There’s a housing bubble lurking in the recession

Bloomberg Opinion Today

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Today's Agenda

Refi Madness

They say you shouldn't fight the last war, but what about fighting the current war by planting the seeds of the next one, which may look a lot like the last one?

That sentence is about as confusing as this K-shaped recession has at times been, with GDP and employment collapsing but the values of stocks and houses soaring. Higher home prices along with record-low mortgage rates have helped ease the recession's pain, giving borrowers lower monthly payments and a magical windfall of home equity to spend.

If this seems too good to be true, then Danielle DiMartino Booth warns it probably is. To grease the skids of the refi boom, lenders are increasingly doing away with pesky human appraisers, who tend to need "money" and "time," relying instead on algorithms to spit out estimated home values. Increasingly those are overinflated, raising the risk of a painful reckoning for borrowers and banks when values sink to meet reality but loan balances don't. And then the new war will look a lot like the old one.

Further Economic Reading:

Trump's Tantrum

Yesterday we warned everybody should take seriously President Donald Trump's threats to overturn election results. We still should. And Wall Street apparently is. But we should also remember this is just the latest episode in a long, long history of Trump believing every game he can't win must be rigged against him, writes Tim O'Brien. This often results in toddler-like tantrums that now just happen to menace the fabric of democracy. Opponents should not be so freaked out by it they don't bother to vote.

Thus Bernie Sanders and Alexandria Ocasio-Cortez are out telling their leftist base to hold its nose and vote for Joe Biden. These voters may not be jazzed about the former vice president, Francis Wilkinson writes, but maybe they'll at least be motivated to safeguard the "democracy" part of the whole social-democrat thing.

Bonus Election Reading: Democrats made some mistakes the last time they had power. Did they learn? — Jonathan Bernstein

Boycott Beijing

Next summer's Olympic Games in Tokyo may still be haunted by Covid-19. But by February 2022, one hopes, the pandemic will finally be over and everybody will be in the mood for a good old normal-ish Winter Olympics in Beijing. Unfortunately, though, there's that "Beijing" part, which raises a thorny moral issue: China is engaged in a horrific ethnic cleansing of its Uighur minority, including internment and forced labor and reported brainwashing, torture and sterilization. Under such circumstances, it makes no sense to give China the public relations lift of an Olympic Games, writes Hal Brands. The U.S. should organize a boycott and help protect nations from Chinese retaliation.

Telltale Charts

Maybe some kids didn't find remote learning so bad at first, but now they hate it as much as their parents do, writes Ben Schott.

Further Reading

FDR couldn't pack the Supreme Court even after a landslide re-election and dominant control of Congress. Joe Biden will probably have even less luck. — Noah Feldman

Although banks have mostly managed remote working just fine so far, their cultures are at risk of eroding the longer this goes on. — Elisa Martinuzzi and Marcus Ashworth

The market's next great dilemma will be the aging of developed nations and the need to fund retirements with likely mediocre stock returns. — John Authers

There are plenty of qualified black job candidates out there; employers just have to get better at finding them. — Sarah Green Carmichael


Russia is really worried about a Biden presidency.

Biden is on track for 352 electoral votes, according to FiveThirtyEight.

Daniel Boulud's relaunched restaurant will have sponsors.


MTA workers built a man cave under Grand Central. (h/t Ellen Kominers)

Mine-detecting rat wins medal. (h/t Scott Kominers)

Crows are even smarter than we thought.

Scientists take a step toward a MS treatment.

Technology is bad.

Note: Please send mine-detecting rats and complaints to Mark Gongloff at

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