• williambanzai7
    08/29/2014 - 01:05
    “I call upon all nations to do everything they can to stop these terrorist killers. Thank you. Now watch this drive.” – George W. Bush

Housing Bubble

Tyler Durden's picture

New Home Sales Surge By 18.6% In May, Now Only 63% Below Pre-Crisis Highs





While we will have much more to say about the price dynamics in the West in a follow up post, where the Western housing market appears to be appreciated right now is in the just released New Home Sales report, which showed that in May new home sales soared by a whopping 18.6%, orders of magnitude above the 1.4% increase expected, and resulting in some 504K new houses sold, far above the 439K expected, and certainly above the downward revised April print of 425K. What caused this surge? Simple: the West, which saw a 34% surge in new home sales, from 97K to 130K, the highest one month jump since February 2013.

 
Tyler Durden's picture

Bubble Finance At Work: After 2-Year Growth Stall, OpenTable Goes For 112x





Priceline announced last week that it will pay roughly 112x for OpenTable - the reservation app pioneer - even though its growth has stalled for two years, is assailed by numerous aggressive competitors (e.g. Yelp, GrubHub and numerous international players) and is not protected by any evident moat of technology or branding. The bottom-line is that the artificial attraction of massive capital and trading leverage  (through options) into rank speculation like the PCLN/OPEN deal here does not stimulate sustainable economic growth or a true rise in capitalist prosperity. It simply generates unearned rents for the 1% who have the financial assets and access to play in the Fed’s casino. One can't help but thnk of Dubai.

 
Tyler Durden's picture

Something Very Disturbing Is Happening In The California Housing Market





While California is by far the most vibrant market when it comes to the most expensive segment (at +6%, the highest in the nation), it is shambles when it also comes to the two lowest price buckets, both of which blow out any myth of a recovery for the "non-1%" out of the water, with a collapse of 40% in sales in the $0-100K range, and a 20% plunge in the prime $100-$250K market (the Median existing home price across the US in May was $213,400).

 
Tyler Durden's picture

Cronyism In The 21st Century





Ghandi was once asked, "What do you think about Western Civilization?" to which he famously replied "I think it's a good idea." He may as well have been talking about free market capitalism. Capital in the 21st Century has hit the world like a new teen idol sensation. Everybody is drinking the Kool-Aid and it's being held up as the most important book ever written on the subject of how runaway capitalism leads to wealth inequality. Paul Krugman of course, loves it. As does every head of state and political hack in the (formerly) free world. So let's do something different here and accept a core premise of Capital, and say that wealth inequality is increasing, and that it's a bad thing. Where the point is completely missed is in what causes it (ostensibly "free market capitalism") and what to do about it (increase government control, induce more inflation and raise taxes). The point of this essay is to assert that it is not unchecked capital or runaway free markets that cause increasing wealth inequality, but rather that the underlying monetary system itself is hard-coded by an inner temple of ruling elites in a way which creates that inequality.

 
Tyler Durden's picture

5 Things To Ponder: Things Bulls Should Consider





Spend any time watching business media, and you could not help but notice the extreme amount of optimism about the financial markets. Despite weak economic data and geopolitical intrigue, the complacency and "bullishness" are at extreme levels. Considering that the markets have been primarily advancing on the back of continued flows of liquidity from the Federal Reserve combined with artificially suppressed interest rates; what do you think the impact on the financial markets will be? “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” - Andy Grove

 
Tyler Durden's picture

The Keynesian Apotheosis Is Here; But Blame The Final Destruction Of Sound Money On The Bushes





The only thing that can be said about Janet Yellen’s simple-minded paint-by-the-numbers performance yesterday is that the Keynesian apotheosis is complete. American capitalism and all political life, too, is now ruled by a 12-member monetary politburo, which is essentially accountable to no one except its own misbegotten doctrine that prosperity flows from the end of a printing press.

 
Tyler Durden's picture

After 6 Years Of Unprecedented Central Planning, The Economy Is More Fragile Than Ever





The damage done by Central Planning has yet to come home to roost. Six years into the Grand Experiment--that Central Planners can pick winners who just happen to be their cronies--the chickens of consequence are still making their way home. And when they finally come home to roost, we will all discover that the economy is much more fragile than advertised by the Central Planners and their media toadies.

 
Tyler Durden's picture

Futures Unchanged Ahead Of The Fed Announcement





it is suddenly not fun being a Fed president (or Chairmanwoman) these days: with yesterday's 2.1% CPI print, the YoY rate has now increased for four consecutive months and is above the Fed's target. Concurrently, the unemployment rate has also dipped well below the Fed’s previous 6.5% threshold guidance, in other words the Fed has now met both its mandates as set down previously. There have also been fairly unambiguous comments from the Fed’s Bullard suggesting that this is the closest the Fed has been to fulfilling its mandates in many years. Finally, adding to the "concerns" that the Fed may surprise everyone were BOE Carney’s comments last week that a hike “could happen sooner than the market currently expect." In short: continued QE here, without a taper acceleration, merely affirms that all the Fed is after is reflating the stock market, and such trivial considerations as employment and inflation are merely secondary to the Fed. Which, of course, we know - all is secondary to the wealth effect, i.e., making the rich, richer. But it is one thing for tinfoil hat sites to expose the truth, it is something else entirely when it is revealed to the entire world.

 
Tyler Durden's picture

London's Whopping 18.7% Home Price Surge Means UK's Housing Bubble Slams China's





A month ago, using the latest UK housing data from Rightmove, we asked a simple question: whose housing bubble is bigger: China's, or the place where increasingly more of China's $25 trillion in bank assets are being parked: the UK (specifically London). Using then available data, the answer was still a toss-up, even if the divergence in directions was quite clear. Earlier today, we finally got the official data from the UK's Office for National Statistics, and we politely retract our question, as rhetorical as it may have been. The reason: there is no contest - the UK's housing bubble has officially slammed China's, and the result is nothing short of a knock out.

 
Tyler Durden's picture

John Hussman's Formula For Market Extremes





Market extremes generally share a common formula. One part reality is blended with one part misguided perception (typically extrapolating recent trends as if they are driven by some reliable and permanent mechanism), and often one part pure delusion (typically in the form of a colorful hallucination with elves, gnomes and dancing mushrooms all singing in harmony that reliable valuation measures no longer matter). This time is not different.

 
Tyler Durden's picture

Meanwhile In Palm Springs...





... the world may be burning, so the Obamas go house hunting.

 
Tyler Durden's picture

The Generational Short: Banks, Wall Street, Housing And Luxury Retail Are Doomed





Those who have lost trust in Wall Street or actively hate it and everything it stands for (neofeudalism, unbridled greed, the corruption and collusion of the revolving door between the state and Wall Street, etc.) will never change their minds and hand their money to Wall Street to play with. If the primary assets held by Boomers (houses and stocks) both decline for these fundamental reasons, there may be relatively little wealth left to pass on to Gen-Y... if Gen-Y avoids bank debt/mortgages, buying conspicuous consumption luxury goods on credit and investing in Wall Street's scams and skims, this generational lack of demand for housing, stocks and luxury goods will effectively crash the sky-high valuations of these assets. These factors suggest a generational bet against banks, Wall Street, housing and luxury retail stocks.

 
Tyler Durden's picture

Frontrunning: June 13





  • Tea Party struggles to repeat Cantor-style shock in Tennessee (Reuters)
  • Iran Deploys Forces to Fight al Qaeda-Inspired Militants in Iraq (WSJ)
  • Oil Rallies as Militant Advance in Iraq Threatens Crude (BBG)
  • Gold Set for First Back-to-Back Weekly Gain Since April (BBG)
  • Hedge Funds Get Stung by Slow Markets (WSJ)
  • Sterling nears 5-year high after Carney speech (FT)
  • Britain Warns Boom in Real-Estate Prices Threatens Economy (WSJ)
  • East Europe Leaders Urge EU Unity to Counter Russia (BBG)
  • Formula One Said to Be Valued at $8 Billion as Malone Seeks Stake (BBG)
  • Dumb and dumber: Abe Plans Company Tax Cut in 2015 as Kuroda Warns on Budget (BBG)
 
Pivotfarm's picture

Global Growth Gets a Downgrade





We all knew just how wrong it was as we sat there and listened to the World Bank going on in January about how world economic growth would top 3.2%. Today the World Bank has downgraded economic growth to 2.8%, which some might say is even over the odds

 
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