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There Was An Acknowledgment That ‘Hey, There’s A Big Problem Here’

A report from the Star Advertiser in Hawaii. “Munro Murdock, Hawaii Legal Short-Term Rental Alliance (HILSTRA) president, said owners and operators across the isles are feeling the pain from delays in reopening Hawaii tourism through a pre-arrivals testing program. ‘First it was Aug. 1, then Sept. 1, now it’s Oct.1 at the earliest. It’s only a matter of time before you see a lot of companies in our industry throw in the towel. We’re coming up on six months with virtually no revenue,’ Murdock said.”

“Murdock said his company manages legal vacation rentals for 30 owners. From April to August of last year, the company took in $1.5 million in gross rent, or roughly $50,741 per owner. During the same period this year, Murdock said gross rents fell to $104,259 or about $3,400 per owner. That doesn’t even cover a month of expenses for Murdock’s average owner, who likely spends from $4,000 to $7,000 monthly, he said.”

“Michael Rubini who owns a vacation rental on Oahu’s North Shore, said he’s been devastated by Caldwell’s emergency orders. Prior to COVID-19, Rubini said the property, which has a NUC, generated about $15,000 to $20,000 a month in income, but he said he’s made ‘zero dollars’ since Caldwell’s ban. ‘Just because they shut down vacation rentals doesn’t mean that I don’t have expenses,’ said Rubini, who is retired and lives in California. ‘My property taxes also don’t go away. I pay the higher residential A rate since it’s an investment property. I used to pay $6,000 in property taxes. Since they passed Residential A, it’s more like $22,000 a year or so and they aren’t even letting me use the property for short-term rentals.'”

From News Channel 5 in Tennessee. “The company with listings all over the globe says the ban will help social distancing efforts, but neighbors across Nashville say they’ve yet to see bans like these enforced. Had they known what to expect next door on Pecan Street, Stephanie Gonzalez and her fiancé Trevor Murphy may have thought twice before moving in a year ago. Since then, practically every weekend has meant one large party after another. On multiple occasions, they’ve seen parties of more than 100 people.”

“‘It’s like somebody decided to take Broadway and say, here’s a little seed of Broadway and we’re going to put it right next to your house,’ Murphy said. ‘We had a three-year phase out, but the state of Tennessee preempted us and said you have to grandfather those,’ said Metro councilwoman Angie Henderson of District 34.”

From Forbes on New York. “It’s likely, however, that the Manhattan market has not reached the bottom, agents say. ‘We are currently in a buyer’s market and for sure there are great deals to be made,’ says Arlene Reed, a broker with Warburg Realty. ‘Interest rates are low and the longer the developers sit with the product the more negotiable they will become. However with COVID-19 still very much on everyone’s mind, an economy that is doing poorly, many jobs not coming back and rising delinquencies, people are fearful. Many prefer to wait and see. The amount of delinquent or understated assets is understated because of all the stimulus packages and deferred loans. There has to be a trickle-down effect. Banks are preparing for a much worse scenario.'”

“‘I believe that because of all this we have not reached the bottom,’ Reed says. ‘Though you can make great deals now, there is no downside to waiting and reevaluating in six months. It is not likely that interest rates will go up anytime soon so there really isn’t any downside to waiting.'”

The Wall Street Journal. “Paul Fireman has sold his home in an affluent suburb of Boston for $23 million. It is one of the priciest sales for the area, though it also sold for a small fraction of its initial asking price. The Brookline, Mass., property originally came on the market for $90 million in 2016.”

The Los Angeles Times in California. “Musician Brent Kutzle wasn’t quite able to record a hit in Topanga. The OneRepublic bassist and cellist just sold his scenic mountain retreat for $1.865 million, or $235,000 shy of what he paid for the place last spring, records show.”

The Nob Hill Gazette in California. “To get to the bottom of this crazy market, we convened a virtual event with seven of the region’s most respected real estate professionals. DJ Grubb: I’ve been poaching a lot of San Francisco brokers who are now jumping the bridge because they’re finding that their consumer wants to come over to the Oakland/Piedmont/Berkeley communities. We are selling luxury real estate over here for under $1,000 a foot. My real estate is not expensive compared to other luxury markets in the Bay Area, especially in Piedmont, on the high end. It’s the family formation. I think they’ve been pent up in San Francisco, in their condominium and/or flat. And they’re saying, ‘Let’s get out.'”

“Gregg Lynn: We focus on the second-home market South of Market, and Russian Hill, Pacific Heights, condominium and co-op. Between 2018 and 2019, about a 12-month period, that’s when the media noticed the homelessness issue in San Francisco. That’s when the big stories came out in The Wall Street Journal and The New York Times. And that’s when there was a big acknowledgment that ‘Hey, there’s a big problem here.’ We lost about 80 percent of our buyers from the Peninsula, Marin and the East Bay that were looking for second homes here. And they haven’t come back yet. So, yes — COVID has been a horrible situation to deal with. But a lot of our second-home buyers, which are the strength of our apartment, co-op and condominium market, disappeared along time ago.”

From Socket Site in California. “Having slipped to just under $3,600 a month two weeks ago, the weighted average asking rent for an apartment in San Francisco has since ticked down another percent to $3,550. The average asking rent for an apartment in the city, which measures 2.4 bedrooms when counting a studio as having one, is now down over 20 percent ($900) from a 2015-era peak of around $4,450 per month, 18 percent ($800) cheaper than at the same time last year and 13 percent ($550) cheaper than just six months ago, with the average asking rent for a one-bedroom in the city having just dropped to around $3,000 a month (which is down from $3,700 at peak).”

“And having spiked last month, as we first reported at the time, the number of apartments being advertised for rent in San Francisco, including both one-off rentals as well as units in larger developments, is now over 150 percent higher than at the same time last year. At the same time, offers of complimentary rent and cash concessions still haven’t waned, driving effective rents down even more.”

From Yahoo Finance. “Almost a quarter of hotels were delinquent on their mortgage payments in July, the highest rate on record, according to a new report. Some 23.4% of commercial mortgage-backed security (CMBS) loans, which finance many hotels, were more than 30 days late in July, totaling $20.6 billion. Only 1.34% of hotel CMBS loans were in default in July 2019, according to Trepp.”

“‘If hotels don’t get more help, we will start to see a lot more defaults,’ said Brian Mahany, a Texas-based attorney specializing in CMBS loans. ‘Hospitality won’t get back to where it was for a couple of years, so unless there is some relief, a lot will go under.'”

“The hotel industry has been hard-hit during the coronavirus pandemic, losing over $46 billion in revenue per room since mid-February. The industry has been hit harder than the retail industry, where only 16.1% of CMBS loans were more than 30 days late in July. Hilton’s revenue per room dropped 81% in the second quarter, Marriott’s dropped 84% and Hyatt dropped 89%.”

“Previously, hotels’ highest delinquency rate was during the Great Recession at about half the rate seen this year, with only $13.5 billion in delinquent loans, according to Trepp. ‘The industry is in a lot of trouble. When you look at the delinquency numbers, it’s the highest to date in history, outpacing 2008,’ said Michael Buono, principal and CEO of New York Renaissance Group and Mulberry Development, which owns well known hotels in New York City such as the NoMad Hotel. ‘And it’s just the beginning.'”

“The largest chunk of delinquencies come from the New York City metro area, with a 38.72% delinquency rate for a total of $1.475 billion in late loans. The Chicago metro area was the next hardest hit, with 53.84% delinquency and a balance of $976.3 million. Houston and Los Angeles also each owed more than $500 million in delinquent loans, according to Trepp.”

“New York is ‘a city dependent on a huge influx of travel, which you don’t see now,’ said Buono. Plus, ‘it’s incredibly expensive to own in New York. So we come up with all these creative ways to make these deals work through long-term land leases and buying air rights. Now, hotels are suddenly not allowed to have people in this incredibly valuable space.'”

“These CMBS loans are particularly tricky when they go into default because most are packaged with hundreds of other loans and underwritten into a trust, said Mahany. ‘If you’re in default on a CMBS loan, hotel owners are starting to realize, there is no one you can deal with. There is no office, no employees — the business exists on paper only,’ said Mahany. ‘The decision maker is a special servicer who has an incentive to keep you under water for the longest possible’ because they only get paid for their administrative, decision-making services when a loan is in default, he said.”

This Post Has 159 Comments
  1. ‘Just because they shut down vacation rentals doesn’t mean that I don’t have expenses,’ said Rubini, who is retired and lives in California. ‘My property taxes also don’t go away. I pay the higher residential A rate since it’s an investment property. I used to pay $6,000 in property taxes. Since they passed Residential A, it’s more like $22,000 a year or so and they aren’t even letting me use the property for short-term rentals’

    UHS says you can always sell Mike.

    1. Rubini, i hope you were saving from that $15K a month for a safety buffer. How many years were you collecting this?

      —-
      Prior to COVID-19, Rubini said the property, which has a NUC, generated about $15,000 to $20,000 a month in income, but he said he’s made “zero dollars” since Caldwell’s ban.

      1. I suspect that Rubini only drives high end, late model German luxocars, would take plenty of pricey vacations, etc., and saved very little. Why save when you have an awesome money machine that provides you with an income most can only dream of?

  2. ‘just sold his scenic mountain retreat for $1.865 million, or $235,000 shy of what he paid for the place last spring’

    Eat yer crowz Thornberg.

  3. ‘a lot of our second-home buyers, which are the strength of our apartment, co-op and condominium market, disappeared along time ago’

    ‘The average asking rent for an apartment in the city, which measures 2.4 bedrooms when counting a studio as having one, is now down over 20 percent ($900) from a 2015-era peak’

    Disappearing buyers, rents down more than 20%. Fooked!

    1. And he said most (80%) of his buyers were from close-in Bay Area suburbs. Think he let the cat out of the bag with this. Why would anyone from Marin or the Peninsula need a second home 30 mins away in SF? We’re not talking Gilory or Sacramento distance. Oh right, speculation.

      Very interesting on many levels. 1) Apparently all along it wasn’t high-paid high-tech workers/first-time buyers propping up SF condo sales, but wealthy suburbinites gambling on appreciation. 2) If 80% of his buyers were locals, what about the myth of wealthy foreign buyers? 3) This pool of local speculators dried up pre-covid, like 2018. So who is left to buy these crazy expensive condos that no one needed in the first place?

      Reminds me of that WSJ story about the NYC couple from the Upper East Side who bought a “vacation” place 12 subway stops away in Tribeca.

      1. Makes a lot of sense. There are tons of super rich folks on the Peninsula, in Marin, and even some in swanky parts of the East Bay who are always looking for a place to park their money.

        1. Park their money and lose a lot of it to taxes and hoa fees. It only makes sense if they are expecting more bubble appreciation. Guess they stopped expecting this around 2018, according to their realtor.

        2. If Treasury rates were higher that’s where they’d park their money rather than take the risk in RE.

          1. The FED’s sick little games work. They force people to gamble in assets as inflation destroys their money if they hold it.

      2. It is interesting that originally Marin homes were vacation home areas for people living in SF. Agree this has to be speculation. When I lived in Marin, I was happy to only visit SF and no longer live there.

      3. A lot of wealthy people have “town homes,” with their main home in the suburbs and a place in town.

        I work with many wealthy people in Chicago and it’s not uncommon at all to have a condo in the city and a huge home in the North Suburbs.

  4. ‘it’s incredibly expensive to own in New York. So we come up with all these creative ways to make these deals work through long-term land leases and buying air rights’

    Creative like appraisal fraud Mike? You guys are fooked too.

  5. ‘On multiple occasions, they’ve seen parties of more than 100 people’

    ‘We had a three-year phase out, but the state of Tennessee preempted us and said you have to grandfather those’

    We’ve seen this repeatedly, including Arizona. The envelopes full of money keep locals from enforcing laws.

    1. I love how peope who broke the law the earliest now have monopoly rights to continue to break the law without any competition. “Grandfathering” my foot, it was never legal to begin with.

      1. Speaking of Airbnb…

        Police Arrest 8, Seize Firearms, Drugs And Cash At South SF Airbnb

        “During the arrests, police recovered more than $14,000 in cash, drugs and nine firearms including a modified device that allows a pistol to convert to an assault weapon… the OPD’s Robbery Division and Intelligence Unit led police to a rented Airbnb in South San Francisco on Thursday, August 20, where the robbery suspects were located and taken into custody….. suspects involved in the robbery ring stole cash, wallets and other personal property from victims all over Oakland.”

        https://sanfrancisco.cbslocal.com/2020/08/25/oakland-police-arrest-8-seize-firearms-drugs-cash-south-san-francisco-airbnb/

  6. “The industry is in a lot of trouble.”

    The existing paper asset holders are in a lot of trouble.

    I actually see hotels as a winner in NY post-pandemic. If companies are going to allow people to work remotely much of the time, they may move out beyond a commute from NYC. And if they need to work together some of the time, they may be brought in to work together and stay at hotels.

    1. ‘I actually see hotels as a winner in NY post-pandemic’

      Click! Put yer money where yer mouth is.

      1. I await a moment when asset prices will be allowed to deflate enough to make it worthwhile.

        Here is a way I could do so easily. The Vanguard REIT fund was down 33 percent YTD for a few seconds. Hmmm — starting to get interesting! Now it is down just 11.4%.

        Bottom line is there is a loss to be taken, and they are looking for someone else to take it. That’s why you have a frozen market.

        1. “Bottom line is there is a loss to be taken, and they are looking for someone else to take it.”

          That’s right. And the way Wall Street operates, I expect them to offload a lot more sh!tty assets on the unsuspecting before the losses are priced in.

          Just like happened in 2008.

    2. Hotel occupancy demand is dead as a doornail and will remain permanently depressed after the virus is gone.

      1. Jobless people won’t be staying at hotels, unless they’re in De Blasio’s New York. Then they’ll be housed in the finest hotels, cuz Compassion, Inc.

      2. Yeah, I heard the other day that Arizonans are now “allowed” to visit NY, NJ and CT without a 14 day quarantine. Of course, the state immediately emptied out to head north – NOT!

      3. Hotel occupancy demand is dead as a doornail

        I suspect they’re operating at reduced capacity, but on our trip so far, hotels have been fully booked up, and pricier than expected.

        We paid $200+ to stay at a Holiday Inn express, for example, and could only get a double-queen room (no King available).

        1. “We paid $200+ to stay at a Holiday Inn express…”

          Yikes! Did that include a Continental Breakfast?

          1. My last night in California a few weeks back I got a multi-room luxury suite with an outside patio for $150. i was the only guest on the entire floor.

          2. Yikes! Did that include a Continental Breakfast?

            Yes. I took a couple Otis Spunkmeyer muffins to go 🙂

          3. I got an email from a nice NYC hotel offering to rent out entire floors of the hotel (8ish rooms per floor) for reunions, parties, etc. for around $120 per room. (An invite your friends kind of deal.) Unheard of before covid.

        2. We paid $200+ to stay at a Holiday Inn express

          From what I have heard Estes Park and Rocky Mountain National Park have been busy this year. Clownifornia is empty? Gee, I wonder why?

          Just took a looksie on hotels dot com. Estes is pricey and booked. A Best Western has two rooms left on Saturday for $207.

          1. The RV parks in Glacier National Park were packed last week. One additional thing that contributed to that was that the native American Indian reservation on the east side had closed things done. So everybody who wanted to go were packed into the west side. Same thing around Olympic national park in Washington. All the native American Indian parts were closed. I am surprised to hear people are so comfortable using hotels.

          2. My little northern California town has been packed with tourists the last several weekends. Every eatery in town has set up tables in the nearest parking lot.

          3. “The RV parks in Glacier National Park…”

            It sure is picturesque up there. I rode through there years ago during a labor day weekend, a hottie and I on a Harley Davidson. I’ll never forget how fast it got cold when the sun set.

        3. on our trip so far, hotels have been fully booked up, and pricier than expected.

          We paid $200+ to stay at a Holiday Inn express

          My last night in California a few weeks back I got a multi-room luxury suite with an outside patio for $150. i was the only guest on the entire floor.

          So which is it? Are hotels dead, or booming?

          1. ‘Almost a quarter of hotels were delinquent on their mortgage payments in July, the highest rate on record’

          2. So which is it? Are hotels dead, or booming?

            Apparently, it depends on where it is. Big cities: dead as a door nail. Other places: your mileage may vary. Looked at Ouray: pricey and booked.

            So it seems that popular outdoor destinations are busy, while anything associated with a larger city is languishing.

          3. So it seems that popular outdoor destinations are busy, while anything associated with a larger city is languishing.

            Yeah, I think this is about right. We stayed at a fancy 5-star hotel in Kansas City, MO, for less than we paid at the Holiday Inn, the night after.

        4. I noticed in Chicago in April I could find rooms as low as $59 at four star hotels in Chicago. Now it’s about half the normal price at those upscale places. So they are picking up. However the Four Seasons and Trump Hotel did not in April nor now show any difference in price from a year ago.

        1. NYC had a glut of hotels way before this spring. How many have to go into foreclosure to convince you?

          1. They’ll go into foreclosure because the room rates required to pay for what they cost to build/buy was too high, even before COVID-19.

            Obviously, the pandemic is going to crush hospitality for a year or two. We’ll see what we have after that. What I expect is that if there are enough foreclosures, leading to reasonable prices, the rooms will fill.

      1. It may seem like a great idea to people who believe in treating a gunshot wound with a bandaid.

    3. Larry Im thinking more like a TV station, with green rooms showers pull out couches… if its bad weather snow, storm watches. power outages at home..etc. employees do stay the night or 3

      1. There are lots of possibilities if foreclosures make the entry price low enough. NYC used to have a lot of residential hotels for young people who were first moving to the city, with meals and community. Only a few left now.

        https://en.wikipedia.org/wiki/Barbizon_63

        We’ve from here, but I can’t imagine someone trying to move here from elsewhere the way it has been. Who could afford it without family to stay with?

        1. Unfortunately the legal requirements now make that kind of residential hotel, as well as rooming houses and boarding houses unfeasible.

      1. In the great green room
        There was a telephone
        And a red balloon
        And a picture of
        The cow jumping over the moon

          1. One of them said he regretted not killing the 17yo. I think he should be a little more careful about saying things like that in public. But maybe he doesn’t care about putting a target on his back.

      2. A RT.com is Russian propaganda. They mix so much BS with actual real information its impossible to determine which is which. This seems to be their goal and thereby to undermine the credibility of all news sources.

        1. Respectfully disagree. They just don’t pack it is so much glitter, and don’t follow the US propaganda. They look at facts and report. More like we had 20 years ago in US. These days all you see is endless commercials and endless propaganda…

        2. “the credibility of all news sources”

          Go back to Reddit.

          I hear they’re really good at posting New York Times and Washington Post links there.

          You’re a troll and the long-time HBB posters all know it.

        3. When I was a boy in the 70s, I would listen to Radio Havana via shortwave and was amazed how they would often carry a story a day or two before the American networks.

          Granted 90% was propaganda, you had to tune out but they got a lot of scoops. I guess that was due to lack of vetting?

    1. Caught a little late night comedy on the CBS Morning News today, Gayle King was interviewing senator Tim Scott and asked him why the black man was shot in Kenosha, Wisconsin and the white 17 year-old vigilante who shot 2 people was handed a bottle of water by police?

      IMHO Tim Scott like many people did not understand when the white kid got to the cops, no matter what he had done had his hands up and clearly had no weapon that threatened them.

      There are obviously bad or badly trained cops, hell I could have told you that in 1977, but if you let them see your hands and show them you are not a threat, don’t fight with them, don’t resist when they put the cuffs on you are more than likely going to have your day in court.

      That is not the message from the MSM. Their message is if you are black you may be gunned down by the police while you are on your way home tonight.

      The cop who knelt on George Floyd’s neck was scum. had George Floyd listened to the cops who were arresting him in the first place and done what they said, that cop would never had the chance to do it, The black dude who was passed out in the drive through in Atlanta would have gone to jail on a DUI had he not fought with the cops and shot their taser at them as he was fleeing and although I’m not sure about the black guy in Kenosha, it appears he fought the cops and then reached inside his car. Is that a reason to be shot 7 times? Probably not but I’m not some cop who just got punched and is watching the dude who punched me reach in his car for something.

      My point is the MSM would be doing black people, quite a few major cities, the United States and for that matter the world a favor if they played Chris Rock’s How not to get your ass kicked by the police video rather than stoke the Soros sponsored BLM flames and ignore the rioting looters while calling them peaceful protesters.

      Chris Rock – How not to get your ass kicked by the police

      https://youtu.be/uj0mtxXEGE8

      1. Love that Chris Rock segment. However, you wouldn’t believe what some of my white clients do and don’t get shot. I made a court appearance this morning for a guy who fled from cops, rammed the cops’ SUV with his pickup, brandished a firearm at the officers who were trying to apprehend him, and then poured gasoline all about threatened to burn up any cop who came near him. Officers negotiated with him for hours before finally blasting him out of this pickup with a fire hose. Not a single shot fired.

        1. This sponsored content post has been paid for by the Southern Poverty Law Center.

          GO BACK TO REDDIT.

  7. The airlines have shown their skill in pandering for bailouts.

    Have they bothered yet to figure out how to fly sealed metal tubes full of human passengers without spreading SARS-CoV-2 among air travelers?

    Frequent fliers want to know.

    1. Otis launches study of elevator airflow to see risk of transmitting COVID-19
      Published: Aug. 27, 2020 at 9:45 a.m. ET
      By Ciara Linnane

      Otis Worldwide Corp. (OTIS, 0.42%) said Thursday it has commissioned a study examining elevator airflow and how it affects the risk of transmitting COVID-19 among passengers. The study will be led by Dr. Qingyan (Yan) Chen, the James G. Dwyer Professor of Mechanical Engineering at Purdue, an infectious disease expert. Otis is seeking to understand how to mitigate transmission risk in elevators with safety protocols. The elevator company was spun out of the former United Technologies in April. Shares were not active premarket.

    2. Those same airlines binged on Powell Bux for share buybacks aimed at artificially goosing their share prices. Using borrowed money for that used to be illegal before these “markets” became a corrupt rigged casino.

      1. Cronyvirus capitalists gonna crony.

        Should Airlines Get a Second Bailout?
        PHOTO: American Airlines flight prepares to land at Las Vegas’ McCarran International Airport.
        (photo via Michael Valdez/iStock Unreleased)

        The airlines are hoping for a second bailout this year.

        Correction. The airlines are pleading for a second bailout.

        CEOs of the major carriers have been actively involved in courting a new round of grants and loans, to the point where United CEO Scott Kirby has made some housecalls to Washington D.C. to personally lobby some lawmakers.

        And it’s not just the head honchos. Six different union leaders representing airline workers sent a letter to the House of Representatives and the Senate asking for a payroll protection package worth $32 billion.

        This would be on top of the $50 billion in grants and loans the industry received in March from the CARES Act stimulus package.

        The question is, should airlines get a second round of funding?
        Not this time.

        Five months ago? Yes, absolutely. The effects from the coronavirus pandemic absolutely crushed the airlines, to the point where in April some flights were leaving with just a single passenger onboard and capacity was off 95 percent from where it was a year ago at the time.

        Airlines needed an infusion of cash to continue to pay employees and help keep the economy going, with the stipulation that carriers would not lay off any workers until October 1.

        But this time is different.

        This time, there likely will be no such stipulation on the airlines regarding employment and if they do get a bailout the major carriers are going to lay off people anyway. Frankly, if airlines needed another bailout specifically for payroll it would be for far less than $32 billion.

        They have repeatedly said they will get smaller, and they will. This is regardless of any new payroll protection. Airlines will downsize, and any good economist will tell you that if such moves are inevitable – and it appears they are with the industry – then better to do it now instead of delaying the expected ripple effect to the overall economy.

        There’s also a perception issue here. For nine years, up until the virus hit earlier this year, the airlines were cash cows making money hand over fist, charging up to $200 for change fees, penalties for bags over 50 pounds, fees for seat selection and more. And the bulk of it was spent on stock buybacks. Southwest Airlines spent $2 billion on buybacks last year, for instance, and American Airlines spent $1.1 billion.

        People remember.

        1. Should Airlines Get a Second Bailout?

          Should my pilot acquaintance who flies for United get paid six figures to fly twice a month?

        2. What they don’ t realize just yet is that they’ll need 50 billion every four mounts for the next 2-3 years, and then i t will go down to 20-25 for the next five years. Everyone assumes this is a short lived crisis, but anyway you look at it, even if the FED will achieve all the goals of inflation, and even at 15% yearly inflation, the only thing that will happen will be a severe deterioration of purchasing power and miserable deterioration of everyone’s standard of living. People will be a lot more focused on surviving than flying around for fun.

    3. Doesn’t sound too safe.

      But one thing’s for certain: With international air travel at only 2% to 4% of normal levels, not many COVID-19 cases are starting up in the air.

      The Coronavirus Crisis
      Coronavirus FAQ: So Do Lots Of People Get COVID-19 From Flying?

      August 21, 20204:12 PM ET
      Pranav Baskar
      A flight attendant adjusts protective glasses. There has been little documentation about COVID-19 transmission on planes.
      Valentyn Ogirenko/Reuters

      Air travel has seldom looked the way it does right now.

      International aviation is operating just 2% to 4% of its normal number of flights.

      And plane tickets are selling for dirt-cheap — like a famed $6 ride from Newark, N.J., to Fort Myers, Fla., earlier this year.

      The economics of aviation has certainly changed.

      So has the nature of air travel. A new spate of rules and techniques — from mask requirements (now enacted by all major airlines) to symptom-screens for signs of the novel coronavirus — has emerged quickly. Airlines are attempting to reassure disease-fearing potential passengers, who may be understandably nervous at the idea of being trapped indoors in close proximity to many people for hours on end.

      And there’s reason to be nervous. A new study published this week discovered two likely transmissions of COVID-19 on a four-hour-plus flight from Tel Aviv, Israel, to Frankfurt, Germany, carrying 102 passengers. The study followed a 24-member tourist group, who, seven days earlier, had contact with a hotel manager who was later diagnosed with COVID-19. Seven of those tourists tested positive for the virus upon arriving in Frankfurt — as did two passengers who were seated within two rows of one of the tourists.

      Which brings us to our frequently asked questions for the week. How risky is air travel during a pandemic? And if it is risky, why aren’t we hearing about more cases where passengers were infected on a flight?

      Or to put it another way: Could the headline of one CNN article, published on Thursday, be right: “The odds of catching Covid-19 on an airplane are slimmer than you think, scientists say.”

      The truth is, there are no easy answers.

      One report in early August by the International Air Travel Association Medical Advisory Group explained that “relatively little research has been published on in-flight transmission of COVID-19.”

      1. Blah blah. Why do these idiots think that travel involves planes and nothing else? I’m not getting anywhere near an airport until I have a vaccine and boosters.

        1. The UK relatives want to go see their son and grand daughter in Canada. The hoops the would have to jump through to do that are onerous, so they aren’t going.

        2. I’m not getting anywhere near an airport until I have a vaccine and boosters.

          I’m not getting anywhere near “a vaccine and boosters.” Nobody’s injecting a Bill Gates Special into my arm.

          1. While I’m not anti-vax, I would rather wait some time for these vaccines to shake themselves out. But as yet, we have no approved at-home treatments. HCQ has been purposely demonized, and I wouldn’t be surprised if Ivermectin is being held in reserve for Biden to crow over. It’s as if Big Pharma and the globalist socialists are purposely withholding treatment as a means of forcing suffering people to finally give in and purchase a very expensive hospital stay.

            The only way I would feel comfortable waiting for a vaccine is if I can get my hands on a rapid test and a pre-emptive course of an approved treatment, so I could test and treat myself the moment I feel a symptom.
            Even then, I would rather stay a hermit if I could; however I probably can’t w@h forever, and my little stock of N-95s won’t hold out that long.

      2. “Airlines are attempting to reassure disease-fearing potential pa$$engers, who may be understandably nervous at the idea of being trapped indoors in close proximity to many people for hours on end.”

        📢🎤 “it’s just the common.cold folks!” Ra$h Limpbaugh$

          1. Uh…no.

            The worst flu season in the past decade was 2017-18, with 61,000 U.S. deaths, with the possible exception of 2019-20, when up to 62,000 deaths.
            And flu deaths pretty much stop when the season ends, in the springtime.

            COVID-19 has already reached three times this number (180,000 deaths so far), with a steady increase throughout the summer. And this is mostly in addition to flu deaths. And people don’t normally hunker down at home during flu season to slow transmission.

            So COVID-19 is much worse. And this ain’t rocket science!

          2. COVID-19 has already reached three times this number (180,000 deaths so far)

            Sorry, the number is totally bogus. Counting motorcycle crash deaths as COVID because the rider tested positive is not a COVID death. Got politicized virus to remove orange man bad?

          3. As I’ve mentioned before, what if the flu spread for the first time, like this virus? It would result in many more deaths than the “annual” counts.

          4. x1 deeth.👾.virus death every 80 seconds, … munch, munch, munch … lung tissues + lung.owners income$+ …

            (-180,086+ Americans) – (x8 motorcycle riders without helmets) = (-180,078+)
            Yesterday’$ deeth.👾 deaths = (-1,210)

            !Gargle with 2oz of bleach x3 times a day, take x2 aspirin, yer healed! (Now get back.to.work!)

            📢🎤 “it’s just the common.cold folks!” Ra$h Limpbaugh$

          5. Could we please show some respect for that poor motorcylclist? That single death has been flogged a thousand times and it’s getting crass.

            Even if 1/3 of cases were something other than actual COVID, that’s still twice our worst flu season, and as Bear said, that’s twice the flu season even while wearing masks and cancelling school. But by all means Rip, go out and party like it’s 2019. Just don’t b*tch if you become a long-hauler.

          6. But by all means Rip, go out and party like it’s 2019. Just don’t b*tch if you become a long-hauler.

            Nah. I will respect that there’s a virus out there that I don’t want to get, so I will continue to wash hands, wear my masks where required, and be diligent, but I’m also aware of how overblown the whole thing is.

            The deranged globalist cuck media has been peddling fear and anti-Trump virus rhetoric on high for over 6 months. They want him out of there so they can continue raping and pillaging the country.

          7. I can’t disagree with the point about politicizing COVID-19 for political gain.

            But the idea that John Hopkins University and other independent scientific organizations are ovderstating COVID-19 death counts for political reasons seems somewhat implausible.

          8. But the idea that John Hopkins University and other independent scientific organizations are ovderstating COVID-19 death counts for political reasons seems somewhat implausible.

            But they are merely following the rules and compiling the statistics. If the rules are flawed and that stats different from state to state you get wrong results.

          9. I know that the stats are imperfect. But I thought some posters were suggesting they were made up and greatly exaggerated for political reasons, which is quite another story entirely.

    4. Frequent fliers want to know. I have a solution! All passengers must die before boarding. Then the airlines can seal them up in plastic wrap for extra protection against communicable diseases of all kinds.

  8. Fed adopts ‘average inflation target’ of 2% as new policy – MarketWatch
    https://www.marketwatch.com/story/fed-unanimously-adopts-new-strategy-widely-seen-as-leading-to-easier-policy-2020-08-27

    (snip)

    “Global oversupply has created deflationary forces that have bedeviled foreign central banks as the traditional tool of cutting interest rates to spur employment no longer is effective. Too low inflation saps energy from economies. Foreign central banks have pushed their benchmark interest rates into negative territory to try to spur demand.”

    Mr. Banker’s opinion on the matter:

    Global oversupply was caused in part due to availability of enormous amounts of capital that was used to build things so as to produce stuff. Because so things were built and so much of stuff was produced an oversupply resulted. This oversupply is deflationary.

    To counter this deflation interest rates need to be lowered so that more capital can be allocated to building more things so as to produce more stuff. This policy should succeed in countering the deflationary forces that were caused in the past.

    1. Dumb question of the day:

      Doesn’t creating massive incentives to build unneeded, unwanted stuff create deflationary pressures when the price of said stuff heads towards $0?

      1. To be helpful, Mr. Banker’s summary:

        Doing more of the same thing will always fix the problem.

        Implied but not stated, doing more of the same thing will help Mr. Banker inflate his personal account balances. This is the only inflation that matters.

          1. A beautiful world is one where so many small businesses spring into being and are forced to compete against each other so severely that they must – MUST – come to me for financing. I, of course, will be the good guy that will lend them the money to, oh, meet payroll or purchase inventory, or whatever. This lending, of course will be on my terms (as it always is 😁).

            If logic prevailed it would eventually come to the attention of all of these desperate borrowers that it is I, Mr. Banker, who is at the root of their problems in that I am the one who financed all these businesses that sprung into being in the first place, that I am the catalyst that drove the creation of the oversupply of businesses that are currently causing them so much financial grief.

            But logic will not prevail because these pukes have been successfully and totally dumbed-down by our No-Child-Left-Behind educational processes, of which I am deeply and sincerely grateful.

            😁

          2. The efficient parasite does not kill the host. The efficient banker does not drive his customers into bankruptcy. The efficient banker sets it up so as to financially squeeze his customers to the max. Ideally he will drive his customers (or, more accurately, he will allow his customers to drive themselves) to the very edge of bankruptcy but will refrain from giving them that final nudge that will send him over. He will do this by implementing his policy of Keeping Hope Alive.

            Keep Hope Alive and suck ’em dry.

      2. What Powell really meant is that everyone will have to take a cut in expectations and standard of living. What happened over the past 20 years was simply unrealistic. Now it is time to pay the bill and reset to much lower wages(in real terms). Of course, some will be suffering a lot more than the others, but we’ll all do, except the 1%s.

      1. I’m hoping this rally lasts till the end of the day. I’m trying to stay 20-25% equities and the recent zoom-up has unbalanced that. Time to unload a little more.

    2. “Many find it counterintuitive that the Fed would want to push up inflation,” Powell said. But the Fed chief warned that low inflation leads to declining inflation expectations, which has the effect of “diminishing our capacity to stabilize the economy through cutting interest rates.”

      Why are these clowns in charge?

        1. Thank you. It is difficult to remain humble as my elevated social status is finally acknowledged, is fully understood, and is deeply appreciated.

    3. “Global oversupply was caused in part due to availability of enormous amounts of capital that was used to build things so as to produce stuff. Because so things were built and so much of stuff was produced an oversupply resulted. This oversupply is deflationary.”

      Global oversupply was caused by income inequality. If people had the income to buy all the extra things they produced, then it would not have been necessary for everyone and everything to to deeper and deeper into debt to prevent a collapse of final demand.

      https://larrylittlefield.wordpress.com/2018/09/06/rising-u-s-debt-is-the-real-cause-of-the-u-s-trade-deficit-and-inequality/

      1. You must be talking about China. Here, we produce f*ck all.

        And Larry, you need to get out more. iPhones and Nikes are a human right.

  9. An example of selective debt cancellation by a government entity: https://baltimorebrew.com/2020/08/26/city-wipes-away-500000-from-loan-to-troubled-shoprite-store-on-liberty-heights/ – the point being that if the Fed owns huge amounts of debt on it magic balance sheet, it, or the government could do the same.

    Powell talked about allowing higher inflation at today’s early morning Jackson Hole speech. This should make the value of the debt go down. Yet the bond market won’t like the value of its debt going down, which means ultra-low or even negative rates on debt. And the debt has its “strategic debt reserve” where it buys trillions in debt (it printed about 3 trillion and sucked that much debt out of the system in like couple of months this year: https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm ). And low interest rates on Treasuries is a requirement for the government so it can implement its MMT-lite.

    It’s a curious conundrum (I think).

    I guess the price stability mandate is out the window, sort of?

    1. “low intere$t rates on Trea$uries is a requirement for the government so it can implement its MMT-lite.”

      “Pu$h.over” Powell & “$ociali$t” Munchin = Apostle$ of thee.🍊.jesus.

      ($ad)

  10. ‘Heidi De La Cruz Velazquez is a working 23-year-old who’s never had her own bedroom. On Wednesday, she and other struggling San Jose tenants rallied on the site of a proposed 1.1 million-square-foot tech campus to ask large developers to pay for affordable housing.’

    “We’re charging you. You owe us,” said De La Cruz Velazquez, whose family of six working adults lives in a two-bedroom apartment. “If you want to come here, you’re going to have to find a way to make sure I can stay.”

    https://www.msn.com/en-us/money/realestate/we-re-charging-you-san-jose-tenants-ask-big-developers-to-pay-for-housing/ar-BB18p1ro?ocid=hplocalnews

    Stamp em Heidi! Now get out of the bulldozers way.

    1. “We’re charging you. You owe us,” said De La Cruz Velazquez, whose family of six working adults lives in a two-bedroom apartment. “If you want to come here, you’re going to have to find a way to make sure I can stay.”

      I never studied political science, but I’m going to go with Socialist.

      1. Well, if you did study it, you would have found out that it is never about socialism, communism, or capitalism, but about a correctly set, functional and fair system, where everyone plays by the same rules and obeys the same laws. When you have “exceptionalism” , than the exempt ones feel entitled to not do any of the above, but take full advantage of those who do.
        Like in ” those who turn their guns into plows will very soon plow for those who didn’t”. And that’s just one random example of many.
        In other words, we are simply animals with instincts and very rarely and never all do we raise above that nature: Human Nature.
        Plato has already discussed in widely 2400 years ago, Cicero understood it very well, and we never made any progress ever since… the stone age.

    2. rallied on the site of a proposed 1.1 million-square-foot tech campus to ask large developers to pay for affordable housing

      Why don’t these people leave for more affordable pastures?

    1. I can’t even relate to all the rigged markets. This is not capitalism . Globalism isn’t capitalism either because it’s based on using the lowest pay scale World wide while outsourcing jobs and manufacturing to the lowest pay scale World wide.
      I think if you manufacture in a Foreign Country you are no longer a American Company because you are giving those wages to a foreign Country. Therefore a penalty tax should be levied for being allowed to sell that product in the USA.

      When American Corporations started outsourcing jobs and manufacturing to other Countries like China it destroyed capitalism. It all started with places like Walmart buying cheap China goods and becoming a monopoly that gutted American Companies ability to compete. Walmart. should of had a penalty tax levied by the Government rather than them becoming the monopoly that gutted American manufacturing and jobs.

      Yes, a Country has to have protection from a Gobal pay scale . Trade is one thing and a monopoly based on the lowest pay scale is another.

      It was a economic betrayal of the US Citizens by the Political class to screw America by Globalism.

      Communist China grew and we got contracted and gutted. China has over a billon people to produce for, but no they had to take our jobs .

      Unless you have the same pay scale and conditions World wide you can’t have Globalism . Now China wants to take over the World because the Politicians sold out to the money people.
      So, all this needs to be reversed and corrected before the USA destruction is a done deal.
      There is no choice because what divides us is not racism but rather the sell out of America to Globalism and Commie BS.
      We have become the victim of the Globalist World and the deep welfare State that the Dem party hijacked.

      The Resistance needs to be taken out before they destroy America entirely. The Globalist need to be taken out because they are the great Looters along with their Commie street Looters they support.

  11. Tests and tracing crucial, say experts, as U.S. coronavirus cases near 6 million

    Coronavirus update: Global case tally tops 24 million, U.S. tally above 5.8 million and experts say testing and tracing is crucial
    Published: Aug. 27, 2020 at 12:11 p.m. ET
    By Ciara Linnane
    Data shows GDP fell 31.7% in the second quarter, while just over a million Americans sought jobless benefits in latest week

    The number of confirmed cases of the coronavirus illness COVID-19 worldwide climbed above 24 million on Thursday, and the U.S. tally topped 5.8 million, as experts continued to criticize new guidelines from the Centers for Disease Control and Prevention on testing that will exclude asymptomatic patients.

    The Harvard Global Health Institute (HGHI) was latest to weigh in and said the change isn’t supported by current scientific evidence and “would lead to more cases, more illness and more deaths.”

    The new guidance “represents a major departure from the evidence-based policy on tracing and testing contacts of positive cases that has played a key role in the success of states such as New York and Massachusetts and countries such as Germany and South Korea to contain the virus,” the HGHI said in a statement.

    1. Contact tracing is worthless in the face of asymptomatic spread. It’s even more worthless if your standard for “contact” is 15 minutes. Testing to stop spread will really only work if it’s done on almost everybody almost every day, with concomitant immediate and voluntary self-isolation. There’s some hope for that with the 15-minute saliva paper-strip testing.

      1. “Testing to stop spread will really only work if it’s done on almost everybody almost every day, with concomitant immediate and voluntary self-isolation.”

        Have they done that in Germany, Norway, South Korea and New Zealand?

    2. Wow, U.S. coronavirus cases near 6 million. So I should be hearing demands to “Bring out your dead”, but for some reason I’m not.

      Not that I get out all that much but I do not know one person who is deathly sick from this coronavirus.

        1. We’re in the early innings of the game, with little chance of rain cancellation.

          Oh, really? Is that from your crystal ball, or your Magic 8 ball? Or, have you been snorting 8 balls? Hehehe….

  12. +700,000 warning$ = tip.of.Federal.Re$erve. “UNLIMITED+”.Gigantic.Titantic.ice.berg

    Buy some $tate lotto winning ticket$? Opened a free Robin.hood $tock.trading account? It’$ all $elf.entertainment now baby!

    $tay.home, gamble with gubermint’$ $timulus.monie$, $tay.$afe!

    Deeth.👾.virus … munch, munch, munch, …

    What you need to know:
    How Coronaviru$ Is Tran$forming Human Behavior

    Pursuit$
    Playing Poker Online During Lockdown? Turns Out You Are Not Alone

    Bloomberg / By Thomas Seal and Jennifer Ryan / August 27, 2020

    Coronaviru$ has left many people uncertain about their economic future. It’s also given some of them an appetite for playing poker.

    Flutter Entertainment Plc said a surge in online gambling helped to push sales up 22% in the first half of 2020. Average daily gaming customer$ grew 70% at its PokerStars division in the second quarter, when economies were frozen by lockdowns.

    People stuck at home “rediscovered their love of poker,” Chief Executive Officer Peter Jackson told reporters after Flutter’s first results since its merger with the Stars Group in May. Much of the betting was “small,” at about 10 pounds ($13) a week, making it a “low-cost form of entertainment,” he said.

    The world’s biggest gambling company intervened far more often to di$courage ri$ky behavior in response to the boom in online gaming and the prospect of tighter regulation. The company “dramatically stepped up the number of intervention$,” Jackson said. At its Sky Betting and Gaming division, it sent more than 700,000 warning$ to players about their depo$it limits.

  13. Brett Arends’s ROI
    Opinion: Investors should be wary of Warren Buffett’s crash warning
    Published: Aug. 26, 2020 at 6:49 p.m. ET
    By Brett Arends
    Leaving the party too early can cost you as much as leaving too late

    I hesitate to disagree with anything Warren Buffett says about the stock market. He’s made about $80 billion from investing—and I certainly haven’t.

    But when it comes to his famous warning about the dot-com bubble 20 years ago, long-term investors—such as those saving for their retirement—need to grab a large fistful of salt.

    “They know that overstaying the festivities—that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future—will eventually bring on pumpkins and mice,” Buffett warned Berkshire Hathaway stockholders back in 2000, regarding those gambling on sky-high internet stocks. He added: “But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”

    1. Oh, there’$ a hand, it’$ the one that continuously goes tick, tick, tick … $adly it only gives you an approximation of the e $omething.wicked.this.way.come$ death.$piral.hour, + – 59 $econds.

      Good thing thee $tock.Market$ are equipped with portfolio.$aving Circuit.Breaker$! = Bee Free, NO worrie$!I

      Keep.throwing.thee.🎲🎲🎰🃏… 👀🎬🎈🎈🎈🚀📈📈📈📈📈📈🎡🎢🌈🎂🎆🎇🎉🎉🎉👏 🙈🙉🙊 … 🍩☕

    1. If this proposal gains widespread traction, fixed income pensioners and bond HODLers will get thrown under the bus, especially with the Fed’s new inflation averaging over an Unlimited future time horizon.

  14. I just got this in an email:

    Alignable’s Q4 Anticipation Poll of 1,361 small retailers warns of what could lie ahead for small B2C businesses on Main Streets across the U.S. and Canada. Based on revenue and inventory projections, and the long-term impact of COVID, more than 35% of shops and restaurants might not survive to see 2021.

    Conducted from August 15-20, 2020, the Alignable poll uncovered key findings that could only be described as bleak:

    -63% of retail business say they depend on Q4 sales to stay afloat

    -69% anticipate a decline in sales compared to Q4 2019

    -33% predict sales decreases in excess of 50%

    -Retailers estimate needing at least 64% of Q4 2019 revenues to stay in business

    What does this all add up to? More than 35% of retailers could close for good at the end of Q4

    “Most retailers look forward to the holiday season,” said Alignable Co-Founder and CEO Eric Groves. “But sadly, the devastation of the COVID threat has turned hearty optimism into a very clear call for help from many Main Street businesses. If consumer demand doesn’t change rapidly, many Main Streets could resemble ghost towns next year.”

    Beyond the survey findings above, other trends have emerged that suggest Q4 2020 could be very disappointing, even devastating to many boutiques, cafes, galleries, and more.

    Supply Chains Are Compromised — Many retailers have already placed orders for the holiday season. Alignable’s poll discovered that 59% of these businesses spent less on inventory this year than last year.

    In addition, 40% say they’re experiencing difficulties obtaining key product lines from suppliers on a timely basis. If they can’t offer what their consumers want, they’re already at a disadvantage before they even open their doors to holiday shoppers.

    Hiring? Who Knows? — The National Retail Federation estimated as many as 560,000 temporary jobs were created during the 2019 holiday season. But in Alignable’s poll, 66% of business owners said it’s still too soon to tell if they’ll even be hiring any temporary staff this year.

    1. As long as the Hitler Salute is required in the name of BLM, the protesters will enjoy immunity against COVID-19 spread.

      I know this is true because someone published an NBER paper to this effect earlier this year which was widely cited in the MSM.

  15. I’m not too worried about Paul Fireman of the Brookline house that sold for 23 million, original asking price of 90 million. He is still a billionaire. I’m currently in Brookline (where my S.O. lives) about 4 miles from Paul’s former country club estate.

    Meanwhile, one of my “high yield interest savings” accounts is currently earning a wicked high 0.60%. After Jay Powell’s speech this morning I can expect that rate to go even lower. In 2019 when the Fed was raising interest rates it went up to a whopping 2.20%. Those were good times!

    Oh yeah, back in the 80’s I had a CD that earned 15%!!! Those were really good times! Back then I heard about people “living off of their interest” and after a few years in the work force, I began saving in earnest.

    Fast forward to today, 0.60% interest rate. Woo hoo! It’s a great time to be a saver! Thanks, Fed! Still not a great time to be a buyer around here unless you’re looking to spend about 23 million….Ok, somewhere in the millions…that’s where the “deals” are, it appears. 🙂

    1. “…. It’s a great time to be a saver! Thanks, Fed! …”

      Remember, ‘We are all in this together’

    2. you’re lucky to be in positive territory> Just wait until Powell get the real inflation around 10% Y

    3. I remember when they made fun of Mr Drysdale (Beverly Hillbillies) for paying 4% when the standard was 5%. He later raised it to 5%.

  16. I just got back to MA from a 3 week trip to Colorado and Wyoming where I stayed in Estes Park, Ouray, Aspen, Colorado Springs and Jackson among other places and all seemed quite busy. I think that urban destinations like NYC and Vegas are probably dead but places that have lots of outdoor activities seem to be recovering nicely. Aside from a run-in with a state trooper at a speed trap in Alamosa it was a great trip.

    1. Mr. Slow Joe Biden, Mr. Slow Joe hidin’
      Gotta keep on hidin’
      Hidin’, Biden
      I gotta hide Joe Bidem
      Well, hidin’, hidin’
      I gotta, wooo, yeah, hidin’
      Whoa, oh yeah

      Well, I picked Kamala Harris bout’ an hour ago
      Took a look around, see which way the wind blow
      Where the little girls in their Hollywood bungalows

      https://youtu.be/vHXjcdNIN-Q?t=294

    2. Are debates in the works?

      Although I completely missed both the DNC and RNC conventions, due to an unfortunate boating accident, I wouldn’t miss the debates, if they happened.

  17. The hotel industry has been hard-hit during the coronavirus pandemic, losing over $46 billion in revenue per room since mid-February.

    Per room? Holy meshuggah that is a lot!

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