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Millions of Americans skipping payments as wave of defaults and evictions looms

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Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#291

Post by ctchocula »

Grimm1 wrote: post #203
ianlevesque wrote: post #183

Earlier quoted context omitted.

These stories that come out of the woodwork every time tenants are mentioned are why I’ll never be a landlord.

My simplified understanding is that this is what REITs are for. They're an investment vehicle for companies looking to build real estate they don't have the capital for. They raise through a REIT and you wind up with a dividend of some kind out of what they make from tenants. It minimizes the risk for a general investor. Disclaimer: I know very little about them, this is not a recommendation I probably have some deta…

My understanding is that the appeal of owning real estate yourself is housing mortgages gives you: (1) the cheapest leverage available to retail investors and (2) a loan that can't be margin-called. In an upmarket, this leverage lets you juice your returns. Say you only have $200,000. Then by getting a mortgage of $800,000 you get ownership of a house worth $1M. This gives you the right to the cashflow from renting the house out and in an upmarket, the appreciation in the house price. If the house appreciates in value by 20% or $200,000, then with your $200,000 investment your return is 100%. Buying REITs in he form of an ETF doesn't offer you either the cheap leverage nor the margin call-proof loan.

Another difference is that REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands, but usually real estate retail investors own are for housing.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#292

Post by maxerickson »

chrisco255 wrote: post #142
eli_gottlieb wrote: post #126

Earlier quoted context omitted.

>The death rate has massively spiked beginning May 24th So it's all right for deaths to spike if the hospitals don't expend their resources dealing with it? What are the hospitals for, then?

Yeah we can't live in bubbles forever. 40 million people are unemployed in the U.S. now and counting. Millions of livelihoods are being destroyed, suicides are up, deaths for untreated non-Covid diseases are up, and if we want to avoid the complete breakdown of civilization we need to get back to work.

The government orders aren't the only thing impacting the economy.

Figuring out how to mitigate the virus, and thus making people feel more confident about economic activity, is what the economy needs.

Like good luck with it, but if 95% of Americans started wearing masks in the next couple of weeks, it's pretty clear that this would be a big boost to the economy over the next 6 months. But we don't do group oriented statistical mitigations here.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#293

Post by xenospn »

olivermarks wrote: post #110
tyre wrote: post #90

Earlier quoted context omitted.

> when things come easy to people I think you have a very misguided idea of what it's like to live in poverty.

I think you have a very misguided idea of what it's like to be a landlord....and perceptions of who/what 'landlords' (a very unfortunate term) are from some tenants... no good deed goes unpunished etc. Plenty of great people around but you have to be very careful who you rent to...

You think rich people don't cause damage?

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#294

Post by MysticFear »

gshubert17 wrote: post #233
sytelus wrote: post #200

Meanwhile stock market is preparing to for its record high :).

> Meanwhile stock market is preparing to for its record high :) Yes, and I don't understand it. The S&P500 is within 8% of its all-time high (3393). Even without a second wave of coronavirus cases and deaths, the current levels of unemployment, defaults, and bankruptices, I can't see what supports these asset price levels. Any ideas?

Stock market is a future prediction machine. The price isn't the current valuation

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#295

Post by MiroF »

CPLX wrote: post #18
0x8BADF00D wrote: post #2

Yet the S&P500 is still green. The Fed continues to print in order to delay the inevitable. Either a currency crisis or hyperinflation.

Hyperinflation is not typically something you're going to worry about in a demand collapse situation.

None of these people have a solid grasp of macro, it's really no use arguing.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#296

Post by boromi »

MiroF wrote: post #290
boromi wrote: post #3

Earlier quoted context omitted.

Bingo, there's also been a huge influx of retail investors fueling the earlier Bull rise

This is just not how the stock market works. "More investors" doesn't trigger price increases.

Markets go up when the amount of bullish positions outnumber the amount of new bearish positions

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#297

Post by blackswan101 »

ngngngng wrote: post #47

I'm so extremely grateful that I accepted section 8 tenants into my rental units. Most of these tenants have nearly all of their payment covered by the government and they just have to pay $100 or $200 on top of that to cover what the government won't. These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my…

I am also in the process of converting my units to section 8.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#298

Post by conanbatt »

ngngngng wrote: post #47

I'm so extremely grateful that I accepted section 8 tenants into my rental units. Most of these tenants have nearly all of their payment covered by the government and they just have to pay $100 or $200 on top of that to cover what the government won't. These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my…

Your tenant is the government though. Thats often pretty sweet if you can get it.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#299

Post by pcurve »

Throwaway8588 wrote: post #125

The impact of this is going to be extremely bi-modal. Working class people are going to be decimated. No income and the cost deferral cliff. Middle class (office workers are least) and upper class people will do very well. They still have their jobs and their costs have collapsed. I am no longer paying for gas, childcare, bussing fees, car insurance, and all manner of other things. I can shop at Costco now that I hav…

I think any savings will be temporarily. Long term effect will be deflationary and wages will eventually go down.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#300

Post by MiroF »

brobinson wrote: post #217
kovacs wrote: post #114

Earlier quoted context omitted.

Trolls? Sounds like YOU need to understand what QE is. From Wikipedia... "Quantitative easing (QE) is a monetary policy whereby a central bank buys government bonds or other financial assets in order to inject money into the economy to expand economic activity." Sounds pretty inflationary to me. Especially when they buy up illiquid mark to fantasy assets that nobody wants and unloads them on the taxpayer to foot the…

"Essentially, the mechanism of QE is that the Federal Reserve and other central banks are buying government bonds - but not directly from the Treasury Department. They’re buying government bonds from banks and paying for them with central bank reserves. Crucially, these cash reserves are held by the central bank and pay an interest rate just as the treasury bonds did. In a sense the Federal Reserve swapped ten year t…

> The money never entered the economy - it is being held in a vault at the central bank (or more realistically is just a number in a spreadsheet)

This is just incoherent. The money does enter the economy because now the banks can lend out money without their cash reserves dipping too low.

The reason that inflation is not spiking is because of the actual reason that the Fed reserve felt that it was necessary to engage in QE in the first place - huge amounts of deflationary pressure. Without the QE, we would be seeing deflation right now.

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