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The Industry Faces A Liquidity Crisis

Two reports from the Wall Street Journal. “Brookfield Property Partners is canceling plans to redevelop a former Vermont mall as an office and residential development, a sign that the slumping economy could be upending the firm’s strategy of buying and repurposing faltering malls. The giant real-estate firm became involved in the Burlington project in 2017. Brookfield demolished the shopping mall and planned to build apartments and a 10-story office tower. Last month, Brookfield said it is selling its interest in the project, now an empty site, to its local partner, Devonwood Investors LLC.”

“‘They understand that their reputation is at stake here,’ said Burlington Mayor Miro Weinberger, adding that Brookfield’s decision to exit without getting another comparable, deep-pocketed entity to replace it is ‘a breach of faith and a betrayal of trust.'”

“Urban office markets and other commercial real estate in major cities are experiencing their worst stretch in decades, upended by the pandemic, changes in work behavior and struggling city economies. Some pain is already being felt. After closures of urban hotels and retail stores in recent weeks, property analysts worry that the office sector could be next to feel the pinch.”

“The slide after 2008 was a valuation crisis, said James Shevlin, president of commercial real-estate firm CWCapital. Most buildings continued to produce steady income, but property values fell as capital markets seized up, leaving overleveraged owners unable to refinance their mortgages.”

“Today, the industry faces a liquidity crisis, Mr. Shevlin said, leaving many property owners without the cash to make their monthly mortgage payments. ‘If we can’t figure this stuff out by the end of the year,’ he said, ‘then we’re going to have some problems.'”

From National Mortgage News. “Multifamily mortgage originations could be down between 20% and 40% this year, according to Freddie Mac. ‘Last year’s numbers pointed to a robust and diverse multifamily lending environment, but conditions have changed with the onset of the COVID-19 pandemic, the greatest being increased uncertainty,’ said Jamie Woodwell, the MBA’s vice president of commercial real estate research. ‘Demand for refinancing because of low rates, particularly for government-backed loans, is unlikely to overcome a drop in sales transactions, which means multifamily borrowing and lending is likely to drop this year.'”

From Mortgage Professional America. “Evidence of distress in the commercial real estate realm is mounting. U.S. commercial real estate transaction activity plunged in the second quarter as the COVID-19 pandemic continues to cripple deal making. Real Capital Analytics (RCA) reports a 68% drop in transaction volume, the lowest level of a second quarter since the global financial crisis.”

“‘There’s a lot of interest in distressed properties and loans and while they do exist, there’s is still a real disconnect between buyers and sellers on what the price should be for those,’ said Carol Faber, partner and co-chair distressed property practice at Akerman Law. ‘Owners still have a perception that their property is worth more, while opportunistic buyers are just looking for a great deal and aren’t inclined to buy anything until they feel the market has reached that point.'”

“‘We’re at a tipping point. There’s no way to quantify it yet, but there will be a lot of distressed loans and properties coming up. Certain industries will be more challenged, hospitality and retail mainly, and that’s where there will probably be the most opportunities,’ she said.”

From Senior Housing News. “Covid-19 has made ‘density’ a dirty word in real estate, and senior living developers are taking heed. Some data indicate an exodus is occurring from the most densely populated urban centers in the United States, in part because people are wary of coronavirus outbreaks like the one that beleaguered New York City in the early days of the pandemic. ‘I think that you’re going to see a lot of de-urbanization,’ Anthology Senior Living President Ben Burke told SHN. For some people, Burke observed, ‘The benefits of living in an urban area are not outweighing the increased price per square foot of urban areas.'”

“Some data points suggest that a flight from the nation’s largest cities is already underway. ‘Early indicators are pointing to an exodus from many densely populated urban centers,’ according to the June 2020 National Multifamily Report from Yardi Matrix. New York City was hit hard by Covid-19 in the spring, causing people to leave the city ‘in droves,’ Bisnow reported. An excess of inventory has caused rents to drop across the Big Apple, with average rent in Manhattan declining 6.4% between March and June, according to MNS Real Estate data.”

“With the fate of so many companies and industries up in the air, finding tenants to fill mixed-use real estate development projects could become dicier. In just one high-profile example, Neiman Marcus is closing its 250,000-square-foot Hudson Yards location, creating a ‘gaping wound’ that developer Related Cos. will be hard-pressed to fill, AdWeek’s Diana Pearl wrote.”

From Multi-Housing News. “The coronavirus crisis boosted vacancies in high-end apartment properties across the U.S. as many residents fled urban centers, adding to the impact of a wave of construction. Class A multifamily vacancy rose 80 basis points to 5.7 percent between the first and second quarters of this year, driven in part by residents seeking lower-cost or more spacious homes, according to Marcus & Millichap. Overlapping with the health crisis, roughly 23,000 more apartments opened in the first half of the year than in the same period of 2019 and new absorption was down 75 percent.”

“Upscale rental units were more exposed to the trend of wealthy urban residents packing their bags during the pandemic. For example, some 420,000 people are estimated to have left New York City during March and April, representing 5 percent of the city’s population, according to a New York Times report drawing on smartphone data.”

The Washingtonian. “All those glassy, luxury buildings that have risen around the city in recent years have become emptier and less expensive since Covid-19 hit. Within the District, rents in high-end buildings are down 3.5 percent compared to last year, in large part because those apartments are having to offer discounts to attract residents. Average rent for a luxury DC apartment is currently $2,561 a month, compared to $2,649 last June.”

“Prices have been particularly affected around NoMa and H Street, where buildings are offering an average 6.3 percent discount off full-price rent, and around Capitol Riverfront and the Southwest Waterfront, where they’re knocking off 5.7 percent. Vacancies in those neighborhoods are also the highest. NoMa and H Street apartments are experiencing an 8.2 percent vacancy rate, while developments in Navy Yard and Southwest are seeing 7.7 percent vacancy. The vacancy rates in those areas were less than 5 percent at the same time last year.”

“And the supply of available apartments is only headed upward: Delta reports that over the next 36 months, more than 42,000 newly built units are expected to be completed across the DC-metro area.”

The Palm Beach Post in Florida. “Locally, the COVID-19 pandemic continues to have a devastating impact on the hotel industry and its employees, with Palm Beach County hotels experiencing occupancy rates and staffing levels far below normal. A stunning, record 32.5% contraction in the nation’s gross domestic product was no surprise to America’s hoteliers. Only 37 percent of U.S. hotels have brought back at least half of their employees.”

“Peter Ricci, Florida Atlantic University professor and director of the Hospitality & Management Program in its College of Business, said tourism and its resultant taxes drive the state’s economy. ‘Since the 1970s, Florida has relied upon tourism as either the number one or number two driver of its economy,’ Ricci said. ‘A lingering COVID-19 pandemic is certain to create tremendous budget shortfalls in 2021 and possibly longer. Every state agency and its ability to offer services will be impacted should the tax collections remain at these historically low levels.'”

“Palm Beach County has approximately 170 hotels with more than 16,000 rooms. Tourism is a leading industry in Florida and Palm Beach County. The county normally draws 7 million tourists a year with a $7 billion economic impact. Ricci said he doesn’t expect hiring levels to increase by the end of the year. He isn’t surprised by the national survey results, because locally he is hearing occupancy rates are 15% to 40%.”

“‘I have lived through SARS and 9-11, the 2008 recession and the ’80s recession, and all these other things. I have seen the industry regroup and refocus. They just can’t do that right now,’ Ricci said.”

From Bisnow on California. “Lennar Multifamily Communities, the multifamily development subsidiary of national homebuilder Lennar, has started leasing at 19th & Harrison, its new 224-unit Uptown Oakland mid-rise, the developer said last month. ‘What’s challenging for people in Oakland is that the market-rate units are getting built faster than the affordable units because it’s much harder to finance affordable housing, period,’ said Tomiquia Moss, chief executive of All Home, a Bay Area-based organization promoting economic mobility for homeless extremely low-income people.”

“‘We need a pipeline of resources and affordable housing production that is commensurate with the need, and we don’t have that right now. My worry is that we’ve overproduced the market-rate units,’ Moss said.”

“Though LMC Vice President of Development Tyler Wood said LMC ‘knew Oakland would be a competitive market when we began this project,’ the developer is offering concessions similar to those offered by other Oakland multifamily developers. Current concessions at 19th & Harrison include two months of free rent and amount to about a 16% or 17% discount off gross asking rent, according to Wood.”

From KPIX in California. “The economic fallout from the coronavirus pandemic has caused the Bay Area’s once skyrocketing rental housing market to come back to Earth. ‘The balance of power has absolutely shifted,’ says Jeff Tucker, an economist with Zillow. Tucker says there’s an opportunity to shave hundreds off your rent if you do your homework and are willing to negotiate.”

“‘If you can say, ‘There’s this vacant unit. It looks similar to mine. I think I might move there. It costs $200 or $300 less than what I’m paying now.’ That might be really convincing,’ says Tucker.”

From Socket Site in California. “The weighted average asking rent for an apartment in San Francisco has dropped another 4 percent over the past few weeks and is now down to $3,700 a month. While $3,700 a month isn’t exactly ‘cheap,’ it’s nearly 10 percent, or $400 per month, cheaper than just four months ago, 14 percent ($600) cheaper than at the same time last year and over 17 percent ($750) cheaper than a 2015-era peak of around $4,450 per month.”

“The average asking rent for a one-bedroom in the city is now back under $3,200 a month, having peaked at closer to $3,700, as well. At the same time, offers of complimentary rent and cash concessions are on the rise, driving effective rents down even more.”

From Spectrum News on California. “Embattled Los Angeles City Councilman Jose Huizar pleaded not guilty Monday to charges in a 34-count federal grand jury indictment against him in a sweeping corruption probe. Huizar was arrested and charged with racketeering in June, and now faces additional charges including bribery, money laundering, wire fraud and tax evasion in the wide-ranging probe that alleges a pay-to-play conspiracy involving Huizar, his associates and real estate developers seeking to build massive projects in Los Angeles.”

“U.S. attorney prosecutors claim Huizar led an extensive racketeering conspiracy, aimed at shaking down developers for bribes to enrich the members of the enterprise with cash and political power, in return for greenlighting real estate projects.”

“When the Luxe Hotel redevelopment project was going through the city planning process in 2017, Darryl Holter was watching closely. Holter is CEO of the Shammas Group, and his family owns the Petroleum Building next door to the Luxe. He voiced concerns about the renderings proposed by Chinese development company Shenzhen Hazens, mainly over the size and scale of the proposed multi-tower property.”

“But he also worried that the luxury condos Huizar seemed so eager to approve would price people out while possibly sitting empty. ‘I think my main objection was based on luxury housing for people that aren’t really living here. And that to me seems really wasteful. We have a housing crisis. We have a homeless crisis. These things are related. I would like to see housing for people that work for a living. People that are trying to raise a family and trying to do what the American dream is all about,’ Holter said.”

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This Post Has 76 Comments

  1. I realize this is way too long, but there’s too much happening to leave it on the cutting room floor.

    ‘Today, the industry faces a liquidity crisis, Mr. Shevlin said, leaving many property owners without the cash to make their monthly mortgage payments. ‘If we can’t figure this stuff out by the end of the year,’ he said, ‘then we’re going to have some problems’

    This is a credit event.

    1. This is a credit event.

      Un-possible. Old Yellen assured us there would never be another financial crisis “in our time.”

    2. “I realize this is way too long, but there’s too much happening to leave it on the cutting room floor.”

      Bring it on. I will risk being triggered.

    3. “This is a credit event.”

      As well as a stupidity event. Combine the two, combine credit with stupidity, and, as Buffett once said, the results can become interesting (or something like that).

    4. When have we not had a liquidity crisis? 🙄 Let ’em all go down. I have to pay my CC minimums and balance my checkbook; let them do the same.

      1. I’ve helped my son through his eight week college macroeconomics course this summer. Last night he covered the last of the reading material. The last few chapters of his textbook, by a renowned professor, were almost entirely a rechanneling of Keynes.

        The book never mentions the problems with an economic policy regime that encourages reckless gambling activities through massive risk subsidies during the good years, followed by bailouts for bankers in the bad years.
        Business as usual by Subprime Sam and his accomplices at the Fed gets the macroeconomics profession’s tacit seal of approval through benign intellectual neglect.

        1. Well, if you’re gonna run the printing press non stop, it helps to make sure the masses don’t understand that’s a problem, or better yet, get them to think that it’s something good:

          – $1000 a week if you’re unemployed
          – $1200 stim checks for everyone else
          – record low mortgage rates
          – eviction moratoriums
          – mortgage forbearance
          – student loan forbearance
          – bail outs galore

          And when inflation rears its ugly head, you can blame it on Covid.

          1. – $1000 a week if you’re unemployed

            Why do only the newly unemployed qualify for this free cheese? Why don’t the long-term unemployed qualify? Fair’s fair, right?

          3. Presumably the long-term unemployed were unemployed long before COVID showed up. If you couldn’t find a job in the pre-COVID economy with 3% unemployment, then I can see why no one wants to enable you.

          4. If you couldn’t find a job in the pre-COVID economy with 3% unemployment, then I can see why no one wants to enable you.

            Seems pretty shallow and judgmental, to me. A lot of those people have a lot of problems and need the money even more.

    5. It is most definitely a credit event.

      I was speaking to our in-house mortgage broker while thinking about doing a lateral trade for a home and either selling or renting the current SFH residence. This is one of the largest US/multi-national banks.

      The requirement is 20% down and 6 months of reserves for the purchase of a primary residence SFH which is of course what it always should have been. They are doing no investment property loans. Does not matter what your DTI or credit score is. I assume this is the same for non-employee origination as well.

      Wondering if others are seeing loan requirements shift away from risky low downs and shoddy credit scores across the board?

      1. I’ve spoken to a number of banks and people recently. Banks are finding any reason not to lend. An attorney/realtor/mortgage broker said only the government is lending at this point. He’s recently been dealing with the legal fallout from the rent and mortgage moratoriums and expects things to get ugly in the next 12-18 months.

  3. “Evidence of distress in the commercial real estate realm is mounting. U.S. commercial real estate transaction activity plunged in the second quarter as the COVID-19 pandemic continues to cripple deal making.

    The media, as usual, is lying. CRE was cratering well before the first Chinaman bit into an infected bat or scaly creature in a Wuhan wet market.

    1. The media, as usual, is lying. CRE was cratering well before the first Chinaman bit into an infected bat or scaly creature in a Wuhan wet market Chinese lab released an altered coronavirus upon the public.

  4. Real Capital Analytics (RCA) reports a 68% drop in transaction volume, the lowest level of a second quarter since the global financial crisis.”

    Is that a lot?

  5. While $3,700 a month isn’t exactly ‘cheap,’ it’s nearly 10 percent, or $400 per month, cheaper than just four months ago, 14 percent ($600) cheaper than at the same time last year and over 17 percent ($750) cheaper than a 2015-era peak of around $4,450 per month.”

    Sorry, greedhead landlords, but 17 percent off the insane peak is peanuts. Better get to sawin’ and slashin’ like you mean it if you want me to sign a lease.

  8. Florida is a mess ..I know thats a very broad brush… but as far as I am concerned Florida has lost its appeal long ago.

    1. LMAO!

      You realize that Powell could fill that crater completely, compacted and graded with $100 bills if challenged.

    2. My family got angry with me the year that I insisted we take a long detour along the way home from the Grand Canyon to visit that site.

      Once we arrived, they seemed to enjoy the experience, but the drive goes through some of the most desolate territory on the planet.

      1. some of the most desolate territory on the planet If you drive at 55 mph on some of that “open range” territory at night, you too could experience the super thrill of suddenly seeing a herd of cattle come out of the darkness & find them all blocking your path. You’ll forget the desolation right quick!

        1. A graveyard shift co-worker hit a cow standing on the highway in the dark headed to work on his motorcycle at 60-mph; a farm worker had left a gate open! Then several minutes later a drunken driver woman ran over him dragging him a short distance. He survived enduring several years of traction, fiberglass body splints, therapy and a variety of titanium hardware.

      2. I used to leave Flagstaff and drive by the crater on the way to Cholla Lake. The lake was always warm due to it being used to cool a coal fired power plant and we would windsurf there during fall and spring. It doesn’t really matter how warm the water is though, once the wind chill gets to a certain point. Hands don’t work and your exposed face feels like it was hit with a bat. Good times.

  10. Wall Street traders feel euphoric, bond traders exhibit fear, and gold buyers smell inflation.

    Which group will history show was wrong?

    1. The Financial Times
      Coronavirus business update 30 days complimentary
      US Treasury bonds
      Treasury yields plumb new depths as bond investors fret
      Debt markets are signalling concern about the US economy even if equities are not
      Colby Smith in New York 6 hours ago

      US Treasury yields closed at new lows on Tuesday as anxious bond investors continued to drive a “relentless rally” in government debt that stood in stark contrast to America’s much more optimistic equity market.

      The yield on the 10-year Treasury note dropped 0.05 percentage points to a record low 0.52 per cent, according to the US Treasury department’s daily closing calculation.

      The debt benchmark has only once briefly fallen below that number in intraday trading at the height of the coronavirus crisis. On March 9, the 10-year yield plunged to 0.31 per cent before rising again.

      On Tuesday, the yields on three-, five- and seven-year notes also closed at fresh lows.

      “What you are seeing right now is continuing angst about what the future holds,” said Patrick Leary, chief market strategist at Incapital, citing the wobbly US economic recovery in the face of persistent virus infections and delays to a new round of fiscal stimulus.

      “If you have a situation where things are not going well, the recovery is stalling and there is gridlock in terms of what is happening in Congress, you tend to see safe-haven plays.”
      …

      1. I smell cascading defaults.

        So many FBs…gotta save ’em all before someone that matters gets hurt.

    3. Here’s why the 10-year yield is a whisker away from setting a new record low
      Published: Aug. 4, 2020 at 4:01 p.m. ET
      By Sunny Oh
      The 10-year Treasury yield is a basis point away from hitting its record low close

      The yield on the U.S. Treasury market’s most watched benchmark – the 10-year note – is on the verge of falling below its previous all-time record low as investors contend with renewed concerns that the pace of economic recovery will slow for the rest of the year, following a sharp contraction in GDP in the second quarter.

      Without a new fiscal stimulus package from Congress, the expectation is for U.S. consumer spending to fall off dramatically, setting back the efforts of households and businesses to rebound from the economic devastation caused by the COVID-19 pandemic.

      “Treasury yields will continue to grind lower due to the combination of economic risks and the fact that the Fed will keep rates low for a number of years to come,” said John Canavan, lead analyst at Oxford Economics, in an interview.
      …

      1. “The 10-year Treasury yield is a basis point away from hitting its record low close”

        Seems like that should help the $30k/yr millionaires buy their next larger dream house since mortgage rates tend to follow the 10yr Treasury?

        1. There’s an uneasy tension between housing market gamblers viewing another tick lower in mortgage rates as a buy signal, and bond traders piling into safe havens in preparation for the eye of the hurricane to finish passing over just before the catastrophic arrival of the storm’s eyewall.

          1. PS A few years ago, i calculated the correlation between 30-year mortgage rates and long-term Treasurys (don’t recall if I used the 1010-year or 30-year). It was around 0.99 — near perfect correlation.

            Don’t know if the relationship has held up since QE2INFINITY…

    4. Here’s why the 10-year yield is a whisker away from setting a new record low
      Published: Aug. 4, 2020 at 4:01 p.m. ET
      By Sunny Oh
      The 10-year Treasury yield is a basis point away from hitting its record low close
      (Photo by Damir Sagolj/Getty Images)

      The yield on the U.S. Treasury market’s most watched benchmark – the 10-year note – is on the verge of falling below its previous all-time record low as investors contend with renewed concerns that the pace of economic recovery will slow for the rest of the year, following a sharp contraction in GDP in the second quarter.

      Without a new fiscal stimulus package from Congress, the expectation is for U.S. consumer spending to fall off dramatically, setting back the efforts of households and businesses to rebound from the economic devastation caused by the COVID-19 pandemic.

      “Treasury yields will continue to grind lower due to the combination of economic risks and the fact that the Fed will keep rates low for a number of years to come,” said John Canavan, lead analyst at Oxford Economics, in an interview.
      …

    7. OpinionMacroscope by Neal Kimberley
      Coronavirus recovery: gold price spike shows real fear of inflation
      No doubt the uncertainty surrounding the pandemic is a key driver of gold demand, the precious metal having been a safe-haven asset for millennia
      However, it is also possible central bank policy responses to the pandemic, while perfectly logical now, will have undesirable consequences in time
      Neal Kimberley
      Published: 5:00pm, 4 Aug, 2020
      Updated: 10:18pm, 4 Aug, 2020

      “Inflation is always and everywhere a monetary phenomenon,” the Nobel Prize-winning economist Milton Friedman wrote in 1970. With central banks firing up the printing presses in their response to the Covid-19 pandemic, global money supply is increasing rapidly and markets have noticed.

      As there’s always a risk such monetary largesse results in price inflation, markets are factoring that into their calculations. The price of gold
      has soared, hitting an all-time high last week of US$1,980.57 an ounce.

      That represented a nearly 30 per cent increase in the gold price in 2020. The rise has occurred despite clear evidence coronavirus-related economic lockdowns in countries such as China and India – both key gold consumers – has hit retail demand for gold. Gold consumption in China, which is the world’s largest producer and user of the metal, contracted by 38 per cent in the first half of 2020, according to the China Gold Association.

      Gold usage in jewellery, which makes up some two-thirds of gold used in China, shrank 42 per cent in the first half of the year. Consumer expenditure on gold coins and bars, more generally for collection or investment purposes, plummeted by 32 per cent. Even so, the gold price keeps rising.
      …

      1. The dollar will soon be in freefall as the Keynesian fraudsters at the Fed employ new tricks from their “toolbox” which in reality has only two tools: conjuring trillions more Powell Bux out of thin air, while keeping interest rates artificially suppressed.

      2. You simply can’t print recklessly and not get massive inflation, especially since trillions of government cheese is now going to the masses weekly, who can’t even hold onto it and spend it the moment it hits their account.

    1. What sort of principles lead a group to decry begotry, only to hurl bigoted epithets at peace officers?

    2. “Protesters in a Black Lives Matter march…”

      > Rep. Roger Marshall, backed by establishment Republicans, won
      > the GOP primary for a U.S. Senate seat in Kansas

      Looks like Kansas isn’t taking a knee!

  12. California is racing to reinstate its unfunded landlord rental income elimination mandate.

    1. Local
      California lawmakers race to pass rent, mortgage relief bills as state eviction moratorium set to expire
      State judicial leaders are set to lift the state moratorium on evictions as early as August 14.
      Author: Lemor Abrams
      Published: 10:25 PM PDT August 4, 2020
      Updated: 10:25 PM PDT August 4, 2020

      SAN DIEGO COUNTY, Calif. — California lawmakers are scrambling to come up with an emergency renter relief plan. Lawmakers want to keep struggling renters from getting kicked out for not paying in this pandemic.

      But they don’t have much time.

      State judicial leaders are set to lift the state moratorium on evictions as early as August 14. That’s why Democrats are pushing several bills aimed at avoiding what they call “complete catastrophe.”
      …

          1. Lots of deadbeat renters agree with you. Didn’t someone say they saw the renters with new sexi-trux?

  13. “‘I think that you’re going to see a lot of de-urbanization,’ Anthology Senior Living President Ben Burke told SHN. For some people, Burke observed, ‘The benefits of living in an urban area are not outweighing the increased price per square foot of urban areas.’”

    Or, rents and prices could drop to the point where the once booming cities become affordable again.

    Remember if you can that less than a year ago it was soaring rents and prices that were driving people out.

    And given how much rents and prices had soared the kind of reductions they are talking about — 6.5%, 3.5% — aren’t much.

    “‘We need a pipeline of resources and affordable housing production that is commensurate with the need, and we don’t have that right now. My worry is that we’ve overproduced the market-rate units.”

    Those market rate units may turn out to be affordable. Is that bad? Think about the impact on the inequality everyone is so upset about.

  14. ‘What started as a massive, boisterous party held in defiance of coronavirus-related health orders ended in gunfire early Tuesday, leaving one woman dead, four other people injured and raising new concerns about private gatherings as a way of spreading COVID-19.’

    ‘The shooting was reported about 12:45 a.m., hours after Los Angeles police were first called to the home in the 13200 block of Mulholland Drive following numerous complaints from neighbors about the size of the gathering after buses were seen dropping off partygoers.’

    https://www.latimes.com/california/story/2020-08-03/lapd-responds-to-party-at-mulholland-drive-mansion

      1. The article has a couple pix. Also from the article:

        “Ramirez said the shooting is considered a gang-related homicide. Social media activity, in part, led detectives to tie the shooting to gang activity, he added.”

    2. GlobeSt.com
      BH Properties: Wave of Bankruptcies Is Coming
      However, there are still a number of foreclosure and eviction restrictions in … Las Vegas is reliant on conferences, and Orlando is reliant on tourism, none of …
      20 hours ago

    1. You know, except for another episode in the Saga of Anti-HCQ, there has been no COVID medical news for a few days. No news on vaccines or hospital treatments or vitamin or bleach theories. Maybe all those partygoers were bored with the lack of scientific papers to read.

      But one thing I’m convinced of: I don’t anticipate a 1918-style second wave. Those waves were due to that virus being susceptible to heat, and returning with a mutation. This virus doesn’t seem to be mutating, and is susceptible only to blocking and distance. Mask up and lock down: wave recedes. Socialize and protest: wave comes back. Over and over, state after state, country after country. *WE* are the waves.

      1. This virus doesn’t seem to be mutating, Too soon and too little reliable information to tell. Generally, all viruses & bacteria mutate over time. People do too. “Lockdown” is not a possible long term strategy. Long term human survival is a group effort.

      3. *The government response* creates the waves. We don’t see death figures climbing in FL. Cases yes because how cases are measured is unadulterated rubbish and testing increased massively as the reported ‘spike in cases’ began to appear.

        1. I’ve noticed your number of tests has tapered off the past couple of weeks. I’m still following Florida “data” as it is probably a fair gauge of when our border with Canada will open. Quite important to me as my redhead first mate is on the other side.

    2. “…Maybe the end of colleges wasting billions on sports…”

      With the exception of very specialized degrees, (Medicine, Law, Engineering, etc) what is the broader purpose of college anyway?

      There is a huge unfilled labor shortage of plumbers, machinists, welders, and others who make products. Do we really need a college degree for those professions?

      For example, if you are interested in software engineering, there is so much free training content, source code, blogs, that why sit in some class?

      Not good news for many colleges and those who sell college loans.

        1. how to think

          And “how to think” was always the selling point that they used for why you should get a real computer science degree and not just “learn to code”. Without that, why bother?

      2. https://www.cnbc.com/amp/2020/08/04/the-fed-is-expected-to-make-a-major-commitment-to-ramping-up-inflation-soon.html

        We need debt to drive the inflation that’s why.

        As far as comp sci, the university education is well worth it, as long as its not one of the 50k+ per year schools financed by debt. I think this holds true for the majority of STEM majors.

        Working with someone who understands the science of state machines, computational complexity, a survey of algorithms, compiler and database construction, and so on really does give a better foundational understanding of a host of issues that arise constructing a program.

        1. Working with someone who understands the science of state machines, computational complexity, a survey of algorithms, compiler and database construction, and so on really does give a better foundational understanding of a host of issues that arise constructing a program.

          +1, in addition to compilers, processors, OS/instruction scheduling and branch prediction, floating-point math/limitations, etc.

          To be really good you need to understand a lot more than just “how to code”.

    3. One of my sons is on his college track team. Luckily he does it for fun and health reasons, as he is not at risk of being tempted into a professional sports career.

      It’s been rough to be cut off from his team and his opportunities to compete. Much to his credit, he maintains his personal fitness routine in the absence of team practice. I can’t imagine how tough this is for serious athletes at the high school, collegiate, or professional level.

  16. Interesting …
    1. What i have told (at least for downtown Seattle) is that the 2 free months count as leasing expenses? They count the full rent for the other 10 months as the cash flow position that keeps the REIT and its investors happy

    2. This will lead to a bi-frication of rental market. much older buildings will continue to be rented as they are ‘dingier/older’ but will more reasonable rents. New ‘luxury’ building that cater to the Amazon/Google/etc crowd will have to offer incentives – but will also start to be filled. So is it the 5-15 year old buildings that will suffer – and who owns these?

    ——–
    Current concessions at 19th & Harrison include two months of free rent and amount to about a 16% or 17% discount off gross asking rent, according to Wood.”

  17. Platinum is making its stealth move up, as I’ve been anticipating – up 4.6% so far today, outperforming gold and silver, but still massively underpriced, IMHO, compared to gold. Platinum, which is both a noble and precious metal, is 10X more rare than gold, and has much higher industrial usage. It should be going for at least 2.5X as much as gold, but instead can be had for around $1000 an oz compared to $2,000 for gold. As the Fed hurtles us down the road to Weimar 2.0, platinum should be a moon shot. I like the 1-oz .9999 fine Canadian Maple Leaf bullion coins, when I can find them.

    https://www.kitco.com/market/

    1. Platinum is not a monetary metal. Copper is and seems indifferent to this end of the dollar scenario.

  18. Am still watching the action in the Turkish lira, as the ECB’s extend-and-pretend will run out of road in the event of cascading Turkish developer defaults of their massive euro-denominated loans from PIIGS banks. These loans fueled a speculative building binge that has left the Istanbul skyline littered with half-finished skyscrapers in yet another malinvestment spree enabled by the central bankers and their Keynesian monetary policies.

    https://www.aljazeera.com/ajimpact/cash-crunch-sends-turkish-lira-offshore-borrowing-rate-1000-200804154004634.html

  19. Jim “Jo-Jo the Clown” Cramer, one of the financial media’s most infamous pitchmen in the run-up to the 2008 financial crash, suffered severe damage to his professional reputation with his “Bear Stearns is fine!” diatribe shortly before Bear Stearns crashed from $60 a share to $2, before being wiped out altogether. Now even Cramer is expressing disbelief at the Fed’s Ponzi markets. However, per The Narrative, he is not allowed to blame the Fed for retail investor muppets piling into the Fed’s Ponzi markets to seek yield as the Fed escalates its War on Savers and further destroys Americans’ purchasing power.

    ‘Clueless’ investors just keep driving this ‘stupidly bullish’ stock market higher, CNBC’s Jim Cramer says

    https://www.marketwatch.com/story/clueless-investors-just-keep-driving-this-stupidly-bullish-stock-market-higher-cnbcs-jim-cramer-says-2020-08-05?mod=MW_article_top_stories

    That’s CNBC “Mad Money” host Jim Cramer shaking his head at ‘clueless’ investors who ignored multiple warning signs to buy up stocks during Tuesday’s bullish trading action.

    “Never underestimate the power of enthusiastic buyers who do not know what they’re doing,” he said after the Dow Jones Industrial Average finished the session with a triple-digit gain.

    “Are any of these moves the fault of the Fed?” Cramer wrote in a separate take. “No, the fault, as Cassius tells us, is not in our stars like Trump or Powell, but in the buyers themselves.”

  20. The county of San Diego announced new, more stringent metrics that must be met in order for local schools to reopen for in-person instruction. The revised metrics have made it impossible for any San Diego County school district to physically reopen schools for in-person instruction before mid-September. Poway USD will be fully virtual through at least January 1. 😞

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