May 17th – Trickle

What I’m Reading

Trickle: Big banks have seen non-performing loans on their books double year over year.  The bad news (for distressed investors)? That translates into only $15.4 billion in non-performing loans on the books with another $2.1 billion in foreclosed properties – a pittance when stacked against the $250+ billion that has been raised to target pandemic-induced distress.  Green Street Blog

Decentralized: The race to replace LIBOR by year end is heating up with some analysts now saying that multiple benchmarks are likely to emerge rather than just SOFR.  Wall Street Journal

Backstory: “The consumer-price index rose by 0.8% in April compared with March on a seasonally adjusted basis, vastly exceeding forecasters’ expectations. Most of that increase, however, can be attributed to a few categories that collectively account for just 13% of consumer spending, at least in normal times: used cars and trucks, hotels and motels, airfares, motor vehicle insurance, car and truck rental, admissions to live events and museums, and food away from home.”  These were all segments that were hit hard by the pandemic and should be transitory in recovery/reopening.  Barron’s

No Free Lunch: “The answer is that there is no, and can be no safe, dependable way to make a high return in a low-return world. It’s too good to be true.” – Howard Marks, Yahoo Finance

Hot Spot: Demand for short term rentals has now surged past pre-pandemic levels.  Early on in the pandemic, I thought that the real estate markets in resort towns that were highly reliant on AirBnb would be a blood bath.  Not sure that its possible to be more wrong.  The Real Deal

Charts of the Day  

I suppose that the good news is that inventory can’t really fall much lower.

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Basically no new home inventory on the entire West Coast.

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Source: Rick Palacios Jr.

WTF

Oops: An H2 loaded with four containers of gas burst into flames immediately after its driver filled up at a station because Florida.  News Channel 8

Influencer: A woman who fraudulently obtained PPP funding was busted when she used said cash to travel and posted about it on Instagram because Florida.  TampaBay.com

Basis Points – A candid look at the economy, real estate, and other things sometimes related.

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