The Federal Reserve has pursued the unprecedented monetary policy of lowering rates to zero and increasing their portfolio from 500 billion to over 4 trillion. But as the Fed reminds us, there is a cost.
At least two major Chinese private providers of home price data have stopped publishing the figures, at a time when China's housing bubble appears to be bursting. "Housing prices are an extremely sensitive matter right now."
Today we got the first confirmation that the latest Chinese housing bubble has finally popped, as housing prices across the 70 cities were up 12.7% Y/Y, below the 12.9% annual growth rate in November. This was the first moderation in year-over-year housing price growth after 19 months of continued acceleration.
As of January 16th, 2017, British Columbia (B.C) residents will have access to some “free money”. In effect, what this is doing is further inflating the already over heated housing bubble, and exacerbating its imminent pop!
In spite of being exposed in what is either a self-exculpating lie (the claim that bubbles can only be seen after they burst) or a sign of gross incompetence (the failure to see two of the largest financial bubbles in history), no Fed official has ever been asked to explain or rationalize the Fed’s contradictory positions on bubbles.
China has a window from now to President-elect Donald Trump’s inauguration to halt FX intervention and let yuan depreciate to its equilibrium level, Yu Yongding, a former academic member of PBOC’s monetary policy committee, said, providing one possible explanation for bitcoin's 20% surge in the past week.
While traders around the world slept, China's banking system suffered another mini cardiac arrest when the overnight repo rate traded on Shanghai Stock Exchange soared as much as 30.87% to 33%, the highest since September 29, before closing at 18.55%.
The fate of a defaulted $45 million Chinese corporate bond sold through an Alibaba-backed online WMP and belonging to the telecom company of one of China's biggest billionaires, was thrown into doubt on Monday, after a bank said letters of guarantee for the bonds were counterfeit, suggesting an entirely new "finance scare" is emerging in China.
"Beijing will increase controls on the property market to maintain stable home prices in 2017, said a statement issued after a plenary session of the Beijing Municipal Committee of the Communist Party of China on Saturday. Housing prices in the capital are already too high and ensuing increased social tension brings enormous challenges to ... stability in the city."
Today we look at a list of 10 things that won't happen in 2017, courtesy of Lombard Street's chief Euro economist. As Perkins puts it, "2016 was weird. Could 2017 get even weirder" and in an attempt to answer, he shares the following, "humorous" (high conviction, non-consensus) take on the year ahead.
"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."