The Federal Moratorium on evictions is ending at the end of the month. Like last month, it could always be extended again.
It will be extended until the most opportune moment to do the most damage to the economy. Why? Vandals are in charge in D.C.
This was always a misguided program but was an integral part of destroying the relationship between lender and lendee, renter and landlord. The government comes in all humanitarian-like to suspend payments on FHA-backed mortgages, which are all of them post-Lehman Bros., after locking people in their homes for a year while blocking access to therapeutics which would have mitigated the worst of COVID-19’s effects on the society.
We know this now. Vaccination is patriotic. Stay home on the dole wearing a mask during sex for the greater good. If not, you’re a COVIDiot.
But, let’s leave all that aside for a minute. People have been terrorized and many of them are still not thinking straight, regardless of why and how they were driven to that state.
Moreover, I’ll stay away (for once) about any conspiracy surrounding this issue. Because the argument actually works better if we don’t go there. Let’s assume the intentions of people we know to be liars had the best of intentions and run the scenario in housing out.
So, while interrupting the normal ebb and flow of capital because of extreme circumstances may have felt like the right thing to do, the consequences of that policy are wholly predictable given the deplorable state of our politics. Again, even without any personal accusations of malice by individuals in decision-making positions, we still arrive at the outcome we have today.
Everyone on both sides of the residential debt divide is staring at a step-function reset of their cash flow when the eviction moratorium ends and that step-function will be a doozy, down.
Then when you think through what it is that Davos is trying to do with the Great Reset, which they have stated forthrightly, it is very clear why this moratorium has been extended until this summer, far beyond when it should have been.
And it has nothing to do with trying to keep Joe Biden’s poll numbers from collapsing by buying the votes of renters.
It has a lot to do with forcing both landlords and debtors into bankruptcy simultaneously, and do so when the bulk of the next round of government spending can be doled out to those closest to the Washington laundromat.
Martin Armstrong is right to bring up this issue but I don’t believe he’s thought through the full effect of the policy:
Those in power are just incompetent of ever managing the economy. Once they stuck their foot in the door, if they take it out and there is a wave of foreclosures, they will be to blame. So what do they do then? Put the foot back in the door and suspend all mortgages because they have an election in 2022?
Assuming incompetence over malice isn’t a bad rule of thumb when it comes to certain things. But in the case of a bunch of dirty European commie oligarchs trying to take over the world, bankrupting the middle class is their raison d’etre.
The play here is simple, convince everyone to stay put and look like the hero to the little guy by suspending mortgage payments for more than a year. This helps get Biden inaugurated president. Then keep the bogeyman of variants of COVID going well past any reasonable person’s patience until the economy has endured maximal pain, bankrupting hundreds of thousands of landlords and assisting the cocking up of the labor market subsidizing sloth through extending unemployment benefits and stimulus checks.
Why do you think they are rolling out your Child Tax Credit as a monthly support payment? Magnanimity?
Once you can’t hold back the “stay in your homes until XXX” narrative anymore you lift the moratorium. Since a lot of small businesses are gone most of the jobs available are McJobs. Even with a labor shortage forcing entry level wages higher that isn’t enough to cover the mortgage payment of a 3/2 in the ‘burbs.
To give you an idea of how bad it is local restaurants are closed on both Sundays and Mondays here in my neck of the woods because they explicitly can’t get anyone to come to work. McDonald’s are begging people for cashier’s jobs at $12/hour. In Florida. Right-to-work. $12 to jockey a register. Madness.
There is little to no incentive to go back to work for even $12/hour when the government will pay you more than 2/3rds of that to stay at home. If it’s bad in Florida where unemployment benefits are less than enough to starve on, you can imagine what it looks like in more enlightened states like New York.
Now all those people have more than a year of back payments to make, which they can’t. The landlords need the money now to keep from being foreclosed on by the bank. And guess who gets to swoop in and buy up all those single-family homes and apartment buildings with newly-minted USG ‘infrastructure’ spending money?
You guessed it…. Blackrock. That story made it out into the world in April with a piece by the War Street Journal.
If you think we’ve seen the peak of Blackrock’s takeover of the economy, just wait until people have to pay their mortgages again.
You really will own nothing and like it or else. But wait, there’s more.
Blackrock will buy those houses at pennies on the dollar. They will wipe out hundreds of billions in mortgage debt but, more importantly, they will force a massive reassessment of housing prices across the country. And, as Dexter K. White pointed out on the latest episode of my podcast, Blackrock et.al. don’t even have to buy indiscriminately to have maximal effect.
They’ll just buy up the properties in red and purple districts to flip the electoral map. Under Obama it was called zip code targeting. And it’ll be accelerating once the eviction moratorium ends sometime soon.
Who do you think they’ll move in there? Well, go ask the people in places like Minneapolis.
Even worse, because the story got too much traction by late June none other than The Atlantic was running an apologia to tell us we’re crazy to think there’s anything weird going on here. The Atlantic. The only publication more Davos than it is The Economist.
But, after debunking the idea that Blackrock becoming the country’s biggest slum lord as ludicrous, the writer Derek Thompson, tells us what the real agenda is:
How can we encourage Americans to support more housing construction near where they live? Maybe the answer is … more single-family rentals. As the Bloomberg columnist Conor Sen points out, homeowners tend to look down on nearby construction, because more ample housing could drive down the cost of their property. But renters might celebrate nearby construction for the same general principle: Ample housing might hold down their rent.
In the arithmetic of online outrage—where big banks are evil, and landlords suck—nothing is more villainous than a big-bank landlord. But the larger villain in America’s housing crunch isn’t the faceless Wall Street Goliath overseeing your apartment building or house; it’s the forces stopping any new apartment buildings or houses from existing in the first place: your neighbors, local laws, and local governments. If we can’t see the culprit of America’s housing crisis, that’s because we’re eager to look everywhere except in the mirror.
Right Derek. More rentals. Why don’t you just polish Herr Schwab’s knob on Tik-Tok while you’re at it.
Here in North Florida, after twenty years of forcing density restrictions on agricultural zoned land development to “preserve green spaces” Alachua County is now trying to get rid of single-use zoning so they can build the equivalent of Section 8 trailer parks in those same low-density zones. So, first they destroy your ability to develop the land for your benefit then they want to use Federal money to bring in refugees and “Dreamers” and create rural slums.
Because The Walking Dead is their model of the future.
And what will that do to the price of your home? You who worked through COVID, who did things right, who paid their mortgage? Oh right, you’ll now be upside down on that place you just bought in Florida or Tennessee to get away from the lunatics in California and New York.
Hamster meet wheel.
This is why you get out of debt in the face of a crisis. Don’t always assume they want endless inflation. Deflation of specific assets is always how they consolidate power. First they’ll make you feel rich through the boom and then they’ll take it away with an inexplicable policy error from the Fed (sound familiar?) and there’s trillions in zero-cost money to help get out from underneath all that stress.
All you have to do is embrace extreme minimalism.
There is no recovery story now. There is only liquidation of the middle class and the destruction of even the veneer of civility granted by the suburbs.
Last week’s jobs report may have kernels of truth in it which point to things improving, but it won’t matter, not with oil prices headed to $90 a barrel or higher. The next phase of the destruction of the middle class in the U.S. is well underway. All those new cars we bought with our stimmy checks? We won’t be able to afford those either. But, hey, there’s a silver lining. Your per child tax credit will come to you as a monthly handout to help you walk to your McJob to make ends meet thanks to a benevolent government who just broke your legs.
Reprinted with permission from Gold Goats ‘n Guns.