Housing Bubble

Trumped! Why It Happened And What Comes Next, Part 1

First there were seventeen. At length, there was one. Donald Trump’s wildly improbable capture of the GOP nomination, therefore, is the most significant upheaval in American politics since Ronald Reagan. And the proximate cause is essentially the same. Like back then, an era of drastic bipartisan mis-governance has finally generated an electoral impulse to sweep out the stables.

As UK Housing Bubble Bursts, Barclays Unleashes 100% LTV Mortgages Again

Just a month after the UK's luxury housing bubble burst, it appears the nice friendly bankers at Barclays are looking for some scapegoats to flip their condos to. That the housing recovery has been driven primarily by a steady flow of foreign investment, and not necessarily the underlying economic fundamentals improving is becoming clear to everyone and so in what appears a desperate act of deja vu, Barclays has brought back the 100 per cent mortgage - the first major bank to do so since the last financial crisis - to keep the ponzi dream alive just a little longer.

Gold And Negative Interest Rates

In Japan, the European Union and Switzerland, where negative nominal interest rates have already been adopted, it was observed that demand for safes and cash increased. At the same time, we learn that negative rates have boosted demand for gold in Japan (sales of gold to Japanese consumers rose to 32.8 metric tonnes in 2015 from 17.9 tonnes a year earlier). According to Takahiro Ito, chief manager at Tanaka Kikinzoku Kogyo K.K.’s store in Tokyo’s Ginza shopping district, “Many customers are wagering that it’s better to turn their savings to gold as a safe asset rather than deposit money at banks that offer low interest rates." 

Why Canada's Oil Industry May Never Be The Same

It is increasingly certain that the future will not be like the past. Previous downturns have been equally devastating but the primary causes eventually reversed themselves; low commodity prices recovered and damaging government policies were rescinded. This recovery will be different for a variety of reasons which will combine to cap growth, opportunity and profits, even if oil and gas prices spike. The following major changes appear permanent...

Automating Ourselves To Unemployment

Students of Austrian business cycle theory are familiar with the term malinvestment. A malinvestment is any poor use of resources or capital, commonly made in response to bad policy (usually artificially low interest rates and/or unsustainable increases in the monetary supply). Here, we introduce a related term: malincentive. While not part of the official economic lexicon, I consider a 'malincentive' a useful word to describe any promise of short-term gain whose long-term costs outweigh any immediate benefits enjoyed. Malincetives and malinvestment go hand-in-hand. In my opinion, the former causes the latter. As humans, we respond remarkably well to incentives. And dumb incentives encourage us to make dumb investments.

Former Fed Advisor Asks "Has The Fed Bankrupted The Nation"

In 1977, the total indebtedness of U.S. government, corporate and household borrowers was $323 billion. By 1985, that figure had grown to $7 trillion. Volcker left the Fed in August of 1987 after handing the reins over to Alan Greenspan. By year’s end 2015, U.S. indebtedness had swelled to $45.2 trillion. Tack on financials, which few do, and it’s $64.5 trillion and unabashedly growing. We are a nation transformed. What has today’s vast store of debt purchased? Certainly not freedom.

Bernanke's New Helicopter Money Plan - Sheer Destructive Lunacy

Bernanke has been a charlatan and intellectual lightweight all along but the gist is that the US economy is wanting for some non-existent ether called “aggregate demand”. And that this ether is something the Fed can easily create by handing an open-ended spending account to politicians, and one that would never have to be repaid or even serviced with interest! It puts you in mind of the medieval theologians who endlessly debated as to the number of angels which could fit on the head of a pin. The trouble is, there is not such thing as angels. Nor is there any such thing as economic growth or wealth that can be conjured by politicians spending Bernanke’s utterly counterfeit money.

"My Daddy’s Rich And My Lamborghini’s Good-Looking": Meet The Rich Chinese Kids Of Vancouver

Meet Andy Guo, an 18-year-old Chinese immigrant, who loves driving his red Lamborghini Huracán. He does not love having to share the car with his twin brother, Anky. "There’s a lot of conflict," Mr. Guo said, as a crowd of admirers gazed at the vehicle and its vanity license plate, “CTGRY 5,” short for the most catastrophic type of hurricane.  Or Diana Wang, 23,  who thinks a supercar is a poor investment, because its value decreases over time. "Better to spend half a million dollars on two expensive watches or some diamonds."

Goldman Slammed With $5.1 Billion Fine For "Serious Misconduct" In Mortgage Selling

Hot on the heels of Wells Fargo's $1.2 billion settlement, Bloomberg reports that Goldman Sachs will pay $5.1 billion to settle a U.S. probe into its handling of mortgage-backed securities involving allegations that loans weren’t properly vetted before being sold to investors as high-quality bonds. “This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart Delery.