• Sprott Money
    03/26/2015 - 11:56
    Take the S&P Index and multiply by the US dollar index. This removes most of the currency variation. Do the same with silver. The chart of silver times the dollar looks very much like silver...

Housing Bubble

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The US Housing Bubble In One Chart: Home Prices Outpace Wage Growth 13:1





If there is one chart that most clearly captures the unsustainable US home price appreciation bubble, it is the following which was released overnight from RealtyTrac: home price appreciation nationwide has outpaced wage growth by a 13:1 ratio!

 
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Some Folks At The Fed Are Lost - No Juice To The Macros, Part 1





Does it really take purportedly intelligent people six years to see that the macros are not responding? Better still, isn’t it time for the Fed to explain the exact channel by which its interest rate pegging and forward guidance is supposed to be transmitted to the main street economy? After all, if these channels are blocked or ineffective - then its flood of liquidity never leaves the canyons of Wall Street. In that event, the central bank actually functions as a financial doomsday machine, inflating the next financial bubble until it bursts. Then, apparently, its job is to rinse and repeat.

 
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The Canadian Housing Bubble Has Begun To Burst





Energy accounts for 10% of Canadian GDP and around 25% of exports and the swift fall in oil prices is having a profound effect in the nation’s oil producing regions where home sales are collapsing by as much as 65%.

 
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Caught Between A Housing Bubble And Falling Crude Prices, Norway Will Invest Oil Riches In Foreign Real Estate





Just as the central bank runs out of viable options, the country's sovereign wealth fund (which once famously loaded up on Greek bonds) is set to buy "a lot" of Asian property with the country's oil riches.

 
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The Moment When The San Francisco Fed Finally Figures Out What "Debt" Is





usability (animated gif) (150x107)"Leverage is risky. Purchasing assets with borrowed money can amplify small movements in prices into extraordinary gains or crippling losses, even default."

- San Fran Fed

 
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Pushing On A String: The Fed's Spectacular Failure To Stimulate Housing





What we have here is another powerful case of the Great Immoderation. That is, the havoc that the Fed’s bubble finance policies have visited upon the main street economy. In short, in the name of improving upon the alleged instability of the private economy - absent the Fed’s expert ministrations - the geniuses in the Eccles building have actually caused the rate of housing starts to gyrate wildly. To wit, by a factor of 5X from top to bottom - so far this century.

 
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Crash Landing: China Home Prices Plunge At Fastest Pace On Record, Surpass Post-Lehman Collapse





Less than three weeks ago, when the PBOC proceeded with its latest "surprise" rate cut, we showed a chart that should scare everyone who is hoping that China will avoid a hard-landing would prefer would never have been revealed: the annual collapse in Chinese home prices is now so sharp and so widespread, that it has surpassed the housing collapse in the aftermath of the Lehman collapse." Overnight things went from bad to worse, when China's National Bureau of Statistics reported that contrary to hopes for a modest rebound, China's average new home prices fell at the fastest pace on record in February from a year earlier.

 
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Futures Weak Ahead Of "Impatient" Fed, Oil Slide Continues; China Stocks Go Berserk





The only news that matters to algos today is whether Janet Yellen will include the word "patient" in the FOMC statement as a hint of a June rate hike, even though the phrase "international developments" is far more important in a world in which everyone (such as the 25 or so central banks who have cut rates in the past 80 days) is now scrambling to export deflation to everyone else. And with carbon-based traders recuperating from St. Patrick's day, few will notice that the oil tumble continues as WTI touches new 6 year highs after yesterday's shocking 10MM+ API build, and is now openly eyeing a collapse into the $30s. Just as nobody will notice that even as futures in the US and European stocks are looking a little hungover ahead of the Fed and perhaps on the latest bout of anti-austerity out of Europe, the China levitation has gone full retard, with the SHCOMP up another 2.1% yesterday and now in full-blown parabolic mode as housing data confirms the Chinese housing bubble has truly burst, and as shadow bankers dump all their funds into stocks in hopes of making up for losses due to regulatory intervention.

 
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Market Top's In? Why Buy-The-Dippers Can't Get It Up





Currently, a new form of danger arises. The Keynesian pettifoggers at the Fed have painted themselves into an epochal corner. After 78 months of ZIRP they have no idea about how and why they got here; and now, mired deep in the lunacy of free money, they are clueless about where they are going next. There is not a chance the US economy has decoupled from the rest of the world. The great credit-driven boom was universal and fueled by out of control central banks. Now comes the bust phase, and these same money printing central bankers have no clue what to do about it.

 
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The Best "Democracy" Money Can Buy: For Every Dollar Spent Influencing US Politics, Corporations Get $760 Back





Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 Billion on federal lobbying and campaign contributions. What they gave pales compared to what those same corporations got: $4.4 Trillion in federal business and support. Here is the visual representation of this stunning finding: for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.

 
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Meet The Relentless, Mystery Buyer Of Chinese Stocks Even As China's Economy Grinds To A Crawl





unlike the late summer and early fall of 2014, when the rise in the Chinese stock market could be attributed to the PBOC's PSL "QE Lite", the relentless buying leg that started in mid-November has stunned most people, as nobody has been able to figure out just who is responsible for all this buying. Until now. According to Reuters, it is precisely China's trust firms, with total assets of $2.2 trillion, and who together with Banker Acceptances comrpise the bulk of China's shadow banking pipeline, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans. In other words, instead of using their vast cash hoard of over $2 trillion to re-lend and stimulate China's economy, China's unregulated, shadow banking conduits are now directly buying stocks!

 
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World's Oldest Central Bank Asks Paul Krugman To Shut Up





Deputy Riksbank Governor Per Jansson "doesn't know why" Paul Krugman insists on equating Sweden with Japan but thinks "mystery" may be related to Krugman doing too much writing and not enough reading.

 
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"An 'Old-Fashioned' Recession Is Spreading Across The World," Billionaire Hedge Fund Manager Warns





The bust of Aussie boom-towns, collapse of the mining industry, dramatic capital outflows, and a bursting housing bubble all have one thing in common, according to billionaire hedge fund manager Crispin Odey - "China is everything to Australia in lots of ways." Simply put, he tells The Australian Financial Review, economies dependent on China for income, including Australia, are headed for recession and central banks will not be able to able to come to the rescue because they have exhausted the arsenal of policy weapons. "We've got a very old-fashioned recession which is spreading across the world," and Australian banks face a tough time ahead too because there are indications bad debt risks are rising.

 
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Wall Street Bonuses Rose 2% in 2014 To $172,860: 427% Increase In 20 Years





Finally some good news for brokers of ultra-luxury Manhattan real estate. Following the recent freeze in the most expensive housing segment in NYC in which "deals slowed to a trickle" as a result of the soaring US Dollar, and the crack down on offshore illegal wealth, it appeared that the final housing bubble left in the US that has yet to pop, that which focuses on properties $5 million and higher, was on the edge. Its day or reckoning may be delayed, however, following news that the most traditional buyer of high-end Manhattan real estate, Wall Street bankers themselves, may be finally coming back following a 2% increase in Wall Street bonuses in 2014, which pushed the average bonus to $172,860.

 
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Warren Buffett Wants To Give You A Car Loan





Berkshire Hathaway is getting into the car-retailing business with the purchase of the country's biggest privately-held dealership chain. With auto sales set to stall thanks to subprime jitters, is the Oracle stepping into the wrong business at just the wrong time?

 
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