NBC predicts largest real estate price drop in Canadian history

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For those who inevitably come to the comments, NBC is National Bank of Canada in this context.


Lol, what do they know? Fact: Vancouver real estate prices only go up.


So in effect the drop equates to one year of gains which makes it even for two years. But not for those entering the market now.


Canadian real estate can never go down. The government has stated they will just increase immigration, lower rates, restrict building, or make it easier to buy homes.


So a 10% decrease after a 100% – 300% bull run in Vancouver/Toronto real estate.


A Tidal Wave of Bankruptcies Is Coming: Experts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving

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Let them fail. That’s what it means to be capitalist! They over leveraged and couldn’t survive hard times. The economy goes into the dump for a bit people retrain and holes in the market get filled with new growing strong companies.
Most will probably just file ch 11 anyway and will reorganize and hopefully come out stronger and more stable financially.

Let the airlines fail, let the banks that are sneakily taking on risky debt fail. Yeah the economy will be fucked for a bit but at least new people will get to try and compete to fill the gaps.

This is obviously a gross simplification of the economics behind a financial crash and the damage it would do but American can’t go around pretending it’s some magestic capitalism and then not take the bad with the good.


Guess we will see how many banks and funds are over exposed to the CLO market.


Get your house in order if it’s not already, it’s about to be a bumpy ride!


Unfortunately it (possibly unintended) had a way of damaging small businesses leading to a consolidation of stronger large corporations who have the means of being liquid for longer periods and had record months in sales because the laws were conveniently written in their favor. If you sold groceries, like Walmart, Sams, or Costco, people could shop every other item in your store. If you just sold clothing, or toys, or bikes you were out of business.


This might be a good way to weed out third rate zombie companies, for the old Wall Street saying is “a hundred thousand fudge sucking tourists is not an economy.”


US May retail sales surge 17.7% in the biggest monthly jump ever

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“Total sales were off 6.1% from a year ago as economists still expect the biggest annualized GDP in the second quarter that the U.S. has ever seen.”

Funny how this much more pertinent stat (YoY change) was shunted to the very end of the article.


There might be a “kink in the hose” phenomena here. I have a list of a dozen large purchases I need to make once production ramps up (all home repair related) and the items are back in stores. We’ve been locked down since early March here so it’s a lot of pent up / deferred demand.

I’m fascinated with our national psychology, personally. It’s almost like the pandemic is over because we decided it was. I think I previously underestimated America’s desire to consume.


What happens at the end of July when people’s benefits are getting cut off? The government is not interested in further stimulus for the “little people”. The Fed forecasts unemployment will stay close to 10% by the end of 2020.

Meanwhile the Fed is now buying, or going to buy, corporate bonds, literally picking winners and losers. What’s next, the Fed buying stocks? This is completely fucked, and not how the “free market” is supposed to work.

And stocks keep going up..


The government’s monthly report on retail sales recorded a 17.7% increase in May 2020 as compared to April. I find these number doubtful. With so many stores and other businesses shut and unable to provide sales data they are making these assesments based on imcomplete data sets that are likely schewing the results. Stores that are still shut and can’t report *a zero percent sales increase* aren’t included in the count. Only those businesses that have survived and are still operational are reporting. And I suspect comparisons of sales figures made against the month-ago and year-ago period may only be comparing figures from these same still-existing businesses and not the many business concerns that have failed.

Surveys show that most Americans are scrambling to find ways to pay their more essential expenses. Large majorities either selling their possesions, borrowing from family and friends or dumping these charges on their credit cards to be paid down very gradually over time. They don’t have the money to go out and splurge on clothing, sales for which in this report supposedly increased 188%.

Finally all data in this report is SEASONALLY ADJUSTED; which sounds like a means to take seasonal factors into account when calculating its data, but ts really a practice by which they create long-run averages to compare current data to. Any deviation above the average is considered growth while any deviation below this average is considered a contraction. The downside to this is that it can misrepresent the actual situation. Say the economy’s been in a slump for a prolonged period and the average of chnages in retail sales each month is -12.1% Then any number above -12.1%, even if still negative at say -5%, because it’s above the long-run average is still counted as a positive number with *retail sales increasing* in this scenario by 7.1%. While if the number were really -13% for a given month it would be ADJUSTED to a loss of merely -0.9%. The same goes for positive numbers; with an average increase in retail sales of 6% a month any number above that, say an increase of 9%, is ADJUSTED to show only a positive 3% increase, while anything below that is considered negative. For example an increase in retail sales of 4% would be ADJUSTED TO A negative 2% monthly rate.


US public is handling the covid impact really well. Virus is not under control but the economic activity is coming back even virus is still at its peak, that’s incredible news economic wise, hopefully the recover will continue on this momemtum.


As Restaurants Struggle, Cities Look to Cap Delivery Fees for Companies Like Grubhub, Uber Eats, and DoorDash that Take 30% Commissions

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The customer still gets charged by the delivery service. They get money from both the restaurant and the customer on each order. If you add up all the fees it can nearly double the menu price in some cases (not typical but can happen for smaller orders.)

As far as restaurants managing their own delivery infrastructure, it’s prohibitively expensive for most independents unless they are set up to focus primarily on delivery already. It would be great to see if local restaurants could cooperate to set up a restaurant owned delivery platform cooperative. If there is a critical mass of places sharing resources then it would end up much cheaper for the individual restaurants since they could remove all the fees going to doordash and grubhub (or capture themselves. )


NYC should just set up it’s own platform. Not rocket science, and make commission small with zero need to advertise. No need for rent seeking businesses like seamless.


I dont see the need for this.

If the companies don’t want the service they don’t have to use it, and no reason competitors can’t make their own app with lower prices if its possible


Someone help me out here… Will this make things better for restaurants?


More instances of progressives blaming consumers when their revealed preferences don’t match the way their ideology suggests they should.


30% of Americans missed their housing payments in June

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I seriously wonder if this is gonna cause another wave of mass uprisings this time against landlords. I mean we went from bodycams to abolishing the police in weeks. Maybe this time it’s gonna be that “landlords do no socially valuable work and just make money by holding land for ransom” or something.


And yet the stock market continues to surge to new highs. I’ve never seen a bigger disconnect between equity valuations and the underlying economic fundamentals in the 30+ years I’ve been watching this stuff.


Im 33. I moved back in with my parents like six weeks ago to start saving money. Turns out, I like being back. Its easier that way. And they like having my extra income in the house.


Pretty disingenuous alarmism – the forebearance + the normal “missed payments” + low end spike due to eviction suspensions explains this bump easily.

The staggering amount of stimulus and drop in consumer spending means there’s no real justification for a lot of this other than people can – the low end of the market is reporting massive delinquencies since their only recourse has been suspended (eviction)


Seems that ppl have forgotten the banks loved buying up the foreclosed homes in the 08 recession! They purchased 10-12% of those and found out that leasing is better than selling is some cases…. It is a lot easier the just evict someone than the cost of foreclosing… The banks are sitting back waiting to buy up these homes and I don’t see the gov’t bailing out tenants or homeowners… They are to busy buying hertz bullshit bonds!


Brexit set to cost the UK more than £200 billion by the end of the year

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I knew it would be very bad, didn’t realize it would be 200 billion bad


The Bloomberg figures is contestable since it assumes the same trends and patterns pre-Brexit vote would have continued… Also, it seems for now London will still remain the financial center for Europe with companies and investors backing the decision to list and stay in the UK. If that lead goes then who knows what would happen


Brexit is a huge change in direction for the UK, from being slowly absorbed into the EU, to being a fully independent state once again. I think any gains from this ‘strategy’ change will likely not be realised in the short to medium term. The costs will be more immediate.

The Potato Famine in Ireland is a local example of how a lack of sovereignty on an island ruled from abroad can cause suffering, both economic & otherwise.

There are so many factors with Brexit that most economic models are as good as useless due to being highly simplistic, and often politically biased.

Staying in the EU, for me, meant losing our unique systems, institutions and ability to govern ourselves to a foreign power that seemed to have contempt for us and our contribution. That situation had economic risk in my mind.

Reforming wasn’t agreeable to the EU, and so remaining wasn’t agreeable to the British. It’s a classic breakdown, and I believe it was necessary for the long term interests of the UK, both economic & otherwise.

My biggest regret about the situation is how long it took to implement the result of the referendum. Cameron & Osborne could have taken responsibility; ripped the band-aid, but they fumbled it to May, Hammond, Robbins etc. for a few years of humiliation instead. What a waste of time that was!


How does this figure compare to what the US is costing?


It won’t have any effect and won’t cost the British economy anything, other than the admin cost of Brexit. The research consistently concludes that economic unions do not change the trading patterns of a country, other than reallocating labour costs (where can companies find the cheapest slave labour).


China’s rich seek ways to move cash abroad before yuan weakens

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No news here. China’s rich have been doing this for years.

Particularly the ultra rich. A combination of fleeing overcrowding and pollution, running from crackdowns on corruption, and avoiding debasement of their wealth by China’s central bank.

I don’t know how true this is *now*, but in the past when US company A had Chinese company B make something, company A would pay in USD. Company B doesn’t need USD, they need RMB, as this is what they need to pay taxes in China. So they deposit these dollars in a bank and get them changed out for RMB.

In a fair trading environment, the commercial bank goes to the Forex and exchanges USD to RMB. Over time this leads to more demand for existing RMB, and oversupply of USD in the Forex. RMB value goes up, USD goes down, and any trade imbalance would naturally smooth out over time.

This is not what was happening. What the China CB would do is have the commercial bank hand the dollars over to them, and print new RMB to give to the bank, who gives it to the customer. This debases the Yuan, and help keeps the trade imbalance going.

US companies get to keep high margins and take advantage of wage suppression, China gets to keep a massive trade surplus. To top it off, China’s central bank would use these dollars to buy treasuries. So the US govt. got to keep spending more than it had as well. It was win/win for everyone but US labor and main street. (Who got cheap shit in return).

But…the other losers not talked about much are China’s rich and ultra rich, who got to see their fortunes debased. It was so bad China had to pass a bunch of laws to try and stop the flight of yuan and people to primarily USD, CAD, and Euros.


If the yuan weakens, which currencies will rise? The American dollar isn’t looking too strong, nor is the Euro. Are we seeing the beginnings of an inflationary spiral? Some say it’s intentional, a way to wipe out overwhelming debts.


The main problem is that the Chinese real estate market is overpriced and the Chinese financial system does not offer any other competitive investments. I’ve been trying to invest in China for years to improve my diversification but the assets available just aren’t that great.

The lack of good assets available on the market means that the few good assets are bid up to crazy valuations. There is way too much savings chasing way too few good assets. Real estate yield is like 1-2%, which is lower than interest rates.

The big problem is the giant state corporations control the best assets, and they are not terribly shareholder friendly. They have a dual mandate of profits + social responsibility. So a lot of the economic surplus from the SOEs do not go to shareholders, they end up benefiting average Chinese citizens instead. For example, the state owned telecoms (traded in HK) are mandated to build out nation wide 5G. This is insanely expensive and capital inefficient. A 5G tower serving some remote mountain village will never generate enough revenue to pay back its capital costs.

In contrast, American companies are generally pretty shareholder friendly. All the surplus cash goes to stock buyback and dividends. None of it is wasted on building out infrastructure to serve poor people who can’t afford to pay enough fees to generate a reasonable return on investment.

This is a problem with the Chinese system that is in conflict with the goal of maximizing return on capital.


What will happen if the American dollar and the Chinese yuan collapse at the same time?


China wants the yuan to weaken though and this has always happened. The more rich that invest in other currencies helps them as well to keep their trade balances.


67% of Jobless Workers Get More in Unemployment Than They Earned While On The Job

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The increased unemployment payments are delaying economic pain. When the increased payments end the real pain begins. People are either going to be working for less money or unable to find a job and cut off the benefits they had. They will start defaulting loans and getting evicted from their rentals. They will do less discretionary spending. This will hurt banks and small investors.

It will be interesting to see when the government decides to end the payments to individuals and what effect is has on the economy.


And now they will have nothing when those benefits end. The jobs they worked at are mostly gone.

It’s not like they can just go back to working.


It is going to get ugly in Aug! Evictions, foreclosures, unemployment ending, commercial real estate is gonna get crushed, and just like politicians, corp America does not let a good crisis to to waste! They are using this as a juatification to cut their labor force to grow the bottom line! Even as the economy comes back the job market is like the commodity market… Supply and demand! They will raise the productivity expectation and drive down wages… I see a homeless epedimic coming in America!


This is why we should just have a UBI; no broken incentives.


Yeah. I had a friend making 250 a week after tax is now sitting comfortably at home making 750 a week


Low Unemployment Isn’t Worth Much If The Jobs Barely Pay

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That was a huge inherent problem with the 2010s economy. Unemployment was low but there was barely any wage growth.


The headline is super wrong, because low unemployment is a key driver of wage growth. When you have 10% unemployment, ain’t nobody handing out raises for the low wage workers this article is discussing. If you want wage increases, you need labor to be scarce.


So sick of awful pay. Can’t live off of it. Most people I know have multiple jobs.


But wait, I thought 2017 tax law was supposed to lead to an explosion in higher wage jobs.


U.S. Slumps to 10th Spot in World Competitiveness Rankings

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Doesn’t seem like an entirely relevant metric – especially given that all the countries ahead of the US are smaller than California


Of course tariffs hurt the US economy. Despite what Trump says, that’s not the point of tariffs – to kneecap China, even at an expense to our own economy.


I dunno man. I look at these rankings and I see little relationship to what actually matters in international economics. In particular, Hong Kong in the top 5 is just insane. Hong Kong is in hyooj trouble, and they were in hyooj trouble this time last year also. I think their approach is somehow missing the forest for the trees.

Also, they added some new tracking item that doesn’t sound so much about competitiveness:

>This year, new criteria were added to reflect the importance of achieving the UN Sustainable Development Goals. The criteria provide a perception of where the economy stands with respect to different sustainable goals that need to be satisfied in 10 years, such as education and the environment, inclusion and empowerment, ageing and health.

Both the USA and China don’t care much about these goals, and so both countries saw significant declines in their rankings after they were added to the rankings. It also looks like the rankings favor quite small countries.

That doesn’t really sound like a fair reading of “competitiveness”, though. Sure, America and China have highly unequal societies, and they aren’t doing enough to combat climate change. Don’t these sound like criteria for some other study, perhaps one on social well being? Having a lot of low wage workers can be a powerful advantage in economic competitiveness.


PSA – No one should pay attention to these sort of “rankings”.

It’s just some group choosing a more or less random group of statistics, adding arbitrary weights to different ones, adding them together in some manner determined by themselves…all to produce a number that they then represents “competitiveness”.

It’s a ridiculous process, but it’s even more ridiculous to give any credence to it.

And it’s even worse when they adjust it from year to year to meet their p-hacking needs.


US cities are no longer competitive given the lack of new housing supply.

But I bet smaller cities with fast and reliable internet in the middle of the country in states with pro-business tax codes will start to be regarded as very competitive.