is going vertical, a classic end of bubble move. This is trader heaven and turns into speculator hell for those who think that markets do grow to the skies. It could go up a long way in price but it won’t go for long in time. It could last to Christmas, it could fold tomorrow, but my feeling is that unless this bubble is cut down by the Fed, the final move will be large and quick.

      You can refer to the dotcom crash for the general shape of what looks possible next.

      The attempts by the government to pump up the economy with new money is resulting in it going straight into equities and straight into the tip of the equity spear, the giant high beta story stocks. This is a malfunction of the QE mechanism that supports asset prices and slowly trickles the benefits of this support down the pyramid of wealth. Now the game is up because the new money is going straight into this bubble of financial assets that are spiralling up out of control.

      1. Everything revolves around the upcoming Presidential election. All the money pumping, keeping dead cats alive, lack of price discovery. All of it.
        Basically, it’s a multi-trillion dollar choice in the direction of the American economy.

    2. 10 Reasons the Stock Market Could Crash in Q3
      The worst for the stock market may not be in the rearview mirror just yet.
      Sean Williams
      Jun 30, 2020 at 6:06AM

      In many ways, this is a year that Wall Street and the American public will never forget. The coronavirus disease 2019 (COVID-19) pandemic has completely turned societal habits upside down, pushed more than 20 million Americans out of work, and sent the stock market into its wildest tailspin in history. It took just 33 calendar days for the broad-based S&P 500 to shed 34% of its value.

      Then again, it’s also a year that’s witnessed one of the most ferocious rallies on record. Despite unemployment levels that haven’t been seen since the Great Depression, the tech-heavy Nasdaq Composite has ascended to new highs, while the S&P 500 clawed back more than 80% of its losses at one point.

      However, the worst may not be in the rearview mirror. Although the stock market has historically bottomed out well before the U.S. economy finds its trough, there are 10 feasible reasons the stock market could crash during the third quarter.

    3. Not really I mean the stocks I had tanked badly and it will be way past when COVID ends and the lockdowns end for them to come back. At least my AAPL stock did well enough to cover the loss.

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

    *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.”

  20. No “pent-up demand” for $500,000 starter homes happening here:

    “As millions of Americans remain unemployed amid the novel coronavirus pandemic, nearly half of U.S. households have seen their income decline, according to new survey data.

    Bankrate, a New York financial services company, conducted the survey with YouGov from June 18 to 23. The results showed that 49 percent of adults in the U.S. have experienced a negative impact on their income during the pandemic. Of that 49 percent, just 17 percent said their income has now returned to normal. Another 42 percent voiced optimism that their finances would rebound within six months. But 4 percent said that their income will never recover.”

    1. From The Financial Times:

      Coronavirus is now spreading rampantly in Los Angeles and throughout California, as well as in other sunbelt states including Texas, Florida and Arizona. On Thursday, the US reported 71,000 new cases of the virus, setting another daily record, and 977 additional deaths.
      Chart of daily cases of patients diagnosed with coronavirus in the US, as a seven day rolling average, that shopws southern and western states are driving a fresh wave of Covid-19 cases – daily average cases are now over 63,000, double that of the first wave peak back in April

      Even as countries in Europe and Asia appear to have had some success in taming coronavirus, it is now surging uncontrollably in large swaths of the US. Just over 4 per cent of the world’s population lives in the US, but it accounts for a quarter of confirmed cases globally.

      Public health experts blame the latest wave of infections on governors who hastily reopened their states despite the risks, as well as crippling testing delays, and a toxic political backdrop in a polarised country where the use of face masks has become a divisive issue.

      “This is the greatest public health catastrophe in the US since the 1918 influenza, and the principal difference is that we knew enough to stop this from happening to this extent,” says Barry Bloom, a professor of public health at Harvard University.
      … ‘

      1. the greatest public health catastrophe in the US since the 1918

        Is 70,000 people a year dying of drug overdose a catastrophe? A decade of that adds up to a big number.

        1. That’s bad, but the US COVID-19 death toll blew past 70,000 in a couple of months.

          And it is now approaching 1000 a day again.

          1. “That’s bad, but the US COVID-19 death toll blew past 70,000 in a couple of months.”

            Nobody is faking any drug overdose numbers.

            Florida Official Admits State Counted Motorcycle Death as COVID-19 Intentionally

            National File – JULY 18, 2020

            A Florida health official claims that a man who died as a result of a motorcycle accident was added to a growing COVID-19-related death toll that has been cited as proof of a spike in the virus.

            The suspicious addition of the man’s untimely passing to the COVID-19 tally has had many people asking questions after two people in their 20s with no underlying health conditions supposedly passed away from the coronavirus, when officials revealed that one of the otherwise healthy men did not die of COVID-19 in a hospital, but instead, died of COVID-19 at the same moment he was killed in a motorcycle incident.

            When asked about the deceased’s underlying health conditions, Orange County Health Officer Dr. Raul Pino told Fox35 that “the first one didn’t have any,” he said. “He died in a motorcycle accident.”

            The Health Officer was then asked whether the two young men’s deaths were scrubbed from the coronavirus data.

            “I don’t think so. I have to double-check,” an uncertain Pino said. “We were arguing, discussing, or trying to argue with the state. Not because of the numbers — it’s 100…it doesn’t make any difference if it’s 99 — but the fact that the individual didn’t die from COVID-19…died in the crash.”

            He added, “But you could actually argue that it could have been the COVID-19 that caused him to crash. I don’t know the conclusion of that one.”


          2. what you reward

            I can see how the hospital is rewarded, but how is testing of the general population being rewarded? Are state governments gambling large on an election upset and rivers of federal money to cure their already bankrupt purse? That would be quite the going out on a limb.

          3. Are state governments gambling large on an election upset

            I don’t think they’re gambling, i think they’re already bought off or coerced in other ways to up the covid numbers to try to force longer shutdowns to damage the economy. They are pulling out all the stops to end Trumps presidency at one term. They’re too close to complete control and they can’t afford to lose. The world elite are lined up against Trump like few can imagine. As the last election, this one is just as much for all the marbles. Only this time, they know they are in a fight.

            He has to win or we are in for very dark days.

          4. My mistake. We’re in for dark days no matter who wins, they’ll just be less dark if Trump wins.

          5. now approaching 1000 a day again

            Actually it looks like from 500 to 700 something on a rolling average. From a math perspective, that is not very telling. It’s +0.00006% of the population. You and the others need better ammo in the fight to maintain irrational hysteria. As for reason, the drug overdose epidemic is relentless, which makes it a bigger problem than died with other morbidities and a dubious positive test for virus.

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