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Bond Raters Saw Virtually No Risk Of Taking Losses Just Two Months Ago

A weekend topic starting with the Los Angeles Times. “The Luxe Rodeo Drive is the first high-end hotel in the Los Angeles area to go out of business because of the pandemic, and industry experts point to an unusually high loan delinquency rate among hotel borrowers as a sign that more closures are likely to follow. ‘We know there is a tsunami outside. We know it’s going to hit the beach. We just don’t know when,’ said Donald Wise, a commercial real estate expert.”

“High-end hotels have also closed in other parts of the country, including the 44-story Hilton Times Square hotel in New York City, which went out of business this month. Ashford Hospitality recently turned over the keys to its newly purchased Embassy Suites in Midtown Manhattan to its lender after the real estate investment trust fell behind on debt payments. The owner of Chicago’s Palmer House Hilton hotel was sued by Wells Fargo last month, accused of defaulting on a $333.2-million loan.”

“‘We anticipate many hotels won’t survive,’ said Heather Rozman, executive director of the Hotel Assn. of Los Angeles. ‘Industry data shows 1 in 4 properties already are struggling to pay mortgages, risking foreclosure.'”

“Nationwide, it’s not clear how many hotels are behind on their loan payments. But figures are available on hotel loans that have been bundled and sold to investors as commercial mortgage-backed securities. Payments on 16.77% of those loans are more than 30 days late, according to Fitch Ratings — up dramatically from less than 2% before the industry began feeling the pandemic’s financial effects.”

“New York has over the last few years experienced a surge in new hotel construction to serve a boom in international visitors and many of the hotels that close due to the pandemic will likely convert to residential properties or offices because of the glut of hotels, said Alan X. Reay, president of Atlas Hospitality Group. In Southern California, it is unclear what will become of shuttered hotels.”

The San Francisco Chronicle. “A large number of U.S. hotels temporarily closed their doors as bookings dried up last spring due to the coronavirus pandemic. And as fall approaches, it looks like a significant number of them might not be able to reopen as expected even if business starts to pick up to a healthy level again. Although big banks and other lenders often allowed some flexibility for strapped hotels to make their mortgage payments during the pandemic, their patience is running low and foreclosure is looming for some major urban properties.”

“New York City, which has seen a boom in new hotel openings in the past few years, is now seeing a boom in permanent closings. Take, for instance, the Omni Berkshire Place, a classic business travelers’ hotel at Madison Ave. and 52nd Street. Go to its website and you’ll see a notice that the property is ‘permanently closed.'”

“The W New York-Downtown in the financial district reportedly plans to shut down for good in October. And more permanent closings are likely. According to a report on CNBC, 34 percent of the hotels in New York City are delinquent on their debts. The report quotes an executive at a leading hospitality investment bank as saying the closures thus far are merely ‘the tip of the iceberg,’ with more likely to follow – especially in the Times Square/Midtown area. The city was already becoming overbuilt before the pandemic hit.”

“And it’s not just New York. The CNBC report notes that hotel delinquencies ‘are rising significantly’” in cities like Houston, Los Angeles and Chicago. Speaking of Chicago, one of that city’s most iconic hotels – the 1,600-room Palmer House, operated by Hilton in the heart of The Loop – was sued last month by lenders for defaulting on a mortgage to the tune of more than $330 million.”

“Last month, the American Hotel & Lodging Association (AHLA) and hundreds of industry executives sent a letter to Congress asking for urgent relief in the face of unprecedented financial difficulties. ‘With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently,’ said AHLA CEO Chip Rogers. ‘Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate.'”

The Wall Street Journal. “The recent sale of the Royalton hotel in midtown Manhattan marks the end of an era. That’s how its new owner, Tyler Morse, sees it, at least. The Royalton was one of the country’s original boutique hotels, properties that put an emphasis on style and design and turned lobbies into social hubs. Located near Times Square, the Royalton helped launch a mania for this kind of lodging, starting in the 1980s.”

“The Royalton’s value has eroded over the years, which now says as much about the challenging lodging environment as it does about the property’s luster. Hotel owner and operator MCR Investors, paid nearly $41 million for the property. The recent sale price was well below the $55 million the previous owners paid for the property in 2017, according to data company Real Capital Analytics. The hotel appraised at $69 million in 2005, RCA said.”

“New York hotels in general have struggled mightily since the pandemic upended business travel, cut off most foreign tourism and closed down many city attractions. New York City’s average daily room rates for the week ended Sept. 5 were down 41% from the year-earlier period, according to data firm STR. The city’s occupancy levels stood at 39%, which was down 56% year over year and below the recent peak of 50% in early June, STR said.”

From Bloomberg. “Bond investors who wagered on a group of malls owned by Barry Sternlicht’s Starwood Capital Group are starting to take losses after the Covid-19 pandemic shuttered stores and wiped out emergency cash reserves that had been keeping interest payments flowing. The commercial-property bond, known as Starwood Retail Property Trust 2014-STAR, is backed by an almost $700 million defaulted loan. It’s cutting interest payouts to investors for a second time, after a reserve account dried up in June and a sharply lower property valuation led to the servicer holding back some funds.”

“The bond’s performance shows how rapidly the pandemic is deepening losses in a sector that was already getting crushed by online shopping. Even the part of the bond deal that was once rated AAA — meaning bond raters saw virtually no risk of taking losses just two months ago — have now been cut deep into junk territory.”

From Market Watch. “Minneapolis Fed President Neel Kashkari on Friday decried the U.S. financial system as ‘absurd’ because it has needed a central bank bailout twice in less than 20 years. ‘How can it possibly be this fragile?’ Kashkari asked, in a speech to the Council of Institutional Investors. In March when it became clear that the coronavirus pandemic would damage the U.S. economy, investors and institutions attempted to move to relatively safe assets, causing the U.S. funding markets to buckle.”

“The Fed moved in with trillions of dollars to support markets and, in the process, removed long-tail downside risks from aggressive trades held by firms. ‘The funding markets that almost collapsed in March raise important and complex policy questions,’ Kashkari said. It is not as simple as addressing the risks of too-big-to-fail banks, where the clear and straightforward solution is to force them to fund themselves with more equity, he said.”

“‘The solution of fragile funding markets is less obvious but also important,’ Kashkari said. ‘Fundamentally, I wonder why we allow firms, financial or otherwise, to fund themselves overnight?’ What societal value is there in repo markets that prove so fragile when risks emerge, he said.”

“Even former top Fed officials like Ben Bernanke and Janet Yellen have said the Fed needs to get its arms around why financial markets broke down in March. Supporters of the financial system have argued that banks and shadow banks were not the cause of the crisis as they had been in 2008. But Kashkari seemed to have little patience with large banks that benefitted from government aid. ‘You might not realize it, but the banks got a lot of help,’ Kashkari said.”

“He noted banks were key beneficiaries of the COVID-19 economic stimulus measures passed by Congress this year. Without these one-time checks, more Americans would not have been able to make their credit card payments, he noted.”

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This Post Has 143 Comments

  1. ‘I wonder why we allow firms, financial or otherwise, to fund themselves overnight?’

    Like Quicken and Lending Tree and dozens of other fly by night non-bank outfits?

    1. I don’t believe Kashkari is that stupid. The only thing keeping the mortgage market going is QuickenLoans. I’ve been solicited to refi so I finally started. Of four refinancing crews I’m looking at, it turns that 3 are actually funded by Quicken… and therefore the Fed. (I’m not sure yet about the 4th — which is an actual CU — being funded by Quicken, but wouldn’t be surprised.)

      1. The only thing keeping the mortgage market going is QuickenLoans. I’ve been solicited to refi so I finally started.

        They’re wringing out every last customer they possibly can, riding this low rate nonsense for everything it’s worth. The problem is rates can’t go lower, so no more refi pandemonium. Then what?

        1. There will always be refi pandemonium because people will always want to take cash out. People will refi at 2.5% and then 5 years later they’ll refi at 2.5% again. Or better yet, refi at 0% or wherever Jerome lands.

          1. People will refi at 2.5% and then 5 years later they’ll refi at 2.5% again. Or better yet, refi at 0% or wherever Jerome lands.

            Nonsense. When prices fall, there’s no more equity to extract.

          2. Agreed. I’m actually trying to accomplish a no-cost refi, with no cash out.

            I electronically signed the paperwork to that effect.

            Today I opened the latest application (on the QuickenLoans site now as the originator has apparently passed responsibility on): An additional $5K was added to closing costs.

            I have the 2 PDFs, side-by-side; there is no mistake. It’s fraud, pure and simple.

            Apparently most of their customers, especially taking cash out, never actually check to see how Quicken is cheating them. (This is the second time QL has done this to me in the last 2 months.)

          4. Wow, talk about not letting a crisis go to waste! Cash-outs are no longer about boobs or sexi-trux. Quicken knows full well that people lost hours or jobs because of COVID and they need that cash out to keep up with bills. They are deliberately taking an obscene skim off of the sick and vulnerable, and they are doing it NOW, just when people’s savings and/or forebearances are running out. May they rot in hell. 👺

  2. ‘Even former top Fed officials like Ben Bernanke and Janet Yellen have said the Fed needs to get its arms around why financial markets broke down in March’

    Even!

    ‘Supporters of the financial system have argued that banks and shadow banks were not the cause of the crisis as they had been in 2008’

    ‘Supporters of the financial system’ is a strange thing to say. Just who are the ‘opponents of the financial system’? Aren’t we all dragged along with this ‘absurd’ set up?

    1. ‘Even former top Fed officials like Ben Bernanke and Janet Yellen have said the Fed needs to get its arms around why financial markets broke down in March’

      Markets could not have broken down in March. That is simply inconceivable. Old Yellen assured us there would be no new financial crisis “in our time” thanks to the Fed’s “reforms” and stewardship of the financial system. So as long as the old girl is still with us, the Fed’s Ponzi markets should grind higher.

    2. Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.

      – Ben Bernanke,
      May 2007

  3. 3 May 2017

    Which US hotel markets are on the bubble?

    As the hotel industry continues on the path toward a downturn, it’s time to begin looking at warning signs for which markets are poised to experience a large drop.

    By Jack B. Corgel, Managing Director, CBRE Hotels’ Americas Research

    ‘At a recent gathering, I was involved in a group conversation with hotel property investors who agreed that they have been “choking on the numbers” in certain U.S. hotel markets. Stated differently, their spreadsheet models explode once either acquisition prices or development costs are entered to evaluate hotel opportunities, especially in red-hot markets.’

    ‘They asked, “Should we pay such high prices now, given that the boom may turn into a bust?” As a college professor, I offered the standard response: “It depends, what do you think?” As a hotel market forecaster, I promised to think and write about hotel property market bubbles with regard to their questions, and likely those of others, about current pricing in local markets.’

    ‘Boom and bust experiences over the past few decades—with tech stock prices and housing prices, for example—have generated an avalanche of books and articles about short-term, extraordinary asset pricing volatility. A summary of these writings appears as follows.’

    ‘The grand debate centers on whether asset price bubbles either emerge from rational responses to fundamental stimulants by market participants or from irrational behaviors, such as sentiment and over-optimism, not directly related to fundamentals (see surveys by Glasser and Nathanson, 2014; and Mayer, 2011).’

    ‘The other grand debate involves measurement. The time-honored definition of a bubble is when asset prices markedly depart from fundamental values. The analysis machinery becomes clogged when trying to deal with the term “markedly depart” and further challenged with attempting to compute “fundamental values.” Hence, no firm conclusions have been reached about how to detect bubbles ex ante. Ex post detection is far easier, in some cases like a slam dunk into a five-foot-high basket!’

    ‘Credit excesses have been found to be instrumental in the creation of many, but not all, asset market bubble cases (see Levitan and Wachter, 2013). Non-credit causes come in many different flavors. Examples of housing market bubbles from non-credit related causes include supply-side constraints and demand factors such as income instability, and social interaction issues (see Jorda, Schularick and Taylor, 2016).’

    ‘All of the research on real estate bubbles focuses on housing markets except Levitan and Wachter (2013), who laid the blame on mortgage credit excesses in pricing of commercial real estate during the last cyclical peak. To my knowledge, no publications have addressed hotel market bubbles.’

    https://www.hospitalitynet.org/opinion/4082501.html

    I posted this when it came out. Just how is it we get these manias in all sorts of markets? And the media will never connect the dots on yield chasing, too much money sloshing around, central banking idiots, because they are “supporters of the financial system.”

    1. Los Angeles Business Journal
      Vivo Looks to Convert ‘Overbuilt’ Hotels Into Apartments
      Torrance-based Vivo Investment Group launched in May with the goal of transforming a glut of excess hotel rooms into much-needed apartment units.

      1. “…with the goal of transforming a glut of excess hotel rooms into much-needed apartment units.”

        What about housing for the homeless? Couldn’t LA hotel rooms serve this much-needed purpose?

        1. There are
          1. employed homeless
          2. employable homeless
          3. unemployable homeless.

          I would prefer that the hotel rooms be rented out to #1 and #2.

    2. As I traveled in the past ten years around the lower 48 I saw being built at every third (or less) exit on the interstate multiple stick and twig motels going up. They are basically all the same. Why are all of these being built? That many people travel and stay at these fiberboard boxes?

      1. That many people travel and stay at these fiberboard boxes?

        No, they don’t. However, that doesn’t stop them from building them and clinging to delusional prices. I was traveling a little over a year ago and feeling tired, so pulled over at a rest stop to call some local motels. I had a dog with me. All had rooms but the prices were in lalaland. I ended up saying forget it, grabbed a massive coffee from a truck stop, and finished the drive. I’m not going to pay $125 to sleep in a strange bed for 6 hours. I’ll sleep in the car.

      2. ‘built at every third (or less) exit on the interstate’

        It’s been the same in Texas. IMO it’s the common refrain: lots of money available to borrow, and yield chasing. You see it in all sorts of businesses. Someone here mentioned the proliferation of urgent cares. Now I see pet hospitals everywhere. Anything that can possibly considered eiking out a tiny profit is jumped on and multiplied. Lodging/apartments are a natural for a model like this. Add in the non-recourse loans and Shazzam!

        Of course this invites fraud. The WSJ report (one and done BTW) on serious appraisal fraud in the CMBS market for instance.

        I’ve had several posts on how this QE effect is deflationary. The clearest example is oil. There a certain return, drillers go crazy on marginal fields with borrowed money, oversupply, price goes down.

        1. Urgent cares are awesome. Granted, there might be too many of them, but IMO they are a great idea. I’ve been to a couple. Once when I infected a cut and needed Keflex, and another time I got a cut in a flower bed and went for an overdue tetanus (tdap) shot.

          1. There can be other ways to skin the cat depending on your circumstances. I got a chunk of rust in an eye while working under my car, despite wearing goggles. This happened at 1:30PM on a weekday. I called my ophthalmologist’s office, got worked into the schedule and had the particle removed – for no charge. I pay her on a regular basis for my glaucoma anyway. My elderly mother got a painful ingrown toenail one morning. I called her her podiatrist’s office. He saw her very soon after that, completely fixed the problem and delighted her by the fast service. These actions may seem like no-brainers, but I have also seen so many people wasting their time & money coming to the ER when they already had established relationships with doctors whose offices were currently open at the time they went to the ER.

  5. ‘A party at a short-term vacation rental in El Verano turned violent early Saturday morning when someone walked from the residence into the street and shot several rounds of gunfire back at the house, into the air, and around the neighborhood, hitting nearby cars and other buildings, according to the Sonoma County Sheriff’s Office.’

    ‘The incident occurred outside the residence at 19350 Riverside Drive in El Verano. Startled neighbors told the Index-Tribune the shots were fired around 3:45 a.m.’

    “There was a large party with several people. Most of the attendees were from the Bay Area,” read a Sonoma County Scanner update posted midday Saturday. “In the early morning hours, an unknown subject fired 20 rounds into the air. Several vehicles and neighboring houses were hit.”

    ‘Neighbor Zane Boehlke, 32, lives in an apartment building across the street and said when bullets began hitting the walls of his and his wife’s apartment he grabbed his 2- and 4-year-old children, got down on the floor with them and crawled into a room in the back. Boehlke then crawled forward to peek out the window and said he saw “a guy just spray bullets at these two guys running.”

    ‘Boehlke said Moore’s vacation rental has been problematic with parties in the past. “That (vacation rental) has parties all the time,” said Boehlke “The biggest thing is lack of safety and lack of accountability with these rentals. These Airbnbs where they say there’s not going to be house parties, there’s going to be house parties.”

    https://www.sonomanews.com/article/news/gun-shots-fired-into-the-air-at-el-verano-party/?sba=AAS

    1. “In the early morning hours, an unknown subject fired 20 rounds into the air.

      B…b…but this is un-possible. California has banned high-capacity magazines. This implies that the criminal element doesn’t obey gun control laws, which would be non-Narrative Compliant.

  6. “California, folks, is America fast forward.” Thus Governor Gavin Newsom, hoarsely, amid brown smoke at the North Complex Fire on Sept. 11. “What we’re experiencing right here is coming to a community all across the United States of America … unless we get our act together on climate change.”

    “As my Hoover Institution colleague Victor Davis Hanson put it last month, California is “the progressive model of the future: a once-innovative, rich state that is now a civilization in near ruins. The nation should watch us this election year and learn of its possible future.”

    ‘California now has 12% of the nation’s population, but over 30% of its welfare recipients. By the official measure, based mainly on income and family size, California’s 11.4% poverty rate in 2019 was close to the national average over the past three years. However, according to a new Census Bureau report, which takes housing and other costs into account, the real poverty rate in California is 17.2%, the highest of any state. (Newsom gets one thing right when he says, “We’re living in the wealthiest as well as the poorest state in America.”)

    ‘I write these words over 1,000 miles from our California home, but it’s no good: in recent days the smoke has found us, too. Hotel parking lots full of vehicles with CA license plates confirm that we are not the only eastward migrants. It’s like Steinbeck’s “Grapes of Wrath” in reverse: Now that the Golden State is the Char-Grilled State, Californians have become the new Okies.’

    ‘The principal reason for California’s decline is that the Golden State became a one-party state…When regular voting has no effect, people eventually vote with their feet. From 2007 until 2016, about five million people moved to California but six million moved out to other states. For years before that, the newcomers were poorer than the leavers. This net exodus is surging in 2020. And businesses (for example, Charles Schwab Corp.) are leaving too. Silicon Valley is going virtual, with many big tech companies thinking of making work from home permanent for at least some employees. (One tech chief executive told me last week that his engineers were pleading not to return to the office.)’

    https://finance.yahoo.com/news/california-burnin-warning-against-one-120009131.html

    1. ‘Californians have become the new Okies’

      I’ve been thinking about that article I posted with the Californian couple refusing to go into a Wyoming shack for sale because there was a flag in the front. I’ve tried to understand what mentality would cause this. There they are, fleeing the poorest state. But turn their noses up at a flag? Is the shack tainted? The childishness is almost too much to comprehend. How do they expect to get along with their new neighbors who actually enjoy the freedoms they supposedly seek? Maybe they’ll kick and punch everybody into agreeing with their thinking.

        1. ‘California, folks, is America fast forward’

          This clown has been saying stuff like this for a while. So why are so many leaving? Fooking Okies.

      2. Driving across Huerfano County this morning there were DJT signs everywhere. I love this part of Colorado, it’s so tolerant and welcoming compared to the totalitarian Front Range.

        2. Just saw another big Trump banner go up, this close to where I live. That’s a big deal in Hawaii as there are so many deranged geriatric hippies that if you do it you have to be prepared to physically defend yourself and not GAF

      3. I’ve been thinking about that article I posted with the Californian couple refusing to go into a Wyoming shack for sale because there was a flag in the front.

        Which just goes to show that these people intend to infect their chosen “new” state with the same rot they inflicted upon the old one. The only reason they’re moving is to put their massive equity to work in a lower cost state, or to avoid high housing prices altogether. It has nothing to do with the politics.

        1. Are they going to get triggered so easily, day after day? There’s an inconsistency I find hard to understand.

          1. Libtards are incapable of accepting other people who have differing opinions. It’s either a) you conform to their belief systems or b) you’re out.

            I have a friend whose wife is friends with another couple, and the husband is one of those aggressive anti-Trumpers. We all got together one night and he had a full-scale meltdown where his wife finally said “I’m sorry, we have to go” and they left early. This guy was an embarrassment of a man and human being. He lost it, emotionally. I can’t help but think his wife was turned off by his behavior. She essentially had to treat him like you would a child throwing a hissy fit in a restaurant.

            Ditto for a couple who are friends with a sibling of mine. They get so wound up that they lose control and make fools of themselves. Everybody else is left looking around at each other with that yikes expression.

        2. So, what has been the pecking order of where to emigrate to out of California? First look at Oregon and Washington. Check. Look into Idaho, Arizona, St. George, UT, Nevada. Check. Scout out NM and CO. Check. Lastly, see Wyoming with its sparse population and presumably expanse of land to anchor on for cheap?

          https://exitcalifornia.org

          3. Nashville

            My realtor bought a house there after visiting, hated living there, and moved back here. She grew up in Ohio so it’s not like she hasn’t lived anywhere other than CA.

      5. I’ve tried to understand what mentality would cause this.

        Libs are searching for an idealized, kum-bay-ah version of liberal America. Where everyone is nice to each other and helps each other. It’s a nice vision. But the libs don’t seem to realize that there is an upper limit to the number of “unfortunate” people — the addicts, the poor, the career criminals, the unemployed — that a society can sustain. Once above that things fall apart. It’s the old producers vs. takers argument.

        Over the past 20 years of offshoring, H1-B automation, importing unskilled labor, printing money, creating addicts, we have certainly reached that point. Especially in the liberal states like California.

        The libs want liberalism in its early stages, i.e. where the number of takers has not yet overtaken the number of producers. That’s why there is so much NIMBYism: e.g. we’ll take care of the 47% takers, as long as we can use other’s people money, and as long as my street is still only, say, 10% takers. When the neighborhood is overrun, or taxes come down from the state level, they flee to another state, again looking for the low ratio of takers. The house hunters who avoided the flag, are likely looking for fellow exiled liberals to go have coffee with.

        Did the article say what kind of flag it was? If it was a Betsy Ross flag or a Don’t Tread on Me flag, at least that’s a good sign they don’t want to meet the sellers. But even so, what do they care what the seller’s politics are? Do conservatives poison houses on their way out?

    2. “I write these words over 1,000 miles from our California home, but it’s no good: in recent days the smoke has found us, too.”

      The road bicycle is ready with a freshly cleaned and lubricated chain, and the GPS is fully charged. This is our first “smoke-free” morning in two weeks!

      1. Got in 13-mi of 2% grade climbing; 125-bpm avg heart rate, 14.2-mph avg, 19-mi total, felt great! I was beginning to become one with my La-Z-Boy recliner.

    3. “What we’re experiencing right here is coming to a community all across the United States of America … unless we get our act together on climate change.”

      Sure, let’s blame climate change instead of Democrat malgovernance and socialist policies that are driving out the honest and productive portion of the populace. What he should’ve said is that if ‘Muricans are stupid enough to elect Harris and Biden, we will all be California.

      1. I don’t think every community in the US has decades and decades of mismanaged forests waiting to go up like tinder (whether or not climate change is a thing doesn’t really matter). But a bunch of them in the west do…

    4. Millions of people have been cycling in and out of California since its inception. I moved to Portland Oregon from Canada in 1995. At the time the southern California aerospace and defense industries were taking a beating and there was significant out-migration. Portland locals bitched non-stop about all the Californians coming to town. California survived and so did Portland. No reason to think this time will be any different.

      1. This isn’t about a business cycle. This is fundamental transformation: “For years before that, the newcomers were poorer than the leavers.”

    5. …(One tech chief executive told me last week that his engineers were pleading not to return to the office.)’…

      Suppose they built a spaceship and nobody came.

      The reality is nobody cares if your office cube is located inside a building that looks like a spaceship and offers personalized yoga classes.

      Even the most case harden CEO’s will realize that costs/sq foot exceed any practical added value, in most cases.

      Now the conversation is shifting to what are the long term holding costs for these CRE monsters. Long term outlook looking pretty sketchy for CRE.

  7. ‘We know there is a tsunami outside. We know it’s going to hit the beach. We just don’t know when,’ said Donald Wise, a commercial real estate expert.”

    Oooooh, look! The tide has pulled back and exposed all the pretty sea shells! Let’s run down to the beach and start collecting them!

  8. Next up: cascading defaults and degradation in loan collateral. When interbank lending locks up, things are going to start to get real. The Fed can’t print away a debt and credit crisis of this magnitude without creating hyperinflation, and that would be the breaking point for the screwed-over proles. These Fed criminals must be aware, in the back of their minds, that lampposts can always be repurposed.

  9. “Minneapolis Fed President Neel Kashkari on Friday decried the U.S. financial system as ‘absurd’ because it has needed a central bank bailout twice in less than 20 years. ‘How can it possibly be this fragile?’

    Elsewhere, Jack the Ripper decried the fact that London prostitutes felt the streets had become unsafe.

      1. It’s the height of hypocrisy for one of the architects of the 2008 Wall Street bailout to talk about the “fragility” of the financial system. The Wall Street-Federal Reserve Looting Syndicate uses these engineered boom/bust cycles and asset bubble crashes to systematically plunder what’s left of the middle class and transfer their wealth and property to the oligarchy. The next Great Muppet Reaping is going to be the biggest haul yet for the financier oligarchy. Kashkari is well aware that any financial system “fragility” is by design, and the Keynesian fraudsters at the Fed are 100 percent responsible for the speculative excesses that are going to end up taking down the U.S. and global financial systems.

      2. How is it fragile? Oh come on. 20+ years of outsourcing, software automation, and rampant immigration. The US has effectively spread the wealth of 300 million people over about a billion people, and borrowed money to maintain the standard of living.

        It’s not that hard, Neel.

  10. “He noted banks were key beneficiaries of the COVID-19 economic stimulus measures passed by Congress this year.

    Of course they were. The Republicrat duopoly is all about ensuring its bankster patrons and puppetmasters thrive no matter what.

  11. ‘A new study has found that people with sociopathic traits are less likely to follow public health measures designed to help limit the spread of COVID-19, including wearing a face mask and adhering to physical distancing.’

    ‘The study, conducted by researchers at the Universidade Estadual de Londrina in Brazil, found that people with sociopathic traits were also more likely to trivialize the risks posed by the novel coronavirus and avoid regular hand-washing.’

    “Our findings indicated that anti-social traits, especially lower levels of empathy and higher levels of callousness, deceitfulness, and risk-taking, are directly associated with lower compliance with containment measures,” the study read. “These traits explain, at least partially, the reason why people continue not adhering to the containment measures even with increasing numbers of cases and deaths.”

    https://www.ctvnews.ca/health/coronavirus/people-with-sociopathic-traits-less-likely-to-follow-coronavirus-guidelines-study-finds-1.5089666

    1. ‘A new study has found that people with sociopathic traits are less likely to follow public health measures designed to help limit the spread of COVID-19, including wearing a face mask and adhering to physical distancing.’

      Joe Biden, Anderson Cooper stop social distancing during commercials

      https://youtu.be/1d-HccCyjj8

      1. Oooooh, look! The tide has pulled back and exposed all the pretty sea shellsnaked swimmers! Let’s run down to the beach and start collecting ogling them!

        1. “Oooooh, look! The tide has pulled back and exposed all the pretty sea shellsnaked swimmers!”

          Reminds me of the stories the old tradesmen would tell about working on the Singer Island high rise condos in the 70s. When the tide brought the bails in that had been thrown overboard in a bust, the workers would empty from the building, back their trucks up to the beach, load up and haul @ss.

          1. When I was living on a barrier island in Texas, a bunch of bails of weed started washing up. Word got out and people headed to grab some. One by one as they drove back to town they got arrested at a DEA checkpoint. That place was always crawling with DEA.

  12. ‘The bond’s performance shows how rapidly the pandemic is deepening losses in a sector that was already getting crushed by online shopping. Even the part of the bond deal that was once rated AAA — meaning bond raters saw virtually no risk of taking losses just two months ago’

    So retail, which was dead as a duck over 10 years ago, was given AAA this spring.

    1. Most of the retail deals I saw around the country over the past 10 years were single-tenant, net lease, preferably a super-drug store, since most of their money comes from the government.

      The lease is valued as a bond. The building is valued at next to nothing without that “credit tenant.” More than once I saw a Walgreens sell for more than a 1 million-square-foot shopping mall in the same market in the same month.

      Of course if you do a traditional cash flow analysis, discounting means what you get at sale after the holding period is a small part of the return. But does that make sense given cap rate compression? And what is the value of an empty commercial property at this point?

      In NYC and California, hotels do have value — as SRO housing, if the zoning allows it. And in NYC eventually as hotels, because hotel rooms have historically been scarce here. So it isn’t abandonment. Just a big financial loss.

      As for shopping malls, how about single-family retirement homes for Baby Boomers? Ugly as sin from the outside but massive, like the generic McMansion, with lots of parking for a large fleet of vehicles. Just add some granite countertops and you are set.

      1. ‘since most of their money comes from the government’

        As I said, communists. I got a pitch to use a pharmacy at a grocery store. It said something like “bring a minimum of 4 prescriptions”. How many people carry 4 (or more) prescriptions?

        1. Having four or more prescriptions is unfortunately very common. Overmedicating folks is as American as apple pie.

          2. Controlling the exceedingly common condition of high blood pressure often requires multiple prescriptions. Having survived 2 simultaneous strokes 3 months ago with no sequelae, I would pay my last dollar to buy the needed meds with or without insurance. At the moment, the needed meds are not that expensive.

          3. How many would they have if they had to pay for all of them personally?

            That’s the thing. Get rid of medical insurance and watch what happens to prices.

          4. How many would they have if they had to pay for all of them personally?

            Generics (blood pressure, cholesterol, etc.) are pretty cheap, like $5 a month.

  13. “A new study has found that people with sociopathic traits are less likely to follow public health measures ” This is an example of how the Left abuses “science.” Basically, the definition of a sociopath is they don’t care about anyone’s rules and have zero empathy. Basically, they are trying to link conservatives to sociopaths. I bet you can link liberals to “sociopathic” attitudes about drugs, prostitution, and and all sorts of criminal behavior because they all share similar disdain for the criminal justice system. So are all liberals sociopaths?

    1. “A new study has found that people with sociopathic traits are less likely to follow public health measures ”

      Gosh, we’d better build a gulag to lock up these “sociopaths”….for the children.

    2. Capitalism isn’t working anymore. Here’s how the pandemic could change it forever

      By Anneken Tappe, CNN Business

      ‘The playing field wasn’t level before, and the virus has shone a new light on the shortcomings of today’s economic and social systems, said Paul Collier, economics and public policy professor at Oxford. The World Economic Forum has already called for a “great reset” of capitalism.’

      https://www.kitv.com/story/42654634/capitalism-isnt-working-anymore-heres-how-the-pandemic-could-change-it-forever

      As I’ve said, there are people out there who are communists. CNN for example.

      1. Doesn’t mean the answer is Communism. How about Globalism doesn’t work, or the One World order idea
        How about Monopolies don’t work . How about really returning to capitalism where the Government stays out of distorting the markets.
        In the 30’s because of the Great Depression, the Commie started to assert themselves also with a attack on capitalism.
        The think is if you want to replace something, it has to be better. The facts show that Communist Countries fail time and time again, and millions die.

        1. How about really returning to capitalism where the Government stays out of distorting the markets. THANK YOU
          Why is Trump deciding single handily the fate of TikTok and other transactions? Trump approves TikTok-Oracle deal
          The president reportedly says he’s approved the agreement “in concept.”

      2. The World Economic Forum has already called for a “great reset” of capitalism.’

        I can’t wait to hear what the Davos crowd has in store for us.

        1. “I can’t wait to hear what the Davos crowd has in store for us.”

          Here’s a hint …

          “The Great Reset agenda would have three main components. The first would steer the market toward fairer outcomes.”

          “… fairer outcomes …” An interesting term. Notice how this term differs from the term “fairer opportunities”. Keep this thought in mind as you read on …

          “To this end, governments should improve coordination (for example, in tax, regulatory, and fiscal policy), upgrade trade arrangements, and create the conditions for a ‘stakeholder economy.’ At a time of diminishing tax bases and soaring public debt, governments have a powerful incentive to pursue such action.

          “Moreover, governments should implement long-overdue reforms that promote more equitable outcomes.”

          There it is again. “… reforms that promote more equitable outcomes.” Equitable outcomes vs equitable opportunities. These two terms are not identical, if fact I believe I can successfully make the case that they are incompatible. Moving on …

          “Depending on the country, these may include changes to wealth taxes, the withdrawal of fossil-fuel subsidies, and new rules governing intellectual property, trade, and competition.

          “The second component of a Great Reset agenda would ensure that investments advance shared goals, such as equality and sustainability. Here, the large-scale spending programs that many governments are implementing represent a major opportunity for progress. The European Commission, for one, has unveiled plans for a €750 billion ($826 billion) recovery fund. The US, China, and Japan also have ambitious economic-stimulus plans.

          I am not touching this.

          “Rather than using these funds, as well as investments from private entities and pension funds, …”

          “private entities and pension funds, …”

          Bye bye pensions …

          “… to fill cracks in the old system, we should use them to create a new one that is more resilient, equitable, and sustainable in the long run. This means, for example, building ‘green’ urban infrastructure and creating incentives for industries to improve their track record on environmental, social, and governance (ESG) metrics.

          “The third and final priority of a Great Reset agenda is to harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges.

          “… social challenges.” Red Flag alert.

          “During the COVID-19 crisis, companies, universities, and others have joined forces to develop diagnostics, therapeutics, and possible vaccines; establish testing centers; create mechanisms for tracing infections; and deliver telemedicine. Imagine what could be possible if similar concerted efforts were made in every sector.”

          (end of snip)

          Go here for more …

          Now is the time for a ‘great reset’ of capitalism | World Economic Forum
          https://www.weforum.org/agenda/2020/06/now-is-the-time-for-a-great-reset/

        2. Stakeholder Capitalism at Davos 2020
          The World Economic Forum’s (WEF) 50th Annual Meeting in Davos is focused on stakeholder capitalism with the central theme “Stakeholders for a Cohesive and Sustainable World.”

          Professor Klaus Schwab, founder and executive chairman of the WEF and a long-time supporter of stakeholder theory, said, “People are revolting against the economic ‘elites’ they believe have betrayed them, and our efforts to keep global warming limited to 1.5°C are falling dangerously short.”

          The WEF updated its “Davos Manifesto,” a set of principles that underpin the event, for the first time in over 40 years. It now plainly states at the top, “the purpose of a company is to engage all its stakeholders in shared and sustained value creation” and says companies should have zero tolerance for corruption, uphold human rights and pay their fair share of taxes.

          The organization and the Big Four accounting companies are also developing a set of universal metrics and disclosures that companies can include in their annual reports to measure their social and environmental performance. “By aligning companies with asset owner and asset managers through common, limited and meaningful metrics, we will ensure sufficient capital is available to meet the Sustainable Development Goals,” said Brian Moynihan, CEO of Bank of America and WEF International Business Council (IBC) chair.

          https://www.investopedia.com/stakeholder-capitalism-4774323

        4. I can’t wait to hear what the Davos crowd has in store for us.

          The Jackson Hole/Davos crowd needs to disappear. All of them. Somebody could drop a nuke on them and the world would be a much, much better place.

      1. If it was a “study,” I can guarantee that the “sociopaths” were anyone who fails to comply with The Narrative. We are one step away from the former Soviet Union solution of having political dissidents involuntarily committed to psychiatric wards, since any opposition to socialism was ruled to be evidence of mental illness.

      2. Seems like that yard should have a few of chickens running around and a pit bull with big nutz.

        You say that like it’s a BAD thing….

      1. A late friend lived in Modesto, CA., on the rough south side where even a garden hose left out would be stolen in broad daylight unless it was tightened on the faucet with channel lock pliers. Seemed like every other yard around there had an energetic pit bull running the inside perimeter so frequently that an edger or string cutter wasn’t needed when cutting the lawn.

          1. Smart dogs. They’d run around at large with the other dogs and kids playing in the alley or wherever starting as a puppy, so they were well domesticated, but back in the yard they’d switch to guard duty.

    1. Tim McGraw Lyrics “Southern Voice”

      Hank Williams sang it, Number 3 drove it
      Chuck Berry twanged it, Will Faulkner wrote it
      Aretha Franklin sold it, Dolly Parton graced it
      Rosa Parks rode it, Scarlett O. chased it

      Number 3 refers to Dale Earnhardt

      Scarlett O Frankly, my dear, I don’t give a damn

  16. In the local news interview the bar owner says the killing was not politically motivated but…

    “Rhynes was found by police crawling through the brush near the restaurant wearing a “Justice For Breonna” t-shirt,”

    BLM SUPPORTER RANDOMLY SHOOTS 3 PEOPLE IN THE HEAD AT POINT-BLANK RANGE IN COLD BLOOD

    Jamie White | Infowars.com – SEPTEMBER 20, 2020

    According to witnesses, Michael E. Rhynes Jr., 33, walked into Bungalow Joe’s Bar and Grill on Friday night, approached a group and suddenly shot three of them in the head at point-blank range.

    “Nobody had ever seen this guy before,” the owner of the bar, Joe Bishop told local media, referring to the shooter. “It was a totally random act.” He added that the men did not exchange words at any time prior to the shooting.

    Rhynes was found by police crawling through the brush near the restaurant wearing a “Justice For Breonna” t-shirt, a girl who had been killed during a police raid.

    Rhynes faces three counts of murder and is scheduled to be arraigned in court on Monday. His bond was set at $2 million.

    https://www.infowars.com/breaking-news/

  17. The Cultural Marxists who control American universities will not miss a chance to inculcate students in the “need” to establish Stasi-like informer networks to surveil and report on anyone committing an ever-growing range of infractions. The camel’s nose keeps pushing further and further into the tent, and still the sheeple slumber on.

    https://www.reuters.com/article/us-health-coronavirus-usa-colleges/as-some-u-s-college-students-party-others-blow-the-whistle-idUSKBN2671TW

    1. When I was in college, back around 1980, Marxist economics was actually taught alongside neoclassical economics, and many people from that era with good memories might actually remember what he said. Is that really true today?

  18. RBG on the 2nd Amendment, and why I’m not mourning the passing of this globalist viper:

    But, Justice Ginsburg explains, “When we no longer need people to keep muskets in their home, then the Second Amendment has no function, its function is to enable the young nation to have people who will fight for it to have weapons that those soldiers will own. So I view the Second Amendment as rooted in the time totally allied to the need to support a militia. So…the Second Amendment is outdated in the sense that its function has become obsolete.”

    As for the Heller case, decided by the Court in 2008, Justice Ginsburg says, “If the Court had properly interpreted the Second Amendment, the Court would have said that amendment was very important when the nation was new; it gave a qualified right to keep and bear arms, but it was for one purpose only—and that was the purpose of having militiamen who were able to fight to preserve the nation.”

    1. I wonder what RBG thought about the U.S. allowing every Iraqi family an AK47 and a stack of high capacity magazines?

      Or how about American household protecting themselves during natural disasters, or more recently the BLM riots?

      1. The Founding Fathers were very explicit on the purpose of the 2nd Amendment: Giving We the People the means to resist and if need be overthrow tyrannical government. RBG, of course, represents the legal veneer whereby tyranny would declare all of its actions legal and justified. It had nothing to do with “fighting to preserve the nation,” especially if that nation had been hijacked by the money changers.

        1. If the Founding Fathers hadn’t had rifles, the American Revolution wouldn’t have been much more than an amusing Monty Python skit.

        2. Libs seem to have this idea that the British invaded America and the “Americans” threw them back out. They miss the subtlety that Americans actually overthrew their OWN government.

  21. https://www.businesstimes.com.sg/banking-finance/billionaire-ron-perelman-selling-almost-everything-as-pandemic-roils-his-empire

    Hmmm. Who could be telling the truth here?

    FTL: Graydon Carter, the former editor of Vanity Fair who’s known Mr Perelman for three decades, said the shift in Mr Perelman’s attitude is sincere.

    “Often when people say this sort of thing, it’s masking something else. In Ronald’s case, it’s true,” said Mr Carter, who partnered with Mr Perelman to reopen the Monkey Bar in Midtown Manhattan.

    Richard Hack, who wrote a 1996 unauthorised biography of Mr Perelman, is sceptical.

    “If you want a simpler life, you go buy a farm in Oklahoma, not sell a painting out of your townhouse in Manhattan,” Mr Hack said. “If he’s selling his art, it’s because he needs cash.”

    1. It makes sense that at his age Mr. Perelman would want to divest himself of assets that no longer serve any useful purpose, especially if he no longer feels the need to impress people.

  22. Holder Says Democrats Have to Do This if Trump Fills Supreme Court Vacancy

    Bronson Stocking
    Posted: Sep 19, 2020

    “You would have a conservative majority on the court, an illegitimate conservative majority on the court, ruling on these matters that will affect the nation, you know, for generations to come,” Holder lamented to MSNBC’s Al Sharpton.

    “If in fact they are successful in placing a justice on the court, I think what Democrats have to do, assuming that Biden is president and there is a Senate majority for the Democrats, we need to think about court reform. And at a minimum, as part of that reform package, I think additional justices need to placed on the Supreme Court.”

    https://townhall.com/tipsheet/bronsonstocking/2020/09/19/eric-holder-biden-must-pack-the-court-if-he-wins-n2576516

    1. “Former US Attorney General Eric Holder…”

      Isn’t he the guy who let Wall Street bankers avoid prosecution?

    2. illegitimate conservative majority on the court

      How is it illegitimate?
      I’m not a fan of ultra-conservative courts (for example, gay marriage would still be disallowed), but legit isn’t really relevant.

      1. I like how what passes for “ultra-conservative” today was “middle of the road” just a couple of generations ago. And what used to be liberal is now “conservative”. A Protestant Pastor friend told me that most “conservative” households would be fine if their son brought home a boyfriend from college.

        Say what you will about the MSM and the education industrial complex, they have been quite effective in shaping minds.

      2. How is it illegitimate?

        Look at how Holder frames his argument. It’s a false premise leading to their desired conclusion. Al Sharpton’s one of them so of course he won’t push back or question the premise.

        1. How is it illegitimate?

          The implication is that the elected administration of the USA is illegitimate. Anything proceeding from this administration is therefore a pox on America. Thus four years of active coup by any means. More important than the Constitution. Power vs Republic.

    1. Asia Markets
      Asian markets start Monday lower with U.S. mired in three-week losing streak
      Published: Sept. 21, 2020 at 12:34 a.m. ET
      By Associated Press
      Referenced Symbols
      SPX -1.11%
      SHCOMP -0.34%
      HSI -1.07%
      180721-0.36%
      XJO -0.67%
      DJIA -0.87%
      COMP -1.07%
      AAPL -3.17%
      MSFT -1.24%
      AMZN -1.78%
      ORCL -0.71%
      WMT -1.02%
      CL.1 -0.27%
      BRN00 -0.25%
      USDJPY -0.24%
      EURUSD 0.21%

      BEIJING (AP) — Asian stock markets were mostly lower Monday after Wall Street declined for a third week and Britain reported a rise in coronavirus infections.

      Benchmarks in Shanghai, Hong Kong and Sydney retreated. Japanese markets were closed for a holiday.

      On Friday, Wall Street’s benchmark S&P 500 index (SPX, -1.11%) lost 1.1%, led by a selloff of tech companies that led this year’s rebound. Investors worry they might have become to expensive.
      …

  24. Fed balance sheet 9/9/20: $7,010,614,000,000
    Fed balance sheet 9/16/20: $7,064,475,000,000
    Difference: + $53,861,000,000

    $53,861,000,000*52 = $2,800,772,000,000 annualized increase at this week’s rate. So, the FED balance sheet will be close to TEN TRILLION this time next year. Remember when they were going to reduce it and the original QE over 12 years ago was temporary? Fawk these scammers. Off with their heads.

      1. Back when the dotcom stock market crashed Greenspan decided to “jump-start” the economy with home equity to avoid fed.gov currency injections. This meant lowering lending standards and government guarantees for the banks making these HELOC loans. And Joe Sixpack took the bait, the beginning of the end!

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