Today, an unholy alliance was born when Blythe Masters, the mother of the credit default swap and former member of the fabled "Morgan Mafia" was named chairman of Santander Consumer, the largest subprime auto lender in the US.
Amid record auto loan ABS issuance, record loan terms, and record high average payments, it's no secret that the market for auto loans in the US has become dangerously stretched. Now, the NY Fed is out with what is perhaps the most shocking statistic yet on just how "darn easy" it is to get a car loan
Just when the Chinese plunge protection team (and "arrest shortie" task force) seemed to be finally getting "malicious selling" under control, first we saw a crack yesterday when the composite broke the surge of the past three days as a result of yet another spike in margin debt funded purchases, but it was last night's reminder that "good news is bad news" that really confused the stock trading farmers and grandmas, which goalseeked Chinese economic "data" beat across the board, with Q2 GDP coming solidly above expectations at 7.0%, and retail sales and industrial production both beating, but in the process raising doubts that the PBOC will continue supporting stocks.
When Warren Buffet put $5 billion in Berkshire Hathaway funds into Goldman Sachs the week after Lehman failed, amidst total turmoil and panic, it appeared from the outside a high risk bet. Buffet had long tried to portray himself as a folksy engine of traditional stability, investing only in things he could understand, so jumping into a wholesale run of chained liabilities may have seemed more than slightly out of character. We have no particular issue with Buffet making those investments, only the pretense of intentional mysticism that surrounds them. The reason the criticism of crony-capitalism sticks is because this was not Buffet's first intervention to "save" a famed institution on Wall Street. If Buffet's convention is to stick with "things you know" then he has been right there through the whole of the full-scale wholesale/eurodollar revolution.
Janet Yellen’s reputed favorite jobs measure, the JOLTS (Job Openings and Labor Turnover Survey) reported blockbuster record job openings in May. But look beneath the headlines and you will see just how distorted and maladjusted the US job market is.
In the wake of China's unprecedented attempt to rescue its collapsing equity markets, Deutsche Bank is out with a history lesson for Beijing where officials can learn some "sweet and sour" lessons from the crash of '87.
Nobody apparently learned much from the whole bubble-bust affair as banks and financial firms are at it again, this time in corporate debt. The artificial suppression of default, in no small part to perceptions of those bank reserves under QE (just like perceptions of balance sheet capacity pre-crisis), has turned junk debt into the vehicle of choice for yet another cycle of “reach for yield.” In the past two bubble cycles, we see how monetary policy creates the conditions for them but also in parallel for their disorderly closure. It isn’t money that the FOMC directs but rather unrealistic, to the extreme, expectations and extrapolations. Once those become encoded in financial equations, the illusion becomes real supply.
Despite endless assurances that the Greek debt crisis is contained, the reality is that the ragin' contagion of debt crises will spread not just to other deeply indebted nations but to the mercantilist economies that depend on selling goods to borrowers. Strip out the borrowing, and you strip out most of the customers for German, Dutch and Chinese goods.
Trillions upon trillions in “stimulus” and the FOMC is left, pathetically, fighting for the distinction of “it’s not as bad as it looks.” That would seem to make this the most costly economic age ever conceived, with global implications that are just now starting to be felt as whatever faith was leftover from 2008, wrong or right, wears off all over the world. That is a highly combustible deficiency, since the longer the global economy remains disorientated the more likely it is to experience not just recession but, since this is all still so leveraged (even more poorly this time), something potentially worse.
What is the reason for the non-existant rebound? Simple: the following chart comparing total new home sales and the median new home sales price explains it.
The NAR Sees "No Housing Bubble", So Here Is A Look At NAR's History Of Absolutely Disastrous ForecastsSubmitted by Tyler Durden on 06/22/2015 18:54 -0400
Prepare to laugh. A lot.
Will we never learn...
Last week the government reported personal income and spending for April. After months of blaming non-existent consumer spending on cold weather, shockingly occurring during the Winter, the captured mainstream media pundits, Ivy League educated Wall Street economist lackeys, and Keynesian loving money printers at the Fed have run out of propaganda to explain why Americans are not spending money they don’t have. The corporate mainstream media is now visibly angry with the American people for not doing what the Ivy League propagated Keynesian academic models say they should be doing. An economy built upon the consumption of iGadgets, Cheetos, meat lovers stuffed crust pizza, and slave labor produced Chinese baubles, along with the production of enough arms to blow up the world ten times over, and the doling out of trillions to the non-productive class, is doomed to fail.
In recent years, home price indices have seemed to proliferate. Measuring home prices has taken on an urgency beyond the real estate industry because for many, home price growth has become something of an indicator of the economy as a whole. If home prices are going up, it is assumed, “the economy” must be doing well. Indeed, we are encouraged to relax when home prices are increasing or holding steady, and we’re supposed to become concerned if home prices are going down. This is a rather odd way of looking at the price of a basic necessity.
Unsold new condos spike to all-time record. Industry in denial.