Housing Bubble

Frontrunning: May 25

  • Oil nudges $50 a barrel as investors bet on shrinking overhang (Reuters)
  • From hinterland to wonderland: China's 'teapot' refinery boomtowns (Reuters)
  • Peter Thiel Has Been Secretly Funding Hulk Hogan's Lawsuits Against Gawker (Forbes)
  • China Wants to Set Prices for the World's Commodities (BBG)
  • Big Banks Ladle On the Risk (WSJ)
  • China Said to Plan Asking U.S. on Timing of Fed Rate Hike (BBG)
Knave Dave's picture

This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve tried to push back up to that distant high that means new life several times, but each time the market falls into a pit again to where the market is once again lower than it was a year ago. These are the last gasps of a stock market (and economy) that is struggling to rise again, which it simply cannot do now that QE has been turned off and the oxygen tank of zero interest is being slowly turned down.

GoldCore's picture

Sell paper and digital gold, maybe but not physical gold coins and bars. Rather both physical gold and silver bullion should be owned as financial insurance and hedges against currency debasement, bail ins, systemic and counter party risks and the myriad other risks today.

With 'Recovery' Disproved, There Is Every Need To Examine The Worst Case

There is a great deal that is wrong with mainstream economic commentary, starting with its unwavering devotion to orthodox economics and unshakable faith in their “stimulus.” No matter how little is actually stimulated there is never any doubt that the media will simultaneously forget the last one while lavishing praise on the next one. It is, however, the actual economic commentary itself that may be the most damaging. Because nothing works, every news story is printed from the shallowest, narrowest perspective. It is a grave disservice to the public and journalism.

Are Property Taxes A "Wealth Tax" On The (Mostly) Non-Wealthy?

As pensions dry up and blow away under the relentless erosion of the Federal Reserve's zero-interest rate policy (ZIRP), unaffordable property taxes may well start evicting homeowners from the "asset" they mistakenly thought they "owned." If your Social Security pension can barely pay your property tax, never mind your Medicare, healthcare costs, food and other living expenses, then what exactly do you own? If politicos and tax authorities think people will passively watch their neighbors lose their homes to sky-high property taxes, they will soon discover their mistake.

Copper Slides To Three Month Low Despite Flat Futures, Oil; Dollar Rise Continues

After two violently volatile days in which the market soared (Monday) then promptly retraced all gains (Tuesday), the overnight session has been relatively calm with futures and oil both unchanged even as the BBG dollar index rose to the highest level since April 4. This took place despite a substantial amount of macro data from both Japan, where the GDP came well above the expected 0.3%, instead printing 1.7% annualized, which pushed stocks lower as it meant the probability of more BOJ interventions or a delay of the sales tax hike both dropped. Meanwhile, in China we got proof of the ongoing housing bubble when new property prices were reproted to have soared 12.4% Y/Y in April, which in turn pushed the local stock market to two month lows amid concerns the rampant housing bubble sector could divert funds from stocks. Yes, China is trading on the "risk" one bubble will burst another bubble.

A Nation Of Housing 'Haves' & 'Have-Nots'

Everyone who follows the statistics of rising income and wealth inequality knows we're becoming a nation of haves and have-nots. What's not being discussed is the role of housing.

The Biggest Source Of Global Growth In 2016 Is About To Hit A Brick Wall

crash car testAfter issuing a record $1 trillion in combined bank and shadow loans in the first quarter which just like during the financial crisis provided a short-term catalyst for global growth (and sent China's debt/GDP to new all time highs) China's dramatic debt issuance binge is about to hit a brick wall. The reason: combined new loans in April by the Big Four state-owned banks were more than halved from March's level.

Dear Homeowner, What Exactly Do You "Own"?

If we understand property taxes as a lease from the local government for the right to gamble on another housing bubble arising, we see "ownership" in a different light. As the saying goes, buyer beware, especially if there's no limit on how high desperate local governments can jack up their lease fees, i.e. property taxes.

June 2003 - The Fed's Brief Moment Of Clarity

We have referred to the June 2003 FOMC meeting many times before and we suspect that we will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that time anticipated their current powerlessness – yet did nothing about it. Their preferred course from that moment until August 2007 was relieved ignorance, as Greenspan admitted at the time, " I don’t think we know enough about how the private financial system works under these conditions [sub-1% rates],  I don’t believe, that we can construct an effective preemption strategy. Well, we can construct a strategy, but I’m fearful that it would not be very useful."