Millions of Americans skipping payments as wave of defaults and evictions looms

https://www.npr.org/2020/06/03/867856602/millions-of-americans-skipping-payments-as-tidal-wave-of-defaults-and-evictions-

by evo_9 • 6 years ago

416 549 6 years ago

npr.org

0x8BADF00D• 6 years ago

Yet the S&P500 is still green. The Fed continues to print in order to delay the inevitable. Either a currency crisis or hyperinflation.

boromi2• 6 years ago

Bingo, there's also been a huge influx of retail investors fueling the earlier Bull rise

MiroF17• 6 years ago

This is just not how the stock market works. "More investors" doesn't trigger price increases.

mullingitover2• 6 years ago

Savings rates are through the roof right now, I would worry more about a deflation spiral.

ed25519FUUU• 6 years ago

You may be biased as a WFH/silicon valley type (continuing to produce income despite shelter at home). The median checking account balance was $3,400 in 2019, and that was before COVID19 struck.

There's a lot of people who were already barely hanging on, and now covid and demonstrations have pulled the rug out from under them.

We're only 2 months in. Things will get worse before they get better.

1. https://www.valuepenguin.com/banking/average-checking-accoun...

qeternity• 6 years ago

Or worse: BAML had a great piece recently that QEternity (cough) has actually stoked deflation by reducing low-risk asset yields to zero, which forces many savers to save more as relatively risk-free income disappears, which lowers consumption and thus inflation, prompting more QE...rinse and repeat.

aaronblohowiak• 6 years ago

Oooh, do you have a link?

arberx• 6 years ago

Or deflation, a bigger worry as consumers might be expecting lower prices in the future and delaying purchases. Leading to a deflationary spiral.

mindslight• 6 years ago

Given the natural resource depletion caused by our economy, plus technological progress implying that we all should be working less, how is this remotely worrying? We've had strong deflation in the tech sector for over four decades, and the results have been fantastic.

cft5• 6 years ago

I wonder who downvotes this and why.

pphysch• 6 years ago

"Lalala I cant hear you, stonks go UP"

probably

diogenescynic7• 6 years ago

Probably someone who actually looked into what QE actually does--it's more deflationary than inflationary. Look at Japan--they've been doing forms of QE for decades. These Fed printing money, inflation trolls are almost never right even though they've been screaming about it for decades.

MattGaiser5• 6 years ago

QE has been going on for years since 2008. Still waiting on that inflation.

https://www.usinflationcalculator.com/inflation/historical-i...

QE contains an easy break on inflation. If it starts surging, the market can just have the assets the fed holds added back to it.

Barrin923• 6 years ago

Because there's no indication of inflation let alone hyperinflation in any economic data or a 'currency crisis' whatever that means.

In fact a sharp decline in demand seems to have outweighed reduction in supply leading to if anything, deflation. (which is in line with data as inflation has slowed to about 0.3%, down a percent from last year).

Given how large the service sector is in particular in the US, and how strongly it is affected by social distancing measures, disinflationary preasures are very likely to persist for a while.

CPLX3• 6 years ago

Hyperinflation is not typically something you're going to worry about in a demand collapse situation.

MiroF17• 6 years ago

None of these people have a solid grasp of macro, it's really no use arguing.

MattGaiser5• 6 years ago

Household incomes rose because of the stimulus.

https://www.bea.gov/news/2020/personal-income-and-outlays-ap...

https://tradingeconomics.com/united-states/personal-savings#....

So millions are defaulting, but millions of others are awash in newfound cash and savings.

thephyber18• 6 years ago

That bump was for the April period. May isn't likely to look as rosy.

viburnum• 6 years ago

Not every inflation is a hyperinflation. Look at inflation in America in the 1945-1951 or the 1970s. It wasn’t the end of the world. A little inflation is easier to deal with than mass unemployment and bankruptcy.

MiroF17• 6 years ago

The Fed targets inflation and can do so pretty precisely - massive amounts of QE are in order to combat deflationary pressure in the economy right now.

anm893• 6 years ago

There is massive demand for dollars worldwide, specifically related to dollar denominated debt and commodities contracts and the first part is likely to get more intense if there is a global recession.

I'm a gold bug libertarian end the fed kind of guy and even I don't think we are at any risk for hyperinflation. That is definitely not to say these policies can't have seriously negative consequences but I don't think hyperinflation is one of them, at least not for the US in the next decade.

elevenoh2• 6 years ago

The inevitable increase in productivity brought by the promise of robotics, ai & automation? ;)

walterbell2• 6 years ago

If there is no spike in infections within two weeks, from areas which had large public protests in the past week, can millions of Americans be helped by restarting the economy?

csommers• 6 years ago

Unlikely. A fair number of people are multiple payments/rent behind, not to mention still missing their unemployment checks.

danans• 6 years ago

can millions of Americans be helped by restarting the economy?

That's already happening. The current slow reopening is restarting the economy in order to help millions of Americans get back to work. For example, the jewelry store in my neighborhood in CA is now open, but for 1 customer at a time (OK in their case because even before the pandemic they controlled the number of people inside). However, the breakfast diner nearby with closely packed tables is still shut down. Even if they could open, the owner has to figure out how to run that business with appropriate social distancing.

An additional problem is that the economy was fragile even before the lockdown. Many employers likely won't rehire nearly as many people as they let go. Those who are still hiring have slowed down their hiring rate.

And until people feel safe consuming services and gathering in public like they did before, the main street economy can't recover fast enough to employ everyone who was laid off during the lockdown.

This is why government support for laid off workers must continue until enough confidence exists that things are safe, even without the lockdowns, and that might take years for some sectors of the economy.

daenz2• 6 years ago

I suspect we will be told that the protests were necessary and for a greater good that outweighed spreading coronavirus, and now that they're over, we should all go back into lock down to prevent further spreading, and anything else is reckless and literally killing people.

aphextron2• 6 years ago

If there is no spike in infections within two weeks, from areas which had large public protests in the past week, can millions of Americans be helped by restarting the economy?

Daily new infections have more than doubled here in North Carolina in the last two weeks since "reopening" [0]. We have had more new cases in the last two weeks (2200) than in the entire length of lockdown from March until then (2000). The death rate has massively spiked beginning May 24th, exactly two weeks (the median time from infection to death) from May 9th, the day the governor relaxed restrictions [1]. The dream of this thing just magically going away is absolutely delusional.

[0] https://www.nytimes.com/interactive/2020/us/north-carolina-c...

[1] https://www.nytimes.com/interactive/2020/us/north-carolina-c...

walterbell2• 6 years ago

Is there a dashboard which shows increase in testing capacity over that same period, case demographics, presence of other medical conditions, and asymptomatic cases?

With increased (including employment-related) testing, case count should be increasing everywhere, but some of those could be recovered or asymptomatic.

We know that most hospitals were well below capacity, so new cases can be treated.

chrisco2552• 6 years ago

Remember the whole point of shutdowns was to "flatten the curve" to keep the hospitals from being overrun. We can't stop the disease and we can't commit economic suicide.

NC has only seen a slight uptick in hospitalizations: https://covid19.ncdhhs.gov/dashboard and it's been flat for the past week.

mikem1707• 6 years ago

There are more tests than there were a month ago, and that affects how many positives are seen (by some amount).

Also the increase in deaths you link to is not statistically significant, given it is in the rage of 10-30 over the course of several months in a state with 10 million people.

Those numbers don't prove your point.

matwood3• 6 years ago

Yeah, the 7 day moving average of new cases and deaths is also slowly trending up [1]. I think we all wished COVID would just go away, but that seems unlikely.

[1] https://www.worldometers.info/coronavirus/country/us/

usaar333• 6 years ago

Daily new infections have more than doubled here in North Carolina in the last two weeks since "reopening"

Confirmed cases, not infections. The hospitalization numbers are about 30% higher or so which is about-ish how much new deaths have increased. Which is bad, but not 2x bad.

All said, NC may have one of the highest spike of any state (reopened or not). Texas and Florida have flat hospitalizations; Georgia is slightly decreasing.

downerending2• 6 years ago

The dream of this thing just magically going away is absolutely delusional.

Since we don't really know what's going on yet, almost anything that happens is going to seem kind of magical. Right now we're operating on guesswork and superstition.

atemerev2• 6 years ago

The delay in observable cases is about 4-6 weeks, due to a number of cumulative effects.

maxerickson2• 6 years ago

Type of activity seems to matter a lot. Protesting in a park with quite a bit of space, where people are mostly wearing masks, is a different thing than sitting in a bar having a beer.

albertshin• 6 years ago

Depends on the density at the park though... I was a bit surprised at the photos from the Boston protests [1].

[1] https://kubrick.htvapps.com/htv-prod-media.s3.amazonaws.com/...

[2] https://boston.cbslocal.com/2020/06/02/george-floyd-protests...

[3] https://www.wcvb.com/article/new-group-of-watchdogs-begins-i...

perl4ever3• 6 years ago

Just today I saw an article that said the covid recession is over.

However...it appears that new infections have been rising again globally since May-ish. It looks to me like it is becoming exponential again, although the slope on a log scale is considerably less than the first time.

This is my interpretation of the charts at: https://www.worldometers.info/coronavirus/

...titled Daily New Cases and Daily Deaths.

Deaths still seem to be declining, but you would expect that to lag regardless.

There seems to be a pattern where the larger countries that weren't hit so hard at first are picking up as developed Europe gets things under control. For instance, India, Brazil, Russia, Pakistan etc.

And within the US, as NY and NJ have fewer new cases, Texas, California, Illinois, and Arizona are starting to take the lead. Over 90% of new cases are outside NY and NJ now.

rhexs4• 6 years ago

Guy has what looks like a luxury truck and is apparently having trouble deciding between food and his car payment.

Sell the car, get a cheap used beater, reduce expenses, keep looking for a job. Not sure what NPR wants me to take from this example.

CPLX3• 6 years ago

Car payments don't work like that.

And that's not even addressing the fact that the entire country went into economic free fall, so "Just sell the X" isn't quite the advice it used to be.

Guest42• 6 years ago

Hiring is very slow at the moment and the beater would likely require a lot of maintenance and have a high price tag although I agree that it’s smart to drive cars that are more economical.

Alupis4• 6 years ago

Anecdotal, but I keep hearing about restaurants and other small businesses that can't convince their employees to come back to work. Something about the unemployment benefits + CARES Act bonus being more than they were earning while working...

rhexs4• 6 years ago

Sure, it’s a rough situation. He lived beyond his means and sank due to the black swan. Now, if the story was about repossessing the truck he needed to drive to a food pantry, I’d have a bit more sympathy.

The loan company should be barred from repossessing for generating subprime auto loans or whatever these are called, but this was still directly caused by lack of financial awareness.

hamandcheese• 6 years ago

Many people finance expensive cars with no money down and are immediately underwater on their loan. In a situation like that, you can’t offload your vehicle easily without also coughing up thousands to cover the difference between the car’s sell value (who is even buying right now?) and the cars loan balance.

sct202• 6 years ago

I had a friend who kept rolling the negative equity of his previous car loan on to the new one. It's pretty ridiculous what the deals will help you do now. He's since gone bankrupt.

MattGaiser5• 6 years ago

Those kind of people are going bankrupt eventually no matter what.

londons_explore4• 6 years ago

Auto loans should allow you to return the vehicle and walk away... They should be more "rent-to-own".

In fact, in my opinion, all secured loans should be this - you should be able to hand over the security to the lender, and walk away without penalty.

jniedrauer• 6 years ago

I suspect not many people are buying trucks right now, used or not. It would be hard to sell. It may not be bright to buy a truck worth more than your annual income, but I don't think the situation can be entirely blamed on consumers. It's a systematic problem. Trucks like this are the only profitable sector left for US car dealerships, and they have gone to great lengths to get people on the hook for them. The result is pollution, dangerously large vehicles clogging roads, and consumers stuck in over their heads.

fred_is_fred• 6 years ago

It's the opposite, a crap load of people are buying trucks right now, dealers are begging for more:

https://jalopnik.com/not-even-a-pandemic-will-stop-american-...

Now - they are drawn by 0% financing which is hard to get on a used truck.

opportune8• 6 years ago

If enough people experience this in aggregate it still has big effects on the economy. You’re focusing on the wrong thing

unchocked2• 6 years ago

That is not a luxury truck. It's an extended cab F-150 with cloth seats, probably an XL. A familiar comparison for someone unused to seeing trucks in ordinary use would be a base model Chevy Malibu. And he's probably underwater on the loan, which makes it hard to sell.

NPR wants you to see that a lot of ordinary people who made ordinary life choices are going bankrupt.

rhexs4• 6 years ago

What price does that start at?

devado2• 6 years ago

The starting price of this is 28k per edmunds. That is quite expensive (even for someone from tech sector).

burger_moon• 6 years ago

He says a call center worker told him that he didn't qualify for any help because he was late on a car payment last year. When NPR contacted Ford, the company said that is not its policy. And after reviewing the case, the company is now letting Baird skip his next car payment, which he says is a big help.

It appears Ford operates on the Google customer service spectrum of only helping those who can gain support of public outcry.

What I would like to see is a response from Ford that they will open an investigation to review everyones requests which have been denied for skipping payment.

noad2• 6 years ago

Like when Wells Fargo investigated their mortgage department and found no problems, right? Or when Google investigated Andy Rubin and decided he wasn't that bad and protected him for three more years? Why on earth would you ever trust a corporation to police themselves? They always lie, they always fail.

thephyber18• 6 years ago

It can't hurt to expect companies to actually troubleshoot their own policies. We don't have to expect that it's the only recourse (eg. government regulation, civil suits, public brand shaming, etc).

avancemos3• 6 years ago

Lockdowns are effective as tourniquets, but indefinite or long term use was never logical. There should have been more forward-thinking and pragmatic options pushed earlier. We will now see the natural repercussions of lockdown-centered policies.

cycrutchfield• 6 years ago

Nobody was ever advocating for indefinite or long-term lockdown policies. That's a strawman.

CPLX3• 6 years ago

I would characterize basically all the the lockdowns as indefinite.

avancemos3• 6 years ago

Which universe do you live in?

“Los Angeles County, which has recorded the highest number of coronavirus cases and deaths in California, has extended stay-at-home orders indefinitely.”

https://www.sfchronicle.com/bayarea/article/LA-to-extend-sta...

avancemos3• 6 years ago

Also: “ Durham leaving stay-at-home order in place indefinitely” https://spectrumlocalnews.com/nc/triangle-sandhills/news/202....

NJ stay at home order continued indefinitely | FOX 5 New York https://www.fox5ny.com/news/nj-stay-at-home-order-continued-.... And many many more...

bagacrap• 6 years ago

I guess it depends on how you define long term. I do have friends who think the lockdown should last in its current form (ie extended holiday with extra $600/week for the unemployed) until there's a vaccine.

Flattening the curve was the refrain but we seem to have forgotten that.

joshstrange2• 6 years ago

Exactly. It was time to get our feet under us, get PPE, get testing capacity up, get contract tracing in place etc. Kentucky, my state, has started opening up but is watching the numbers closely. No one wants to stay locked down.

It's going to be very interesting going forward. The American public (myself included more times than I would care to admit) is really good about moving on and having a short-term memory on things (Lots of these things happened back in 1918 with masks, social distancing, lockdowns, people hating the lockdowns, etc). I worry what happens when you couple that urgency to move on with something that, from all indications, cannot be swept under the rug.

staycoolboy4• 6 years ago

I think you may have misunderstood the point of lockdowns.

Lockdowns are/were intended to prevent jamming hospitals with COVID patients which would lead to non-COVID emergencies being put at risk.

The idea is to lockdown an area not to STOP, but to SLOW the trickle of new patients into hospitals at a rate they can be serviced: e.g., balancing the pipeline. In anticipation of the huge surges seen in the North East US, many hospitals built-out their capacity but didn't need it. Thankfully, and hopefully they will not.

As for "natural repercussions," the different phased-reopening plans that governors are drawing up all share the same thing: let's try opening a little, and if the cases shoot up again, lock down if hospitals are at risk of overflowing. We just don't have a national policy, it is patchworks of different state alliances.

It was the best idea at the time, and we all know the only other proposed solution was to NOT lock down and let those who are susceptible pay the price. Some people on the news vocally approved of that idea, most people did not according to surveys.

somewhereoutth• 6 years ago

In Europe we are using lockdowns to get infections sufficiently low to do test, trace, and isolate - with eradication as the ultimate objective.

bshipp2• 6 years ago

This is just the start. Landlords would be smart to work with tenants to share some of the loss and renegotiate temporary adjustments to keep at least some revenue coming in because the heady days of high demand for rental units is likely behind us for a while.

It'll be worse in downtown areas. I've heard from multiple firms that are looking at downsizing their expensive office space and continuing to allow employees to work from home. if a person doesn't have to work downtown they will often choose not to live there either.

COVID is going to change the face of urban real estate. So if you have a tenant, they're gold and do what you can to keep them.

cft5• 6 years ago

In California for example, due to state-wide rent control, it's very dangerous for a landlord to lower rents. I would rather offer 6 months free rent than lock into permanent nonadjustable lower rent situation.

leereeves• 6 years ago

If a lot of landlords start exploiting that loophole, I wouldn't be surprised if the law were revised to be based on the average rent over a year, or something similar.

sonthonax• 6 years ago

So a rent reduction by another name?

dheera• 6 years ago

At the same time maybe it's time for landlords who have been sitting in armchairs swimming in cash to start giving back to the people who haven't been able to afford to live here?

twblalock• 6 years ago

This is yet another reason in the long list of reasons why rent control is a bad policy.

bluntfang• 6 years ago

excuse me, but dangerous for who exactly? You mean your future returns on investments will be lower on your rental property? How exactly is that dangerous? Is someone's life in danger? If anything, lower rents allow more people to afford housing, making it less dangerous.

Let me guess, you have huge problem with the homeless situation, but are unwilling to consider lowering rents? Is that right?

nly• 6 years ago

Why do you say this? By all accounts, in the UK at least, rental demand has boomed compared to last since lockdown restrictions eased

https://www.bbc.co.uk/news/uk-england-52847319

atemerev2• 6 years ago

The second wave and new restrictions are inevitable.

londons_explore4• 6 years ago

Leases are typically for a fixed period, so it's really the integral of these charts that matters - how many people are currently in a rental.

I suspect that number is still a long way below normal, because lots of people are moving in with friends or family (students, young professionals, etc.).

My experience in London is the ratio of people looking for a house to houses advertised is the lowest I've ever seen in 10 years.

lacker• 6 years ago

In some places, like Oakland and Tahoe, rent seems to be going up. But in San Francisco it is going down. Probably all as a result of people fleeing San Francisco to nearby places with a cheaper rent per square foot.

matwood3• 6 years ago

Yeah, people want that space for a home office now.

notJim• 6 years ago

Are that many people really moving away? I understand the logic, but it's a major life decision, so I'm surprised if it's happening so rapidly in response to covid. I've heard of people leaving the city temporarily, but assumed many of them were maintaining their apartments.

I would have guessed the lower rents were more about money drying up, and landlords being desperate to hang onto any tenant who can pay.

jeffbee5• 6 years ago

Mix shift. Oakland has just gone through a major wave of new construction. New apartments command higher rents. This does not necessarily imply a movement of people.

dv_dt• 6 years ago

Unfortunately, as part of the unfolding of the post 2008 recession, a lot of rentals shifted from individual or smaller landlords to larger corporate landlords whom take a much more impersonal approach to making it through the depression. To some degree, to the extent they can take out holdover loans and let rentals sit empty, they will do just that - irregardless of the social utility of compromise.

https://www.theatlantic.com/technology/archive/2019/02/singl...

joe_the_user• 6 years ago

This is the pernicious dynamic. For Large landlords, certainly but also generally, you have a situation where property appreciation becomes more important than rental income, so evicting people and getting nothing becomes a better outcome than lowering rent.

Edit: Also note this appreciation driven dynamic is something of a product of QE - printing money. As the treasury dumps money into markets, anything of apparently reliable value, "money-like", becomes more valuable - commodities and land being examples but the "best" companies also. This appreciation process becomes more important than the ordinary use of the object in the case of land (empty mansions in London being the prime example but we may wind-up with many more if the approach continues).

jeffbee5• 6 years ago

Corporate landlords are rational and reasonable negotiators who will readily respond to market signals. Small landlords are a crapshoot; you might get one who just prefers an empty unit over lower rents. You can easily see this from craigslist data right now. Large buildings are lowering rent faster than small buildings and single-family houses.

wishinghand4• 6 years ago

I wonder if that explains my current place. There was a recent ownership change and right before that the owners cut down the shade trees for the house. There's no air conditioning so back in April it was already getting too hot to stay indoors. The lease renewal is in June so when the new, corporate management company asked us if we wanted to stay and that they were generously not going to raise rent, we asked they either lower the rent or figure out a cooling situation. They balked so we walked and they didn't flinch at all. They were honestly surprised we weren't going to take such a deal.

brutus12133• 6 years ago

Was a renter in 2008 and you are spot on. Same situation in the Bay area as well as NY/CT. It was insane that rents started to go up during that time. People basically walked away from their houses and started to rent. It was weird. Also, the "corporatization" of housing scared me a bit. Consider the area in downtown Mountain View. Rent was under 2K around 2008. The corporate landlords did minor renovations (fancy gyms, granite counters, maybe a redo of flooring) - they then did fancy websites and sold a lifestyle. Totally focused on the high-paying tech jobs. I used to live in a complex with families and non-techies. All that evaporated as rent shot up to 3.5-4K for the exact same units.

fbonetti• 6 years ago

You’ve got it backwards when it comes to residential real estate. More people become renters during a recession. Vacancies reduced dramatically after 2008.

https://fred.stlouisfed.org/series/RRVRUSQ156N

amiga_5005• 6 years ago

2008 didn't have airbnb imploding at the same time.

01100011• 6 years ago

Google 'white flight' for historical precedent. It remains to be seen if it will happen again, but it is certainly possible. I know I'm ready to leave the Bay Area for someplace boring.

jackcosgrove• 6 years ago

If there is deflation in the housing market, then marginal mortgage holders will walk away and become renters. That will swell the ranks of renters and drive up rents.

In many metro areas owner occupied real estate is overpriced relative to rents. When this imbalance corrects rents will rise, as before the correction owner occupants were subsidizing renters by overpaying for property even though renting made more sense.

api2• 6 years ago

I know people who are skipping payments just to be in solidarity with people who can't pay. They see it as an act of protest not only of inequality generally but of the fact that no matter what happens the financial industry will get a limitless bailout at the expense of everything else. Not paying is a way of getting a piece of that bailout.

I agree with the latter point. We've seen in the past 10 years or so that the regular economy will be sacrificed to save the financial industry. This has resulted in a complete decoupling of the two. The regular economy can be in a state of total collapse and the stock market goes up.

(By "the financial industry" I mean top politically well connected banks, not necessarily smaller private equity or smaller financial institutions. Those will crash and burn and be sold off in fire sale prices to larger banks that get bailed out, just like 2008.)

If we ever have real leadership again, one of the tasks before that real leadership is going to be undoing the loss of integrity and trust created by the 2008 bailouts. Like the second Iraq war, people have yet to even grasp how much damage was done in those years.

pengaru2• 6 years ago

I know people who are skipping payments just to be in solidarity with people who can't pay.

So they're donating what would have been spent on rent to an appropriate cause? Surely they're not keeping the money if it's just that. /s

rabidrat• 6 years ago

Yeah they're donating the money to their self-in-3-months, who has even less than they do now, with no job and no prospects and no bailout on its way.

opportune8• 6 years ago

I imagine a huge cash crunch is coming up soon as deferred payments come home to roost.

We can’t continue kicking the can down the road forever. If people are over leveraged or insolvent we have to bear the pain eventually. It’s part of the credit cycle and it’s how savers get their foot in the door regarding asset ownership. Otherwise we will have basically embraced some absurd worst-of-both-worlds kind of socialism in which we bailout the people who are leveraged and over-exposed-to-risk at the expense of future generations and savers.

The Fed/Government can probably kick it down the road until November though.

MattGaiser5• 6 years ago

For mortgages I don't see why the deferrals are a problem as long as they are just tacked on to the end of the mortgage.

It is going to be a major problem for renters.

opportune8• 6 years ago

If people don’t have their jobs immediately come back after all the restrictions are lifted then they’ll still be unable to make future payments.

Correct though that renters will be hurt more, though it will likely have less systemic effects.

entangledqubit2• 6 years ago

I've been expecting a "cash crunch" too but the Fed seems happy to keep making me wrong.

opportune8• 6 years ago

If the actual economy (gdp, not equities) doesn’t make a v-shaped recovery then it’s inevitable. I think the shakeup of who gets rehired for which jobs is going to cause some personal bankruptcies regardless. Basically if Acme co laid off 5k people, the 5k they rehire to resume operations may be a different set of people.

anm893• 6 years ago

We've been in that worst world since 2008 and will likely not be leaving any time soon.

swiley• 6 years ago

Or we just ignore/jail the unfortunate ones sense the general consensus is that we have too many people anyway.

(This isn't good, it's just the way we've structured the economy.)

ngngngng4• 6 years ago

I'm so extremely grateful that I accepted section 8 tenants into my rental units. Most of these tenants have nearly all of their payment covered by the government and they just have to pay $100 or $200 on top of that to cover what the government won't.

These tenants are often not accepted by landlords because they're thought to cause more issues. Mine are great. They keep the units spotless, mow the lawn for me on my multi unit properties. When I have a tenant like this, I never raise their rent, and if they can't pay the hundred bucks the government won't I sure don't care.

dmarlow8• 6 years ago

if they can't pay the hundred bucks the government won't I sure don't care

I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.

Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.

cr__• 6 years ago

Do you have any evidence that they did this because the government assisted them with their housing payments?

JadeNB2• 6 years ago

I used to have this same mentality. Until the person who was renting one of my properties decided to lie about certain issues (like claiming a shampoo bottle lodged down one of the toilets was there for years). When I decided to not renew the lease with that tenant, they decided to cause considerable damage to our property.

Surely the lesson here is that "this person was a criminally inconsiderate jerk", not "all Section 8 tenants are untrustworthy". (cr__ put it more punchily while I was posting: https://news.ycombinator.com/item?id=23409805 .)

Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.

How does denying housing to someone who needs it help them lift themselves up?

tyre• 6 years ago

when things come easy to people

I think you have a very misguided idea of what it's like to live in poverty.

no_wizard• 6 years ago

One or even a few bad experiences shouldn’t mean disregarding a whole block of people, either

michaelmrose4• 6 years ago

Anyone who thinks anything comes easy because you're poor hasn't been poor except in the poor college student "working" their way through the college daddy is paying for type of poor.

Your experience points to the human race sucking not poor people.

rudolph9• 6 years ago

What the probability is of something like this happening with a random tenant vs a subsidized tenet?

monadic24• 6 years ago

Sometimes, when things come easy to people, they don't appreciate it. Holding people accountable helps them lift themselves up too.

Yea I’m invoking Poe’s law on this coming from a landlord. Are you trolling?

ipython• 6 years ago

Bless you for taking a chance on the less fortunate. It sounds like you treat your tenants like people and they in turn repay you in something way more valuable than money: their time and kindness.

pengaru2• 6 years ago

These tenants are often not accepted by landlords because they're thought to cause more issues.

You're ignoring the potential effects on property value.

dntbnmpls• 6 years ago

You're ignoring the potential effects on property value.

Bingo. Surprised nobody else brought this up. Not to mention the neighboring home/property owners are going to be pissed off because it's a potential drag on their property value. Though the stigma against section 8 may not even be warranted. I wonder whether there are any studies on the effects of section 8 on communities.

jedberg2• 6 years ago

I love my section 8 tenants. Same here, they take good care of the place and the government doesn't miss rent payments.

Some counties even provide free legal help for landlords if their section 8 tenants do something bad. It's actually pretty low risk.

The main downside is the increased overhead of paperwork and inspections. The government wants to (rightly) make sure you aren't a slumlord so they do a lot more inspections.

ngngngng4• 6 years ago

Interesting. I'm actually a bit separated from it because I pay someone ~8% of my rents to manage the place, I wasn't aware of any extra inspections or hassle so I guess I'm getting my money's worth.

koheripbal• 6 years ago

I'm on the other side of the spectrum. I converted all my units to luxury units, and have had far far fewer tenant problems after the renovations and rate increases.

High paid tenants seldom miss payment - I've setup automatic EFT withdrawal from their accounts, so I don't even need to process checks, and they aren't really impacted by the rise in unemployment right now - most just work from home.

I think the bitter spot for being a landlord (especially now) is to manage low-mid income units. ...it's just a constant stream of problems - people moving in and out - single mom's that chronically cannot afford the rent - unregistered tenants - people that refuse to pay and refuse to move out - drug and police raids... like it was a total total nightmare.

Managing 12 low-mid income apartments was a full-time nightmare. Managing 12 high income lux units now takes about 4 hours every other weekend and is usually a pleasure to do.

vmception• 6 years ago

My mom was obsessed with providing Section 8 housing and low income housing, the tenants were a mess every single time. I was put off on the entire concept and hassle of real estate, until I was exposed to inner city luxury housing. Which is priced in its own privileged tier to even get started as an investor.

Of course it comes down to the people, regardless of the psychological incentives. But maybe the incentives promote some poor behaviors enough that its such a shared experience of poor behaving tenants.

asjw4• 6 years ago

I guess being good sometimes pay

I own an apartment in Rome that I rent because I don't live there anymore.

It's rented to a Bengali family that nobody wanted as tenants because they're immigrants and such (you can guess the reasoning behind it)

They used to bring the grocery home to my mother, so I gladly accepted to rent my house to them when they asked

They've been the best tenants I've ever had and due to covid they found themselves in the position of being one of the few local shops still open in the neighborhood, so their business didn't suffer much from the lockdown.

Many in Italy stopped paying the rent for 2-3 months as of now, but they always paid in time and in full, I asked them if they needed a cut on the rent to save some money, due to the bad situation, but they refused the offer.

So I'm installing air conditioning at my expenses in exchange

It's good when things go smoothly despites the odds

ngngngng4• 6 years ago

Someone must be cutting onions in here.

What a great story.

mav3rick• 6 years ago

Thank you for being a decent human. Is racism more prevalent in Italy ?

jungletime4• 6 years ago

You're very lucky. Rented to a single mother with two teenage sons. The teenage sons that decided to strip down living trees of their branches, to make bonfires for parties in the backyard. Two trees are severely damaged, and anything that was burnable in the landscape is burnt. I don't even know how to go about pricing out the damage. Insurance is paying for their rent, because the last house they lived in burned down. Sent her a strongly worded email. She promised not to make more bonfires. But I was there this week, and more branches where hacked off, and one tree is almost hacked of its bark 60% around. Can't sleep at night, getting anxiety that they will burn the place down. They're to move out before the end of the month.

ponker2• 6 years ago

Are you that worse off if they burn it down? You won’t have to worry about them resisting eviction and you’ll get an insurance payment.

inetknght3• 6 years ago

I'm not a lawyer but reddit's r/legaladvice seems to enjoy referring to people to tree lawyers. From what I gather there's a lot of money involved in tree laws. And if you've got picture evidence that's especially loved by lawyers.

ianlevesque• 6 years ago

These stories that come out of the woodwork every time tenants are mentioned are why I’ll never be a landlord.

drewmol3• 6 years ago

How big is the tree? Beavers cause this type damage and they also can't be reasoned with. If it's small enough to reach 60% of the bark just have it cut down and into pieces. It seems to make good enough firewood for them, hopefully the'll burn through most of it and you can plant a new tree in the ashes next month?

conductr4• 6 years ago

Hire an arborists to assess the trees with whatever is remaining; street view images. Also an appraisal based on arborists opinion. Mature trees are very pricey in legal damages. as essentially irreplaceable.

I could never imagine this scenario. But I have a Tree Addendum I had drafted specifically because I don’t want my tenants to even lay a hand on the trees. I’m more worried by negligent tree trimming that kills a tree. But it sets value to each tree too. Something like “$1000 per inch diameter at 18” above ground.” Sorry about this situation you’re in.

hanoz• 6 years ago

I don't suppose the struggling non state supported private renters whom you outbid to buy these houses, which they might otherwise have been able to afford to buy themselves, but who are now paying rent to some other landlord instead, are quite so enamored with your altruistic enterprise.

ngngngng4• 6 years ago

I actually lived in this multi unit property when I first bought it. My wife and I were newly married and buying a multi unit property qualified us for a 3.5% down payment which was much more management than >=10%. Also, I live in a rural part of America where property values are relatively stable because there's so much room to build. There are ample new homes available and new homes cost about $100 per sq ft. Existing homes are unable to rise above this except for extreme circumstances.

amiga_5005• 6 years ago

You said something negative about landlords. You can really see from the rash of landlords on this post why hacker news is hugely pro landlord.

blackswan101• 6 years ago

I am also in the process of converting my units to section 8.

conanbatt• 6 years ago

Your tenant is the government though. Thats often pretty sweet if you can get it.

miked85• 6 years ago

I doubt that communities adjacent to you were nearly as grateful.

yardie• 6 years ago

I lived in a building with a few section 8 tenants. Most were disabled, some elderly, and others young single mothers. I only found out we had any at all because the property manager mentioned it to me. It was primarily a building of young professionals and grad students. She told me management love them. Government always pays the rent on time. They still had to pass a background check so that locked out a lot of the assumptions.

hackerbrother• 6 years ago

You should waive their fees for the duration of Corona, and refund any ones you've received! Just saying, it would be a great way to do some good, and they might get a lot more out of the 100/200 than you would!

reshyith• 6 years ago

I am very thankful to hear you have had a good experience with your Section 8 tenants.

As a HUD-VASH veteran recipient in Los Angeles, I have hoped to discover that there are reasons to expand programs for more low-income people in the United States. I am EXTREMELY fortunate as a veteran to receive housing assistance. Thanks for making it possible for people in need to have a safe and affordable option! Blessings!

roenxi• 6 years ago

There is a real problem with the situation though. And I want to distinguish between the decision you've made, which are savvy, and the broader picture where this showcases some of the more unfortunate elements of socialism.

It is a terrible outcome if millions of Americans are about to go broke and the relative winners are people who (a) totally rely on government handouts and (b) rely on people who are totally reliant on government handouts.

This story points to a situation where a rational person would rather be involved in ventures that produce less resources than they consume. That will really start to hurt the absolute measures of prosperity if it persists for long.

perfunctory• 6 years ago

what a nice government subsidy you have there.

beervirus3• 6 years ago

I have a commercial tenant who was forced to shut down their business during the lockdown. I just waived rent until they were allowed to reopen. You can't get blood from a turnip, and I really don't want to force them into default and try to find another tenant in this environment anyway.

Almost everybody is taking a haircut this year.

nickff3• 6 years ago

I think that's probably the smart move, at least for commercial property in this situation. The waived rent is essentially an insurance premium against the risk of vacancy coming out of the recession.

londons_explore4• 6 years ago

Isn't the smarter move to defer payment of the rent for a few years?

One day, they'll be able to pay, and then you'll get paid.

beervirus3• 6 years ago

Smarter? Eh, probably.

I dunno though. It's a small enterprise that doesn't do a lot of business even in good times. I'm ok helping them out. It can be my good deed for the decade.

vkou2• 6 years ago

If they are a low-margin business, the only way they'll be able to pay up, is if inflation makes money worthless.

A high-margin business with low cash on hand, that's temporarily impacted by COVID is another story - they might be able to pay up later.

thephyber18• 6 years ago

There are also tax concerns that might affect a decision on whether to write down a loss this year versus some time in the near future.

m4rtink• 6 years ago

Here in Czech Republic there is a program where government pays 50% of busines rent as long as the property owner agrees on a 30% discount and the tennant pays 20%. The program covers March to June (three months) with most businesses having to be closed for about six weeks from that and restaurants fully reopening only recently.

IMHO this is a really good idea while not giving money away due to each party covering a part of the deal.

jeffbee5• 6 years ago

There's plenty of landlords in SF who think turnips bleed. There was a cafe that just closed permanently because the landlord wouldn't lower the rent, in a building bought 20 years ago for $1m where the gross rents are over $60k/month. You do the math.

thechao• 6 years ago

... 12?

fyfy18• 6 years ago

This has been very much the case in UK high streets for the past few years (on and off since '08). In the county-town where I grew up a Starbucks (!?!) closed because the rents were too high. Even before the pandemic, a number of shops have closed down in the last year, so it will be interesting to see what's left 6 months post lockdown.

The only businesses in that town that have been booming are retirement homes... but after this I assume there will be a lot of empty properties.

m4632• 6 years ago

Almost everybody is taking a haircut this year.

I haven't had a haircut since febuary. (cutting my actual hair) :)

Some of my friends look a little bushy too.

I've paid the lady who cuts my hair anyway, I've been seeing her forever and this is her only income.

beervirus3• 6 years ago

I needed a haircut even at the beginning of the lockdown, so it got pretty long in a hurry. My wife finally got sick of it and cut it for me a couple weeks ago.

It’s.. ok. Very short though.

ken• 6 years ago

Yup. "If you owe the bank $100 dollars, that's your problem; if you owe the bank $100 million, that's the bank's problem."

prawn• 6 years ago

We have small scale commercial tenants and halved their rate and extended terms. Would rather retain tenants we like than play hardball and risk having to find new ones. Over the last couple of months, we've lost one tenant (half rate) but gained two (full rate).

tinza1235• 6 years ago

As a passive real estate investor I'm seeing bidding on new sales has actually been more competitive than ever in my area (Atlanta GA). A lot of houses are selling above asking prices with 8-10 offers on the table. I am not sure if people genuinely think it is a good time to buy, or is it mostly FOMO.

poulsbohemian• 6 years ago

I sell real estate in Washington state. What you are describing has been our norm for a while. I am curious - is this a new phenomenon you are seeing in Atlanta? Is it at all price points and areas of the city? Would be interesting to see the data.

tinza1235• 6 years ago

I'm not sure how it compared year-to-year, but at the beginning of the COVID thing, house prices did drop a little with quite some offers cancelled (even pending ones, according to some of my agent friends).

entangledqubit2• 6 years ago

How do things look without using the questionable guidance of "asking price"? "Asking price" (and the notion of above asking) often seems like real estate agent reality distortion to me.

Mortgage rates are super low, so some may see this as getting an asset they can leverage in an improved environment later.

tinza1235• 6 years ago

I mean listing price is the most direct measure of the market temporature, not saying it's 100% accurate but it does represent the sentiment. Mortgage rate is indeed low, but not that significant compared to before (< 1% compared to 6 month ago I think).

I'm hesitating to bid because 1) price is still high 2) unemployment benefits will run out in 2 months, and I do think teh COVID effects have a long tail, that takes time to pan out. Thus the curiosity about the thought behind the "hot" market right now.

bbarn2• 6 years ago

It's also very location specific. Some areas listing too high will hurt you in the long run, so sometimes people definitely do what you're saying - price it low to get lots of offers hoping to get a bidding war. Other areas are much less tolerant of games like that - it's quite regional.

caseysoftware• 6 years ago

I've been watching 20+ properties around Austin, some out of genuine interest, others for a baseline. Zero of them moved in March and April despite asking price coming down every couple weeks. Now in the last couple weeks, 8 of them have had offers. I can't tell if they just dropped back into a "reasonable" range or some segment of the market has turned but it's fascinating.

tinza1235• 6 years ago

Yeah Atlanta had a similar "dip" period earilier, with many offers cancelled and investors on the sideline. Maybe the "reopen" gave people confidence? I'm afraid it is still too early to tell so I don't want to jump in too fast.

Obi_Juan_Kenobi2• 6 years ago

Home sales are seasonal. They peak in the summer at over double the rate of the winter. This occurs in all regions of the US.

Your observation does not deviate notably from typical market behavior.

bbarn2• 6 years ago

Home sales always peak when weather is nicer. As do leases for rentals. Leases that were ending a year from today are still ending, and some people are in a great place to buy a home, and inventory is incredibly low right now.

conductr4• 6 years ago

My understanding is real estate was not essential here in Texas. Agents tried to do virtual showings but, come on, most people want to see a home before they submit an offer.

charwalker• 6 years ago

My anecdotal factor in Seattle is we have a set $/month in mind that is then tied to the price of the house. If a house will be more than $650k we can't afford it at this point, even with down payment help. If a house nearby falls to about $650k I'll walk over and check it out to build up examples of what is nice/not or what I like/dislike. The goal is to be able to buy next summer or the year after though so this is mostly experimental to gauge what is out there and identify what we'd like to buy vs pulling the trigger.

thephyber18• 6 years ago

I think people who can work from home and who didn't get laid off are fine and the stonks appeared to mostly recover (which may explain some of the money sloshing around the market).

I think there will be massive economic damage in 6 months that we aren't focusing on right now.

tinza1235• 6 years ago

I agree. A good portion of the 40m job loss are not gonna be fully recovered even if the situation improved a little, not to mention it is getting worse by the day.

asjw4• 6 years ago

That's my understanding as well.

My wife started a co-working space January this year, it was her office and the co-working bit was to save on the rent with a prediction of some profit in a year or two.

Then covid happened, so we gave our notice to the landlord and are looking for a bigger house, with a spare room she can use as an home-office

We're saving money from the office rent and investing them in a less potentially profitable solution, but safer, at least for the moment.

Apparently this is a thing not just here, but it's global.

I think that's gonna keep the market alive for the next few months, I really can't say what could happen after that.

brutus12133• 6 years ago

Is anyone (except govt employees and people making PPE/in healthcare) really fine? The economy is so intricately connected, I feel that everyone will eventually pay the price. The large-corp tech sector has been fine so far but I am not sure how comfortable I am taking on a large mortgage. Atlanta is cheap .. a bay area techie could probably buy a place in cash.

refurb6• 6 years ago

Same thing in SF. Demand dropped, but so did supply, so prices are holding reasonably steady at this point.

I assume if prices drop, they won't stay low for long as people see it as an opportunity to jump into the market.

MiroF17• 6 years ago

San Francisco rent is collapsing - largest YoY decreases on record

e: edited

pnw_hazor2• 6 years ago

A wave of more layoffs will happen as soon as the Paycheck Protection quiet period ends.

After June 30, companies that took PPP money are free to fire people without repercussion.

wysewun• 6 years ago

this is true. will probably happen at my workplace as well unfortunately. the PPP was a stopgap which helped a bit, but sales are still not back to normal to help pay for full staff.

thephyber18• 6 years ago

I like to remind people that in 2008, Bear Stearns fell in March. Most of the the economy didn't realize the financial system problems until late August.

I'm waiting for a very large shoe to drop in a few months. How big will depend on whether consumers feel comfortable about their jobs+health.

uoaei6• 6 years ago

How big will depend on whether consumers feel comfortable about their jobs+health.

This is a very frightening sentence because obviously not many consumers feel comfortable about either right now.

bsanr29• 6 years ago

Titanic Syndrome. Everything's going under, but the people on the upper decks are still enjoying their late-night cigars while the boiler crew is drowning. It's an interesting phenomenon (and, I'm sure, has a better name than the one I just made up).

adamsmith• 6 years ago

The turnarounds always happen quickly after the fed takes serious action. Consider the 2008 crisis, or take 1933 (I believe?) when we broke from the gold standard: immediate exit from the Great Depression.

The fed and congress have been very on point with the stimulus response speed this time around and so I think we’ve seen the bottom of the market through this. And most investors are voting with their dollars that this is true.

(I’m just parroting Ray Dalio.)

downerending2• 6 years ago

Probably. Though with some weird details. I'm actually getting paid more right now being "furloughed", with the approval of my employer and (tacitly) the state. When the "don't work" bonus ends, I'll revert to full time.

PragmaticPulp• 6 years ago

Probably. Though with some weird details. I'm actually getting paid more right now being "furloughed", with the approval of my employer and (tacitly) the state. When the "don't work" bonus ends, I'll revert to full time.

I think a lot of people haven't realized that for many workers, being furloughed or having your hours reduced can result in an effective raise under the current Coronavirus aid package.

A friend's company furloughed everyone on Fridays. She was disappointed at first, until she realized this hours reduction qualified her for the $600/week Coronavirus aid. Now she's making more money, working less, and enjoying 3-day weekends.

Now everyone at her company is trying to convince management to continue the Friday furlough until the $600/week stimulus runs out.

This is why I don't trust the unemployment claim numbers until after July. Too many perverse incentives to increase the number of claims.

wcfields• 6 years ago

My company, an experiencial ad agency, furloughed all but 2 people in every non-finance Dept March 23, rehires everyone with big paycuts (me, 37% cut) April 27 through PPP.

No new business was able to be drummed up and now massive lay offs of 90% of the US offices starting June 15 with a paycheck severance so effectively June 30. The EU offices have faired better with more work, and few layoffs of only receptionists.

All and all it’s bleak for the events industry. I’m sure that a lot of convention centers, caterers, AV rental houses, independent producers, PAs, will all be on the dole and you’ll see a huge spike in unemployment on Aug 1.

Throwaway8588• 6 years ago

The impact of this is going to be extremely bi-modal.

Working class people are going to be decimated. No income and the cost deferral cliff.

Middle class (office workers are least) and upper class people will do very well. They still have their jobs and their costs have collapsed.

I am no longer paying for gas, childcare, bussing fees, car insurance, and all manner of other things. I can shop at Costco now that I have more time, saving me even more. Nobody is buying lunch out as we now have tons of saved time to make food ourselves. I used the crisis to squeeze by suppliers of internet and cell phone and whatnot. We now save 40% of our take home pay.

Personally the crisis has been great for me.

novok4• 6 years ago

How did you get cell phone and internet discounts?

thephyber18• 6 years ago

Many companies have advertised that "our customers who are affected by COVID can contact customer support for ..." type of PR messages announcing discounts/deferments.

I actually started collecting the URLs, but there are so many it's not worth centralizing.

Verizon: https://www.verizonwireless.com/support/covid-19-faqs/#bill

AT&T: https://about.att.com/pages/COVID-19.html

Cox Cable: https://www.cox.com/residential/support/coronavirus-response...

Comcast Xfinity: https://www.xfinity.com/prepare

pcurve• 6 years ago

I think any savings will be temporarily. Long term effect will be deflationary and wages will eventually go down.

blueblisters• 6 years ago

This seems to be true. Massive income inequality will in turn cause more civil unrest.

troughway• 6 years ago

US and Canada are going to soon realize that all the govt did was buy temporary peace.

Not sure how either country will lift from this without having a negative impact, as not only was it giving emergency funds to people, but in a lot of cases giving up to 200-300% of what they earned prior.

It will be a shitshow.

sytelus4• 6 years ago

Meanwhile stock market is preparing to for its record high :).

gshubert17• 6 years ago

Meanwhile stock market is preparing to for its record high :)

Yes, and I don't understand it. The S&P500 is within 8% of its all-time high (3393). Even without a second wave of coronavirus cases and deaths, the current levels of unemployment, defaults, and bankruptices, I can't see what supports these asset price levels. Any ideas?

yingw787• 6 years ago

I've heard that all that QE and tax cuts from '08 and '20 goes into assets that are valued by rich people. Healthcare, real estate, college, financial securities, which drives up prices due to inflation. I'm not sure if I'm totally right, seems a bit too simple, but it makes enough sense to me. That money has to go somewhere, right?

Add that demand with demand from rich people from other countries for the same services (who might just loot their country and therefore aren't subject to the same domestic economic pressures) and prices keep going up.

gbear6052• 6 years ago

Part of it is that there’s nowhere else to put the money. Currently we’re in a situation where no one has a way that they can spend money to make more of it.

MysticFear• 6 years ago

Stock market is a future prediction machine. The price isn't the current valuation

Obi_Juan_Kenobi2• 6 years ago

Money is cheap, and where else would you put it?

The market is effective at allocating funds among equities, but the overall valuation of the equities market is another issue entirely.

uoaei6• 6 years ago

Your not understanding is a direct consequence of the decade+ of discussion around the stock market as if it's "the economy". Of course conflating the two will cause confusion when they eventually diverge.

nikanj• 6 years ago

The average P/E ratio for SPY companies is around 15. The price of the stock today is built on the earnings of the next 15 years, and most investors seem to believe we'll bounce back in a year or two.

anm893• 6 years ago

Markets function through buying and selling. More people need to be selling then buying for prices to go down. But the fed is just coming in and buying in the markets with no buyers so this mechanism stops working and unsurprisingly prices are staying inflated.

ipnon• 6 years ago

The price of a stock is whatever someone will pay for it. The stock indices certainly have no obligation to reflect the current or future conditions of the overall economy. Some points to consider:

1. Stock prices follow trends. Increasing stock prices make stocks more attractive. These are the foundations of financial bubbles. History repeats itself.

2. Most of the valuation of an index like the S&P 500 is derived from a few stocks. 17.5% of the S&P 500 is the valuation of FAAAM.[0] Take a look at other members of the top 30 like Proctor & Gamble, Johnson and Johnson, Visa, Mastercard. The S&P 500 is mainly composed of companies essential to the daily functioning of the average American's life.

3. The stock market is essentially an unknowable process. Even the most profitable trading firms making billions of dollars a year make countless unprofitable trades each day and will go for years without turning a profit.

[0] https://www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-mi...

seanconaty• 6 years ago

How many HN readers are landlords?

amiga_5005• 6 years ago

Seems like working in IT isn't enough, judging from the number of landlords on this post. Almost as if all productivity gains flow into land in our current system!

person_of_color• 6 years ago

Yet the stonks go up.

yalogin• 6 years ago

Will this effect the economy and the stock market at some point? That is not clear to me. The way the stock market is going it makes me quite scared. The whole thing might just collapse under its own weight at some point.

elevenoh2• 6 years ago

Skipping payment != need to skip payment.

JackPoach• 6 years ago

This is one of those cases when delaying solving a problem can turn out to be a good thing. And in the end, a jubilee (debt forgiveness) might be inevitable. Which is likely to be a good thing too, especially if it covers student loans and other things that aren't cleared by bankruptcies.

xbmcuser• 6 years ago

This is the main reason I have been scratching my head thinking how the hell is NASDAQ going up. Though might just be sour that I didn't go back in after getting at the right time

tjomk2• 6 years ago

I'm likely out of touch here, but at least for the person mentioned in the article, why does he need a huge SUV? If the crisis hits and you cannot re-pay the bills, that would be the first thing I'd get rid of. It doesn't look like he needs it for work, and he could just get away with a used Honda Civic or a similar smaller car that doesn't require much gas, expensive insurance, and most importantly monthly loan payments.

During the last financial crisis I sold lots of stuff that was dear to my heart but wasn't essential like motorbike, mtb, etc.

Is it the cultural gap that I'm not seeing as a European? Or something else?

MandieD• 6 years ago

If he's like a lot of Americans, he's "upside down" on the truck - as in, he still owes more on the loan than he could realistically sell the truck for. That would leave him still in debt, but now without a vehicle, even if he could be content with a 10 year old Civic or Corolla.

The wisdom of having purchased such a large vehicle on credit to begin with is another discussion entirely. Americans are, on average, far more relaxed about owing a lot of money on a vehicle than, say, Germans. I grew up assuming a car payment was just part of adult life; my husband, a German, was raised to believe that borrowing for anything other than property was foolish. I've since come around to his point of view, and am the reasonably content co-owner of a 12 year old Fiesta, though considering our upgrade options as we have a baby on the way.

Why a large truck in the first place? A lot of American men, especially in the South (where this guy is), consider small sedans to be unmanly. If they're overweight like most Americans, they also think they're going to sit more comfortably in a larger vehicle. Plus, SUVs and trucks are less expensive in the US than they are over here - for what I'd have to pay for a new Corolla hybrid station wagon (my current coveted car) in Germany, I could get a Toyota Highlander mid-sized SUV in the US, which Toyota doesn't even bother trying to sell here.

tjomk2• 6 years ago

Gotcha! Thanks for a thorough explanation

Millions of Americans skipping payments as wave of defaults and evictions looms

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