The economic crisis caused by the COVID-19 Coronavirus situation is going to result in massive business chaos because if people cannot buy, businesses cannot pay loans, and it will have a “domino” type effect on others industries in society. While a lot of stuff people buy is junk (objectively speaking in that we do not need something), the cycle of purchasing is what keeps the US economy going. As Zero Hedge reports by way of Bloomberg, the effects of the shutdown is hitting business now, including property markets, sending it into chaos.
The shutdown is also having an effect on apartment buildings and industrial properties. Nothing is off limits, and it’s sending the commercial property market into chaos.
Alexi Panagiotakopoulos, partner at Fundamental Income, a real estate strategy firm, said: “On the investor side, there’s widespread panic. There’s downward pressure on every aspect of every asset class.”
And there’s no way to value a market when you don’t have a bid and an offer – and you’re not sure when the market will “re-open”. Further, there’s no way to try and model the future value of such properties when everyone is unsure of what the real estate landscape will look like when everything is said and done.
Scott Minerd, chief investment officer at Guggenheim Partners said: “There will likely be long-lasting changes.”
It’s estimated that investment activity in the space could fall by 45% this year, which would be further than post-9/11 or the 2008 financial crisis.
The drumbeat of large deals has already gone silent. For example, Bloomberg reports that the Canada Pension Plan Investment Board’s planned sale of a 50% stake in the 900 million pound Nova development in London’s Victoria district collapsed on Friday. Similarly, Singapore-based ARA Asset Management Ltd., which was lined up to purchase the pension fund’s half of Nova, has balked on the deal. (source)
The real interesting part is going to happen when April comes around. That is when the next month’s bills are due.
This is what is going to “make” or “break” Trump’s 2020 election prospects. It is already being exploited for political ends, but expect it to get a lot worse in the time leading up to it.
What the average man can come away with is the warning that, as I have said, the average citizen is looked at as a tax mule and otherwise is not cared about.
Remember that Christians in Iraq survived fourteen centuries of Islamic domination and abuse, only to be destroyed in fourteen years by the Americans. If the US would commit genocide against six million Christians (the estimated pre-invasion Christian population of Iraq), does one not believe that the same entity would not think twice about putting millions of Americans out of work and forcing them into real poverty if it was believed to be politically exploitable for money and power?