The Inevitable Will Likely Be A Deluge Of Residential Evictions And Foreclosures

1. Raleigh, NC Housing Prices Crater 14% YOY On Plunging Housing Demand

   https://www.zillow.com/raleigh-nc-27613/home-values/

   *Select price from dropdown menu on first chart

   As one Raleigh broker bemoaned, “I’ve never seen such disinterest in housing in my 20 years in this business.”

2. I kid around sometimes, but we’re into the serious as a heart attack zone. I was a public accountant for a while, corporate accountant. I’ve been involved in business my whole life. You may have heard a majority of businesses fail. That’s because it’s tough. Shut down the global economy and you’ll see many millions of businesses fail. People may think business is the names they see on the stock market. Most of what carries the US is small business. These people won’t be reopening anytime soon. Untold damage has been done and continues to be done.

   Now we see the convergence of a CRE and housing bubble collapse, mixed with a credit event. May jeebus have mercy on our souls.

   1. ‘Four months into the COVID-19 pandemic, the pink slips keep coming. With most movie theatres closed and thousands of employees awaiting recall, Cineplex Inc. said last week it was cutting about 130 full-time roles. The operator of Toronto’s Pearson International Airport is eliminating 500 positions as air travel takes a nosedive. Reeling from weak oil demand, Ovintiv Inc. (formerly Calgary-based Encana Corp.) targeted a range of positions in some 650 cuts – geologists, engineers, human resources and senior leadership, to name a few.’

      ‘WestJet Airlines Ltd. and Canadian National Railway Co. also slashed positions in recent weeks, and in what feels like an especially bad omen, the professional networking site LinkedIn Corp. said Tuesday it was cutting about 960 employees, or 6 per cent of its global work force, saying that “fewer companies, including ours, need to hire at the same volume they did previously.”

      ‘And the layoffs aren’t over yet. “The first wave was something very unique to the pandemic,” said Royce Mendes, senior economist at CIBC Capital Markets, referencing shutdowns that left employers with little choice but to trim headcount as they waited to reopen. “The second [wave] is really the underlying economic drag on employment. That’s going to be far more persistent than the first wave of layoffs, and it’s going to take a lot longer to heal.”

      ‘The drag could last years.’

      https://www.theglobeandmail.com/business/article-the-great-reset-pink-slips-pile-up-as-businesses-continue-cutting/

      1. ‘Mall closures and investments in hotels dragged down earnings this spring for Brookfield Property, which on Thursday said it lost money in the second quarter. Brookfield Property, which reports in U.S. dollars, reported a net loss of $1.512 billion, or $1.26 per unit, for the three months ending June 30. During the same period a year ago, the company earned $23 million, or 12 cents per unit, when the company had a $38 million windfall from mergers and acquisitions. Funds from operations were $178 million during the quarter, down from $362 million in the year-ago period.’

         https://www.theglobeandmail.com/business/international-business/article-hotels-mall-closures-drive-15-billion-loss-for-brookfield-property/

   2. Sad when a global frenzy of fake.$helter.$hack.price$ gets devoured in way$ knot of yer choo$ing.

      👾… munch, munch, munch … 👾👾👾👾👾👾 … 👀 …📈📈📈📈📈🚀🎆🎇🎉🎉🎉

      1. Hi Hwy! Missed your emojis!!

         1. Howdy, eye’s been in wilderness isolation, workin’ on building fire.tolerant shelters, steel pipe & rebar & cement … No cellulose.

   3. “Untold damage has been done and continues to be done.”

      Understood and wondering for months why this is not being discussed at the level of things like “we need more testing”.

      WTF do we need more testing for? You get negative results today from a test you took last week (although much more likely a false positive or a positive because you had the common cold two years ago) and you pick up a Corona covered apple at the grocery store tomorrow and the test results you got yesterday are meaningless.

      There is not one case in the whole fuqing world of a student giving a teacher the https://youtu.be/rfh4Mhp-a6U Coronavirus and yet the MSM Dr. Fow-chi Bill Gates Joe Biden (when he knows where he is) the the Professor and Maryann insist on keeping schools closed and parents unable to go back to work along with, cough-choke some political leaders demanding the continuation of an extra $600 in the unemployment checks of millions of people who weren’t making $600 a week to start with.

      “Most of what carries the US is small business.”

      But small business owners do not make big political donations like Walmart and the Big Box stores do they?

      I had one more politically incorrect sentence here but I decided not to post it.

      1. This idea that “we need more free money, one more time” shows this has been a giant can kicking exercise. What happens when that runs out? And again?

         They never shut down lotto – oh hell no.

         1. European markets closed in the red, despite the massive liquidity pumping by the central banks. That could be a harbinger of trouble ahead for the Fed’s Ponzi markets.

      2. the Professor and Maryann

         😂

   4. “Shut down the global economy and you’ll see many millions of businesses fail. People may think business is the names they see on the stock market. Most of what carries the US is small business. These people won’t be reopening anytime soon. Untold damage has been done and continues to be done.”

      – Agreed. I saw a stat. stating that 40% of closed businesses won’t likely reopen. That may be conservative.

      – My comment from yesterday’s blog post:
      “You Have Developers In The Mood, They Want To Close ‘Em Out”
      August 5, 2020

      red pill economics
      August 5, 2020 at 12:35 pm

      “Small businesses with fewer than 500 workers employ about 58 million people, almost half the private workforce, ADP Research Institute data show.”

      – Small to medium enterprises (SMEs) are the main engine for job creation, efficiency, and innovation in most countries, including the U.S. Recall that Apple started in a garage, for example.

      – SMEs mostly got the shaft from the stimulus monies, while large corps. got bailed out. This is due to a lot of factors, but includes a Byzantine bureaucracy and conditions for SME PPP funds, along with the Cantillion effect.

      https://mattstoller.substack.com/p/the-cantillon-effect-why-wall-street
      The Cantillon Effect: Why Wall Street Gets a Bailout and You Don’t
      Matt Stoller | Apr 9, 2020

      The result is further concentration of capital in the large tier Cos., which does nothing for innovation and creativity, but rather contributes to corp. bloat, and keeps many “zombie” companies alive; they’re all becoming “too big to fail.” Meanwhile SMEs are struggling, which will translate into a weaker economy in the long-term. Each cycle it’s getting worse.

      – Add to this growing government intrusion into the economy at large, and the growing size of government, which further squeezes out the remaining productive private sector, and what’s left is declining wealth and prosperity for citizens at large and the nation as a whole. Recall that government, the public sector, produces nothing, and adds no value to the economy, but rather parasitically extracts wealth from a nation for the increasingly protected elite classes. Welcome to my world. Government owning the means of production, aka Socialism, always leads to a reduction prosperity and freedoms, but the elites/oligarchs/plutocrats like it that way. “Know your place, peasant!” This works until it doesn’t. We’ll know more soon enough.

      – Add to that the enormous debt load on the country. After debt gets too high, there’s an inverse relationship between debt to growth. Most of the OECD (developed) countries have exceeded this level in terms of debt-to-GDP ratio. The U.S. is no exception, and it’s only getting worse with $T bailouts, stimulus, etc. The higher the debt, the lower the growth, due to debt service payments and debt saturation. This is true even at ZIRP. There’s no free lunch. End game soon.

      1. Always appreciate your roundups of real news, RPE. A welcome dose of sanity amidst the sea of BS we’re floating in. Keep up the good work.

         1. BR- Likewise!

            – Sidebar: It’s not often mentioned, but all of the can-kicking policies, such as deferral, forbearance, moratoriums, etc. do not cancel the rent and mortgage payments; they’re not forgiveness, but rather, the total bill comes due at the end of the can-kicking period.

            – I don’t think many can come up with several thousands of dollars when it gets real.

            – I’m a glass-half full kind of guy, but also pragmatic. At some point, the SHTF and reality bites. I’m thinking after the Nov. 3rd elections, and so probably early 2021. The Gov’t. and Fed can only delay the economic cycle (and they have), but they can’t prevent it. Humpty Dumpty.

      2. “The higher the debt, the lower the growth”

         This is why the United.$tate$.of.America should bee managed bye “Mega.bidness.per$on$”

         Proof? … When Corpooration$ where loaded with hi$torical debt$, thee $tawk.Market$ reach hi$torical.high$.

         👾 … munch, munch, munch … odd it don’t eat “Earning$” ain’t it?

         1. Proof? … When Corpooration$ where loaded with hi$torical debt$, thee $tawk.Market$ reach hi$torical.high$.

            The Fed’s stimulus-engorged Ponzi markets should not be confused with the debt-laden real economy.

      3. The public sector provides goods and services that the private sector can’t or won’t provide and does so at reasonable cost. A huge variety of things from roads, to education, to parks, to libraries, to fire protection, to courts … are provided by the public sector.

         1. does so at reasonable cost

            When the cost is more than the people being served can afford, it is no longer reasonable.

            1. I think the point was that we can’t all afford to build our own private freeways or hire our own private police force, fire department, or army. In these cases, it works best to go with government providers.

               On the other hand, housing is a private good. I’ve never seen any convincing justification for Subprime Sam’s heavy footprint in housing.

            2. we can’t all afford to build our own private freeways or hire our own private police force, fire department, or army

               We can’t? Where does the government get its money?

               Pretty sure we’re paying for it, with an inefficient middleman taking a cut and paying for it by devaluing the savings of everyone on top of taxation.

            3. Free bailouts are another questionable area for government involvement.

               Long before the advent of arguments by the likes of former Treasury Secretary Timothy Geithner to justify the Fed’s systemic risk / too-big-to-fail doctrine, there was this amazing form of financial innovation known as private insurance which provided risk protection through free market exchange. Aside from regulatory oversight, the government stayed clear.

            4. “We can’t? Where does the government get its money?”

               We the people. What I mean is that some projects require pooling resources to happen. For instance, it seems obvious that you can’t have a country without a military, unless you are willing to rely on the protection of some other country’s military. This is something that individual households cannot each do individually, at least since the day when nobles built castles with moats and high walls.

            5. For instance, it seems obvious that you can’t have a country without a military, unless you are willing to rely on the protection of some other country’s military.

               Not that I necessarily disagree, but I would suggest the American revolution is a pretty good counter argument to that statement.

               Yes, the French were absolutely instrumental, but the colonists did well for themselves, no?

            6. When the cost is more than the people being served can afford, it is no longer reasonable.

               Now think about the federal budget deficit. Even before the current mess, the gov’t was spending much more than it was taking in. Thus hiding in part the true cost of the services it provides (including the money it doles out to the states).

            7. For instance, it seems obvious that you can’t have a country without a military, unless you are willing to rely on the protection of some other country’s military.

               Not that I necessarily disagree, but I would suggest the American revolution is a pretty good counter argument to that statement.

               Yes, the French were absolutely instrumental, but the colonists did well for themselves, no?

               There was little difference between the armament levels of the colonists and the British military. To say the least, modern military forces have weapons, equipment, and resources far beyond that available to a small guerilla group. Unless said group is being supported by another country with such assets.

      4. That was good!

      5. “The result is further concentration of capital in the large tier Cos., which does nothing for innovation and creativity, but rather contributes to corp. bloat, and keeps many “zombie” companies alive;”

         This is so profoundly evil. Small businesses are closed while large corps with public stock tickers could remain open as they were deemed “essential”.

         The US is a Banana Republic with large corps essentially capturing government. Additionally if you wanted to pull off shady actions under the cover of this ‘event’ then note that they couldn’t have pulled it off without the massive centralization in all things including food production, travel, medical, etc coupled with key gov players playing along to push the nightmare.

         The destruction was not from a perhaps not so novel virus but the government response at all levels.

         Welcome to the Rez. brothers and sisters.

   5. I kid around sometimes, but we’re into the serious as a heart attack zone.

      And yet we have massive speculation in stocks and real estate going on right now. Weird.

3. Boynton Beach, FL Housing Prices Crater 10% YOY On Soaring Inventory And Mortgage Defaults

   https://www.movoto.com/boynton-beach-fl/market-trends/

   As a distinguished economist advised, “Get what you can get for your house now because it’s going to be a lot less later for years to come.”

4. ‘…If you’re a borrower and can’t make a payment at the end of forbearance, you have the option of just selling your home and buying a less expensive home or renting,’ said Karan Kaul, senior research associate at the Urban Institute’s Housing Finance Policy Center…”

   Karan Kaul couple of questions:

   1) “…just selling your home…” Selling to whom? and at what price?

   2) What color is the sky in your world?

5. We should all be worried that one in four landlords have already borrowed funds to make ends meet and almost two in five lack confidence in their ability to make ends meet over the next 90 days.’”

   Anytime an REIC shill in the MSM starts with “We should all be worried” or “we’re all in this together,” my BS detector goes off at earsplitting volume. As a renter who has prudently chosen not to buy into an unsustainable housing bubble or any of the Fed’s other asset bubbles, I have zero sympathy for speculators who play the game and lose. Landlords who buy overpriced shacks or multifamily housing in the expectation that they can charge exorbitant rents to cover their overpriced acquisitions fail to appreciate the impact of the financier oligarchy’s pillaging of the productive economy, and the middle and working classes who make their living therein.

   When something like COVID comes along, it only exacerbates existing financial stresses and pushes millions of people over their own financial tipping point – or, if they’re Democrats, they now have legal top cover to be deadbeats and stiff their landlords. Either way, I’m not about to view speculators who overextended themselves as “victims” no matter how hard the REIC shills in the MSM beat that drum.

   1. I’m not “in this together” with any of these deadbeats.

      This is the third U.S. recession of my adult life.

      1. “This is the third U.S. rece$$ion of my adult life.”

         p$haw, quit yer whinnnnning, we won all the Nation.Building War$!

6. 👀 …Thee 🍊.jesus is beginning to part thee Red legal $eas for thee lo$t $heep! ($ad)

   Landlord$ must notify tenants about eviction proceeding$ in multi-family buildings, hou$ing regulator says
   Published: Aug. 6, 2020 / By Jacob Passy

   The Federal Housing Finance Agency is also improving online tools where tenants can see whether they’re eligible for protection$

   Concerns have mounted in recent weeks that the U.S. could soon face a tidal wave of evictions. The federal eviction moratorium expired in July, and many local and state moratoriums are set to expire in the coming weeks.
   President Trump has said he may revive the federal moratorium with an executive order. The FHFA’s eviction moratorium was separate from the federal one

   Beyond now requiring tenant notifications, Fannie and Freddie are making changes to the online tools used to look up information on multifamily property loans. They are putting information about tenant protections on the tools’ landing pages and are making it easier for renters to find out if their building is backed by a Fannie or Freddie loan, which means they’re eligible for protections.

   1. “Concerns have mounted in recent weeks that the U.S. could soon face a tidal wave of evictions. The federal eviction moratorium expired in July, and many local and state moratoriums are set to expire in the coming weeks.”

      – With millions unemployed, and deferrals running out, why are there only “concerns?” Unless there’s more “extend and pretend” – likely more before the Nov. 3rd election – there will be evictions.

      – This is contract law. Governed by the rule of law. Rental agreements require tenants to pay rent and give the landlord the right to evict if noncompliance. Not rocket science, but even if gov’t. allows contracts to be broken, either the LL or the lender will have to eat it and go BK. Someone’s going to pay. No free lunch. Just not happening until after Nov. 3rd.

      – Eventually can kicking will end – likely soon after the Nov. 3rd election. I’m expecting some “rubber meets the road” economics starting in 2021. Until then, it’s a fantasy world.

      1. “Until then, it’s a fanta$y world.”

         Sun Tzu: “never undere$timate thee 🍊.jesus’$ order$.of.decree!

      2. This is contract law

         That story about the Granite Bay buyers who rented the house out temporarily and now can’t get the non-paying renters out made me think about buying with a short rent-back period. Sounds like a disaster if you rent back to the previous owner while they close on their new house and then something goes wrong and they won’t move out and the sheriff can’t kick them out…any reason why that couldn’t happen right now?

         1. Put enough of the money in escrow and deduct their rent from that?

            Why you would buy a house now with such a beautiful view of the precipice is a mystery.

            1. Put enough of the money in escrow and deduct their rent from that?

               How much is enough when everything is open ended?

            2. How much is enough

               All of it? I have no idea.

      3. It’s not just contract law. Strong property rights are also ingrained into this country’s legal fabric.

         When the dust starts to clear, I expect there to be legal challenges put forth by the landlords that got shafted and ignored on both those fronts. For them this has been a Darth Vader “I have altered the deal, pray I don’t alter it further” moment.

         1. If Biden gets in, I expect property rights to further weaken, through amplified wealth redistribution (e.g. UBI). Just seems like the trajectory of the Democrats.

      4. Eventually can kicking will end

         Perhaps not in our lifetimes. They’ve been playing kick the can for over 20 years.

7. Anybody hear anything from our esteemed master of hyperbole Lawrence Yun of the NaR?

   Seems we all got a dose of his missives practically daily during the heady ‘housing can only go up’ era.

   Maybe in hiding out in one of those empty airboxes?

8. I am waiting for foreclosures to hit Sacramento, Placer and El Dorado county in northern California. Hopefully, inventory rises and prices drop.

   1. As a few people have pointed out here for a long time, it’s the credit that controls this. As long as credit is easy, people with that access to credit are going to big up the price of everything.

      Lately we’re seeing articles about how the credit spigot is closing. The banks don’t really want to loan now. This is a very hopeful sign for what you are talking about…but can you take advantage of it when the time comes if you can’t get credit either?

      1. can you take advantage of it when the time comes if you can’t get credit either

         There may be another way to buy things in that case. If credit becomes unavailable, then a modest amount of cash will buy what must be sold. That’s how I bought my house.

         1. Like 30% cash down and finance the rest if credit becomes difficult? I have solid A+ credit and finances.

            1. Like 30% cash down and finance the rest

               No. I meant “Here’s a little cash, take it or leave it.” I qualify for credit but the house didn’t. When credit isn’t available, your personal rating is irrelevant.

      2. This is a very hopeful sign for what you are talking about…but can you take advantage of it when the time comes if you can’t get credit either?

         A very salient point, because when credit dries up, only the upper crust can get credit. So, you may want to buy that cheap house, but you will only be able to do so with 100% cash. No loan for you, buddy!

         1. Well if prices drop by 50%, those who saved can pay cash.

   2. Not happening just yet. Bay Area money looking for a new home is overwhelming smaller northern California markets.

      1. How many of those houses are you still carrying, Jingle?

9. ‘If these properties fail, a cascade of negative outcomes ensue. The impacts to the renters themselves—including concerns of evictions and lack of basic upkeep and maintenance of their units—are dire.

   Not buying it, REIC shills. What the globalist media calls “a cascade of negative outcomes” translates into true price discovery laying waste to speculator pipe dreams of easy money at the expense of financially stressed renters. The sooner the speculative excesses are purged from the system, and housing becomes affordable again, the better. Seeing speculators become cautionary tales doesn’t bother me one bit.

   1. I don’t disagree, but consider this is happening all over the world, at the same time. Some might ask, what would you have done Ben? I wouldn’t make things worse. Months ago I mentioned, if I am willing to go out to eat, and the owner is willing to open, and the cook and waiter are willing to work, aren’t we free people? So we’ve snuffed out millions of small guys/girls and we’re not close to where they said we’d be. At some point you have to put on the big boy pants and take yer chances.

      1. I don’t disagree, but consider this is happening all over the world, at the same time.

         I think Gregory Mannarino, who has his own YouTube channel, has nailed the reasons behind these wholesale shutdowns despite the massive damage inflicted on real people in the real economy. The Fed and central banks are determined to be the lenders and buyers of last resort, and their power – derived from their ability to issue debt – has grown exponentially since the start of the pandemic. Mannarino thinks that’s by design, and when you look at how this is playing out, especially the suppression of any inconvenient truths that deviate from the approved Narrative, it’s hard to disagree.

         1. Right. With every crisis, the FED gleans more control over the entire economy. For God’s sake something needs to be done with these people. They’re fawking evil.

      2. aren’t we free people

         Well that’s kinda the issue. Anti-maskers think a mask is like wearing a seat belt: if you don’t do it, you’re the only one who risks getting hurt, so who not let people have that choice and take their own risks. But masks prevent you more from spreading the virus; not as much from getting the virus. Going maskless is more akin to driving drunk. You could kill yourself, but you could also kill other drivers or pedestrians. Should we be free to drive drunk?

         My state is commie nanny, but I appreciate that we’ve had an indoor mask order in place for almost four months. I feel very safe indoors where everyone has a mask. Even so, I’ve been using N95s in case someone gets persnickety or gets too close.

      3. Going maskless is more akin to driving drunk

         That feels a bit…hyperbolic to me. Maybe more akin to vaping/smoking in public? Which I’ve not heard of folks assaulting/beating down others for doing.

         1. Well, at least you can tell who’s smoking and stay away from from them. I have no way of telling who might be contagious.

            1. I have no way of telling who might be contagious

               Fair point, though with vaping it’s harder to know until you walk into the cloud of their exhale :/

               But what you say is true for every other communicable disease, no? Yet I’ve not heard anyone comparing going to work with the a cold/the flu and drunk driving, have you?

            2. How many other deadly communicable diseases can be spread asymptomatically through casual contact? Cold and flu spread only symptomatically, don’t cause permanent damage, and aren’t deadly.

               The only other asymptomatic communicable disease are the STDs like AIDS, and that’s hardly casual contact and highly preventable.

            3. and aren’t deadly. Influenza can be deadly.

            4. telling who might be contagious. Have the existing COVID-19 virus tests been vetted to distinguish between patients emitting viral materials that do not cause any disease in contacts, and those emitting materials which can/do cause disease? Remember the existing virus tests measure (mostly) viral RNA. That RNA is most definitely NOT the true cause of COVID-19 disease. The active virion containing COVID-19 viral RNA and other key viral components is the entity that causes a COVID-19 infection, as best we can tell. So many of the “experts” bloviating all over the world seem incapable of explaining (or perhaps even understanding) critically important matters like these.

            5. The main differences between going to work with COVID-19 versus the flu seem to be the relatively more contagious nature of COVID-19, the higher case fatality rate*, and the risk of an extended period of disability with long lasting health consequences to those with severe but nonfatal cases.

               * Based on recent counts of confirmed U.S. cases that either ended in recovery or death, I estimate a case fatality rate of
               162,836 / (162,836+2,577,914) = 59 deaths per 1000, which I believe is roughly 59 times higher than the seasonal flu case fatality rate.

            6. 162,836 / (162,836+2,577,914)

               Every place is recording deaths. Not every place is recording recoveries.

               Total deaths is with coincidental positive test, not even pretending cause of death.

               It’s fun to do calculations, but with the crap for information we’re getting, not so useful.

         2. The analogy is to demonstrate who is the giver and who is the receiver, and why a maskless person is risking more than just himself. And why is this hyperbole? A young contagious person could breathe on a high-risk person in a bar and kill them as surely as if the same bloke had driven home from the bar drunk.

            1. How many other deadly communicable diseases can be spread asymptomatically through casual contact? Define “casual contact” carefully. N. meningitidis has been known to spread where people just live together, particularly in large groups like colleges & military installations. Carriers may not be symptomatic while they are spreading the disease. Bug is one of the few that can kill an otherwise healthy person in a few hours, without timely treatment.

            2. Driving drunk is pretty much a dangerous situation for the driver and anyone else who happens to be anywhere nearby on the road, under all circumstances. Two of my college friends lost their lives at young ages in head on collisions with drunk drivers.

               By contrast, going maskless is harmful mainly in the restrictive case of close personal contact between some people with the disease and others without it. I see my neighbors walking around outside in the warm San Diego sun wearing masks while I walk on the other side of the street without. Hopefully they aren’t judging me to be putting them at risk of death, especially given that I pretty much spend almost all of my time inside the quarantine cocoon of my family pod.

               So your drunk driving analogy is a bit sensationalistic.

            3. A young contagious person could breathe on a high-risk person in a bar and kill them

               If one is asymptomatic (so they’re unaware) and breathe on someone who is high-risk due to bad life choices, would you still say that the breather “killed” them?

               I’d say that’s hyperbole.

            4. High risk persons should not be present in crowded interior areas.

10. Now that the evidence is out that U.S. politicians have no qualms about passing rent moratoriums, the pool of foreigners interested in buying U.S. homes is drying up.

    1. Foreign buying of American real estate plunged before the pandemic — will COVID-19 push it even lower?
       Published: Aug. 6, 2020 at 10:01 a.m. ET
       By Jacob Passy
       International buyers purchased the smallest number of existing-homes in the U.S. since 2011 this past year
       …

    2. Who would’ve thought Rule of Law and contracts were what made foreigners want to invest in the USA!

       1. “…foreigners want to invest in the USA!…”

          According to the REIConplex, its the weather and that ‘everyone wants to live here’.

          Getting the impression here in the SoCal, that the OC is no longer the goto place for foreigners (historically Chinese) to launder money.

          IMO, even a 50% haircut would just be a starting point.

          We will see what happens.

    3. WaPo has a couple stories of protests of progressives carrying signs: “Not one more eviction.”

       1. In the riot areas, lots of “End Rent” signs.

11. Deep Dive
    Gold rising to $4,000 an ounce ‘would not be an unreasonable move,’ fund manager says
    Published: Aug. 6, 2020 at 11:35 a.m. ET
    By Philip van Doorn
    Michael Cuggino of the Permanent Portfolio makes the case that gold is still relatively cheap, despite its 35% increase this year
    …

    1. Gold rising to $4,000 an oz is pretty much a given, now that the writing is on the wall about what the Fed intends to do with the money supply. When the Fed’s MSM cheerleaders start touting the idea of “unlocking inflation” – which they claim is highly desirable – the smart money is going to hedge their wealth against what the Fed is clearly telegraphing: a massive opening of the funny money spigot.

       https://www.cnbc.com/2020/08/05/the-ballooning-money-supply-may-be-the-key-to-unlocking-inflation-in-the-us.html

    2. Maybe!

       When I first bought gas for a car it was 35¢ and gold was $40.

       We’ve seen $3.50 gasoline. Why is gold worth $4,000 rather than $400?

       1. Because crude oil discoveries are leaps and bounds beyond gold discoveries?

       2. Barrel of oil, 1/01/1970 = $1.39
          Barrel of oil, 1/01/1974 = $8.32

12. ‘Lower Manhattan’s W Hotel, a 56-story trophy building erected amid the wave of giddy real estate speculation…’

    QE is ultimately deflationary.

    1. “QE is ultimately deflationary.”

       “unlimited”
       adjective

       Having no restriction$ or control$
       Having or seeming to have no boundarie$; infinite
       Without qualification$ or exception$; ab$olute

       Powell & Munchin’$ x9 Trillion$$$$$$$$$ was a $tarting point. Adding “unlimited+” is the end point.

       Who$e a American $ociali$t now?

       1. “unlimited”

          Talk is the cheapest commodity on earth.

          1. Munchin doesn’t seem like a “$alt.of.thee.Earth” type, imhto

13. Colorado Springs, CO Housing Prices Crater 10% YOY As Toxic Rot Sets In On US Housing Market

    https://www.zillow.com/colorado-springs-co-80908/home-values/

    *Select price from dropdown menu on first chart

    As one broker conceded, “This business is built on fraud.”

    1. – I don’t see 10% price declines yet in Colorado Springs, but I do see an increase of “price reduced” houses at http://www.realtor.com. Was at 8% or less pre-pandemic and now at 12% (297/2477). These are small reducitons of $5-10K only, but some are larger. The number of reductions is trending higher.

       – Interest rates are key here, and driving prices higher in some places. Forbearance, deferral, and other forms of can-kicking are still in effect. Lenders are tightening. Having a job is starting to matter again when buying a house. Patience required.

       1. “Patience required.”

          A 70’s throwback:

          https://i.pinimg.com/originals/eb/17/16/eb171616343852a6d25c996c3fab2b8f.jpg

14. Money
    Quicken Loans IPO debuts at $18 a share, below expectations
    Company applied to list common stock on NYSE in June
    Ken Haddad, Digital Content Manager
    Derick Hutchinson, Senior Web Producer
    Published: August 6, 2020, 9:28 am

    DETROIT – Detroit-based Quicken Loans debuted their IPO on the New York Stock Exchange on Thursday with a lower-than-expected opening share price of $18.

    Rocket Cos., the parent company of Quicken Loans, will offer public shares for the first time this week, but it will be smaller than originally reported. The company originally planned to sell 150 million shares at between $20 and $22, according to the Wall Street Journal.
    …

    1. It’s a good thing that Quantitative Easing is Unlimited now!

       Economics & Business
       A COVID-19 crisis looms in the mortgage industry, experts warn
       April 16, 2020 , University of California – Berkeley

       Berkeley Haas Professors Nancy Wallace and Richard Stanton were some of the few voices to forewarn of the massive risk posed by shoddy practices in the mortgage industry prior to the 2008 financial crisis.

       Unfortunately, history seems to be repeating itself.

       More than two years ago, Wallace and Stanton again began raising the alarm that the mortgage landscape that emerged from the last crisis is dominated by “nonbank” lenders who operate with little of their own capital or access to emergency cash. It was another disaster waiting to happen, they warned, and called for increased oversight.

       No one predicted a shock the size and speed of the coronavirus pandemic, but it’s now upon us, and Wallace fears the worst. Millions of laid-off Americans won’t be able to make mortgage payments, and have been given a temporary payment reprieve by the federal rescue package. This plummeting cash flow could quickly push fragile nonbanks into bankruptcy. And since so many of the loans they service are backed by the U.S. government, that’s who will be left holding the bag.

       “The $2.2. trillion (coronavirus relief act) was the largest in history, but we’re talking about liabilities that are orders of magnitude bigger,” Wallace says. “Solutions are going to have to involve trillions of dollars. It could be the bailout of all bailouts.”

       Wallace says this new crisis will begin to show itself within the next 30 days, as people forgo their monthly payments and the highly leveraged nonbanks face margin calls from the brokers they’ve borrowed from—commercial banks like JP Morgan Chase and Wells Fargo Bank and investment banks such as Morgan Stanley. They need cash to pay these lenders, and they don’t have it. The nonbanks have already begun asking for a rescue.
       

       We asked Wallace, who has studied real estate industry financial dynamics for the past three decades, to explain this looming mortgage crisis.
       …

       1. The nonbanks$ have already begun a$king for a re$cue.

          Mega.Bank$: $uper.💪 … $hadow.Non.Con.$helter.$hack.loan.lender$: 🚽

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

    “Nearly 3 out of 4 younger millennials are concerned that the coronavirus pandemic will impact their finances, with 57% saying that Covid-19 derailed their plans for financial independence.

    For many, those plans include having their own place. But 39% of younger millennials (defined here as ages 24 to 29) say they are either planning to or have already moved back in with their parents because of the economic downturn”

    https://www.cnbc.com/2020/08/05/39-percent-of-younger-millennials-say-covid-19-has-them-moving-back-home.html

    39% is that alot?

    1. “with 57% saying that Covid-19 derailed their plans for financial independence.”

       https://youtu.be/pkYNBwCEeH4?t=30

16. “Keeping the moratorium in place for much longer, he said, would create an ‘armageddon’ of landlords going bankrupt, Vasil warned.”

    Oh Dear. Let me get you the tissue box

    “‘School starts and my kids don’t have a permanent house, right now,’ Diana Polyakov said. ‘So, I have chills. I’m going to start crying. I don’t know what to do.’ Her husband, Michael Polyakov, feels helpless. ‘We are currently $20,000 down from what we’re supposed to get for all these months that we didn’t receive the payments,’ he said.”

    “The Polyakovs said his issue with the eviction ban is not just the financial ramifications, but more importantly, the legal ones. He wants to see government officials help landlords when renters may be taking advantage of the eviction moratorium. ‘You take away the legal rights for me to protect my dream,’ Michael Polyakov said. ‘This is my dream we’re talking about — and you took it away. This is not right.’”

    I really want to give a DAMN! Really!!!

    1. Maybee a Di$ney Crui$e would $oothe their pain$, oh wait …

    2. He wants to see government officials help landlords when renters may be taking advantage of the eviction moratorium.

       Unless you’re BlackRock or some other Wall Street vulture fund, SO not going to happen, Michael.

    3. I really want to give a DAMN! Really!!!

       Perhaps you should. If small landlords get wiped out, the housing they owned will be scooped up (at fire-sale prices) by institutional investors. Consolidating even more of the country’s real property/wealth in a small number of hands is not good for most of us.

       https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/

       1. IIRC, this is what happened in 2009.

          Why didn’t these lords of the land set up an LLC to protect their personal assets such as their primary home, and keep 6 months of expenses in the bank? They could have sold off the business assets to stronger hands, folded up the business, and kept their home as they looked for other jobs. Not great, but at least the kids have a place to live. Wal-mart is hiring.

          1. Many of them did set up an LLC.

             The problem remains that without out income coming in, but a hefty payment going out each month, they are fooked. Yes, they can file file for BK, but 1) that takes time, and 2) they lose everything put into it, not to mention if the LLC owner signed a personal guarantee of any sort…

             Maybe they will eventually walk away from it without personal damage, but they still lose all they the have built up in the business entity, which might represent a lot of years lost.

             1. years lost

                The real shame is that there was ever a bubble in the first place. Malinvestment was guaranteed, and when it’s done on credit is like a sharp knife.

             2. a lot of years lost

                I have zero sympathy for investors who lose years after all the years I’ve waited for rationality to come back to the markets.

       2. The common wisdom here on this blog is that it’s better to rent than own. Who would we rather have as a landlord? Some mom-n-pop “greed head” or someone like BlackRock?

          1. Blackrock, hands down. My mom-and-pop is neglecting the crap out of our rental house and clearly doesn’t understand the negative impact of deferred maintenance.

             1. For a single property owing person, Is using a property management company to manage the rental make them mom-and-pop or not?

                In any case, both times I rented under the above scenario, it worked out rather well as I had developed a good personal relationship with the owners.

             2. Is using a property management company to manage the rental make them mom-and-pop or not?

                From my perspective it makes it more appealing as a renter, as I know there’s a professional involved who will address and take care of issues as dictated by law.

                Sadly there are too many accidental landlords out there, or amateurs who don’t understand how to run it as a long-term business.

             3. a professional involved

                My husband with a decent network to remedy problems in a relatively timely manner. That network relies on repeated business.

          2. Really lucky here. Our LL’s previous tenant was a long-term renter who lived in our place for many years before recently moving on. The home is old…maybe 40 years or so…but well maintained. Landlord leaves us alone unless we ask for help, in which case he is very responsive. I couldn’t be much happier in a rental situation.

             1. We were real lucky – left alone, except if anything needed fixing it got fixed quickly – except for not having our lease renewed both times because 1) landlord(s) wanted to move back into the house (the 1953 Usonian) and live the rest of their lives there and 2) landlord needed to sell to pay her deceased husband’s medical bills, which is when we just bought it (Casa Spiffy) from her in a very nice off-market deal.

                My old landlord actually called me the other day – they got an important piece of mail addressed to me from the the Texas AG’s office, and invited me to see to come see and tour the renovation/restoration as it is apparently almost complete (the husband is an architect and wanted to preserve all the FLW/Usonian/Mid Century details while making (invisible) upgrades to materials used, code compliance, etc) I will probably go there tomorrow afternoon.

       3. “…by institutional investors.”

          And the Fed will more or less hand them the money for free.

          Unless this time is…

    4. School starts and my kids don’t have a permanent house, right now,

       I’m sure that totally sucks not having your house. But your name is on it, so you get the Granite Bay address with access to all “10” schools…the rest you’ll just have to deal with while your kids go to those schools.

       1. Welps with schools shutdown in California, no point overpaying just because an area has great public schools, right? Hopefully, prices drop and inventory rises in Sacramento, Folsom, Roseville and Granite Bay.

          1. For now even if you don’t go into the building you still get the teachers that got hired for “your” school.

             1. Makes you wonder how long until the remote teachers are in the 3rd World?

             2. Makes you wonder how long until the remote teachers are in the 3rd World?

                Maybe for the inner city schools. Maybe even in the rural schools. But there are too many people in the burbs willing to pay any price to get an advantage for their kids to go along with that. They want total control over who teaches their kids or they will move somewhere else. That’s the only reason they live where they are now.

             3. They want total control over who teaches their kids Let them hire their kids’ teachers &/or start their own schools. Then it won’t matter how good the local schools are or aren’t.

             4. This gets us back to the public goods discussion from yesterday. It’s far more cost effective for one teacher to teach calculus to a class of thirty students than for each of those students to hire someone such as myself to teach them individually. Albeit those whom I teach may get a better education than those limited to the classroom experience, but one-on-one tutoring may be unaffordable at a societal level.

             5. How would this pandemic’s effects on education be different without the Internet? Would the state retain their teachers while schools are shutdown indefinitely?

             6. Let them hire their kids’ teachers &/or start their own schools.

                Hence the battle over charter schools anyplace where they can’t get what they want from the public schools. The real battle, of course, being over money and whether they have to pay taxes for public schools AND full freight for their private school or if they can somehow get out of having to pay for both.

             7. It’s far more cost effective for one teacher to teach calculus to a class of thirty students than for each of those students to hire someone such as myself to teach them individually.

                It’s far more cost effective for a single teacher to teach online calculus to a network of 3,000 students than it is to have a large, expensive building where a single teacher instructs 30.

             8. one-on-one tutoring may be unaffordable at a societal level Achievement of “total control” is expensive!

             9. for one teacher to teach calculus

                Calculus is an example of subjects which do not benefit from social gatherings. My calculus professor didn’t even speak in class. It was all writing on the chalk board.

             10. one-on-one tutoring

                 The school district finally got around to hiring my son’s former behavioral therapist as his 1:1 aide for the upcoming school year.

                 http://gph.is/1auFX4A

             11. “The school district finally…”

                 +1 Now you’ll have some time to frolic?

             12. time to frolic?

                 A lot less stress, especially since school will be virtual through the end of the year.

             13. Teacher are the same in 1 and 10 schools. It’s the peers that make the difference. Teachers are exempt from competition; students are not.

          2. My calculus professor didn’t even speak in class. It was all writing on the chalk board.

             Sounds like a perfect thing to learn from videos online if there is an efficient way to get answers to questions.

             1. videos online

                It worked OK with an open text book. Easy to turn the page back.

             2. Teams, Webex, Zoom, and Skype all have chatboxes. I and my coworkers found the chatboxes to be amazingly effective for asking and answering questions, especially if there are two instructors or there’s a panel discussion. One teaches and the other answers questions without disrupting the class or the meeting. More questions get answered that way.

             3. “One teaches and the other answers questions without disrupting the class or the meeting. More questions get answered that way.”

                You get more from the lecture by jotting-down the elapsed time (bookmarking) and continue to listen, and return to the bookmarks during the Q&A phase. This is one of the best features of good Podcast software rather than using a simple audio player.

17. Lumber futures are still on a tear …

    https://finviz.com/futures_charts.ashx?t=LB&p=d1

    1. All dollar-denominated commodities will be on a tear as the Fed’s debasement of the currency accelerates.

       Gold, Bitchez!

       There, I feel better for putting that out there.

       1. All dollar-denominated commodities

          Don’t forget about art, classic cars and Houses! Tens of millions of people, countries even, who can’t find enough dollars to pay their debts will be buying everything in sight. Everything.

          Or not.

          1. Got all the violins, cars, and guitars I need to stay happy and mobile. And renting a place we like. I’m good…

       2. Gold?

          Eye’s been contemplatin’ gettin’ my bucket & screen & pan to put asunder my deeth.👾 isolation blues & spend time down @ the creek.
          (skeeters & mountain lions, ugh!)

          Got Tanzanite?

          https://news.yahoo.com/miner-discovered-largest-tanzanite-gems-185901123.html

       3. KingDollar my good friend….. KingDollar.

          1. Do you look at the Fed’s plan to financially engineer inflation as DOA?

             1. Being that they are finally starting to give unprecedented amounts of free money to the proles, which is setting the stage for UBI, this could definitely lead to some real inflation. 1000 free dollars a week will have consequences.

             2. Look no further for your consequences than the furrowed puzzlement on Uncle Warren’s face as Millennial day traders use their UBI monies to drive the headline stock market indexes to a new record high levels every day.

    2. Can you get webcam futures?

       There’s been a crazy run on items needed for kids ‘going to back to school but remote’ – Ikea’s across the country are sold out of most desks, and good luck finding a Logitech Webcam at twice the price as last year.

       1. good luck finding a Logitech Webcam Many of the current new laptops & Chromebooks have built in cameras & won’t need to add on for video conferencing.

          1. True, but when you start trying to do after school dance classes and such over zoom a good camera for the main PC connected to the big family room TV starts to look really nice.

             1. after school dance classes and such over zoom a good camera Many regular digital cameras are more than capable of serving in that capacity. Granted they are not as simple as webcams, but then Zoom isn’t really a simple technology. If people are willing to learn to use what they already have, they can adapt, improvise & overcome. They might even be willing to go so far as to read their device’s user manuals, perish the thought!

18. “Nevada lawmakers passed a bill on Monday to provide renters additional means to fight evictions outside traditional court hearings once the state’s eviction moratorium is lifted on Sept. 1.

    …The bill will allow courts to delay evictions for up to 30 days, during which tenants and landlords can pursue “alternative dispute resolution,” such as third-party mediation.

    …A report written by the Guinn Center for Policy Priorities projected from 118,00 to 142,000 households could face evictions in September. ”

    https://www.fox5vegas.com/coronavirus/nevada-legislature-passes-pandemic-eviction-protections/article_bbe80dcc-d60a-11ea-8aba-7397edb70f31.html

    1. …The bill will allow courts to delay evictions for up to 30 days, during which tenants and landlords can pursue “alternative dispute resolution,” such as third-party mediation.

       Huh? I think it’s pretty much “give me my fawking rent money, or get your asz out.” Is there really anything else to talk about?

19. It’s the price, stupid!

    Mortgage rates fall to a record low for the eighth time this year, making buying a home more affordable for many Americans
    Published: Aug. 6, 2020 at 10:20 a.m. ET
    By Jacob Passy
    While home buyers may have plenty of options for cheap financing, they won’t have much choice about what properties they can purchase
    …

    1. “Mortgage rates fall to a record low for the eighth time this year, making buying a home more affordable for many Americans”

       – 1) Home is where the heart is. A house is only a shack; it’s now a commodity, just like oil or lumber. No emotional attachment there.

       – 2) Shack price is inversely proportional to interest rates. The Fed is still goosing the housing market via rates, even though lenders are tightening. Prices are, in many places, up due to mostly historically low mortgage rates. High prices not compatible with affordability. We’re getting to be un-affordable again, since rates are down.

       – 3) Buying now is risky, IMHO, since we haven’t yet seen the other side of the stimulus spending yet, moratoriums, deferrals, forbearance are still in place. Unemployment is extremely high.

       – 4) A true picture of unemployment is unclear at least to me. Unemployment is high (millions), but it’s two-tier, with low income/gig economy taking it on the chin, while many of the higher income cohorts are fairing pretty well, so far. Employment, along with interest rates, drive a conventional market (i.e. absent speculation), but nothing has been normal for a while now. I’m looking for clearer guidance in 2021. Based on previous asset bubble behavior, I don’t think it’s different this time. Time will tell.

20. Scientist, #MeToo Advocate, Admits To Making Up Professor Who ‘Fought’ For Social Justice Issues, ‘Died’ Of Coronavirus

    byPen ka Arsova
    August 5, 2020

    The popular Arizona State University professor who often discussed social justice issues and purportedly died after a battle with the coronavirus actually never existed. The person behind the hoax account was BethAnn McLaughlin, a neuroscientist, and founder of the #MeTooSTEM advocacy group.

    The story: McLaughlin, who last week announced the fake professor’s death, told the New York Times this week that she was operating the account.

    “I take full responsibility for my involvement in creating the @sciencing_bi Twitter account. My actions are inexcusable. I apologize without reservation to all the people I hurt,” she said in a statement.

    The Twitter account, @Sciencing_Bi, had been frequently posting about diversity, sexual harassment, and discrimination in the world of science since 2016. Based on posts and comments, the account was believed to belong to an LGBTQ Native American Anthropology professor who worked at the Arizona State University.

    It stated that the made-up scientist attended Catholic school, “fled the south because of their oppression of queer folk,” and later identified as a Hopi. @Sciencing_Bi interacted and formed connections with other scientists on Twitter, including McLaughlin, and played an important role in promoting a petition that pushed for her promotion at Vanderbilt University.

    The COVID-19 diagnosis: In April this year, the account announcing contracting the coronavirus and detailed a long struggle with the disease in the following weeks. It claimed the scientists got infected because the university forced her to go to work and that they cut her salary by 15% when she was in the hospital. On July 31, McLaughlin announced that the scientist she made up is dead.

    https://www.lacortenews.com/n/scientist-metoo-advocate-admits-to-making-up-professor-who-fought-for-social-justice-issues-died-of-coronavirus

    1. identified as a Hopi

       Hilarious.

       I wonder if the Canadian government would let me cross at the reservation if I identified as a Mohawk.

       1. I self-identify as a Yemeni lesbian for reparations purposes. Ya gotta use #ClownWorld rules to your own advantage sometimes.

          1. I self-identify as a deathclaw…

    2. LGBTQ Native American Anthropology professor who worked at the Arizona State University.

       Crap, the account has been suspended. I was curious as to how many followers this clown had. I was hoping that at least ONE of these genius followers would have looked up the Department of Anthropology at AZ state to try to identify this professor. How many AZ State Native American professors of Anthropology could there possibly be? I’d be surprised if there were more than 40 faculty total.

       I apologize without reservation

       Yeah, I bet your Native American professor did too. 🤪

       1. Yeah, I bet your Native American professor did too. 🤪

          Let’s leave Senator Running Deer out of this.

          1. I was trying to make a joke.

             But whoh, I didn’t realize you could italicize the emojis. That zany emoji looks even zanier in italics. Hmmm…

             🙄😱😷🤒🍆🏳‍🌈🍺

21. Oh dear…when the sawin’ and slashin’ comes to the “ultra-luxury” RE segment that has been the playground of the Fed’s Wall Street grifter cohorts, you know the meltdown is starting to get real.

    https://www.forbes.com/sites/lisachamoff/2020/08/03/manhattan-developer-deeply-discounts-unsold-units-in-ultra-luxury-peter-marino-building-on-the-high-line/#37de45101ec3

22. PMs on another tear today. While the average prole cannot afford a 1-oz gold coin going for more than $2100 with premiums, if it can be found at all, 1-oz silver coins are a lot more affordable, and are still a relative bargain even though prices jumped another 7.3% today.

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

    1. While Kitco lists silver for $28.99 an oz, the lowest real-world price I could find on Ebay was $35.97 an oz. That’s a steep premium, but at the rate the Fed is increasing the money supply, prices are probably headed far higher.

       1. The 10% fee charged to the seller by Ebay sucks, though.

          1. They’re still clearing more than they would at the dealer.

    2. How come stocks can spiral upwards for months on end with no expression of doubts by the MSM, while a gold rally of a few days is immediately labeled “euphoric”?

       Metals Stocks
       Gold prices log fifth record in a row as bullion enters ‘euphoric phase’ of rally
       Published: Aug. 6, 2020 at 3:10 p.m. ET
       By Mark DeCambre
       …

23. The FBI might give the really big criminals on Wall Street a free pass, but it looks like they might at least be coming down on some of the looting scumbags who cleaned out malls during the BLM-Antifa protests.

    https://www.vice.com/en_us/article/m7jxky/jake-pauls-house-raided-by-swat-team-in-connection-to-looting-during-protests

    1. All the low-end gibs went to the low-information gibs grabbers, sh*tting in their own neighborhoods and destroying local businesses.

       The first week of June high-end loots in Manhattan were executed with the precision of Zero Dark Thirty. I watched alot of it live on YouTube, there were no police there to stop any of it.

       What happened to “Umbrella Guy” from Minneapolis smashing out all the windows at Autozone?

24. Economy / China Economy
    China omits US dollar from forex trading fee waivers in bid to bolster yuan
    – China’s exchange regulator says waiving of transaction fees supports the national belt and road strategy, but Chinese banks still mainly use the US dollar in cross-border deals
    – The euro, British pound, Japanese yen, Hong Kong dollar and Australian dollar are also not exempt from trading fees
    Topic | China economy
    Amanda Lee in Beijing
    Published: 5:37pm, 5 Aug, 2020
    …

    1. https://www.scmp.com/economy/china-economy/article/3096122/china-omits-us-dollar-forex-trading-fee-waivers-bid-bolster

25. We like to often take our walks around Ellis pond to see the ducks, and the other day walking by this, I noticed it was sprouting a new ‘for sale’ sign.

    https://www.redfin.com/WA/Mercer-Island/4667-91st-Ave-SE-98040/home/8184928

    Asking $2.4M which is totally out of whack for the neighborhood. At very best maybe $1.6-1.7M? and yet we saw plenty of showing activity. I’ll be curious to see what happens.

    1. I like the clean lines, but the house feels very… well, flat and exposed, especially from the outside. Too many windows for that type of property. Plus I’m used to basements or crawl spaces.

       1. I’m used to basements or crawl spaces. I consider basements “instant swimming pools” — just add water!

26. ‘Governor Newsom said — and I wrote it down because I wanted to make sure I got it right –, that everyone is going to have to make sacrifices, but a place to live shouldn’t be one of them,’ said Richard Szerman of Alta Realty Group. ‘What is foreclosing on someone’s home during a pandemic if not denying them their place to live?’”

    Newsom said “A PLACE TO LIVE” not “THEIR PLACE TO LIVE.” You wrote it down and still got it wrong.

27. Calpers not doing so great

    Meng, in an interview, said he’d left to focus on his health and family. But a statement from the state controller pointed to something else: an unspecified lapse in judgment that breached conflict-of-interest rules and, even more, hinted at wider oversight problems inside the organization.

    “While Calpers saw its assets plunge by $70 billion in late February and March as the Covid-19 crisis hurt global markets, it has said it recovered almost all of that value by June. Meng said Thursday that the recovery was evidence that his changes had been effective.”

    HAHA I don’t think that ( his changes) had anything to do with the recovery the market came right back you didn’t have to do anything.

    1. You just needed to HODL and wait for the Fed’s printing press to work its magic in the asset markets.

28. Asian markets are all in the red, and futures are down. Have the Fed’s Ponzi markets finally topped out?

    1. Not even close.

29. Another day, another 1000+ U.S. COVID-19 deaths reported. I thought this was supposed to end this summer?

    1. The Financial Times
       12:47am Gary Jones
       US death toll jumps by more than 1,000 for third day running
       Peter Wells

       US coronavirus deaths rose by more than 1,000 for the third day in a row, while the number of new cases increased by the most in five days.

       A further 1,251 people died, according to Covid Tracking Project data, down from 1,403 on Wednesday.

       Texas (306) had one of its biggest one-day jumps in deaths, while California (166) and Florida (120) also revealed large increases. Tennessee (42) was the only state to report a record jump in fatalities.The national death toll, which stands at over 151,000 has risen by more than 1,000 a day 14 times in the past 17 days.

       A further 54,184 people in the US tested positive for coronavirus over the past 24 hours, up from 52,265 on Wednesday. It was the fifth day in a row that new infections have risen by fewer than 55,000 a day.

       Texas (7,598), Florida (7,650) and California (5,258) reported the largest jumps in cases. Indiana (1,040) was the only state to reveal a record single-day rise, according to Financial Times analysis of Covid Tracking Project data.
       …

    2. Few flu-type viruses survive the light and heat of summertime. It was entirely reasonable to start off with the hypothesis that this virus would subside in summer as well. When new data comes in, it is natural to change the hypothesis.

       Being wrong is not the same as lying, although you’d never know it from today’s political climate.

       1. Being wrong is not the same as lying I’ve been wrong most of my life, and that’s no lie!

          1. Funny! Marx bros.funny.

          2. “I’ve been wrong most of my life…”

             Hehe…good thing they call it practicing. 🙂

             1. Realtor:

                “I lie all the time, and that’s the truth.”

       2. Some of the loudest politicians who ever spoke into a microphone seem to imagine scientists as some kid of mystical savants who are magically endowed with all the answers before even seeing the data.

          The reality was captured well by John Maynard Keynes, whose familial social network included numeros historically renowned scientists:

          When the facts change, I change my mind.

          1. When the facts change, I change my mind.

             I think the frustration with science for some is that theories can change but facts can’t. So obviously what was being treated as a fact actually wasn’t actually a fact…and some people are getting tired of getting bludgeoned with facts that aren’t.

          2. “…John Maynard Keynes…”

             I’m working my way through, “Confessions of an Economic Hitman,” and Perkins suggests that Keynesian economics made its debut in the early 70’s whereas the Wiki page says after the 30’s depression. To me, printing away the recession(s) such as the ones resulting from the OPEC oil crisis would be Keynesian economics. Professor?

    3. another 1000+ U.S. COVID-19 deaths reported. I thought this was supposed to end this summer? Months ago some experts were predicting far more deaths than that. Other experts predict the pandemic will not end unless & until effective treatments &/or vaccines will be found.

       1. “Months ago some experts were predicting far more deaths than that.”

          IIRC, the most dire scenarios assumed no quarantine measures.

          You can’t have an intelligent discussion of predictions without qualifying them by their underlying assumptions.

          1. “You can’t have an intelligent discu$$ion of prediction$ without qualifying them by their underlying a$$umption$.”

             QE “UNLIMITED+” x9 Trillion$ $$$$$$$$ = alotta.a$$umption$

             🚀👆📈📈📈📈📈📈📈📈📈🏁🎇🎆🎉🎉🎉👏

          2. The worst was over in NY by the time the quarantine measures started. The models didn’t work.

             It is curious that now quarantine is over here and there was no increase in deaths. Daily deaths in NY are insignificant. Has everyone already been exposed and all the super susceptible died? If so, closing the state was a futile exercise.

             1. Daily deaths in NY are insignificant. Has everyone already been exposed and all the super susceptible died? Yes, that is very mysterious, deserves close investigation, publicity & discussion. I doubt any of that will take place.

             2. I doubt any of that will take place.

                Chris M at Peak Prosperity investigated and discussed this concept on both Tuesday and Thursday this week. But I doubt he’ll get and publicity, as he is an HCQ pusher.

             3. What is the “concept”?

             4. Chris’s “XYZ” concept is that a lot of exposed people already had some cross-immunity, more exposed people had a good general immune system and were asymptomatic, and only 10-20% ever had symptoms. Only the symptomatic people show antibodies. Hence, the theory is that places like NYC achieved a form of “herd immunity” with only 10-20% positive antibodies. I’m skeptical.

             5. Only the symptomatic people show antibodies.

                How is that possible?

                This is beyond crazy.

             6. Chris’ expertise is neurotoxicology.

       2. Technically, Keynesian exons never been tried since Keynes posited that governments would save in the good times and then spend heavily in the lean years. If you only follow the theory 50% of the time, you ain’t a Keynesian.

          1. The theory can’t be followed since no one can know when to save and when to spend. It’s only known in hindsight when you’re looking at some charts of the past.

30. Not all professional economists are spewing a barrage of delusion-fueled lies about the Pandemic Depression.

    1. I guess as long as the Wall Street bull herd keeps chasing after its Golden Crosses, we needn’t be overly concerned about the Pandemic Depression.

       1. Market Extra
          A bullish ‘golden cross’ forms in the Dow industrials
          Last Updated: Aug. 6, 2020 at 9:57 p.m. ET
          First Published: Aug. 6, 2020 at 3:00 p.m. ET
          By Mark DeCambre
          The last time a golden cross formed in the Dow was March of 2019
          …

          1. Why is there always a fly in the ointment?

             Associated Press
             Asian markets skid as China-U.S. trade tensions rise
             Published: Aug. 7, 2020 at 12:14 a.m. ET
             By Associated Press
             Stocks sink in Hong Kong, Shanghai
             …

    2. Not all professional economists are spewing a barrage of delusion-fueled lies Whenever I feel the need for a barrage of delusion-fueled lies, I browse the internet, particularly social media. They never let me down!

       1. And for that reason, I largely ignore social media, this site excepted. Yesterday I removed the FB app from my phone. It was a liberating experience that freed up a lot of wasted memory!

31. Beware the unequivocal economists who state the truth.

    The Pandemic Depression
    The Global Economy Will Never Be the Same
    By Carmen Reinhart and Vincent Reinhart
    September/October 2020
    Standing in line at a soup kitchen in Cape Town, South Africa, June 2020
    Dwayne Senior / Eyevine / Redux

    The COVID-19 pandemic poses a once-in-a-generation threat to the world’s population. Although this is not the first disease outbreak to spread around the globe, it is the first one that governments have so fiercely combated. Mitigation efforts—including lockdowns and travel bans—have attempted to slow the rate of infections to conserve available medical resources. To fund these and other public health measures, governments around the world have deployed economic firepower on a scale rarely seen before.

    Although dubbed a “global financial crisis,” the downturn that began in 2008 was largely a banking crisis in 11 advanced economies. Supported by double-digit growth in China, high commodity prices, and lean balance sheets, emerging markets proved quite resilient to the turmoil of the last global crisis. The current economic slowdown is different. The shared nature of this shock—the novel coronavirus does not respect national borders—has put a larger proportion of the global community in recession than at any other time since the Great Depression. As a result, the recovery will not be as robust or rapid as the downturn. And ultimately, the fiscal and monetary policies used to combat the contraction will mitigate, rather than eliminate, the economic losses, leaving an extended stretch of time before the global economy claws back to where it was at the start of 2020.

    The pandemic has created a massive economic contraction that will be followed by a financial crisis in many parts of the globe, as nonperforming corporate loans accumulate alongside bankruptcies. Sovereign defaults in the developing world are also poised to spike. This crisis will follow a path similar to the one the last crisis took, except worse, commensurate with the scale and scope of the collapse in global economic activity. And the crisis will hit lower-income households and countries harder than their wealthier counterparts. Indeed, the World Bank estimates that as many as 60 million people globally will be pushed into extreme poverty as a result of the pandemic. The global economy can be expected to run differently as a result, as balance sheets in many countries slip deeper into the red and the once inexorable march of globalization grinds to a halt.
    …

    1. Reading this article clearly leads to only one conclusion: There’s never been a better time to buy!

       ($nark tags omitted…)

32. I read the whole article, which I found thought provoking and sobering.

    However, I disagree with this premise:

    “After the crisis in 2008, governments did nothing to change the risk and return preferences of investors. Instead, they made it more expensive for the regulated community—that is, commercial banks, especially big ones—to accommodate the demand for lower-quality loans by introducing leverage and quality-of-asset restrictions, stress tests, and so-called living wills. The result of this trend was the rise of shadow banks, a cohort of largely unregulated financial institutions. Central banks are now dealing with new assets and new counterparties because public policy intentionally pushed out the commercial banks that had previously supported illiquid firms and governments.”

    The rise of the shadow banks was the consequence of a societal and legislative to turn a blind eye to the problem of permitting ‘nonbanks’ to operate outside the regulatory framework developed to avoid banking crises. Rather than enabling reckless financial behavior by ignoring or even encouraging it, we could have passed laws that make such behaviors illegal, with stiff prison sentences for those who engage in it.

    Our banking regulators have made this bed, and they can enjoy lying in it once again, just as when subprime lending cratered in 2007.

    1. ‘societal and legislative choice to turn a blind eye’

       1. legislative choice has so far mostly been (1) get re-elected (2) draw on or legislate all the bennies possible or tolerable for legislators and their friends and (3) learn as little as possible and legislate as little as possible otherwise.

       2. Agree Prof but I don’t agree that it is anything other than legislative as the societal oversight has been largely neutered. This seemed to be evident with the co-opting of the early Tea Party movement which was a direct response to the bailouts post the 08-09 crash followed by the Occupy Wall Street protests being muted as well.

          Personally I believe representative democracy is dead at the national level if it wasn’t always entirely controlled while we were provided the illusion of choice. The republican (not the party but the polity based on law) form of government in the US seems to also be largely in shambles.

          From a RE or investment perspective what does this mean for us? Is it too late to buy gold, guns, ammo and land? Do we pivot out of hot residential markets and keep powder dry for the desolation that will rip through commercial?

          Somebody on the HBB said we are in the eye of the hurricane about to encounter the wall. I can’t think of a better analogy.

    2. Mega.Bank$ 💪 … They sit in their high.tower suite$ wearing Captain America & Wonder Woman suits, their golden la$$o is the Federal Re$erve, their protective $hield is the $hadow.Con.Non.banker.$helter.$hack.loan.lender$

       👀:

       Wealth
       Dan Gilbert’$ Wealth $oars to $34 Billion$ After Rocket IPO
       By Tom Metcalf, Donald Moore, and Tom Maloney / August 6, 2020
       Bloomberg News

       Mortgage company shares jump 19% on first day of trading
       Listing propels founder Gilbert up Bloomberg wealth rankings

       Rocket Cos. long-awaited initial public offering finally reveals the vast fortune founder Dan Gilbert has built in a city battered by the last financial crisis.

       Shares of the Detroit-based mortgage company rose more than 19% on the first day of trading in New York, pushing Gilbert’s net worth to about $34 billion, according to the Bloomberg Billionaires Index.

       Thursday’s IPO makes Gilbert, 58, one of the biggest beneficiarie$ of the era of ultra-low intere$t rate$ and caps a career that’s seen him rise from delivering pizzas to befriending Warren Buffett, winning an NBA championship and becoming a figurehead for the transformation of downtown Detroit.

       Rocket is valued at about $40 billion, more than Bank of New York Mellon Corp. or Ford Motor Co. Gilbert owns an estimated 73% of the firm.

       His net worth is more than four times the previous estimate on the Bloomberg index. It means he’s now the 28th-richest person on the planet, ahead of Blackstone Group Inc.’s Stephen Schwarzman, casino magnate Sheldon Adelson and cosmetics titan Leonard Lauder.

33. What the…!?

    The Financial Times
    Coronavirus business update 30 days complimentary
    Capital markets
    Investors fear negative real yields are driving the ‘everything rally’
    Concerns start to grow among analysts over the longer-term inflation outlook
    Swaths of the Treasury market are expected to lose money, in real terms, over the next decade
    © FT montage
    Tommy Stubbington and Robin Wigglesworth 2 hours ago

    A collapse in real yields — the return that bond investors can expect once inflation is taken into account — is rippling through global financial markets and driving record rallies in assets from gold to technology stocks, investors say.

    The yield on 10-year inflation-linked US government bonds, known as Tips, sank below minus 1 per cent last week to a historic low, as investors bet that a surge in coronavirus cases would prolong the damage to the world’s biggest economy — and that the Federal Reserve’s efforts to stimulate demand could stir inflationary pressures.

    The deeply negative Tips yield implies that large chunks of the Treasury market are expected to lose investors money, in real terms, over the next decade. Sub-zero real yields have long been a feature of the landscape in Japan, the eurozone, and the UK. But the shift in the US — the last bastion of positive real returns on safe assets — is showing up in all corners of the financial markets.

    “There isn’t an interest rate anywhere in the world that looks attractive once you take inflation into account,” said David Vickers, a multi-asset portfolio manager at Russell Investments. “That makes just about everything else seem more appealing.”

    Tumbling real yields help explain the remarkably strong stock market recovery from the coronavirus-triggered crash in March, according to some analysts and investors.

    “Many investors have underestimated the impact of low yields on valuations,” Howard Marks, the founder of Oaktree Capital Management, wrote in a letter to his clients this week.
    …

    1. In short, there’s nowhere left to hide. Happy Hunger Games, asset HODLers, and may the odds be ever in your favor.

34. “…there was this amazing form of financial innovation known as private insurance which provided risk protection through free market exchange.”

    Wasn’t that Maurice Greenberg’s shtick at AIG?

    1. I suppose there’s always the ideal, and then there’s the real world reality…

35. Sorry but I don’t see this happening where I live in Sacramento and northern California. Every home that I wanted to buy this year was bought in a week over asking price multiple offers. CRAZY! The bay area kids are the ones doing this because of COVID and everyone working at home. Low inventory lack of homes to buy, record pent up demand, bidding wars, low interest rates, welfare bailout by FED is causing a mess.

    1. The bay area kids are the ones doing this because of COVID and everyone working at home.

       …and a little problem down in the bay area that nobody wants to talk about.

       1. Which one?

          1. Anything they see in the local news that makes them feel like they may not be safe and should think about living somewhere else.

    2. @ben a lot of people are leaving the big metros. Property markets from Sac to Bozeman are spiking. Tampa is seeing a spike as well as people from the NE look for life boats. I live in Tampa at present and the same is happening here. Eventually this credit event will catch up with all markets I believe…

       Now would be the time to sell residential and wait for opportunities in commercial or try to find an abandoned missile silo to live in.

       1. @CorporateShill,
          I love your idea of getting a missile silo compound! Nothing cooler than to have a retired military base fenced off securely with an underground missile bunker. That would make a superb music studio for me! Talk about creating thrash metal in a bunker. Plus if the Chicoms nuke the USA, I’d be safe at least.

36. The Financial Times
    Coronavirus business update 30 days complimentary
    Opinion FTfm
    Fed policy could leave retirees broke after crisis
    A 5% yield on a $1m nest egg delivers $50,000 a year but the egg must be five time bigger to produce that at 1%
    © Andrew Hamik/AP
    John Dizard 3 hours ago

    During the shambolic negotiations between Congress and the White House, one of US president Donald Trump’s proposals was to suspend the payroll tax funding social security for several months, ie long enough to buy some popularity before the elections. That was rejected by the Democrats for not covering the unemployed and for reducing the dedicated funding for the national pension system.

    At the same time, there is a cross-party consensus that the Federal Reserve should not raise policy interest rates, and to continue open-ended funding of what will be an even larger federal deficit.
    …
    At the present trajectory of Fed policy, the 10-year bond will be close to yielding zero per cent by election day in November. The Fed will be trying to defend the “zero lower bound”, a set of points on a yield curve just above negative interest rates, for short-term funding. But by the time the 10-year rate gets within 10 or 20 basis points of the ZLB, the curve is telling you that there is no reward for saving money for the long term.

    At that point, which by simple extrapolation comes in three months or so, fixed income investors will frantically chase yield from anywhere available. That is already happening.
    …

    1. “… so, fixed income investors will frantically chase yield from anywhere available. That is already happening.”

       You are a fool if you join the rush.

       Yield chasing produces returns for the managers of other people’s money. The risk to capital is high but so are the easy-money fees extracted by the money managers.

       If you, as an individual using your own money, decide to play this game then understand that these managers of other people’s money will not incur the risk that you will be taking on because:

       1. Unlike you, they work for fees.

       2. Unlike you, the money they put at risk belongs to somebody else.

       1. During the gold rush era, the prospectors went broke while the merchants who sold them equipment accumulated gold.

          Middlemen rule,
          Gamblers drool.

37. rejected by the Democrats for …reducing the dedicated funding for the national pension system.

    The Dems had no complaints when Obama did it.

    1. Some did complain:

       https://thehill.com/homenews/house/172133-liberals-trash-presidents-tax-holiday-call-it-short-sighted

       Liberal Democrats are stepping up their attacks on President Obama for his plan to extend a payroll-tax break by a year.

       Rep. Peter DeFazio (D-Ore.) blasted Obama last week for his “stupid Social Security tax holiday,” arguing that the money would be better used on more stimulative spending.

       He and other liberal lawmakers fear the extended tax holiday might make a permanent cut more likely, thus slashing Social Security’s primary funding stream and threatening future benefits.

       “It’s a unique tax break,” DeFazio said Friday. “You don’t just give away money, you have to borrow money to give away money, to restore the Social Security trust fund. If you’re going to borrow $110 billion, spend it on infrastructure [and] put 4 million people to work instead of pissing away 25 bucks a week, which is what we’re doing now.”

       Funny how few today on both sides of the aisle have a problem with borrowing money to give it away.

38. Yet another has-been actress listing her home for a greedhead wish price that’s going to require some serious sawin’ and slashin’ (to less than what she paid in 2007) if she wants to unload it.

    https://www.marketwatch.com/articles/actress-geena-davis-lists-longtime-l-a-home-for-6-million-01596810182?mod=mw_latestnews

    1. Interesting how quickly they can go from the toast of Hollywood and the media to has been.

       1. How quickly? Geena Davis is 65 years old now. She’s been a has been for 20 years now. Few women survive Hollywood past perimenopause.

          1. I remember when the media wouldn’t stop talking about how awesome and amazing she was. Until they suddenly stopped.

    2. “David Offer of Berkshire Hathaway HomeServices California Properties has the listing.”

       Looks like Grandpa is also a broker/realtor?

39. Wall Street HODLers seem bamboozled by current Fed policy.

    Need to Know
    Bank of America strategist: ‘I’m so bearish, I’m bullish’
    Published: Aug. 7, 2020 at 8:52 a.m. ET
    By Steve Goldstein
    It’s tough being a bear in the age of coronavirus.
    Getty Images

    Only on Wall Street would an investment research report titled, “I’m so bearish, I’m bullish” make some sort of intuitive sense.

    That is what Michael Hartnett, chief investment strategist at Bank of America, went with for his weekly report on asset flows.

    The “nihilistic” bull take, he says, is a decadelong backdrop of maximum liquidity, and minimal growth is still maximum bullish. The value of U.S. financial assets, after all, is 6.2 times gross domestic product. So while GDP has hemorrhaged, and with some 30 million unemployed, that is numbed by central bank asset purchases that work out to $2 billion per hour.

    The structural view driving bond yields lower is now “shared by all,” as the yield on the 10-year Treasury-Inflation Protected Securities was -1.08% on Thursday. While that “doesn’t mean to say it is wrong,” it is inciting a bubble, Hartnett says. Ultimately, an S&P 500 (SPX, -0.21%) at 4,000, gold (GC00, -1.32%) at $3,000 per ounce and oil (CL.1, -1.36%) at $60 per barrel is “probably inconsistent with 0% (TMUBMUSD10Y, 0.543%) Treasury yields.”
    …

    1. Ultimately, an S&P 500 (SPX, -0.21%) at 4,000, gold (GC00, -1.32%) at $3,000 per ounce and oil (CL.1, -1.36%) at $60 per barrel is “probably inconsistent with 0% (TMUBMUSD10Y, 0.543%) Treasury yields.”

       Meaning what its going to crash ?

40. Oh dear….

    https://www.cnbc.com/2020/08/06/manhattan-apartment-deals-plunge-57percent-suburban-real-estate-surges.html

    1. Run away!

41. Vibrant cultural enrichment may not be bullish for luxury skybox prices.

    https://nypost.com/2020/08/06/hundreds-of-new-homeless-bring-drugs-loitering-harassment-to-uws/

42. While half of American small businesses have been culled by the scamdemic, the Fed’s monetary policies are having their desired effect of concentrating even more wealth and power in the hands of its oligarch cohorts.

    https://www.staradvertiser.com/2020/08/06/news/facebook-founder-mark-zuckerbergs-fortune-surpasses-100b/

    1. Hehe…centibillionaire status!

       1. I wonder where his bug out bunkers are.

          1. I believe he has a compound in New Zealand.

             So many ultra rich had been buying up land there, that they banned it…

             https://www.cnbc.com/2018/08/16/new-zealand-bans-most-foreigners-from-buying-homes.html

             1. It’s because these billionaires are like a bad odor you can’t get rid of.

             2. I wonder how the billionaires plan on staying rich should bug out time arrive? Their stocks and holdings will be worthless. Do they have a Scrooge McDuck style vault full of gold and silver in the bunker?

             3. Do they have a Scrooge McDuck style vault full of gold and silver More likely they have vaults with a 1000-year supply of toilet paper. Now that’s real wealth!

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