Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65460 Thu, 13 Aug 2020 18:40:11 GMT Empty apartments in Manhattan reach record high, topping 13,000 http://implode-explode.com/viewnews/2020-08-13_EmptyapartmentsinManhattanreachrecordhightopping13000.html The number of apartments for rent, or listing inventory, more than doubled over last year and set a record for the 14 years since data started being collected, according to a report from Douglas Elliman and Miller Samuel. As the number of apartments listed for rent hit 13,117, the number of new leases signed fell by 23%.

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Manhattan apartment rentals are still far from cheap. The average rental price for a two-bedroom apartment is $4,620. Yet the so-called effective median rent -- what people pay with concessions -- fell 10% over last year, according to Miller. Aside from offering free rent, brokers are offering to pay broker fees, adding gift cards to Home Depot and other retailers, and offering initial cleaning services, brokers say.

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The surge in empty apartments in the nation's largest rental market is likely to have ripple effects throughout the economy. Housing experts estimate that about half of Manhattan's apartment rentals are owned by small business owners, rather than large publicly traded companies or the big, well-funded real estate families. As the small landlords lose income, they may be unable to pay property taxes, which is New York City's largest source of revenue. A drop in property taxes could result in cuts to services, which could make New York less attractive to new residents.

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iehi-feed-65459 Thu, 13 Aug 2020 14:08:23 GMT Thousands of Small Businesses Going Bankrupt in US Are Uncounted in Covid http://implode-explode.com/viewnews/2020-08-13_ThousandsofSmallBusinessesGoingBankruptinUSAreUncountedinCovid.html This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court.

... Yelp Inc., the online reviewer, has data showing more than 80,000 permanently shuttered from March 1 to July 25. About 60,000 were local businesses, or firms with fewer than five locations. About 800 small businesses did indeed file for Chapter 11 bankruptcy from mid-February to July 31, according to the American Bankruptcy Institute, and the trade group expects the 2020 total could be up 36% from last year.

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Chapter 11 bankruptcy gives a business protection from its creditors while the owners work out a turnaround plan. For smaller companies, though, the extra time might not make any difference. "Bankruptcy cannot create more revenue," said Robert Keach, a restructuring partner at New England-based Bernstein Shur and former president at the American Bankruptcy Institute.

Some owners fear bankruptcy could scar their credit reports and hurt their future chances to rebuild. Bankrupt businesses have a nearly 24 percentage point higher likelihood of being denied a loan, according to the SBA, and a filing can show up on a credit report for 10 years.

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To be sure, small business attrition is high even in normal times. Only about half of all establishments survive for at least five years, according to the SBA. But the swiftness of the pandemic and the huge drop in economic activity is hitting hard among typically upbeat entrepreneurs. About 58% of small business owners say they're worried about permanently closing, according to a July U.S. Chamber of Commerce survey.

In a June 2020 NFIB survey, a net 31% of owners reported lower sales in the past three months, while 7% reported higher sales a year earlier. In the same survey, only 13% of business owners said it was a good time to expand, a dip from 24% a year earlier.

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iehi-feed-65458 Sun, 09 Aug 2020 20:02:56 GMT Congressional panel slams Fed's Main Street Lending Program as Hotel works oppose CMBS owner bailout http://implode-explode.com/viewnews/2020-08-09_CongressionalpanelslamsFedsMainStreetLendingProgramasHotelworkso.html The Main Street facility took three months to get up and running and has been little used relative to some of the other emergency lending programs created to help companies survive the pandemic. So far, only 509 banks have signed up to be Main Street program lenders, and 29 have made loans. Only 54 loans totaling $580.9 million have been issued to date. For comparison, the Paycheck Protection Program has pushed out more than 5.1 million loans worth $523.4 billion.

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"I think the issue is that the Fed is trying to solve a problem that doesn't exist and it's incapable of solving the problem that does exist. By law, the Fed can only support loans, and more loans are not the answer here for most companies," Ramamurti said, urging Congress to act to provide direct support to midsize firms with strings on the money to ensure that workers also benefit.

The Main Street Lending Program relies on banks to issue mid-market companies five-year term loans with low interest rates. The Fed then effectively buys 95 percent of those loans from the bank. The way the terms work now, companies little hurt by the pandemic can get better loans from regular lenders.

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Gwen Mills, secretary-treasurer of UNITE HERE, which represents hotel, casino and restaurant workers, opposed an asset-based facility, saying it would be a bailout for real estate investors that would do little to help laid-off employees.

"Lobbyists claim if the Fed doesn't rescue [commercial mortgage-backed securities] borrowers, hotels will default and workers won't have jobs to come back to, but that is not our experience, and this isn't the first time hotel owners got themselves in trouble using these inflexible loans," she said. "After the financial crisis, there were scores of defaults across the country, but defaults and foreclosures didn't lead to closed hotels. Hotel workers, who were used to seeing absentee owners come and go, understand that jobs are driven by occupancy. And only ending the pandemic can fix that."

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iehi-feed-65456 Fri, 07 Aug 2020 23:31:55 GMT Covid's next casualty -- American restaurants http://implode-explode.com/viewnews/2020-08-07_CovidsnextcasualtyAmericanrestaurants.html "Four out of five of our favorite independent restaurants may not survive this shutdown." ... Most survived on small profit margins before the Covid-19 crisis compelled many to temporarily close, and re-open at 25% capacity, operating with skeleton crews doing takeout and serving food outdoors when the weather permits. Now, they're trying to convince Congress to throw them a much needed lifeline in the form of the Restaurants Act, a bipartisan bill to establish a $120 billion grant program distributed through the Treasury Department... But despite one-third of Congress co-sponsoring the bill, it has not been taken up by Senate Majority Leader Mitch McConnell as negotiations for a new round of relief drags on.

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[The] supply chain is now breaking, with small family farms feeling the pain. "It's nearly impossible to plan what we need to grow, how much seed to buy, or when we should start growing given the current situation," said third-generation farmer Kate McClendon from Peoria, Arizona. "Farms like ours don't have the connections to grocery chains and other businesses that might help us get through this. We depend on independent restaurants."

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The Restaurants Act's sponsors believe their bill will reduce the unemployment rate by more than 2 percentage points -- given the fact that restaurant and bar workers made up a staggering 60% of initial unemployment claims when the coronavirus pandemic hit.

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iehi-feed-65455 Fri, 07 Aug 2020 21:24:44 GMT Coronavirus stimulus updates: Relief bill stalls, Trump mulls executive order http://implode-explode.com/viewnews/2020-08-07_CoronavirusstimulusupdatesReliefbillstallsTrumpmullsexecutiveord.html It would take a massive effort for Democrats and the White House to even reach the outline of a deal soon. But the clock is ticking: the expiration of both the $600 per week enhanced federal unemployment benefit and the eviction moratorium late last month have left millions of Americans scrambling to cover bills and remain in their homes.

The U.S. added 1.76 million jobs in July despite a resurgence in coronavirus cases that forced many states to pause or reverse their economic reopening plans. The unemployment rate fell to 10.2%, but was still higher than at any point during the 2008 financial crisis.

In a joint statement after the jobs report release Friday, Pelosi and Schumer said the data shows "that the economic recovery spurred by the investments Congress has passed is losing steam and more investments are still urgently needed to protect the lives and livelihoods of the American people."

Democrats have insisted on extending the jobless benefit long term at $600 per week. The White House has made several counteroffers, reportedly proposing extra payments of $400 per week into December.

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iehi-feed-65454 Fri, 07 Aug 2020 15:50:20 GMT Capital One Fined $80 Million For Data Breach. Who's In Your Wallet? http://implode-explode.com/viewnews/2020-08-07_CapitalOneFined80MillionForDataBreachWhosInYourWallet.html iehi-feed-65453 Thu, 06 Aug 2020 22:19:15 GMT 'They Are Literally Exploding Right Now': The Rise Of Blank Check Real Estate Companies http://implode-explode.com/viewnews/2020-08-06_TheyAreLiterallyExplodingRightNowTheRiseOfBlankCheckRealEstateCo.html There were 59 SPAC IPOs in 2019, which raised a combined $13.6B. So far this year, according to Danic's data, there have been 60. A SPAC is a shell company that is set up to go public, even though it doesn't have any operations. Money poured into these "blank check companies" by shareholders is used to acquire another company, thus taking it public in a reverse merger. After the acquisition, the company is usually listed on one of the major stock exchanges.

Just in the last few weeks, a SPAC called PropTech Acquisition Corp., acquired Porch, an online real estate and home improvement marketplace, for $523M after the SPAC raised $172.5M in a November IPO. An offshoot of Miami-based Lionheart Capital filed paperwork with the Securities and Exchange Commission specifying that it intends to raise $200M to acquire a proptech company. Benchmark Real Estate Group is likewise looking to raise up to $200M for a SPAC called Property Solutions Acquisition Corp. that would target property technology or real estate service firms.

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iehi-feed-65452 Mon, 03 Aug 2020 23:42:38 GMT The next housing crisis is here http://implode-explode.com/viewnews/2020-08-03_Thenexthousingcrisisishere.html The eviction wave has already started, said Will Parker at The Wall Street Journal. The national moratorium only covered tenants in buildings with federally backed mortgages. States passed their own eviction limits, but some, such as Texas, have already let them expire. In a sign of things to come, attorneys in Houston are seeing "long lines at courthouses, sometimes people standing shoulder to shoulder" awaiting eviction hearings. "Stuck between tenants who can't, or simply won't, pay up and banks that still expect mortgage payments every month," landlords are also feeling the squeeze, said Tim Logan at The Boston Globe. In Massachusetts, a fifth of the landlords say "they don't know how they will pay their bills this year." That will only get worse if the state extends its eviction ban without help for property owners.

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"Perhaps this is all starting to sound like a redux of the mid-2000s housing crisis," said Derek Thompson at The Atlantic. "It's not." In many ways, it is the opposite. Back then, "foreclosures soared" and single-family homes stood empty in the suburbs. Now there is an undersupply of suburban housing and a hot market in new construction. The problem today is in the cities, where the pandemic has accelerated a crisis of affordability. "Without income, renters can't pay rent and utilities. Without monthly payments, landlords and other companies can't make mortgages and bond payments." Housing costs in cities have been approaching a crisis for years; thanks to the pandemic, that crisis is here, and "dangerously close to spiraling out of control."

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iehi-feed-65451 Mon, 03 Aug 2020 15:47:48 GMT Trump Housing Crisis: 40 Million Americans Face Being Homeless http://implode-explode.com/viewnews/2020-08-03_TrumpHousingCrisis40MillionAmericansFaceBeingHomeless.html iehi-feed-65450 Sun, 02 Aug 2020 16:45:23 GMT Retail rents plummet across New York City, a warning for other areas http://implode-explode.com/viewnews/2020-08-02_RetailrentsplummetacrossNewYorkCityawarningforotherareas.html During the second quarter ended June 30, average asking rents along 16 major retail corridors in Manhattan declined for the eleventh consecutive quarter, falling to $688 per square foot, according to a report from the commercial real estate services firm CBRE. The drop marked the first time since 2011 that prices dropped below $700, the firm said, representing an 11.3% decline from a year ago.

Within that, rents on Prince Street in the SoHo neighborhood saw the biggest declines, according to CBRE, tumbling 37.5% year-over-year to $437 per square foot from $699 per square foot -- and falling below $500 for the first time since 2014.

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One driving factor is fewer people spending their afternoons out shopping -- especially tourists. Global luxury sales are forecast to drop roughly 29% in 2020, falling anywhere between $85 billion and $120 billion from a year ago, amid the decline in tourism, according to a report from the Boston Consulting Group.

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iehi-feed-65448 Tue, 28 Jul 2020 16:57:25 GMT COVID-19 RELIEF FRAUD ALERT! Florida Man Busted In $3.9M Scam http://implode-explode.com/viewnews/2020-07-28_COVID19RELIEFFRAUDALERTFloridaManBustedIn39MScam.html iehi-feed-65447 Mon, 27 Jul 2020 19:01:04 GMT These NYC Businesses Lasted Decades. The Virus Closed Them for Good. http://implode-explode.com/viewnews/2020-07-27_TheseNYCBusinessesLastedDecadesTheVirusClosedThemforGood.html A gun store that opened in 1911. An Irish pub that had drawn crowds since the Reagan administration. A coffee shop that sheltered frightened Brooklyn residents during the 2001 terrorist attacks.

These small businesses -- John Jovino Gun Shop in Little Italy, Coogan's in Washington Heights and Cranberry's in Brooklyn Heights -- are among the mom-and-pop shops and restaurants in New York that have withstood decades of economic downturns, wars and natural disasters, helping to anchor their neighborhoods and define the city.

But they could not survive the coronavirus pandemic, which has ravaged not just fragile small businesses but stalwarts that had lasted for generations. Many were especially reliant on repeat customers and foot traffic, and their income dried up almost overnight when the state shut down to stop the spread of the virus.

Their losses have not only left troubling holes in their neighborhoods but could signal even deeper trouble for other small ventures.

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Nearly 3,000 small businesses in New York City have closed for good in the past four months, blaming falling revenue, vanished tourism and ballooning debt, especially for overdue rent. Some older businesses pointed to their failure to develop robust online commerce that might have carried them through the tough times.

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iehi-feed-65446 Mon, 27 Jul 2020 17:32:10 GMT The Coronavirus Turns Midtown Manhattan Into a Ghost Town, Causing an Economic Crisis http://implode-explode.com/viewnews/2020-07-27_TheCoronavirusTurnsMidtownManhattanIntoaGhostTownCausinganEconom.html Editors and account managers at the Time & Life Building in Midtown Manhattan could once walk out through the modernist lobby and into a thriving ecosystem that existed in support of the offices above. They could shop for designer shirts or shoes, slide into a steakhouse corner booth for lunch and then return to their desks without ever crossing the street.

To approach this block today is like visiting a relative in the hospital. The building, rebranded a few years ago and renovated to fit 8,000 workers, now has just 500 a day showing up. The steakhouse dining rooms are dark.

On a sidewalk once lined with food carts, a lone hot-dog vendor stood one recent Friday on a corner below the building. His name is Ahmed Ahmed, and he said he used to sell 400 hot dogs a day. How many now? "Maybe 10."

Midtown Manhattan, the muscular power center of New York City for a century, faces an economic catastrophe, a cascade of loss upon loss that threatens to alter the very identity of the city's corporate base. The coronavirus's toll of lost professions, lost professionals and untold billions of lost income and tax revenue may take years to understand and resolve.

Other neighborhoods are rushing to reopen, while Midtown remains stuck in a purgatorial Phase Zero, its very purpose -- to bring as many human beings together as possible -- strangling most hope of a convincing comeback in the foreseeable future and offering a sign of what may lie in store for business districts across the country.

Upstairs, floors are mostly empty, as companies reassess their need for office space, raising serious questions about the future of the city's commercial real estate market. Downstairs, streets were lined with the creature comforts that made working in Midtown not only bearable, but even fun. They are vanishing, and with them, the men and women who fed, clothed, poured drinks for and drove the people in those tall buildings.

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In jeopardy of extinction, at least in its known state, is the corporate office culture at large -- its corner suites and cubicles, water-cooler movie reviews, coffee breaks, office crushes, shoeshines, black cars. Happy hour, "Mad Men."

That show was set in part in the Time & Life Building, which lent a shorthand nod to corporate chic. Today, the story of the state of Midtown can largely be told with a close look at the block near Rockefeller Center where it has stood for more than 60 years.

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iehi-feed-65442 Sun, 26 Jul 2020 15:35:55 GMT Millennials are Caught in the Two Recession Trap: the Great Recession and now the Great Pandemic. http://implode-explode.com/viewnews/2020-07-26_MillennialsareCaughtintheTwoRecessionTraptheGreatRecessionandnow.html iehi-feed-65441 Fri, 24 Jul 2020 20:31:52 GMT WeWork Has Glut Of NYC Availability http://implode-explode.com/viewnews/2020-07-24_WeWorkHasGlutOfNYCAvailability.html The firm has some 1.9 million square feet of space in New York that's either available or will become so in the coming months, according to Business Insider, which obtained leaked marketing materials. That's more than 20 percent of WeWork's portfolio in the city, and far exceeds the availability rate in Manhattan of 12.1 percent in June.

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The news comes about a week after WeWork chairman Marcelo Claure said the company plans to turn a profit by 2021.

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iehi-feed-65436 Mon, 20 Jul 2020 16:04:26 GMT Caliber Home Loans Management Favors Kiddie Porn Peddlers Over AIME http://implode-explode.com/viewnews/2020-07-20_CaliberHomeLoansManagementFavorsKiddiePornPeddlersOverAIME.html iehi-feed-65435 Mon, 20 Jul 2020 13:53:27 GMT Global Real Estate Investment Plunges Amid Covid Pandemic http://implode-explode.com/viewnews/2020-07-20_GlobalRealEstateInvestmentPlungesAmidCovidPandemic.html Global real estate investment fell by 33% in the first half as the coronavirus pandemic battered economies and disrupted deals.

The Asia-Pacific region took the biggest hit, with volumes down 45% from the year-earlier period, because it was the first struck by the outbreak, according to a report from broker Savills Plc. Investment dropped by 36% in the Americas and 19% in Europe, the Middle East and Africa.

Investment is "expected to remain well below pre-pandemic levels for the rest of 2020 as investors wait for market clarity," Simon Hope, Savills head of global capital markets, said in a statement on Monday. "However, certain sectors are expected to outperform as investors focus on secure assets, namely logistics, residential and life sciences."

The global economy has been hammered by the pandemic, with the International Monetary Fund forecasting a 4.9% contraction this year. IMF chief economist Gita Gopinath has said the cumulative loss for the world economy this year and next as a result of the recession is expected to reach $12.5 trillion.

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iehi-feed-65432 Fri, 17 Jul 2020 18:44:47 GMT AIME CEO Anthony Casa Takes Leave Of Absence http://implode-explode.com/viewnews/2020-07-17_AIMECEOAnthonyCasaTakesLeaveOfAbsence.html iehi-feed-65431 Wed, 15 Jul 2020 21:05:54 GMT Trump Financial Regulator Quietly Shelved Discrimination Probes Into Bank of America and Other Lenders: Propublica http://implode-explode.com/viewnews/2020-07-15_TrumpFinancialRegulatorQuietlyShelvedDiscriminationProbesIntoBan.html Since President Donald Trump took office, the OCC has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases. Flagstar Bank, a leading lender in Michigan, wrongly charged Black homeowners more through a network of mortgage lending affiliates, OCC officials concluded in 2017. That same year, agency examiners found that Colorado Federal Bank, an online lender, was doing the same to female borrowers.

Another inquiry by OCC officials concluded that Chicago-based MB Financial, a lender acquired by Fifth Third Bank last year, charged Latinos too much on mortgage loans. Cadence Bank, a lender in several Southern states, was turning away minority borrowers in Houston, according to an OCC investigation. Fulton Bank, a lender based in Pennsylvania, had been discriminating against minorities in parts of Richmond, Virginia, and its home state, regulators concluded.

In each case, despite staff recommendations that fines or other penalties be imposed, the OCC took no public action and closed the investigations quietly. In the past, banks have had to pay substantial sums after similar investigations. In 2012, in the wake of the housing crisis, Wells Fargo paid $175 million to resolve allegations that it charged Blacks and Hispanics more to buy a home after an investigation that began with the OCC years earlier.

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iehi-feed-65428 Mon, 13 Jul 2020 23:27:10 GMT Manhattan Apartment Rents Slide After Exodus Empties Buildings http://implode-explode.com/viewnews/2020-07-10_ManhattanApartmentRentsSlideAfterExodusEmptiesBuildings.html The borough's apartment-vacancy rate in June rose to the highest on record [the vacancy rate climbed to 3.67%, a record in data going back to August 2006. The rate had never before topped 3%, according to Miller.]. Available listings surged 85% from a year earlier to 10,789 -- an all-time high for a single month, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday.

All that inventory put a dent in pricing. The median rent slid 6.6% to $3,242, the first decline in 18 months and the biggest in data going back to October 2011, according to Jonathan Miller, president of Miller Samuel.

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