Can’t Get Out: US imports from Asia in August jumped 34 percent from June, driven by ongoing strong demand for e-commerce fulfillment and personal protective equipment (PPE). Imports from China alone last month were up 32 percent from June. I’ve been skeptical about the whole re-shoring-due-to-COVID narrative (outside of perhaps the medical industry) since this sort of environment tents to favor large contract manufactures in Asia that can produce goods cheaply and pivot quickly to meet demand. Its still early here but still…… JOC.com See Also: “Only about 4% of the more than 200 manufacturers surveyed by the American Chamber of Commerce in Shanghai said they will shift any production to the U.S., according to a report released Wednesday. More than 75% said they don’t intend to move production out of China, while 14% said they will shift some operations to other countries and 7% planned on relocating domestically and overseas.” Bloomberg
Growing Concern: The special servicing rate on commercial mortgage-backed securities hit 10.04% in August, with retail and lodging properties once again leading the way, according to data from Trepp. Globe Street
Watch List: US banks are increasingly worried about borrowers’ ability to repay their loans against commercial property. This concern is showing up in disclosures on so-called criticized loans – considered equivalent of debt rated CCC or lower by a credit agency. Criticized commercial real estate loans rose by 144 per cent, to $26bn in the 2nd quarter, according to an analysis by the Financial Times. Financial Times
Endless Bummer: Student housing investors are under pressure as colleges retreat to online learning following COVID breakouts and mortgage delinquencies spike. Wall Street Journal
Melt Up: SoftBank’s massive options play on large tech companies has roiled financial markets and resulted in spiking volatility. This explanation of what happened behind the scenes by Ranjan Roy of Margins is a phenomenal explanation of the concept of reflexivity in real-time and the best thing you will read today. Margins
Chart of the Day
The office market is in trouble.
Source: Moody’s Analytics
WTF
I Respect the Hustle: A Tennessee man called 911 more than 1100 times over the past six weeks, asking police operators if they wanted to buy egg rolls. The Smoking Gun
Tasty: A 60-year old mafia boss serving a life sentence for killing a policeman bit off an swallowed the little finger of a guard during a cell inspection because Italy. The Times
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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