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That Eats All Your Cash Flow, Sometimes It Puts You In A Negative Situation

Two reports from the Los Angeles Times in California. “Adam Lambert couldn’t quite turn a profit in the Hollywood Hills. The ‘American Idol’ alum sold his modern digs last week for $2.92 million, or $75,000 shy of what he paid for the place in 2014.”

“It was supposed to fetch a kingly sum but ended up selling last year at auction for a relative pauper’s price. Now, the Mountain of Beverly Hills is at the center of a new lawsuit seeking to recover more than $100 million in allegedly embezzled funds. The Justice Department filed seven lawsuits Thursday in U.S. District Court in Los Angeles seeking the forfeiture of real estate and other assets purchased using funds that the suits contend were embezzled by former officials in Kuwait’s Ministry of Defense.”

“Touted as the city’s finest undeveloped piece of land, the Mountain made international headlines in 2018 when it hit the market with the highest price tag in L.A. real estate history: $1 billion. Although some dubbed the ambitious listing a publicity stunt, the prized piece of land offers more privacy and space than almost any other property in Southern California. Set at the highest point of the 90210 ZIP Code, it spans 157 acres — or roughly twice the size of Disneyland.”

“Despite plenty of hype, no buyer materialized, and the price was eventually lowered to $650 million. The $45-million debt eventually ballooned to around $200 million, and the company tried and failed to declare bankruptcy last year. As a result, the Mountain was auctioned off at a sparsely attended, unceremonious foreclosure auction behind a fountain in Pomona’s Civic Center Plaza.”

“Only one bid was placed, for a mere $100,000.”

From Mansion Global. “Wilt Chamberlain’s former Los Angeles mansion was relisted Tuesday for $14.9 million, a more than 20% price cut from when it was last listed in 2018. The 9,395-square-foot home in L.A.’s Bel Air neighborhood has six bedrooms and eight bathrooms on two and a half acres. It was last listed in June 2018 for just under $19 million, and the listing was removed in November of that year.”

From Socket Site. “Having hit a 9-year high last week, the number of homes on the market in San Francisco which have undergone at least one official price cut has ticked up another 10 percent in the absolute to 330. As such, there are now over 150 percent more reduced listings on the MLS than there were at the same time last year, six times (6x) more than there were in July of 2015, and the most reduced listings since the fourth quarter of 2011.”

The International Business Times. “Rents in San Francisco fell nearly 12% year-on-year in June as tech workers continue to leave the city, the biggest drop among all the cities in the U.S., according to Zumper. Speaking to CNBC, Zumper’s CEO Anthemos Georgiades, said, ‘Rent prices in San Francisco have historically only gone up and typically only incrementally, yet now we are seeing double-digit percent rent reductions. This is unprecedented for this generation of renters.'”

“The results of a survey conducted by the San Francisco Apartment Association (SFAA) of 300 landlords owning more than 10,000 apartments (approximately 6% of the city’s total rental units) support Zumper’s findings. Nearly 7.5% of the respondents said tenants did not opt to renew their leases in the last three months (April to June). ‘Anecdotally, we had been hearing from members that lots of their renters were turning in their keys and leaving,’ SFAA’s policy director Charley Goss told CNBC.”

“Interestingly, Bengaluru in south India, which was once the outsourcing capital of the world and is dubbed India’s Silicon Valley, is seeing a similar trend. ‘Bengaluru has witnessed a sharp drop in commercial rentals of around 20%-30% in the last few months of the lockdown when the WFH model was adopted by tech companies,’ Jayanth Kolla, a partner at Convergence Catalyst, told the International Business Times.”

The Bakersfield Californian. “Local landlords have begun feeling the pinch of Gov. Gavin Newsom’s eviction moratorium. Now, some landlords say a portion of tenants are taking advantage of the moratorium to skip out on rent payments, not only cutting into those landlords’ finances, but causing concerns about what might happen once evictions are reinstated.”

“‘As a small landlord, we’re being put in a situation where the law is not really protecting us,’ said local Realtor and property owner Tony Ramirez. ‘A lot of landlords are just in the middle, or we’re caught in this situation with tenants that are being abusive.'”

“Out of the 20 units he owns, Ramirez says around two tenants have stopped paying their rent. He admits it might not sound like much, but to a small landlord like himself it could mean the difference between making a profit or breaking even.”

“‘That eats all your cash flow, sometimes it puts you in a negative situation,’ he said, noting he’s seen a new vehicle in the driveway of one of his tenants who’s not paying. ‘I’m involved with a lot of landlords and they have the same problems.'”

“Some say the problem has worsened the longer the moratorium’s lasted. In the beginning, property owners and rental assistance agencies say renters mostly paid their rents, but as word spread about the moratorium, that’s begun to change. ‘When COVID first hit, it was pretty quiet in regards to assistance,’ said Ashley Vorhees, site director for the Bakersfield office of the Catholic Charities Diocese of Fresno, which provides rental assistance. ‘Now we’re still stuck in the COVID moment, but obviously landlords still have to pay their own bills.'”

“Although evictions may be temporarily on hold, once the governor ends the moratorium, a wave of evictions may hit Kern County and the state as landlords seek to collect on rent that’s been due for the past few months. ‘The floodgates will open and we will be swarmed with assistance calls,’ Vorhees said, adding some renters may be unable to come up with back rent, which could lead to more evictions. ‘How do people come up with $3,000 at once to pay the landlord when they struggle monthly to get by as it is?’ she said.”

From ABC Bakersfield. “Even though it might seem counter-intuitive for a realtor to discourage people from making an offer, Benny Villarreal says if he thinks it’s a bad idea he’s not afraid to tell clients to hold off. ‘People falling behind on mortgages — there are plans to help,’ he said. ‘However when you fall behind its hard to come back from it.'”

This Post Has 129 Comments
  1. Question: why are rents in San Francisco going down?

    Correct Answer: because they were too high to start with.

    I think that will be true of everything.

    1. IIRC, we were posting scads of bay aryan “free rent” Craigslist adds 4 years ago. I think their apartment bubble peaked in 2015. There’s likely a bunch of SF airbox gamblers running cash flow negative.

      1. There’s likely a bunch of SF airbox gamblers running cash flow negative.

        Some of those people will feed the alligator for a decade, hoping against hope that they come out on the right side of things. They won’t.

        1. “…hoping against hope that they come out on the right side of things….”

          Gotta look at the bright side, the debt can always be passed on to the next generation.. Who knows, by the year 2120 things might be all squared up again.

    2. If you are a home owner or business owner in a long term democrat controlled city, you are in fooked.

      Restaurants, bars, shopping, etc. closed due to COVID power mad mayors. Looting and rioting. Degraded city services. Defunded police. Streets not safe.

      The tax base has been voluntarily destroyed. But pensions will be paid. Your property taxes are about to go from insane to ludicrous.

      Those that can get out are gettin out. To the outer suburbs or small to mid cities with some sanity left to battle BLM thugs.

      There is low to no demand to buy in a big city now. It will only get worse too. Very hard to sell a house or rent commercial space without significant price cuts.

      The most truly fooked are those who purchased expensive and/or fixer upper homes or started a small business, with all life savings, in “gentrification” neighborhoods expecting that sweet equity.

  2. A comment from the Socket Site link:

    ‘There are now “10 weeks free” concessions popping up on craigslist, and it’s silly with “8 weeks free,” “gift card,” “move-in allowance,” and “pets ok.” Smaller deposits, too. All I care about is “reduced price,” and those are also increasing.’

    How are those 5% cap rates looking now?

  3. ‘Out of the 20 units he owns, Ramirez says around two tenants have stopped paying their rent. He admits it might not sound like much, but to a small landlord like himself it could mean the difference between making a profit or breaking even’

    You paid too much UHS Tony.

        1. Andy: Since when you been in the real estate business?

          Barney: Since I talked to Mr. Shlummer, the real estate man.

          Andy: Yeah

          Barney: Yeah I bumped into him in the Diner and he got me to thinking.

          Andy: Yeah

          Barney: Well here’s old man Schlummer sits around in his office all day long smoking a big fat cigar never stirs unless somebody wants to buy something. Then he takes em out in that old rattle trap car of his and if they buy he collects five percent. Now has he got it made or has he got it made?

    1. Most small landlords could not afford a 10% cut to revenue with no drop to expenses.

      Most have a ROI of 6-8%.

      1. Most small landlords of today can’t afford to even be landlords, they were gambling on shack appreciation.

    2. Realtors are pros at dumb borrowed money.

      There is nothing more satisfying than Realtors taking the financial beating of their lives.

  4. ‘sold his modern digs last week for $2.92 million, or $75,000 shy of what he paid for the place in 2014’

    These reports keep rolling in. Note the media (LA Times, cough) isn’t asking the local REIC, “Wa happened to my sweet equity?” Did you guys just lose years of double digit gains? Cuz that’s what it looks like to me.

    1. And these “close to profit” statements never figure closing costs, taxes, improvements, moving expenses, etc.

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

    “Millions of Americans who managed to hold onto their jobs amid the coronavirus pandemic have seen their incomes drop as employers slashed wages and hours to weather what they expected to be a short-term shutdown.

    Now, with the virus raging and the recession deepening, those cuts that were meant to be temporary could turn permanent — or even pave the way for further layoffs. That could portend deep damage to the labor market and the economy because so many workers who have kept their jobs have less money to spend than a few months ago.

    The numbers haven’t received the same attention as job losses, which are highlighted every week in government data. But at least 4 million U.S. workers have received pay cuts since February even as they continued working the same job, and millions more have seen pay freezes, according to economists from the Federal Reserve and University of Chicago who put out a study analyzing data from the payroll processing company ADP.”

    https://www.politico.com/news/2020/07/19/wage-cuts-economy-crisis-368508

    1. Not said in the article.

      The companies doing the white collar cutting…new tech that never made a profit in the first place.

      “Unlike job losses, which have disproportionately affected low-income workers, the pay cuts are mostly hitting workers in white-collar industries, according to the study of ADP data. Three-fourths of the cuts in pay fall within the top 40 percent of wage earners, researchers said.”

      1. That’s even better news, because it means no “pent-up demand” for $800,000 starter homes here in Denver.

    2. “Vagedes said he was able to get a delay in paying his mortgage, but all other bills and expenses have remained the same. ‘Doing everything on 20 percent less — it’s challenging,’ he said.”

      Translation: Delaying his mortgage payments subsidizes his other bill paying obligations. Since mortgage payments (and rental payments) take up such a huge chunk of one’s income such delaying of payments helps keep our stupid consumer-based economy afloat.

      For now this works but it can only work for so long. Stay tuned.

      1. What gives? Pay the mortgage first. Who cares if they reposes the fancy car. Its easier to drive a beater than it is to live in a box.

      2. For now this works but it can only work for so long. Stay tuned.

        They’ve been playing kick the can for 12 years. We’re at all time highs on most assets.

        1. To play the devil’s advocate, what would stop the financial PTB to continue the game of kick-the-can indefinitely, given how well it has already worked for several decades now.

      3. Which explains why mortgage defaults are skyrocketing and housing prices plunging.

        Santa Clara, CA Housing Prices Crater 10% YOY As Silicon Valley Lay Offs Accelerate

        https://www.zillow.com/santa-clara-ca-95051/home-values/

        *Select price from dropdown menu on first chart

        As one noted economist stated, “Housing prices are cratering and there is nothing you can do about it…..”

  6. Harbor Bluffs, FL Housing Prices Crater 14% YOY As Gulf Coast Housing Prices Drop Like A Rock

    https://www.zillow.com/harbor-bluffs-fl/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist said, “I can ask $50k for my run down 10 year old Chevy truck but where is the buyer at that price? So it is with all depreciating asset like houses and cars.”

    1. That’s just ridiculous. The virus isn’t viable on cardboard, paper or even masks for more than 72 hours. A simple week quarantine of the books would allow them to be safely given away.

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

    New York Times — Federal Aid Has So Far Averted Personal Bankruptcies, but Trouble Looms:

    “The United States went into the Great Lockdown with the most household debt in history, stagnant incomes for all but high earners and armies of people telling pollsters they were living paycheck to paycheck. Then, for millions, their paychecks stopped.

    But instead of a stampede to the bankruptcy courts, personal bankruptcy filings — a useful, if extreme, indicator of the financial health of the American consumer — dropped sharply from April through June, even as unemployment soared …

    As of mid-June, the Treasury Department had issued nearly $270 billion worth of stimulus payments to some 160 million people. Unemployment benefits, which normally average about $340 a week, were temporarily increased by $600 a week. Some unemployed people now have more income than when they were working.

    But those benefits are set to expire this month. Congress will take up the issue of whether to extend them, along with other emergency aid, when the Senate returns next week, but if no more aid is forthcoming after July — given the double-digit unemployment rate and a resurgent virus in many parts of the country — a far more dire portrait of the financial pain of millions of Americans is set to emerge in the coming months. Bankruptcy experts say consumer bankruptcy filings will then start to rise.”

    http://archive.is/Xb51f

    1. This is an article about free cheese going away:

      ‘Christopher Bolei, 63, was recently laid off from his property-management job in Oakland, Calif., which paid $75,000 a year. He and his wife haven’t paid rent on their $2,650-a-month apartment since April. Combined federal and state benefits pay Mr. Bolei $1,050 a week, about three-fourths of his prior income. Even with the federal aid, he said, he has run up around $7,500 in credit card debt, including more than $1,500 a month for medication for his wife, who has an autoimmune condition.’

      ‘Mr. Bolei has been applying for work as a dispatcher and maintenance supervisor, but so far nothing has come through. He says he doesn’t feel comfortable going back to work anyway and fears becoming an asymptomatic carrier and infecting his wife. “If I go back out and start doing maintenance supervision in the field, that’s an extremely dangerous situation,” he said. “I’m alternating between panic and depression.”

      https://www.wsj.com/articles/as-600-a-week-jobless-aid-nears-end-congress-faces-a-quandary-11595151000?mod=hp_lead_pos5

      People who think this can go on are living in fantasy land.

      1. We need Mr. Bolei to move to Florida, pretty soon we are going to have more people testing positive for coronavirus than we have people.

        1. more people testing positive for coronavirus than we have people

          Not far-fetched given the notation that accompanies FL’s data: “The numbers in the table below represent the number for whom test results were received by the Department of Health. A person can be tested by more than one laboratory and can have both positive and negative results. Therefore, the sum of the numbers in each column will be larger than the total number of people tested.”

      2. “Christopher Bolei, 63, was recently laid off from his property management job in Oakland, Calif., which paid $75,000 a year. “

        In Oakland, CA, $75k is not tall cotton. He can see the poverty line just looking over his shoulder.

        1. That depends on how long he has lived in Oakland. If he is a lifetime resident, he got in on the ground floor, or at least could have.

      3. I’m alternating between panic and depression.”

        The mental health toll of disappearing jobs and COVID-related economic disruptions in our oligarch-pillaged economy is going to be staggering. You have to wonder when the tipping point is going to be reached.

    2. But any day, she said, she may open the door and find a process server standing there with the papers for a bank’s lawsuit.

      And 90+% will never show up in court and lose by default…I’ll never understand this, you have this one chance to tell a judge you’re broke and to show you have no way to pay it back, and hope the debt collector screws up and the judge dismisses with prejudice.

      1. It’s not just a matter of showing up in court. You have to file a reply and where I live that’s $290. That is just to tell the judge you have no money and have him decide against you anyway.

        Of course you can get it waived but you must be at the same level of income for food stamps, so a lot of people don’t bother.

    3. Just anecdotal…I’m told by a few lawyers that it was hard to file or conduct any real business with any court starting in March. Courts are slowly coming back on-line so we might see a spike in bankruptcy filings soon.

  8. The Bakersfield Californian. “Although evictions may be temporarily on hold, once the governor ends the moratorium, a wave of evictions may hit Kern County and the state as landlords seek to collect on rent that’s been due for the past few months. ‘The floodgates will open and we will be swarmed with assistance calls,’ Vorhees said, adding some renters may be unable to come up with back rent, which could lead to more evictions. ‘How do people come up with $3,000 at once to pay the landlord when they struggle monthly to get by as it is?’ she said.”

    – We’re in can-kicking mode until after the Nov. 3rd election. Deferrals and forbearance will “extend and pretend” until at least after the election. I don’t think anyone has any idea what will happen then, but something’s gotta give. Somehow, it’s hard for me to imagine this as a neat and orderly process.

    – Again, this is a force majeure event. What’s needed is actual forgiveness of mortgage and rental payments. This can be accomplished by lenders forgiving loans temporarily for both single and multifamily housing, which would carry through to the tenants and mortgagor (loosely called homeowner, but actually debt donkey or loan owner). Of course the Fed, and ultimately, the taxpayer, will then provide the ex nihilo printed capital to fund the whole thing. Remember, in the U.S., only the taxpayer takes it on the chin. BTW, I’m not seeing indications of a “V”-shaped recovery. Economic growth is inversely proportional to debt, and are highly correlated with sovereign defaults. The world currently has high debt-to-GDP ratios. MMT is BS. Just ask Venezuela, former Weimar Republic, Germany, etc. Adding more debt only reduces growth and increases the likelihood of default, both of these are looming large on the horizon right now.

    “You cannot spend your way out of recession or borrow your way out of debt.” – Daniel Hannan, Member of the European Parliament

    – The view from 30K ft. The CCP virus pandemic only accelerated the popping of “The Everything Bubble.” We were at the end of the credit cycle anyway. We’ve again reached debt saturation. The pandemic will get the blame, but the U.S. taxpayer will get the bill. In that regard, I don’t think “it’s different this time.”

    “We’re essentially continuing a system where profits are privatized and…losses socialized,” – Nouriel Roubini

    1. I haven’t had any missed rents. These states that insist on deconstructing their own economies can pound sand. Arizona isn’t far from S California, but somehow they are hiding under their beds there and my tenants are doing fine. BTW, just found out this past week Arizona had the fewest CCP hospitalizations of all 50 states. This is all a big globalist Farcei. Lose your fear.

      “I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.”

      ― Frank Herbert, Dune

      https://www.goodreads.com/quotes/2-i-must-not-fear-fear-is-the-mind-killer-fear-is

      1. Not following the reply here. Was this a reply to my post, or other, or are you saying that tenants aren’t missing rent payments? Confused in Colorado.

  9. Adam Lambert couldn’t quite turn a profit in the Hollywood Hills. The ‘American Idol’ alum sold his modern digs last week for $2.92 million

    A dude I’ve never heard of was living in a $3M shack. Then again, actors who have never had a steady gig, or who do cartoon voices, also live high on the hog.

    1. Local kid who was a runner-up on 2009’s American Idol. He’s touring with Queen.

      1. He grew up performing on stage at the Poway Center for the Performing Arts, where some of my family members have occasionally played music over the years.

        1. If he’s not, I’m fairly confident he knows people that are. He had a brief stint on Glee.

  10. I always liked it the most when I lived in Arizona. Why I went back to California was because family talked me into it. Bad mistake for me. Something about Arizona I liked on a gut level.

      1. Fourth video down

        “Law and Order imposed on ANTIFA”

        with the Rawhide tune cracked me up. 🙂

        1. You can almost see those fat white ANTIFA members thinking…

          Is this really worth $50 an hour?

          as they retreat.

          1. I don’t think most of them are being paid. Keep in mind, a lot of these young people have been so completely brainwashed by our NEA indoctrination mills and the globalist media-entertainment complex that they genuinely believe they are being a force for good. They’re also trying to validate their empty and meaningless existences.

  11. Re-post from last week:

    “That is a form of racism and white supremacy and white control to say that all Black people need to be Democrat and to assume that me running is me splitting the vote. All of that information is being charged up on social media platforms by Democrats. And Democrats used to tell me, the same Democrats have threatened me. . . . The reason why this is the first day I registered to vote is because I was scared. I was told that if I voted on Trump my music career would be over. I was threatened into being in one party. I was threatened as a celebrity into being in one party. I was threatened as a Black man into the Democratic party. And that’s what the Democrats are doing, emotionally, to my people. Threatening them to the point where this white man can tell a Black man if you don’t vote for me, you’re not Black.”

    Kanye West, Forbes Magazine interview, July 8, 2020

    1. It’s called the Big Government Bribe for votes Political system. Than Big Government picks the winners and losers, and make ones they didn’t bribe pay for it.

  12. ‘Dushan County in Guizhou Province has many unfinished buildings that result in a debt of 40 billion yuan ($5.7 billion USD). Recently, an independent media, now commonly known as We Media, published a video introducing every single unfinished building in the county.’

    ‘The video went viral. Local residents revealed that the local government is extremely corrupt and the lands to build these unfinished infrastructures were purchased from the locals with low prices. Many houses on the lands were demolished by the government without notice and compensation. Local residents are being suppressed by the government for defending their rights.’

    https://www.theepochtimes.com/poor-county-in-guizhou-province-is-billions-of-dollars-in-debt_3429398.html

    There’s a video at the link. Dan says this is how they build cities in China!

      1. The Financial Times
        Coronavirus business update 30 days complimentary
        Opinion Coronavirus economic impact
        US Covid-19 surge could trigger a double-dip recession

        Markets are ignoring the possibility that severe lockdowns may be needed in many states
        Gavyn Davies
        President Donald Trump and Anthony Fauci at the White House in April. The US policy response so far has been muted
        © Leah Millis/Reuters
        Gavyn Davies 7 hours ago
        The writer is chairman of Fulcrum Asset Management

        The relentless rise in the number of new US Covid-19 infections, which is being followed by increased hospitalisation rates and fatalities in the worst affected states, suggests that Anthony Fauci of the White House coronavirus task force was justified when he recently described the deteriorating situation as a “perfect storm”.

        So far, the US policy response has been muted, certainly compared to nationwide lockdowns in other countries in March. And markets remain surprisingly relaxed, reportedly because investors are optimistic that an effective vaccine from the Oxford university or Moderna trials may be “within sight”. Those trials are highly encouraging. But even the most favourable outcome in vaccine development would come too late to save the US economy from the spread of the virus over the next three months.

        Unless public policy can control the rate of infections across the American sunbelt, there could be adverse consequences for any US economic recovery over the rest of this year. Consensus economic forecasts have not yet given much weight to this increasing risk, although the US Federal Reserve is increasingly worried.

        Fulcrum economists have developed a new model which tracks the epidemic on a state-by-state basis, based on the now-familiar SIRD model used by the Imperial College Covid-19 response team and other researchers.

        It suggests that the virus’s effective reproduction number, known as R, is now above the critical level of 1 in all but five of the US’s 50 states. Weighted by gross domestic product, this means that 95 per cent of the US economy is affected by a viral reproduction rate high enough to cause an exponential rise in the number of cases — unless something intervenes to prevent this. Other researchers have found similar results.

        This spread of R levels above 1 is the broadest it has been since the epidemic started. In March, absolute levels of R were higher in the north east, when the reproduction rate exceeded 3 for several weeks and infection numbers doubled every few days.

        In the current wave, the generally lower levels of R have slowed down the spread of the disease. Furthermore, the age distribution of the infected group is younger, and the case fatality rate within intensive care units has fallen as treatment has improved.

        As a result, there has been political resistance to full lockdowns in the most severely affected states. Unfortunately, international experience suggests that delayed lockdowns result in worse outcomes for cases and fatalities, at least in the short term.

        The key economic question now is how much damage to activity will be incurred as policy lockdowns and voluntary social distancing bring the epidemic under control. So far, the answer is very little.

        According to Harvard University economist Raj Chetty’s website, which tracks the recovery and is based on big data, US consumer expenditure has flattened since late June but not fallen substantially — even in the most affected states. Trackers based on Google searches and other big data paint a similar picture.

        Most forecasters therefore assume that there will be nothing worse than a brief period of stable activity. This would result in strongly positive growth between the second and third quarters. For example, Goldman Sachs believes the virus may be controlled by measures focused on ending indoor gatherings and promoting the wearing of face masks. Both of these have been effective in some states.

        Such measures would fall short of full stay-at-home lockdowns, permitting the economy to resume recovery. Arizona is one example of a state that has made encouraging progress. However, the downside risks are obvious.

        Fulcrum economists have modelled an alternative scenario where full lockdowns are eventually needed in states where the R is currently above 1.5, with partial lockdowns in states where R lies between 1.25 and 1.5, and no lockdowns elsewhere.

        This would lead to a large drop in activity — in effect, a double dip — of about 7 percentage points through the whole economy while the lockdowns last. If the situation persisted for three months, it would knock almost 2 percentage points from this year’s growth rate, compared to the latest consensus forecasts.

        This double dip may not be the most likely outcome, right now. But is a highly plausible worst-case scenario if the national spread of the virus is not brought under control soon.

        1. “Coronavirus business update 30 days complimentary
          Opinion Coronavirus economic impact
          US Covid-19 surge could trigger a double-dip recession
          Markets are ignoring the possibility that severe lockdowns may be needed in many states”

          https://youtu.be/ss2hULhXf04

          1. Exactly why I expect the Wall Street bovine herd to get rounded up and slaughtered again before long.

          2. Many businesses that were forced to shut-down back in March spent heavily on PPE and reorganized interior work areas with plexiglass, etc., following guidelines for reopening, and are now shut-down again, have been wiped-out.

        2. Goldman Sachs believes the virus may be controlled by measures focused on ending indoor gatherings and promoting the wearing of face masks.

          That may not be enough. Maryland is showing a small resurgence in case count. We still have mandatory masks inside retail. Could it be all from indoor dining? I think the virus is more contagious outdoors than first thought.

          1. Maryland is showing

            Maryland has just doubled the number of tests it is doing. The percent positive is as flat as a pancake. Deaths with Farce written on the certificate are next to nothing and not rising.

          2. I think the virus is more contagious outdoors than first thought.

            I haven’t seen anything to convince me of that yet.

        3. Coronavirus business update 30 days complimentary
          US banks
          Wall St traders warn of slowdown after best quarter in a decade
          Executives reflect on prime conditions created as coronavirus panic shook markets
          JPMorgan Chase boss Jamie Dimon
          After a stellar quarter for Wall Street’s top five banks, JPMorgan Chase boss Jamie Dimon suggested analysts could ‘halve’ second-quarter revenues as a predictor for the rest of the year
          © FT montage; Bloomberg
          Laura Noonan in New York and Joe Rennison in London July 17 2020

          Wall Street’s top five banks have posted their best quarter for trading in a decade after the coronavirus pandemic led to frenzied market conditions and radical interventions from central banks.

          JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup posted combined trading revenues of $33.4bn in the second quarter, their highest tally since the $33.7bn they made in the first quarter of 2010. The gains cushioned the blow of more than $20bn of provisions for loan losses on the banks’ income statements.

          But executives are already warning of a sharp drop-off. Just hours after announcing his bank’s 80 per cent rise in trading revenues from a year earlier, JPMorgan Chase boss Jamie Dimon suggested analysts could “halve” that haul as a predictor for the rest of the year. Other executives agreed with the thrust of Mr Dimon’s argument: this was a blowout quarter and unlikely to be repeated.

    1. “Poor County in Guizhou Province is Billions of Dollars in Debt”

      How is a poor country supposed to grow its GDP without burying itself in an unrepayable pile of debt?

    1. “You Keep Me Hangin’ On”

      Great song, don’t think I’ve heard it in years and possibly decades. I’m going to have to stop clicking on your songs because some of them send me down the rabbit hole and one of these days I may not find my way out.

      Mott The Hoople – All the Young Dudes

      https://youtu.be/yNHdPPJGowY

  13. Getting a good laugh from the ABC Sunday News propaganda Corona/Orange Man Bad/Portland peaceful protesters having their civil rights violated by unidentified federal officers.

  14. Check out this local listing: 16529 Calle Ana, Poway, CA 92064

    “Painted Rock Elementary! Gorgeous ONE story, where style meets function! Farmhouse appointments that “Joanna & Chip” would APPLAUD. THE latest colors, surfaces & finishes. Vaulted ceilings, incredible upgraded kitchen, sautillo tile, wide-plank flooring, new roof, Saltwater pool, paid SOLAR + a “Never lived in” darling 1 Sty Guest House (750sf, kitchen, laundry killer style). Cul-de-sac living, bucolic environs, 3 car garage, pool/spa, BBQ loggia. Owners are relocating. The quality- unfound!”

    Last sold 3/21/2019 for $1,217,700.

    1. Is this an actual sale price in 1999 for that house in that hood?

      08/06/1999 Sold $224,000 $57 Public Record

      1. It was built in 1979 and probably needed work. For comparison, my mom paid $410K on 4/22/1999 for the Encinitas property I’m currently selling. It needed a lot of work too.

          1. No sadly in 99 we were just off the 1997 income adjusted lows and the bubble had yet to really inflate. If only I weren’t 1 year out of college and debt averse…..

    2. Nothing says 1.6M like walking through the front door straight into the living room.

      Let’s see … 1.6M @ 3% over 30 years is … $$6800 per month P&I, plus another $1400 a month in property tax. Heaven knows how much it costs to insure. Probably $9000 a month altogether.

      For a fancy tract house built in 1979. In Poway, inland, far from the beach.

        1. The rugs and furniture are atrocious, but that’s just bad staging. (What is that oval table in the breakfast nook?)

          The rest of the decor is not bad, but it’s so mismatched.
          To many changes in the flooring. Nothing says $1.6 million like walking in the front door and tripping over a half-step down. They should have filled that in, or broken up the space with a railing or a closet. No shiplap or barn door — can’t say Chip and Joanna without that. The layout of the kitchen and breakfast nook is awkward — they should have spent the money to move the air return ductwork and just blown out the whole wall for open concept with the living room. I’m not a big fan of high vaulted ceilings in a bedroom. They could have at least put in some foam beamworks, or built a loft/playspace in the kids rooms.

          That said, the pool is nice and the playhouse is utterly adorbs. You could bring in some money by renting out the guest house.

          1. Yeah, it’s shiplap, but I’m used to Joanna’s white shiplap, not unpainted wood.
            Yup, that’s nice kid loft too — but a loft would look even better in the Ana house because of the higher ceilings.

            The Oakstrand house is more expensive but it’s a much better value. Twice the land, and a much nicer house. Plus it’s got even better entertainment value with that poolhouse. (could have lived without the fake rocks on the wall)

          2. fake rocks on the wall

            It’s dizzying with the Versailles pattern floors in picture 4. There’s the barn door Calle Ana is missing.

        2. And no thanks on that gold bathroom. This is one place where the gray tile would work much better. The shower is too small, and anyone taking a bath in that garden tub would be seen from the side yard and the pool. 👀

      1. For that price, it should have much newer cabinetry rather than a trendy paint color coat and the sautillo tile replaced.

      1. Good thing you’re not buying in Poway. Desirable lots requiring hundreds of thousand of additional investment are listed for twice that. You could get a nice, small manufactured home for that. And yes, prices are beyond ridiculous in CA.

          1. Schools, lot sizes, no or low HOAs and no Mello-Roos. Rancho Bernardo has been built up as 4S Ranch and has some hefty HOAs and Mello-Roos. With a child in special education, it doesn’t matter where we live in the district. He’ll be bused to whatever special day class. Having a large and safe backyard for him is what’s most important.

        1. As I’m driving into Poway yesterday with my immigrant wife I had to explain to her that a house in Poway that would be 500k in Escondido is 650 in Poway. The myth of great schools is strong. To be fair the schools are good, but performance improvement bonds are spensive!

          1. The median home price in Poway is almost 800k$. You can probably count on the fingers of one hand the number of single family homes in Poway for sale for 650k or less.

          2. Who repay the Poway Unified School District’s capital appreciation bonds, and how?

          3. Education
            Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools
            After putting together a bond that will cost taxpayers almost 10 times what they borrowed, the Poway Unified School District has become California’s poster child for a form of exotic financing.
            Will Carless
            August 6, 2012

            Last year the Poway Unified School District made a deal: It borrowed $105 million from investors to fund a final push in its decade-long effort to revamp aging schools.

            In many ways, the deal was unspectacular. Some of the money was used to pay off previous debts from delayed and over-budget construction projects. The rest went towards finishing upgrades that Poway taxpayers had been promised as far back as 2002. To a casual observer, it was just another school bond.

            But Poway Unified’s deal was far from normal.

            In 2008, voters had given the district permission to borrow more money to finish its modernization, and they had received a big promise from the elected school board in return: No tax increases.

            Without increasing taxes, the district couldn’t afford to borrow money in the conventional way. So, instead of borrowing from investors over 20 or 30 years and paying the debt down each year, like a mortgage, the district got creative.

            With advice from an Orange County financial consultant, the district borrowed the money over 40 years in a controversial loan called a capital appreciation bond. The key point for the district: It won’t make any payments on the debt for 20 years.

            And that means the district’s debt will keep getting bigger and bigger as interest on the loan piles up.

            The bottom line: For borrowing $105 million in 2011, taxpayers will end up paying investors more than $981 million by 2051, or almost 10 times what the district borrowed. That’s wildly more expensive than a typical school bond, in which a district pays back two or maybe three times what it borrowed.

            As well as being expensive, capital appreciation bonds work by tapping future growth in property values to pay today’s debts, a concept considered by many in the school bond business to be both risky and inequitable. In 1994, the state of Michigan banned school districts from issuing bonds like this, deeming them too toxic to taxpayers.

          4. Education
            Nine Years After Notorious Deal, Poway Wants Voters to OK Another School Bond
            It’s been several years since Poway Unified School District passed a bond that ignited outrage and led to statewide reforms. Now district leaders hope residents in March send millions more bond dollars their way with a promise it will be different this time around.
            Ashly McGlone
            February 4, 2020
            Poway High School could receive security and technology upgrades, as well as building renovations if 55 percent of voters approve a new $448 million bond measure in March. / Photo by Adriana Heldiz

          5. Who’s paying back ANY bond at any time? I’ve been reading a watching a lot on the financial markets, and everything is about rates and liquidity and bond trading. All they do is lend each other money to make the minimum payment. When they run out of money to make minimum payment, they get another credit card to charge the minimum payment. If a bank gets sick of getting minimum payment, they just sell the bond to some other bank. If they still can’t do it, they lower the interest rate to make the payment lower and stretch it out a little longer. They just pass these things around like hot potatoes until they print it all away. I have not ONCE seen anyone talk seriously about actually paying back principle on these bonds, not cities or states or corporations or sovereign governments. The only people who pay back debt are chumps like me.

        2. Good thing you’re not buying in Poway. Desirable lots requiring hundreds of thousand of additional investment are listed for twice that.

          It just proves that price doesn’t equal value, because the materials add up to something you could buy in the midwest for $100k. So they’re paying more than 10x that for what exactly?

          1. price doesn’t equal value

            Value is relative. As a fair-skinned redhead who has a divet in her arm following the removal of skin cancer at 34yo, I don’t value living near the beach. I don’t like or do well in sun and sand. Enough people, however, do value living near the beach. Those same people would not be happy in the midwest.

          2. Those same people would not be happy in the midwest. Plenty excellent seasonal beaches around the Great Lakes. I have spent many hours this past month enjoying some of them. I have many elderly friends & relatives who live much closer to the beaches than I. They very rarely visit them, preferring to watch TV and visit casinos.

          3. Enough people, however, do value living near the beach. Those same people would not be happy in the midwest.

            It’s a massive BUBBLE.

  15. Someone recently linked to this Derek Lowe post (forgive me for not remembering, I’m usually good about this sort of thing): https://blogs.sciencemag.org/pipeline/archives/2020/07/15/new-data-on-t-cells-and-the-coronavirus

    This comment and the responses to it echo some of my thoughts:
    “This is a dumb question, but I haven’t taken Immunology in a while. But just because antibodies in plasma wane over time doesn’t mean that individual’s aren’t protected right, Derek? What’s really important is Memory B-Cells, which can rapidly reproduce antibodies if the antigen is seen again? Have peoeple [sic] tested individuals with SARS-CoV-2 for Memory B-Cell formations?”

    Oxide might want to consider this since she’s promulgating the no permanent/long-term immunity narrative.

  16. Update on SIL’s SLC condo sale:
    – 10 offers received on first listing it
    – Highest one accepted, @ $10K over list
    – SIL’s hubby was visibly unsettled by the stress of the sales process, disturbing the ambience of a family dinner
    – FIL, himself an attorney with long experience in real estate transactions, later commented to me on how crazy the market is for them to get ten offers on a condo.

    No bubble here, folks!

    1. The wonders of mortgage and appraisal fraud…

      Culver City, CA Housing Prices Crater 24% As Los Angeles Housing Market Swirls The Bowl

      https://www.movoto.com/culver-city-ca/market-trends/

      *Select price from drop-down menu on first chart

      As a noted economist said, “A house is a rapidly depreciating asset that empties your wallet every day it owns you.”

    2. stress of the sales process

      Surprisingly stressful. My OCD kicked in and is driving my husband nuts.

      1. How much more stressful is it than the buy process? When I bought, it was a lot of work to put the financial package together, but I didn’t feel stressed out.

        1. The buying process hasn’t been fun either trying to do this 1031 exchange with an irrevocable trust. As for selling, 4 realtors scrambled to check out my property the afternoon it listed. Two properties dropped their prices $150K the next day. 217 S. El Portal is now pending. It’s kitty-corner from an Econolodge and half the lot size. Houses in coastal Encinitas vary from tear downs selling for $1.25M+ to complete rebuilds selling for $2M+. My property lies somewhere in between. It Enough has been done so it’s quite nice and livable indoors and outdoors but the bathrooms could use remodeling.

  17. Health and Science
    ‘We need to close down’Florida reports more than 10,000 new virus cases for fifth day
    Published Sun, Jul 19 2020 4:54 PM EDT
    Updated 22 Min Ago
    Will Feuer
    Key Points
    – Florida reported 12,523 new cases of the coronavirus on Saturday, marking the fifth consecutive day the hot-spot state reported more than 10,000 cases, according to the state’s health department.
    – The state has reported more than 11,865 new infections on average over the past seven days, up 29% from a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University.
    – “The residents here are terrified and I’m terrified, for the first time in my career because there’s a lack of leadership,” said Rep. Donna Shalala, D-Fla.

    Florida reported 12,523 new cases of the coronavirus on Saturday, marking the fifth consecutive day the hot-spot state reported more than new 10,000 infections, according to the state’s health department.

    The state has reported more than 11,865 new cases of Covid-19 on average over the past seven days, up 29% from a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. The Florida Department of Health says the virus has infected more than 350,047 people in the state and killed at least 4,982 people.

    1. ‘The residents here are terrified and I’m terrified, for the first time in my career because there’s a lack of leadership’

      Sounds like a political statement.

      1. “said Rep. Donna Shalala, D-Fla.”

        “Sounds like a political statement.”

        Which is what the Professor has missed since the early COVID-19 days and dire death rate predictions.

        How will we reopen states? Donna Shalala and other Democrats have national plan

        BY ALEX DAUGHERTY
        APRIL 14, 2020 11:16 AM ,

        WASHINGTON
        As President Donald Trump fights with a group of governors over who has the power to lift stay-at-home orders across the country, House Democrats led by Miami Rep. Donna Shalala are drafting a plan of their own.

        Shalala and a group of House Democrats, including Maryland Rep. and constitutional law professor Jamie Raskin, plan on Friday to introduce the Reopen America Act, a bill that would establish a comprehensive national proposal for reopening America’s economy — and ensuring it stays open by relying on science to determine when to lift social distancing measures.

        Instead of states reopening piecemeal, the Reopen America Act would give states money if they meet a national standard for reopening that would include more testing and protective equipment to make sure infection rates don’t rise. It would also create a federal board to set up widespread testing and push companies to manufacture needed equipment.

        https://www.miamiherald.com/news/coronavirus/article241986061.html

        Shalala Leads Florida Members of Congress in Calling on Gov. DeSantis to Issue Stay-at-Home Order

        July 17, 2020 | Posted in Press Releases

        Miami, FL – Today, Rep. Donna Shalala (FL-27) lead fellow members of the Florida Congressional Delegation in calling on Governor DeSantis to take dramatic, science-based action to curb the spread of the novel coronavirus by mandating stay-at-home orders and a statewide mask order. The letter is signed by Rep. Shalala and U.S. Representatives Alcee Hastings (FL-20), Debbie Wasserman Schultz (FL-24)… Read more »

        https://shalala.house.gov/news/documentquery.aspx?DocumentTypeID=27

        After Revelations of Improper Stock Sales by Rep. Shalala, Groups Demand Pelosi’s Pick for Bailout Oversight Step Down

        by Eoin Higgins, staff writer

        Progressive groups on Wednesday demanded House Democratic leadership pressure Rep. Donna Shalala to step down from a committee on oversight of the appropriation of billions of dollars in coronavirus stimulus funds after it was revealed Saturday by journalist David Dayen that the Florida Democrat failed to follow the law on disclosing stock transactions in 2019.

        https://www.commondreams.org/news/2020/04/22/after-revelations-improper-stock-sales-rep-shalala-groups-demand-pelosis-pick

        1. Maryland’s reopening already looks a lot like that.

          Anyway, the “lack of leadership” is the new buzzword against Trump. It’s all over WaPo. They’re also using the “rely on science” buzzword to dovetail into climate change post-virus.
          They aren’t fooling me. But they’ve lost ALL credibility with the science. Where were you guys when Trump went to the mat for hydroxychloroquine?

          1. Trump fights with a group of governors over who has the power

            They fight while claiming no leadership. What a joke.

          2. “Where were you guys when Trump went to the mat for hydrochloride?”

            I have seen several people including one from this area on the local news who said they were within hours of dying and begged their doctors for hydroxychloroquine and quickly recovered.

            Treatment with Hydroxychloroquine Cut Death Rate Significantly in COVID-19 Patients, Henry Ford Health System Study Shows

            July 02, 2020

            DETROIT – Treatment with hydroxychloroquine cut the death rate significantly in sick patients hospitalized with COVID-19 – and without heart-related side-effects, according to a new study published by Henry Ford Health System.

            In a large-scale retrospective analysis of 2,541 patients hospitalized between March 10 and May 2, 2020 across the system’s six hospitals, the study found 13% of those treated with hydroxychloroquine alone died compared to 26.4% not treated with hydroxychloroquine. None of the patients had documented serious heart abnormalities; however, patients were monitored for a heart condition routinely pointed to as a reason to avoid the drug as a treatment for COVID-19.

            The study was published today in the International Journal of Infectious Diseases, the peer-reviewed, open-access online publication of the International Society of Infectious Diseases (ISID.org).

            https://www.henryford.com/news/2020/07/hydro-treatment-study

            Study finds hydroxychloroquine may have boosted survival, but other researchers have doubts

            By Maggie Fox, Andrea Kane, and Elizabeth Cohen, CNN

            Updated 1:31 PM ET, Fri July 3, 2020

            “The combination of hydroxychloroquine plus azithromycin was reserved for selected patients with severe COVID-19 and with minimal cardiac risk factors,” the team wrote.
            The Henry Ford team said they believe their findings show hydroxychloroquine could be potentially useful as a treatment for coronavirus.

            “It’s important to note that in the right settings, this potentially could be a lifesaver for patients,” Dr. Steven Kalkanis, CEO of the Henry Ford Medical Group, said at the news conference.

            https://www.cnn.com/2020/07/02/health/hydroxychloroquine-coronavirus-detroit-study/index.html

        2. national plan

          Emphasizing power of the federal government instead of state and local governments. We’re experiencing a lesson in federalism.

          1. Emphasizing power of the federal government instead of state and local governments. We’re experiencing a lesson in federalism. Emphasizing one thing against another is very often part of pushing an agenda and hiding one’s real goal. We are also getting a lesson in propaganda and media distortion, no news here for the experienced HBB’ers.

          2. Emphasizing one thing against another is very often part of pushing an agenda and hiding one’s real goal.

            False dichotomies, such as today’s saving lives or saving the economy.

        3. There’s a national plan that will be executed on November 03, 2020.

          All the rioting in the world won’t stop housing prices from falling.

          DonK

          1. All the rioting in the world won’t stop housing prices from falling.

            I really doubt that Antifa or BLM give a flying fig about housing prices. If they were to get their way, rent would be abolished.

          2. All the foot stamping over falling housing prices will seem like a Saturday night squaredance compared to the brain hemorrhaging I’m gonna witness on November 3rd.

  18. BREAKING NEWS

    RON PAUL: BIG HOLES IN THE COVID ‘SPIKE’ NARRATIVE

    The virus is real, but the government reaction is political and totalitarian

    Ron Paul | Infowars.com – JULY 20, 2020

    Washington state last week revised its Covid death numbers downward when it was revealed that anyone who passed away for any reason whatsoever who also had coronavirus was listed as a “Covid-19 death” even if the cause of death had nothing to do with Covid-19.

    In South Carolina, the state health agency admitted that the “spike” in Covid deaths was only the result of delayed reporting of suspected Covid deaths.

    An analysis of reported daily Covid deaths last week compared to actual day-of-death in Houston revealed that the recent “spike” consisted largely of deaths that occurred in April through June. Why delay reporting until now?

    We do know that based on this “spike” the Democrat mayor of Houston cancelled the convention of the Texas Republican Party. Mission accomplished?

    Doesn’t it seem suspicious that so many states have experienced “delayed” reporting of deaths until Fauci and his gang of “experts” announced that we are in a new nightmare scenario?

    Last week in Florida – which is perhaps not coincidentally the location of the Republican Party’s national convention – another scandal emerged when hundreds of Covid test centers reported 100 percent positive results. Obviously this would paint a far grimmer picture of the resurgence of the virus. Orlando Health, for example, reported a positivity rate of 98 percent – a shocking level – but a further investigation revealed a true positivity rate of only 9.4 percent. Those “anomalies” were repeated throughout the state.

    “Cases” once meant individuals who displayed sufficient symptoms to be treated in medical facilities. But when the scaremongers needed a “second wave” they began reporting any positive test result as a “Covid case.” No wonder we have a “spike.”

    Politics demands that politicians be seen doing “something” rather than nothing, even if that something is more harmful than doing nothing at all. That is why Washington is so addicted to sanctions.

    We are facing the greatest assault on our civil liberties in our lifetimes. The virus is real, but the government reaction is political and totalitarian. As it falls apart, will more Americans start fighting for their liberty?

    https://www.infowars.com/

    1. Politics demands that politicians be seen doing “something” rather than nothing One thing Ron Paul left out is the complete abdication of state and federal legislatures in doing their duty. They are pretty much doing “nothing” with regard to revising / limiting executive over-reach based on what has been learned and what can be learned about the current pandemic over the last 4 months.

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