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The Loss To Landlords Is Insane

A report from Curbed New York. “During what would have normally been the busiest season for rentals, new listings are flooding the market to far less demand. July saw 30 percent more rental listings across the city but 35 percent fewer leases signed compared to the same time last year, according UrbanDigs. And landlords finally seem to be capitulating to renters looking for lower prices. According to StreetEasy, 34.7 percent of all Manhattan rentals got a discount from April through June, with a median cut of 6.7 percent (or $221) per month.”

“‘I think everybody is kind of looking at lease renewals with a little bit more of a critical eye,’ says Robert Khederian, a Compass agent who has recently helped several clients renegotiate their leases. ‘Renters have the upper hand right now.'”

“Remember to be courteous. A good way to end the email or conversation with your landlord or property manager, Khederian suggests, is something like this: ‘I am willing to re-sign, and I really enjoy living here, but [my research] indicates that the value of my apartment has changed; can we please agree upon a price that reflects a fair market value for my apartment?'”

The Dallas Morning News in Texas. “Less than 80% of U.S. apartment residents had made their August rent payments as of last week. Apartment landlords are keeping an eye on the info because of the surge in unemployment. The recent expiration of hundreds of dollars in weekly federal assistance for jobless Americans has been a big worry for the industry.”

“‘Over the past few months apartment residents have largely been able to meet their housing obligations,’ said David Schwartz, chairman of the National Multifamily Housing Council,. ‘In no small part, this is due to the enhanced unemployment benefits enacted under the CARES Act and significant steps by apartment owners and operators to help their residents. These unemployment benefits that have proven so important to so many households have now lapsed, meaning greater financial distress for millions and the potential worsening of America’s housing affordability crisis.'”

“The apartment industry is lobbying Congress to continue to provide support with new legislation. A larger share of Dallas-Fort Worth residents are keeping up with their rent payments. As of last week, about 86% of local renters had made their August rent, according to data from Richardson-based RealPage.”

“‘Apartment collections in early August are largely in line with the results posted during the previous few months, but the interruption of enhanced unemployment benefits creates near-term concerns,’ said RealPage market analyst Adam Couch. ‘The additional unemployment benefits provided by the CARES Act allowed many households to stay current on their rent obligations in recent month, but has now run its course.'”

The Press Telegram in California. “Betty Ordaz, 55, is one of almost 1,000 Los Angeles County tenants facing a renewed threat of eviction in the coming weeks while tens of thousands of other renters in the region with unpaid rent are still protected under eviction moratoriums being extended at city and county levels. Ordaz falls into a category of tenants who are being ‘legally evicted’ because her case pre-dates the COVID-19.”

“Eviction attorney Dennis Block said the Sheriff’s Department posted five-day notices to vacate on 13 properties owned by his clients and carried out lockouts on six of them. He estimated that those landlords lost from $10,000 to $22,000 per unit. ‘The loss to landlords is insane,’ Block said. ‘The financial burdens of the pandemic are being put … on the shoulders of landlords.'”

From Socket Site in California. “With listing activity having spiked, the weighted average asking rent for an apartment in San Francisco has dropped another hundred dollars ($100), or roughly 3 percent, over the past two weeks and is now down to a little under $3,600 a month, continuing a trend which shouldn’t catch any plugged-in readers by surprise.”

“While $3,600 a month still isn’t ‘cheap,’ it’s over 10 percent or $500 per month cheaper than just five months ago, 17 percent ($700) cheaper than at the same time last year and nearly 20 percent ($850) cheaper than a 2015-era peak of around $4,450 per month. And the average asking rent for a one-bedroom in the city is now back under $3,100 a month, having peaked at closer to $3,700, as well. At the same time, offers of complimentary rent and cash concessions haven’t waned, driving effective rents down even more.”

The Los Angeles Times in California. “Lenders are turning away freelancers and small-business owners who have lost clients or projects during the last four economically challenging months, mortgage experts say. The new rules haven’t made refinancing impossible for freelancers, but they have made it dramatically more difficult.”

“‘Lenders used to simply require a current-year tax return to verify self-employment income,’ said Steven Foster, owner of Pasadena mortgage brokerage Vista Financial Advisors. ‘Now you need to show bank statements for the past two months to prove that your income hasn’t been hurt.’ If it has, you may need to jump through hoops to get qualified based on assets or a low debt-to-income ratio.”

From Seattle PI in Washington. “It may have taken half a year, but Seattle’s placid condominium market finally got a boost in July. After months of sluggishness, condo sales and inventory supply improved substantially. For condos buyers and sellers, sales have been slower, particularly in the downtown core where the majority of condos are located. Listings remain on the market longer and currently 35% of all active condo listings in Seattle have taken a price reduction.”

“Plus, inventory has steadily risen all year. In July there were 741 Seattle condo listings for sale, which was 5.9% more than the same period last year and 21.3% more than last month. For some perspective, that’s the most listings we’ve had in a single month since November 2011. And, that’s just the NWMLS listed condo inventory. There are thousands more presently under construction, though not available for immediate purchase.”

The Post Independent in Colorado. “Development plans could move forward for about 400 homes in the Lakota Canyon area after the Basalt-based Romero Group acquired the property for about half its appraised value. Located near New Castle, the Lakota Canyon Golf Club and 122 acres of land designated for residential development were purchased in a bankruptcy auction for $1.5 million, said Dwayne Romero, Romero Group president and CEO. ‘It was a very good deal,’ Romero said. ‘Especially considering it was appraised in the high $3 million range.'”

“Previously owned by Warrior Acquisitions LLC, the company filed for a Chapter 11 bankruptcy after failing to make a $500,000, semi-annual interest payment in 2019.”

From McKnight’s Senior Living. “Many of Georgia’s assisted living communities — which often are private-pay — also have been experiencing significant financial struggles due to COVID-19, according to the Atlanta Journal Constitution. Atlanta has one of the most overbuilt markets for senior housing in the country, with the second lowest occupancy rate among the 31 major metro markets, according to a report last month by the National Investment Center for Seniors Housing & Care.”

“Occupancy has shrunk at many facilities, further squeezing finances. State figures show that half the beds are unoccupied at dozens of Georgia senior living communities as they remain on lockdown. Without federal assistance, many assisted living operators in Georgia and across the country could face ‘an untenable financial crisis,’ James Balda, CEO of Argentum, told the news organization. ‘Over time, the strain is going to be significant,’ Balda said.”

From Multi-Family Biz. “33 Holdings LLC is excited to announce the acquisition of two multifamily properties, located in Birmingham, Alabama, for a purchase price of $3M. Acquired by its subsidiary, 33H Fund II LLC – It’s Distressed & Foreclosure Residential Fund, the portfolio purchase represents the first acquisition by 33 Holdings LLC (33H) outside of Atlanta, GA as it expands its investment footprint into other South East US States.”

“The properties in the portfolio, include 128 Units of Garden Style Apartments, located within five miles of each other and three miles from downtown Birmingham and consists of one, two and three-bedroom garden-style apartment homes. Both properties were approximately 30% occupied at purchase and were foreclosed last year by the lender. 33H started discussions on this acquisition in December 2019 with the Seller/Lender and signed the contract in January 2020 slated for March 2020 closing after extensive due diligience.”

“Due to the Global Pandemic hitting the US in March 2020, lenders backed out of the deal causing the parties to re-evaluate, re-negotiate and re-underwrite the deal. After extensive underwriting to Post-COVID19 world, 33H decided to move forward on the deal given they were acquiring a pre-covid19 foreclosed asset at post covid-19 pricing.”

This Post Has 102 Comments
  1. ‘purchased in a bankruptcy auction for $1.5 million… ‘It was a very good deal…Especially considering it was appraised in the high $3 million range’

    But half off is unreasonable?

    ‘the company filed for a Chapter 11 bankruptcy after failing to make a $500,000, semi-annual interest payment in 2019’

    So way before this spring.

    1. I don’t get that they were for sale for $3 million, but had a $500k semi-annual interest payment. Did they put this on a really bad credit card?

  2. ‘Listings remain on the market longer and currently 35% of all active condo listings in Seattle have taken a price reduction’

    If prices are up, why would anyone cut their price? This particular guy baffles with BS.

    ‘Plus, inventory has steadily risen all year. In July there were 741 Seattle condo listings for sale, which was 5.9% more than the same period last year and 21.3% more than last month. For some perspective, that’s the most listings we’ve had in a single month since November 2011. And, that’s just the NWMLS listed condo inventory. There are thousands more presently under construction, though not available for immediate purchase’

    So you got 741 airboxes, but thousands sitting in the wings, and you claim 2.5 months of inventory. Openly discussing market manipulation? Check!

    1. not questioning your quotes …. But below I believe is from the same SeattlePI article. So is it an issue with REIC/press cherrypicking stats. At this point i am wondering about the skew of the sales.

      the issue is that relatively innocent people might be getting hurt from agents etc.

      ————
      The Seattle citywide condo median sales price rose 10.43% year-over-year to $497,475, reflecting a 19-month high. That’s also 9% greater than a month ago.

      1. …. and not a buyer in sight at any price.

        Oooooph.

        Las Vegas, NV Housing Prices Crater 15% YOY As Toxic Lending Tanks US Housing Market

        https://www.zillow.com/las-vegas-nv-89119/home-values/

        *Select price from dropdown menu on first chart

        As a noted economist stated, “Get what you can get for your house today because it’s going to be less tomorrow for decades to come.”

      2. My eldest and spouse live in Seattle and are trying to understand what is going on there. They have a 1950s townhome. Their neighbor’s half of the building went up for sale nearly a month ago and hasn’t seen an offer yet while a dual career couple they know found themselves in their first bidding war for a SFR which sold for 15% over listing price. It’s a very uneven market playing out. A theory is the software-associated folks are looking for improved digs they can enjoy working from rather than be in apartments and condos with less of whatever they would prefer to have around them. Seattle, as a city has spent most of its urban life with a small city-like core and lots of SFRs, which would look more like suburbs relative to most cities.

        1. ya – it makes NO sense to me either.

          if it were rich software couples – i would think that Magnolia and Queen Ann – the most favorite locations would have gone up (but went down) and downtown and Capital Hill (where CHOP happened) would have gone down (but went up).

          Who the heck knows?

          [aside. I mention that we had sold/closed our 2 br condo on 2nd ave at the end of Feb. We could have gotten more if we sold in 2019 – but the timing did not work for us. The unit directly above us is now asking 10% more than our selling price – and it is exactly the same (constructors) finish – so who knows in the middle of a pandemic]

        2. “They have a 1950s townhome.”

          FWIW, modern townhouses frequently feature an attached bathroom for each bedroom, i.e., they’re designed for subletting. Their asking prices have been inflated well beyond fundamentals.

  3. Clifton, VA Housing Prices Crater 14% YOY As Fairfax County Slips Deeper Into Foreclosures And Mortgage Defaults

    https://www.zillow.com/clifton-va/home-values/

    *Select price from dropdown menu on first chart

    As one Fairfax County broker lamented, “How can we possibly sell a resale house when builders are selling new houses for 20% and sometimes 30% less?”

    1. Let me add to that, cheeto hon:

      How can we possibly sell a resale house when builders are selling new houses for 20% and sometimes 30% less, and when it doesn’t matter that the resale houses are closer to jobs, given the new normal of work-at-home?”

  4. ‘nearly 20 percent ($850) cheaper than a 2015-era peak of around $4,450 per month’

    2015 peak? But that means rents have been falling for 5 years? Which they have and I have documented.

    ‘And the average asking rent for a one-bedroom in the city is now back under $3,100 a month, having peaked at closer to $3,700, as well. At the same time, offers of complimentary rent and cash concessions haven’t waned, driving effective rents down even more’

    Just get on craigslist and look at the concessions (as we have many times over the years.) Effective rents can be down double or triple the stated amount. How are those 5% cap rates looking now?

    1. Speaking of, I saw this on a Redfin “rental estimate” for a listing in a West LA:

      “Market trends for Westwood: Condo, 2 beds
      $3,500 / mo Median rent
      -29.29% Since Aug 2019”

      Median rent down -30% in a year. No cap rate will save that.

  5. “The apartment industry is lobbying Congress to continue to provide support with new legislation.

    It’s infuriating to me as a taxpayer and renter to be involuntarily forced to subsidize speculators and greedy landlords. Rent is unaffordable for one reason: the speculative excesses created by the Fed’s easy money policies, which benefit only a tiny minority of the population. The sooner supply and demand fundamentals are no longer distorted by the Fed’s gusher of funny money, the sooner the real economy can revive and housing can become affordable again.

    1. A couple of things. The US hasn’t even paid for WW2. Nor anything borrowed since. For well over 10 years the US debt has been mathematically impossible to pay back. The only people subsidizing anything are bond buyers.

      What’s noteworthy here is the apartment/rental biz is dependent on a short term, drop in the bucket, that hasn’t even passed. These guys are fooked.

      1. I got this in an email:

        Price Reduced, Motivated Seller! 45 Home SFR Portfolio in Dallas, TX

        It goes on to say “new owner can increase rents 8%”. These emails always say that.

        1. I always get a kick out of the “great investment opportunity” housing listings on Craigslist. Kinda begs the question: if it’s such a great opportunity, why aren’t you hanging on to it?

          1. $1.9M “Investor’s Dream! Don’t miss the opporunity [sic].”

            1236 Summit Ave, Cardiff, CA 92007

            “This property was scheduled to be sold at a foreclosure auction. Because auction dates often change or are postponed, it is unknown at this time if this auction was held. Please confirm with a foreclosure specialist.”

          2. “Lot: 7501 sq ft” You can build a pretty big mansion on a lot that size. Are people really willing to pay $1.6M for a lot? How’s the nabe?

      2. “For well over 10 years the US debt has been mathematically impossible to pay back.”

        Who Will Fund $24 Trillion in New Government Debt?
        By Brian Riedl
        July 28, 2020 6:00 AM
        (Elena Perova/iStock/Getty Images Plus)
        The federal government’s expensive response to the coronavirus pandemic makes an already-bleak long-term fiscal outlook even bleaker.

        After five years in which federal budget deficits gradually climbed toward $1 trillion, the coronavirus pandemic forced Washington to borrow $1 trillion per month between April and June. And this is just the beginning. The unlikelihood of a quick economic recovery and the additional relief legislation sure to come out of Congress should together push the deficit to roughly $4 trillion in 2020 and ensure that it averages $2 trillion annually over the rest of the decade.

        1. The Federal Reserve had a study in 2004 saying total US gov obligations were in the $100 to $150 trillion range. It also said it was impossible to pay off. I don’t know how this will play out, but somebody is going to take a hair-cut eventually.

  6. ‘The loss to landlords is insane,’ Block said. ‘The financial burdens of the pandemic are being put … on the shoulders of landlords.’”

    Landlords have been gouging tenants since 2009, especially the speculators who levered up on debt to buy overpriced SFH and multifamily buildings that were inflating along with the other asset bubbles blown by the Fed. It should come as no surprise that tenants in our oligarch-looted, COVID ravaged real economy are struggling to keep up with the loss of their purchasing power coupled with the rise in asset prices caused by the Fed’s monetary malpractice. At some point true price discovery has to be allowed to impose itself, so housing can become affordable again and speculative excesses purged from the system.

    1. “In our call of the day, Morgan Stanley said its combined market timing indicator (CMTI) was now giving a sell signal for the first time since January 2018.”

      That must be a pretty strong sell signal at the moment, if it completely missed the March 2020 corona-crater.

  7. The price for retail space on North Michigan Ave in Downtown Chicago is dropping faster than white suburban voter support for Biden.

    Goodbye, Burberry and Hermes. Hello, Dollar Tree.

    Stick a fork in that place ‘cuz it’s DONE.

    1. +1

      – Chicago and all other “blue” cities (and States) are reaping what they sow. While this is an unpopular view, and doesn’t fit “The Narrative”, capitalism, when properly policed and regulated, is the best economic system for raising all boats. That being said, what we have now in the U.S. is more of a combination of crony-capitalism and socialism than anything else, so it’s not surprising of recent outcomes.

      – Socialism is Western Civ. in retrograde; going back to barbarism, war lords, and feudalism. Think banana republic and you won’t be far off. And yet, those living in these once prosperous cities, now turning to some version of a third-world sh*t-hole, keep voting for the same politicians, with the same destructive policies, over-and-over again. Insanity.

      1. That those who aren’t crazy are leaving places like Chicago means that the percentage who are nutters, dindus and overall parasites keeps going up.

        Of course, as we know, many who do leave promptly pull the D lever where their new home is. I recall a former coworker who moved here from Chicago who hated TABOR with a passion. I guess some people just love to pay taxes.

    2. It was already going downhill if one of the stores was a Nordstrom Rack. Nordstrom Rack is the off-price sale-store for regular Nordstrom. We have a couple in my area, in small shopping plazas. Hardly a candidate for the Miracle Mile.

        1. I’m always confusing the Miracle Mile and the Magnificent Mile. I hope they survived yesterday’s derecho.

  8. “Occupancy has shrunk at many facilities, further squeezing finances. State figures show that half the beds are unoccupied at dozens of Georgia senior living communities as they remain on lockdown.

    I’m surprised the globalists haven’t escalated their efforts to offshore eldercare facilities to places like SE Asia or Mexico where the elderly are afforded more respect and the quality of care, relative to costs, is vastly higher than what is provided by surly minimum-wage “caregivers” who staff most positions at U.S. old folks’ homes.

    1. I’ve watched some videos on senior care in Mexico and Thailand. For active adults, it seems reasonable. Dental/medical care is pretty good. Cost of living way lower.

      1. And the wimmins don’t have no truck with no Triggly Puff blue-haired land-whale horsepucky neither. Win-win!

        1. From what I have read, triggly puff style feminism is on the rise in the land of the eagle and the serpent.

      2. Dental/medical care is pretty good.

        The one downside would be insurance, or lack of, as Medicare won’t pay south of border providers AFAIK. American style care is available from private providers, and while much cheaper than here, a major intervention can be still be costly. The Mexican Guberment hospitals are best avoided as they are rife with shortages and incompetence.

  9. After extensive underwriting to Post-COVID19 world, 33H decided to move forward on the deal given they were acquiring a pre-covid19 foreclosed asset at post covid-19 pricing.”

    Hey 33H geniuses, congrats on securing “post COVID-19 pricing,” but now when this “deal” goes into foreclosure, the purchaser can claim they acquired a “post-COVID-19 foreclosed asset” at post-SHTF pricing.”

  10. – Probably most contracts (including rental agreements and mortgage loans) didn’t have a Force Majeure clause prior to the current CCP virus pandemic, but the economic loss will have to be borne by someone.

    – Should it be renters/tenants and homeowners? Should it be landlords? Should it be lenders/banks/non-banks?

    – Based on recent history, somehow, as a taxpayer, I’m getting the feeling that everything is going to be dumped on me.

    – This will have to be worked out, since can-kicking implies eventual resolution, and independent of a vaccine or the virus burns out, the economy can’t get back to normal until this is resolved, since deferral and forbearance isn’t forgiveness.

    – The problem (OK, at least one problem) that I see is that it will be hard to separate out the already existing pre-pandemic CRE+RRE asset bubble impacts from the pandemic-only impacts. BK is the best option for the former and some kind of force majeure forgiveness for the latter, but everyone is going to looking for a freebee rather than BK. Interesting times indeed.

    – Finally, all of the pre-pandemic bubble stuff was due to low rates and easy credit conditions from government and the Fed. It will be hard to get back to “normal” if rates and unlimited QE are allowed to continue, but when, if ever will that happen? Since nothing has changed in policy response since the GFC, the current glide path says more of the same, with continuing low growth, increasing wealth inequality, and declining prosperity. Prove me wrong.

    “Insanity: doing the same thing over and over again and expecting different results.” – Albert Einstein (misattributed) – Narcotics Anonymous

    “We cannot solve our problems with the same thinking that we used when we created them.” – Albert Einstein

    https://morningstarlawgroup.com/insights/is-the-covid-19-pandemic-a-force-majeu
    Insights
    Is the COVID-19 Pandemic a Force Majeure?
    March 13, 2020
    Jennifer Van Doren

    “The COVID-19 outbreak, now deemed a pandemic by the World Health Organization, is disrupting supply chains globally, leaving many companies unable to perform contracts or supply products to their customers, but is COVID-19 a force majeure that will shield affected companies from liability for non-performance? Under US law, the answer depends primarily on the terms of the companies’ contracts.”

    “If the contract does not have a force majeure provision:”

    If the contract does not have a force majeure provision, then look to the governing law of the contract for guidance on common law force majeure claims or frustration of purpose claims. Even if a company cannot claim force majeure, it may be able to claim that its performance of the contract is frustrated by events beyond its control. Again, this is generally a question of state common law, and each state’s laws may vary.”

  11. well today i was going to pay my auto registration online which expires this week, and its been extended 90 days with no penalties.

  12. Could this be yet another flavor of crater in the making?

    Pocket worthy
    Retirees, Don’t Get Stranded Hunting Returns
    Some older investors are turning to unregistered securities and other alternative investment risks.
    Kiplinger
    Eleanor Laise

    Retirees seeking yield and diversification are venturing into some murky waters. With valuations lofty and yields low in the traditional stock and bond markets, many older investors are casting about for alternative investments that can offer attractive distributions and low correlation with plain-vanilla investments. In some cases, they’re turning to “interval” funds, which offer access to more exotic, higher-yielding investments than those typically found in traditional mutual funds; non-traded real estate investment trusts, which often sport distributions of 6% or more and are not listed on an exchange; and private placements, which are unregistered securities offered privately to investors rather than sold in a public offering.

    Sales of such holdings are soaring. Non-traded REITs raised $10 billion in 2019, more than double their 2018 sales, according to Robert A. Stanger & Co. Interval funds held nearly $30 billion in mid 2019, up 25% from a year earlier, according to Interval Fund Tracker, a website that follows the funds.

    “We’re absolutely seeing more and more wealth-management clients allocate to alternative strategies” in search of yield, higher total returns and diversification, says Eric Mogelof, head of U.S. global wealth management at Pimco, which launched its first two interval funds in 2017 and 2019.

    1. Negative US interest rates ‘are still possible’ as Treasury yields hit record-low, DataTrek says
      Matthew Fox
      Aug. 3, 2020, 06:36 PM
      Drew Angerer/Staff/Getty Images
      – Sinking US Treasury yields signal that negative interest rates in the US “are still possible,” according to a note from DataTrek published on Monday.
      – While the stock market is breathing a sigh of relief due to stronger-than-expected second quarter earnings, falling interest rates suggest investors are skeptical of the current rally and are still risk averse, the note said.
      – Last week, the 2-year and 5-year US Treasury rates hit record lows of 0.109% and 0.209%, respectively, and the 10-year rate sat just above record lows.

      While the stock market continues to move higher after better-than-expected second quarter earnings reports, falling interest rates suggest investors are still risk averse and skeptical of the current rally, according to DataTrek.

      In a note published on Monday, DataTrek co-founder Nicholas Colas said that negative interest rates in the US “are still possible.” It seems the Treasury market is getting closer to that reality, which might please President Donald Trump.

      Earlier this year, President Trump called for negative interest rates in the US, so that the country can take advantage of record yield borrowing rates.

      Meanwhile, Fed Chairman Jerome Powell has insisted that the Fed is not looking at negative interest rates as a potential monetary policy tool.

      In early March, in response to the COVID-19 pandemic, the Fed slashed the US federal funds rate to 0% to 0.25%.

      Last week, interest rates on the 2-year and 5-year US Treasury notes hit record lows of 0.109% and 0.209%, respectively, and the 10-year rate finished last week at 0.533%, just above its record nominal low of 0.498% reached in mid-march, Colas said.

      The 10-year note was trading at 1.90% just one year ago, and its long-term trading average is 4.44%, according to data from YCharts.com.

    2. non-traded real estate investment trusts, which often sport distributions of 6% or more and are not listed on an exchange;

      Sounds legit.

  13. The Financial Times
    Coronavirus business update 30 days complimentary
    Chicago
    Chicago restricts access to city centre after looting
    Mayor decries ‘abject criminal behaviour’ as US city grapples with fresh wave of unrest
    Windows were smashed and goods stolen from stores in Chicago overnight
    © Getty Images
    Claire Bushey in Chicago
    3 hours ago

    Downtown Chicago has hit by widespread looting late on Sunday and early Monday morning, hours after police shot a young man in a predominantly black neighbourhood.

    About 100 people have been arrested and 13 police officers were injured as they tried to contain the looting, according to David Brown, Chicago police superintendent.

    The Chicago Transit Authority cut off trains and buses to the downtown area known as the Loop during the Monday morning rush hour, and the city raised all but one bridge over the Chicago River, further restricting access to the city centre.

    “This was an assault on our city that undermines public safety and breeds a sense of insecurity among our residents,” said Lori Lightfoot, the city’s Democratic mayor.

    1. These aren’t protestors. Basically they are more like roving hoards led by warlords, kind of like Europe after the fall of the Roman Empire.

      1. The Roman Empire fell when people started using “hoards” when the proper word was “hordes.” Just sayin’….

    2. All I can say is the folks supporting this current episode in a long sad tale of a downward spiral of a once great American city must stay in their habitat.

      So very happy I got out when I did 4 years ago this week!!

    3. “This was an assault on our city that undermines public safety and breeds a sense of insecurity among our residents,” said Lori Lightfoot, the city’s Democratic mayor.

      So what do you intend to do about this, yer honor? Maybe ask the President to send in help? Nah! Orange Man Bad!

      1. Chicago has had many years to correct the systemic issues in their law enforcement and get the gang related crime and murders under control. None of the mayors in the high-crime cities has ever acknowledged the real issues. Now they are crying!

        This may be the 3rd nail from last in the coffin. Same stores sales have been decreasing over the years as sales move online. The
        younger generation will order stuff from the brand name stores online. IMO, quite a large number of people want to check the fit while buying expensive clothes. Unless technology improves substantially for visualizing and verifying the quality of fit, people will still go to stores to buy “almost tailored” clothes.

          1. When I buy a new pair of shoes, I’ll usually try several. Most won’t feel right. That would involve a lot of shipping charges.

          2. I’ve been a Zappos shopper since 2005. Great selection, particularly for expanded widths, along with quick and free shipping both directions.

          3. I have settled on Ascis and New Balance and know my size. If you stick to one maker the size will fit. I order them on line at Macys/ bloomingdales whenever there are sales. Boss sizes are 1 size too big for shoes and belts. I learned that lesson the hard way and had to send them back.

        1. The problem is these people will simply not accept responsibility for their actions. I worked with the food stamp program in Illinois
          and it’s ludicrous the people that genuinely believe somehow being related 150 years ago to someone that might have been a slave is why they can’t make a go. And the state encourages this, instead of pointing out, their five siblings are all doing just fine but the fact they chose the easy way out time and time again makes them a victim. Sorry virtually none of these people are victims. But believe what you want

    1. Stock markets in Zimbabwe and Venezuela soared, too, as the central bankers there debased the currency into worthlessness. There is nothing new under the sun, to quote (I think) Solomon.

      1. Solomon it is – in the Book of Ecclesiastes – He also quoted this: Ecclesiastes 1
        Everything Is Meaningless
        1 The words of the Teacher,[a] son of David, king in Jerusalem:
        2 “Meaningless! Meaningless!”
        says the Teacher.
        “Utterly meaningless!
        Everything is meaningless.”
        3 What do people gain from all their labors
        at which they toil under the sun?
        4 Generations come and generations go,
        but the earth remains forever.
        5 The sun rises and the sun sets,
        and hurries back to where it rises.
        6 The wind blows to the south
        and turns to the north;
        round and round it goes,
        ever returning on its course.
        7 All streams flow into the sea,
        yet the sea is never full.
        To the place the streams come from,
        there they return again.
        8 All things are wearisome,
        more than one can say.
        The eye never has enough of seeing,
        nor the ear its fill of hearing.
        9 What has been will be again,
        what has been done will be done again;
        there is nothing new under the sun.
        10 Is there anything of which one can say,
        “Look! This is something new”?
        It was here already, long ago;
        it was here before our time.
        11 No one remembers the former generations,
        and even those yet to come
        will not be remembered
        by those who follow them.

        Further he says:
        “What a heavy burden God has laid on mankind!
        14 I have seen all the things that are done under the sun; all of them are meaningless, a chasing after the wind.
        15 What is crooked cannot be straightened;
        what is lacking cannot be counted.

        1. Well, we know what we’ve been told to seek first, but that doesn’t ever get discussed here.

        2. “The eye never has enough of seeing,
          nor the ear its fill of hearing.”

          “Look! This is something new”?
          It was here already, long ago;
          it was here before our time. ”

          Obviously, this guy never bought a iPhone.

    2. It almost seems like we’ve reached the point where you can’t go wrong buying and HODLing any asset class whatsoever, thanks to the Fed’s Big Bang UQE balance sheet expansion.

      1. Is the Buy Everything Trade Stalling?
        Posted 11 hours ago
        Asian markets stall at start of week

        Friday had a buy the rumour, sell the fact look about it as US Non-Farm Payrolls data outperformed, but markets still retreated anyway. Jobs rose by 1.76 million, much better than the 1.5 million expected. However, the v-shaped recovery gnomes of Wall Street decided that wasn’t close enough to last month’s 4.8 million and headed to the exit door. Financial markets can be a tough audience to please sometimes.

        Adding to the woes was the breakdown in talks between the Republicans and Democrats over the follow-up stimulus package. Covid-19 continues to rampage across the US, stoking fears of a double-dip in America’s recovery. Coming hard after the banning of WeChat and TikTok by the President, investors seemed more focused on reducing risk into the weekend, concerned by the potential scale of Chinese retaliation.

        China has said nothing of note over the weekend regarding the matter, its attention seemingly focused on an official US government visit to Taiwan instead. Hong Kong will likely reflect the concerns today instead, being a listing venue for Tencent. Hong Kong’s police have also arrested several citizens under the new security law this morning, including a prominent media magnate. Hong Kong stocks are likely to be unloved in the first part of the week.

        Markets, though, appear to be stalling across the spectrum of instruments, notably amongst the major currencies. But precious metals, oil and even stock markets are all displaying topping formations on their charts, and a fall in momentum. I will stick my neck out here and suggest that this week could be one of correction, with the potential to develop into a deep stall.

      2. In stimulus we trust.

        The Financial Times
        Coronavirus business update 30 days complimentary
        Markets Briefing Asia-Pacific equities
        Global shares rally as investors bet on new stimulus
        Asia-Pacific stocks defy rise in US-China tensions as traders focus on Washington talks
        Japanese stocks gains as traders in Tokyo returned from a holiday
        © AFP via Getty Images
        Hudson Lockett in Hong Kong 2 hours ago

        Shares across the Asia-Pacific region rallied as investors pinned their hopes on Washington pushing through more support measures to limit the economic damage from coronavirus.

        Japan’s benchmark Topix index rose 2.2 per cent on Tuesday as traders in Tokyo returned from a long weekend. Hong Kong’s Hang Seng index climbed 2.1 per cent while China’s CSI 300 of Shanghai- and Shenzhen-listed shares gained 1.3 per cent. Australia’s S&P/ASX 200 index was up 1.2 per cent.

        Chinese internet stocks rose after two consecutive days of losses scythed billions of dollars of market value from these companies. The country’s technology groups have been under pressure after the Trump administration at the end of last week unveiled executive orders targeting popular social media apps TikTok and WeChat.

  14. Market up again today – I just wonder when the whole house of cards comes crashing down.
    P Bear – you read the tea leaves – what say you – how long can this charade go on?

    1. I recall my macroeconomics professor at Cal back in 1998 suggesting that the economy was “peaking”, meaning that an economic turning point was on the horizon. I won’t get into the details, but his personal network connections included many people considered “in the know” on such matters. The tech stock collapse didn’t begin until a couple of years later.

      Though the 2007-2009 recession was eventually dated to have begun in December 2007, this wasn’t officially acknowledged, I believe, until Fall 2008, at which point the wheels came off everything, financially speaking, and an ugly political battle over bailouts ensued while the Fed began its own mop up operation on a global scale at an order of magnitude larger than what Congress and the WH discussed publicly. The policy response began well into the recession, and was never fully unwound by the onset of COVID-19.

      This time is quite different than these previous two, due to the suddenness of the COVID-19 stock market crash and ensuing Fed response of unprecedented magnitude. The situation we face is unprecedented over the lifetime of anyone currently alive, and maybe ever in history, making it very uncertain how it will play out.

      1. The Vanguard REIT Index fund was down about one-third at its low, and was down less than 10 percent last time I checked. That is certainly not in accord with all the crater posted here.

        Then again with all the bailouts, the massive borrowing of money that won’t have to be paid back until later, and extend and pretend, the “credit event” has not really happened yet.

        But I thought the market was supposed to look ahead? I guess it is pricing in a bailout for every asset, and selling Americans under 40 into slavery to pay for it.

    1. I’ve got a great book on building log cabins. It was written by my grandfather and his friend, both consummate lifelong Boy Scouts. My dad, same lifelong Boy Scout type, passed on the original to me.

      I told him once I hoped to build that. He replied without much thought that it was at one time the best a man could do with time and muscle and plenty of trees, but little money…Now, it’s inferior in many ways to a house built with modern technology and way more expensive.

      1. Now, it’s inferior in many ways to a house built with modern technology and way more expensive.

        Yeah, I was thinking even if the fuel to heat it is “free” my time is worth more than that and by the time it’s not I probably won’t be capable of preparing that much firewood each year. And then there is the constant fire danger from without and within.

        Having said that I have very fond memories of cabins…one of which I helped build and it hurt to see it sold outside the family. But I knew I shouldn’t even think about buying it…I don’t have that kind of disposable income to keep it as a vacation home and I can’t work from there.

  15. The Financial Times
    Coronavirus business update 30 days complimentary
    Property sector
    Landlords see cracks in August rent as stimulus talks stall
    Growing proportion of payments by credit cards points to signs of strain
    A ‘cancel rent’ banner is displayed on Monday by demonstrators against evictions in New York City
    © Getty Images
    Joshua Chaffin in New York 3 hours ago

    Apartment rent payments have largely held up in August although several property executives warned that weaknesses were emerging and that a failure to extend federal aid programmes could prove calamitous.

    As of August 6, 79.3 per cent of US households made a full or partial rent payment, according to a survey conducted by the National Multifamily Housing Council, a residential developer trade group. That was down 1.9 percentage points from the same period a year earlier.

    Many property executives and policymakers had looked with trepidation to August because the $600 in additional weekly unemployment benefits granted under the first coronavirus relief package, known as the Cares Act, expired at the end of July. A federal moratorium on evictions has also expired — as have similar measures at the city and state level.

    Even though the headline numbers were generally solid, property executives noted that the proportion of renters who used credit cards to make their payments was increasing, one sign of growing financial strain. They also argued that the federal aid had kept many families afloat as jobless claims have surged due to the pandemic, and should be extended.

    “It has worked and it needs to continue working or we will have a problem and people will be out of their homes,” said Elizabeth Francisco, president of ResMan, a property management software company.

    1. It has worked and it needs to continue working or we will have a problem

      We have a problem. People needed to work and continue working. Bread doesn’t fall from the sky on command, despite popular political opinions.

    2. We’ve talked here before about Wile E. Coyote running off the cliff and not falling until he looks down. We ran off the cliff in March and we’re holding up a funny sign while looking at the people on solid ground right now but we refuse to look down…

  16. The Margin
    ‘It was chaos!’ Students get suspended for posting pictures of packed halls — now the high school is closing after 9 people were infected
    Published: Aug. 9, 2020 at 6:43 p.m. ET
    By Shawn Langlois
    Hannah Watters

    Last week, pictures of maskless students crowding the hall of Georgia’s freshly reopened North Paulding High School went viral and raised questions all over the internet as to whether getting kids back to school while coronavirus cases are still on the rise is a good idea.

    Two students involved with posting the images were suspended, including Hannah Watters, who said: “There was no social distancing, a 10% mask use rate, it was chaos!”

    After a national outcry, the district reversed course and the kids were allowed to return.

    Watters raised her concerns after the district called mask-wearing a “personal choice” and acknowledged that social distancing “will not be possible to enforce” in most cases.

    One school nurse in the district resigned over concerns about virus safety.

    1. Two students involved with posting the images were suspended, including Hannah Watters, who said: “There was no social distancing, a 10% mask use rate, it was chaos!”

      Karens tend to self-identify at a young age.

      1. I think the Karens were whoever suspended the kids. Of course the halls are crowded. That’s not news; halls were crowded when I was in junior high in the early 80s.

        And by the way, 6-foot social distancing is nearly impossible. When I go to the grocery store, I often look at the 1-foot floor tiles and try to stay 6 floor tiles from someone. That’s the width of an entire aisle in a larger store. To maintain that, I pretty much need to go at 10 pm, and spend twice as much time in the store because I have to wait for people to leave the aisles I want to get into.

  17. The one thing I am seeing here in northern California areas like Sacramento are homes listed above $5 million are not selling. However, anything under a million bucks with a nice kitchen, large master bathroom and pool is selling in less than a week over asking price!

    1. Oh, to be so optimistic! I can’t imagine signing the dotted line on a big mortgage right now, amid all this uncertainty.

    2. “…and pool…”

      Such a waste of money on chemicals and time spent cleaning. Get a membership at a Swim and Racquet Club, and enjoy the eye candy.

  18. How are bonds supposed to beat bonds when their yields are bumping up on the zero bound and real yields are negative?

    1. FA Center
      Opinion: Here are your odds that stocks will outperform bonds over the next 20 years
      Published: Aug. 10, 2020 at 12:40 p.m. ET
      By Mark Hulbert
      This head-turning research upends traditional portfolio allocation advice
      iStockPhoto

      Financial planners often tell clients that, so long as they hold on long enough, stocks should do better than bonds. But how long is long enough — 10 years, maybe 15?

      Try 150 years. That isn’t a typo. According to research posted recently on the Social Science Research Network, the bond market outperformed the stock market in the U.S. from 1793 to 1942 (see chart, below). The research was conducted by Edward McQuarrie, a professor emeritus at the Leavey School of Business at Santa Clara (Calif.) University, who has spent years reconstructing the history of U.S. stock and bond returns.

    2. The Financial Times
      Coronavirus business update 30 days complimentary
      High yield bonds

      Another Rubicon crossed: a 10-year junk bond below 3%
      Ball Corporation secures record-low borrowing costs for non-investment grade US company

      Fizzy drinks cans leave the production line at a Ball Corporation plant in the UK © REUTERS
      Joe Rennison in London and Eric Platt in New York 6 hours ago

      Aluminium can maker Ball Corporation secured the lowest-ever borrowing costs for a US junk-rated company on Monday, as investors starved of returns shrugged off lingering concerns over Covid-19 in their pursuit for higher yields.

      Ball raised $1.3bn through a 10-year bond, paying an annual coupon of 2.875 per cent, according to people familiar with the terms. It was the lowest borrowing cost clinched in the junk debt market for a 10-year bond, according to financial data provider Refinitiv.

      The strong investor demand followed the best month for high-yield bonds since 2011 in July. A rally in junk debt has erased the losses investors suffered at the depths of the coronavirus induced sell-off in March.

      At double-B plus, Ball holds the highest junk rating assigned by the big credit rating agencies, one notch below the threshold to be considered investment grade. Investor appetite for Ball’s bond allowed bankers — led by Goldman Sachs — to lower the coupon below 3 per cent and increase the size of the deal from a planned $1bn.

      “This is another sign of the insatiable hunger for yield the world is currently facing,” said John McClain, a portfolio manager at Diamond Hill Capital Management.

      1. Ball raised $1.3bn through a 10-year bond

        I have their glass canning jars in my pantry, some of them as old as I. Some kind of “high tech” company now that they need a billion to keep going?

  19. Arlington, Va Housing Prices Crater 14% YOY As Double Digit Price Declines And Soaring Mortgage Defaults Envelop Northern Virginia

    https://www.movoto.com/arlington-va/market-trends/

    As one Arlington County broker lamented, “How can we possibly sell a resale house when builders are selling new houses on the same street for 20% and sometimes 30% less?”

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