What I’m Reading
The End is in Sight: The Federal Reserve has told banks that they should stop writing contracts using LIBOR by the end of 2021, after which the rate no longer will be published. The current plan is that LIBOR will be fully phased out by June 30, 2023. This is effectively an 18-month reprieve for the beleaguered benchmark that is used to price hundreds of trillions in financial instruments. CNBC
Concentration Risk: Occupancy in the iconic ’99 unit ‘New York by Gehry’ apartment tower plunged from 98% at the end of 2019 to 74% by the end of September due to NYC’s COVID exodus. The CMBS loan backed by the building is still being paid current but it has been placed on a watch list according to Trepp. What is interesting about this loan is that it is a single asset CMBS, meaning that owners of the security don’t have exposure to a basket of real estate loans but rather only the loan in this one, increasingly vacant tower. This strikes me as a massive concentration of risk that I highly doubt that the return bondholders are receiving accurately reflects. Wolf Street
Pedal Down: The continuing supply / demand imbalance in the housing market make it unlikely that upward pricing momentum will abate in the coming months. Calculated Risk See Also: The rental market is poised for a boost as housing affordability gets strained. Globe Street
Inflection Point: A resurgent coronavirus has brought the U.S. economy back to the brink of contraction according to Goldman Sachs. While clearly not good news, Goldman sees this as a soft patch over the next six months until vaccines are widely deployed. Yahoo Finance See Also: US COVID hospitalization rates have hit an all time high. Calculated Risk
Shot in the Arm: Britain’s NHS is taking a hard look at using vacant retail properties as staging areas for the COVID vaccination effort. I suspect that there is a good chance that the US, which has far more vacant retail than Britain, will eventually look to do the same. Bisnow
Chart of the Day
“2020 is what people in 1995 assumed 1999 would be.” – Morgan Housel
Source: @morganhousel
WTF
Mile High Club: A British Airways flight attendant is selling sex via her social media accounts, leaving the airline scrambling to find her true identity. With cutbacks to pay related to COVID, I respect the hustle here. The US Sun
Rough Night: A drunk, topless woman was arrested after yelling racial slurs at her neighbors, trying to start a fight and eventually getting pepper-sprayed because Florida. This is why we need Black Friday to come back. Otherwise the crazy people will take things to the streets. NBC 2
Basis Points – A candid look at the economy, real estate, and other things sometimes related.
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