Norway is heading straight into stagflation and at some point Norges Bank will be forced to tighten monetary policy into a weakening economy. The world should take note, because the real end game for central banks will come when they are constrained by rising inflation in a weakening economy. We all know what happened after the 1970s stagflation; and hiking rates to 20 per cent in an overleveraged world is a lot harder than it was back then.
The Dallas Police and Fire Pension System is on the verge of collapse amidst shady real estate deals that resulted in massive asset markdowns in 2015 and the FBI raid of former real estate investment manager, CDK Realty Advisors.
Under guise of preventing fraud the ECB voted to kill the €500 note. Fraud was not the real reason. The real reason was to make it more difficult for banks to store physical cash to avoid negative interest penalties... but it's not working.
One month ago, we showed three prominent "red flags" that the US housing market was starting to roll over. Fast forward one month and we find that the adverse trends observed in early July have gotten progressively worse, and we can now add one more.
Mainstream economics is fraying at both ends. At one end, heterodox and Austrian economists keep pulling on loose strands: pointing out the inconsistencies, failures, and absurdities of their unrealistic models. At the other end, top mainstream economists and mouthpieces are doing the same, but with a touch of deflection and embarrassment.
The Economist and the World Economic Forum (WEF) have “dumb and dumber” competing notions as to what is the gravest threat to the global economy. The WEF says “Social Media Feed” biggest threat to democracy. The Economist says Populist Nationalism ‘Gravest Threat Since Communism‘
While California may have the highest per capita debt, it also has the lowest default rate across the entire US. Which is incidentally where it also was in the years 2003-2005, just before its default rate exploded after the subprime bubble burst.
S&P500 index futures were unchanged (up less than 0.1%) following another modest, low-volume levitation in European, Asian shares in a mostly eventless overnight session; oil comes off following gaining overnight with WTI trading just around $43.
Apparently the stunning Soviet-era architecture of malls built in the 80's just doesn't draw the crowds it used to and valuations are crashing. But that's ok, there's only a couple trillion of debt backing commercial real estate...should be manageable.
As a new dawn breaks in Metro Vancouver’s real estate market, realty companies are reporting the first anecdotes of deals falling through as foreign buyers forfeited deposits on binding deals rather than pay the new tax, while local buyers withdraw offers in expectation that the market will tumble. In short: the Vancouver housing bubble has burst.
The economic backwash of too-expensive new cars and the reappearance in the marketplace of affordable alternatives (good used cars) is causing sales of new cars to wilt, probably precipitously, as invariably happens in a Boom Bust cycle. The car industry will squeal for help from Uncle Sam – just like back in the early 2000s. And Uncle will be happy to oblige, as he always is... But Uncle’s “help” always comes at a cost.
"...The Fed only has only one option at this point: Continue to fake it for as long as possible by printing more money or let the whole system come crashing down. BUT... The world has caught on, and the gig is up"