What I’m Reading
Tightening the Belt: Commercial real estate financing for major rehab and construction projects is becoming harder to get and more expensive while leverage is falling. This should eventually lead to lower valuations since real estate falls in value for two reasons: falling income and rising risk premium. However, it also will also eventually result in less supply. The final result is that this will be a very uneven recession since the impacts are being so unevenly felt across real estate asset classes.
Calling in Sick: The NBA’s reopening is a cautionary tale for the US economy – some people may not be so keen on returning to work in this environment.
Rational Exuberance? The stock market rally since March has been both puzzling and epic. However, a closer look at data shows that its nothing like the 1990s internet bubble.
Good News/Bad News: The current recession will likely be deep but relatively short. The bad news is that it will be a long, winding road back to recovery which will largely hinge on infection flare ups and renewal of government support. See Also: The OECD is warning against the withdrawal of emergency measures designed to support employment.
Chart of the Day
Most of the job loss headlines are focusing on total unemployment. It’s like nothing we’ve seen before but is improving.
However, the large numbers above somewhat obscure the more important permanent layoff numbers. These are nowhere near previous recessions yet. However, they are dropping quicker than they did back then and show no signs of a turnaround.
Source: Calculated Risk
Bombs Away: Penguins aren’t just adorable, they can also shoot their poo up to four feet. (h/t Adam Werblow)
Heading Somewhere? A jogger found a human head on the side of a road because Florida.
Landmark Links – A candid look at the economy, real estate, and other things sometimes related.
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