Housing Market

James Rickards: The Fed Is Going To Cause Recession

"[The Fed is hiking rates] to prepare for the next recession... they know a recession will come sooner rather than later... My estimate is that they’re not going to get there. The recession will come first. In fact, they will probably cause the recession that they’re preparing to cure."

Frontrunning: June 23

  • One year after Brexit: Forget euro zone breakup, sterling now deemed riskier (Reuters)
  • Senate Holdouts Seek Upper Hand in Perilous Health Bill Talks (BBG)
  • Trump’s Tape Ruse Risks Fresh Legal Jeopardy in Russia Probe (BBG)
  • Arab states demand Qatar closes Jazeera, cuts back ties to Iran (Reuters)
  • Qatar Seen Rejecting List of Severe Demands to End Gulf Crisis (BBG)

Buffett Stuns Market After Berkshire Acquires 38.4% Of Home Capital Group, Provides C$2 Billion Loan

In a stunning development involving Canada's largest alternative lender which as recently as a month ago was facing virtually certain insolvency after a furious depositor run drained it of liquidity, overnight Home Capital Group Inc said billionaire Warren Buffett's Berkshire Hathaway Inc will provide a new C$2 billion ($1.50 billion) line of credit to its unit Home Trust Co, ending the Canadian lender's strategic review process.

Moody's Cuts Aussie Bank Ratings Due To "Tail Risk" Concerns

"Whilst mortgage affordability for most borrowers remains good at current interest rates, the reduction in the savings rate, the rise in household leverage and the rising prevalence of interest-only and investment loans are all indicators of rising risks."

Mark Hanson: Housing Bubble 2.0 - The End Is Nigh?

"If, the past 8-years of a Fed in Armageddon-mode created the 'everything bubble', what will shifting monetary policy into reverse do to said asset price levels? ..Remember, a 'house-price recovery' and 'housing market recovery' are two vastly different things."

China's "Ghost Collateral" Arrives In Canada, "Heralding A Crisis"

"We all know that the ghost collateral is a huge deal, and we all know that the shadow banking and other Chinese influence in Vancouver is profound. The issue is that the ghost collateral ends up re-hypothecated and laundered. So by the time it shows up in Vancouver, it will likely just look like a rich Chinese cash buyer with a suitcase of money.“

Quiet Start To Quad Witching: Stocks Rebound Around The Globe, BOJ Hits Yen

Today is quad-witching opex Friday, and according to JPM, some $1.3 trillion in S&P future will expire. Traditionally quad days are associated with a rise in volatility and a surge in volumes although in light of recent vol trends and overnight markets, today may be the most boring quad-witching in recent history: global stocks have again rebounded from yesterday's tech-driven losses as European shares rose 0.6%, wiping out the week's losses.

Pound Spikes As BOE "Hawkish" Vote Surprises Traders

The pound sharply reversed overnight losses rising as much as 0.3% to 1.2794 after the BOE announced it kept rates at 0.25%,however the hawkish surprise was the 5-3 vote which was far closer than expected, as two more MPC members , Saunders and McCafferty joined Forbes in calling for a rate hike on the back of rising inflation concerns.