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US Homeownership Rate Drops To 1983 Levels: Here's Why

The last time US homeownership declined down to 64.4% (which the Census Bureau just reported is what US homeownership declined to from 64.7% in Q2), was back in the fourth quarter of 1983. Here's why.



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Cramer Does It Again: 4 "Irresistible" Stocks

Just 7 short weeks ago, no lesser guru of gains than CNBC's Jim Cramer proclaimed for all retail-stock-investing moms-and-pops that "through the end of the year, I am pegging Twitter, GoPro, Tesla and Netflix as the four stocks that investors will find irresistible." Things are not going well...



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The Stunning Difference Between "Income Expectations" And Reality

It appears the burden of hope for the future of the American consumer, based on this morning's confidence survey data, is based on a surge in incomes. In fact, the income 'hope' index is at its highest since February 2008... which is odd given the utter stagnation of real wages. Perhaps the survey respondents have been listening to a little too much 'hope-and-change' TV promises of minimum wage hikes and fair livable wages and not enough paying attention to the layoffs, "M&A synergies", restructurings, and buybacks firms are actually undertaking, or as some call it, reality. Shown on the chart below: the largest decoupling between reality and hope in the history of income reality vs expectations.



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Here Is The Reason For The Surge In Consumer Confidence

Last month's sudden plunge (and biggest miss since Jan 2012) in Conference Board consumer confidence merely enabled an even bigger bounce this month. Consumer confidence surged to 94.5, its highest since October 2007, beating by the most since April 2013 (amid Ebola outbreaks). While the current situation was relatively flat, the surge in the headline data was purely due to a huge spike in future expectations from 83.7 to 95.0 - the highest since Feb 2011. Oddly, fewer people are likely to buy a car, major appliance, or house in the next 6 months but survey respondents expect a surge in incomes?



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China "Ghost Town Index" - Here Are China's 10 "Ghastliest" Cities

Who can forget China's ghost city of Ordos: back in late 2009, when the hollow shell behind China's torrid growth was first revealed to the world, the city near China's Mongolia border was cooler talk for weeks. Fast forward five years later, and Ordos is all but forgotten, having been eclipsed by a veritable army of much bigger "ghosts" that make up the "ghost town network" - a list of cities created by the China Investment Network, a business newspaper in Beijing, to determine which cities were the most ghostly. Below we present the 10 biggest ones.



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And The Brand New Fastest Appreciating US City Is... (Hint: Not Cleveland)

For those living in Cleveland, where home prices rose a tiny 0.8% compared to last year (a number which is sliding every month), the latest dead housing cat bounce is almost over, and with the release of the September, or at the latest, October numbers, expect the first Top 20 US MSA to go back into annual price decline for the first time in two years. Those living in America's other cities are safe, for now. Then again, while still rising at a comfortable upper-single digit pace, all California cities as well as Las Vegas, are about to hit a brick wall, as the Y/Y pace of price increases is now grinding to a halt.



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California Leads Housing Slowdown As Case-Shiller Home Prices Decline For 4 Months In A Row

Following misses in yesterday's Markit Service PMI, Existing Home Sales and the Dallas Fed report, and today's Durable Goods numbers, we just made it a pentafecta for misses in US econ data, when the just released August Case-Shiller data for August confirmed once again that US housing is rapidly slowing down, when the Top 20 Composite Index (Seasonally Adjusted) posted another decline in August, its fourth in a row, declining by -0.15% and missing expectations of a modest 0.2% rebound (following last month's -0.5%) decline. The best summary of the situation came from S&P's David Blitzer: "The deceleration in home prices continues... The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities -- Los Angeles, San Francisco and San Diego." But who cares what the birth (and death) place of every housing bubble is doing, right?



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Core Capex Drops Most Since January; Durable Goods Orders Slide, Miss By Most In 2014

It was just 2 months ago when the one-off Boeing order-related idiocy distorted the entire time series and was thus extrapolated into escape velocity dreams by prognosticators everywhere. Excused by the cognoscenti as a "volatile time series," Durable Goods new orders dropped 1.3% MoM, missing expectations by the most since Dec 2013 and negative for the 2nd month in a row. Lats month's drop was revised lower also. Even more concerning is the 1.7% drop MoM in Core Capex, the biggest miss in over a year and biggest drop since January. Did it snow in September?



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On Traders' Minds This Morning

A summary of the key things on traders' minds this morning, as reported by Peter Garnry, head of equity strategy at Saxo Bank



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Frontrunning: October 28

  • CDC says returning Ebola medical workers should not be quarantined (Reuters)
  • Sweden’s central bank cuts rates to zero (FT)
  • Hacking Trail Leads to Russia, Experts Say (WSJ)
  • Discount-Hunting Shoppers Threaten Stores’ Holiday Cheer (BBG)
  • Apple CEO fires back as retailers block Pay (Reuters)
  • Repeat after us: all China data is fake - China Fake Invoice Evidence Mounts as HK Figures Diverge (BBG)
  • FX Traders’ Facebook Chats Said to Be Sought in EU Probe (BBG)
  • Euro Outflows at Record Pace as ECB Promotes Exodus (BBG)
  • Apple boosts R&D spending in new product hunt (FT)


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Futures Levitate On Back Of Yen Carry As Fed Two-Day Meeting Begins

If yesterday's markets closed broadly unchanged following all the excitement from the latest "buy the rumor, sell the news" European stress test coupled with a quadruple whammy of macroeconomic misses across the globe, then today's overnight trading session has been far more muted with no major reports, and if the highlight was Kuroda's broken, and erroneous, record then the catalyst that pushed the Nikkei lower by 0.4% was a Bloomberg article this morning mentioning that lower oil prices could mean the BoJ is forced to "tone down or abandon its outlook for inflation." This comes before the Bank of Japan meeting on Friday where the focus will likely be on whether Kuroda says he is fully committed to keeping current monetary policy open ended and whether or not he outlines a target for the BoJ’s asset balance by the end of 2015; some such as Morgan Stanely even believe the BOJ may announce an expansion of its QE program even if most don't, considering the soaring import cost inflation that is ravaging the nation and is pushing Abe's rating dangerously low. Ironically it was the USDJPY levitation after the Japanese session, which launched just as Europe opened, moving the USDJPY from 107.80 to 108.10, that has managed to push equity futures up 0.5% on the usual: nothing.



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7 Things The Middle-Class Can't Afford Anymore

Though there is some debate over the exact income a middle class household brings in, USA Today notes that we do have an idea of who the middle class are — most working class people. Today's bourgeoisie is composed of laborers and skilled workers, white collar and blue collar workers, many of whom face financial challenges. Bill Maher reminded us a few months back that 50 years ago, the largest employer was General Motors, where workers earned an equivalent of $50 per hour (in today's money). Today, the largest employer — Wal-Mart — pays around $8 per hour. The middle class has certainly changed. USA Today's Cheat Sheet has ranked a list of things the middle class can no longer really afford.



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To Protect and Perve – California Cops Share Nude Photos Stolen From Citizens' Cellphones

The worst thing about the government’s reckless response to the financial crisis of 2008, even worse than the trillions in taxpayer bailouts and backstops granted to the financial criminals that created the disaster, is the primary lesson that it sent to American society as a whole. Some people like to call it “moral hazard,” but in more pedestrian terms it really just boils down to: The Bad Guys Got Away with It... "The California Highway Patrol officer accused of stealing nude photos from a DUI suspect’s phone told investigators that he and his fellow officers have been trading such images for years, in a practice that stretches from its Los Angeles office to his own Dublin station."



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A Chinese Soft-Landing Will Inevitably Lead To A "Very Brutal Hard Landing", Pettis Warns

"If we have what everyone would hail as a soft landing, with growth remaining above 6-7% for another two years, it would just mean that credit was still growing too quickly. And once we reach debt capacity constraints, the so-called soft landing would be followed by a very brutal hard landing... Growth miracles have always been the relatively easy part; it is the subsequent adjustment that has been the tough part."



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Kuroda Comedy Hour (Or Has The World Gone Mad... Again?)

The head of Japan's Central Bank kept a straight face while unleashing a torrent of comedic genius this evening with regard the Japanese economy and its monetary and fiscal policy success... Enjoy...



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