Well, today we learn that housing starts fell 30% in April on top of the 23% drop we saw in March. Building permits fell an additional 20%.
Yep, 53% in just two months. These represent the biggest drops we’ve seen in the last five years.
What’s especially bad for working families is the fact that multi-family housing starts fell 40%, while single-family homes are down 24%.
The Northeast and the West saw the largest drops.
And then we have commercial real estate, which is going to have a spectacular crash here real soon. I mean...people aren’t paying rent!
“The domino effect of landlords not having rental revenue will potentially force property owners to default on their mortgages,” one analyst says. “This will in turn force banks to write down loans and attempt to raise capital to cover losses, in an environment where capital markets are paralyzed.”
The commercial real estate market is worth $20 trillion, though $3.6 trillion of that is mortgage debt. The residential mortgage market is $11 trillion.
Why the discrepancy?
“Ultra-low interest rates encouraged a borrowing boom in which commercial real estate loans at U.S. banks surged by $863 billion or 62% since 2012,” Forbes tells us.
Yep, once again we can blame cheap and easy credit. Businesses that should never have opened will now close, with malls likely leading the way, followed by downtown main streets.
It’s figured that 50% of department stores in malls will close by the end of next year.
The $11 trillion residential mortgage-backed securities program (RMBS) is going to be where the mess starts when reopening gets into full-swing. These mortgages are not backed-up by Freddie Mac and Fannie Mae and account for $1.7 trillion of home mortgages.
These will be the first dominoes to fall, pushing our national homelessness rate past 0.17% to something more like 5% to 10%.
Joe Dooling has been doing a great job with radio advertising. I’m not sure that’ll cut it in this six-way primary race, however. Most figure Rosendale will win. The only one that’s come close to him in the polls is Denny Rehberg. The second leading pick is “undecided.”
I voted for Dooling in the primary. At least he’s from here.
We have seven seals and seven trumpets, and these are supposedly God’s way of telling us the end times are near.
Most Americans do not want to hear this.
But could there be some truth in this?
First Seal: Antichrist riding in on a white horse of peace to secretly wage war
Second Seal: War comes with a rider on a red horse killing many
Third Seal: A rider on a black horse spreads famine
Fourth Seal: Death on his pale horse takes a quarter of the population
Fifth Seal: The dead will ask for judgement, and told the wait isn’t long
Sixth Seal: Sun turns black, great earthquake, moon turns red, mountains and islands disappear
Seventh Seal: Silence fills heaven as judgement begins
I’m not going to get into the seven trumpets, as those are especially depressing.
African swine flu hit China real hard late last year, with 40% to 60% of their pig population dying because of it, something that caused pork prices to soar.
By February, 50 Asian countries were reporting the virus, which caused pigs to have “high fever, vomiting, and diarrhoea” and many of these pigs probably became infected when farmers “gave them spoiled leftovers and raw food material from hotels without cooking it first,” or at least that’s what they figure in Bali.
Many outbreaks are being traced to pigs eating from the village dump.
Papua New Guinea is being hit hard, and their neighbor - Australia - figures this crisis will cost them $2 billion. Death numbers are quite spotty in many of these Asian countries, though China is probably being hit hardest. That country has 40 million pig farmers, though we don’t have any concrete numbers from them.
In the Philippines, we know that over 250,000 pigs have been culled since August. In China we know that 55% of pig farmers say they’re no longer going to raise pigs, giving us an idea of how bad this crisis is. The only number to come out of China is that they’ve culled 1.19 million pigs since August 2018, which didn’t stop the spread to the rest of Asia.
At the same time this outbreak is hitting Asia, here in America we’re culling our own pig population because our meat packing industry can’t keep up.
A perfect storm for massive worldwide famine.
On top of this problem with pigs in Asia, we have the problem with locusts in Africa.
The first plague of locusts came in February, hitting eight East African countries. It was the worst they’d seen in 70 years. The pests can travel 90 miles a day and eat their own body weight in food...which is typically enough to feed 35,000 people a day.
The locusts settled in Somalia and the spring’s heavy rains favored breeding. Now the second wave is hitting East Africa, which “includes more young adults which are especially voracious eaters.”
Africa is going to be decimated, with waves of starvation on the horizon. Famine is defined as 20% of the population not having enough to eat, or 30% of children. I think it’s going to be twice as bad as that, probably worse.
“According to the UN Food and Agriculture Organization (FAO), left unchecked, locusts swarms multiply by a factor of 20 per generation,” a report on the Weather Channel tells us. “Practically, that means there are probably trillions of locusts in the current swarm. They also estimate that this swarm is 400 times stronger than the first.”
As if this wasn’t bad enough, the sun is having some of the lowest incidences of sun spots in decades. Scientists figure this will usher in years of lower temperatures, making crop cycles in much of the world obsolete.
In these changing and uncertain times, the UN wants you to make sure you’re using the right words to describe people.
Canada is expecting to have their worst economic depression since the country’s founding in 1867. In the UK, they figure this will be the worst depression in 300 years.
Here in Montana, we’re still in Phase One and there’s no idea when we’ll get to Phase Two, despite having just three people in the state’s hospitals with this virus.
I fully expect the governor will begin talking about Phase Two this week, and we might even enter it.
More and more people are beginning to realize we never should have shut down in the first place.
We’ve lost more people worldwide in the last week to cardiovascular disease than we have to the coronavirus all year (17.9 million deaths / 365 = 49,041 * 7 days = 343,287).
Here’s a chart with more death comparisons.
So far 319,000 have died from coronavirus.
But the lockdown zealots don’t want to hear that.
We never should have passed these huge stimulus bills, and the Fed never should have injected so much fake money into the economy.
If we would have done those two things - stay open and not spend tax money - we would have come out of this in months, if not weeks.
Now it’s years, probably the better part of a decade.
Let’s say we have a resurgence this fall. How will we react?
I suspect we’ll keep businesses and schools open and encourage people with shoddy health to stay home.
By fall the economic devastation we’re in will be apparent to all, and there will be no desire to shut down from anyone, from the lowest workers to the highest-up CEOs.
Politicians will have no appetite for it, as elections near and they see their political futures begin to slip away as more and more of the destitute rise up to ask, ‘Why did you do this to us?!?’
I really don’t think people know what’s coming, not at all.