Housing Market

Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloomberg explains, "traders assessed the outlook for the global economy."

Pine River Shuttering $1.6 Billion Fixed Income Fund

Following a brief surge of hedge fund closure announcements in late 2015 and early 2016, there had been a lull in hedge fund shutterings in recent months, as the smart money community had benefited from the dramatic jump in the S&P500 to just shy of all time highs. That changed moments ago when Reuters reported that hedge fund Pine River Capital Management is closing its Pine River Fixed Income fund and returning roughly $1.6 billion in assets to investors just two months after Steve Kuhn, one of the fund's co-managers, left the firm.

This Financial Bubble Is 8 Times Bigger Than The 2008 Subprime Crisis

This isn’t a cause for panic or to assume that the financial system is going to crash tomorrow. But it’s clearly a disturbing trend... the proverbial powder keg in search of a match. And when future pundits write the history of the financial crisis to come, whether it happens today, tomorrow, or years from now, you can bet they’ll wonder how the entire system failed once again to see something so dangerous... and so obvious.

Vancouver Homeowners Made More From Sitting On Their Assets Than The Entire City Did By Working

The most stunning statistic to come out of China's offshore money-laundering mecca located in Vancouver, where over the past two years Chinese buyers have created the biggest developed world housing bubble in recent history as a result of unprecedented capital flight from China's financial system, is that just by sitting on their assets local homeowners "made" more in 2015 than the entire city population earned by actually going to work.

China Is The Biggest Short...Ever

As simply put as possible... over the next 2 decades, there will be an average of 7.5 million fewer 0-55yr/old Chinese every year vs. an average annual increase of 9.5 million 55+yr/olds. And the wealthy minority of the elderly have stashed their reserves in a whole lot of expensive, vacant real estate that they intend to pass along (rent or sell) to the declining young population.  What could go wrong since housing prices only go up...right!?!

OECD Warns Of "Disorderly Housing Market Correction" In Canada

The OECD is ringing fresh alarm bells over the frothy nature of the Toronto and Vancouver housing markets and high levels of consumer debt. “In relation to household incomes, both house prices and household debt are high." But the loudest warning was the OECD's assessment of a “disorderly housing market correction,” notably in Toronto and Vancouver, as the biggest threat to Canada’s economy.“

The Death Of The Virtuous Cycle

Current economic policy is not simply flawed in its logic and application but actually destructive. As should be evident to all by now, these experimental monetary and fiscal policies provide short term economic relief but only serve to exaggerate the problems they claim to solve. The elegant Virtuous Cycle that propelled western economies to prosperity has been quietly dismantled and replaced with an unproductive imitation. This new, Un-Virtuous Cycle euthanizes discipline and prudence in exchange for the immediate gratification of debt-fueled consumption.

Peak Insanity: This "Trophy Apartment" In Manhattan Is Going For A Cool $250 Million

In April we pointed out that due to an already abundant supply of condos on the market, luxury real estate developer Extell Development Co couldn't sell luxury condo's at its One57 tower, in the heart of New York's premier ultra luxury destination... and now, documents filed in April with the state attorney general's office reveals a "trophy apartment" for sale in the complex, with a price tag of a cool $250 million...obliteraing the previous $88 million high - "That $88 million sale triggered the sense that there was this yet-to-be-harvested, nine-digit New York housing market. We started to see a frenzy of $100 million listings – what I call aspirational pricing."

Trickle-Down Crash? Trophy Assets Suddenly Tanking

One of the defining traits of the past few years’ “recovery” has been the torrent of money flowing from big banks to favored clients, and from there into trophy properties like high-end real estate, superyachts, and fine art. This might be the first financial bubble to completely bypass the 99%. And now it’s ending...

Why This Friday's Payrolls Report Could See A Big Miss

When the main economic event this week hits this Friday at 8:30 am EDT, when the BLS releases the May payrolls report, Wall Street consensus wil be expecting a 160,000 print, a number which will have a big impact on market expectations for a Fed rate hike at the June or July FOMC meeting. However, consensus may be disappointed for one reason: the Verizon strike could chop off as much as 35,000 workers from the headline payrolls print.

All Eyes On Yellen: Global Markets Flat On Dreadful Volumes, Oil Slides

In a world where fundamentals don't matter, everyone's attention will be on Janet Yellen who speaks at 1:15pm today in Harvard, hoping to glean some more hints about the Fed's intentionas and next steps, including a possible rate hike in June or July. And with a long holiday in both the US and UK (US bond market closes at 2pm today), it is no surprise overnight trading volumes have been dreadful, helping keep global equities poised for the highest close in three weeks; this won't change unless Yellen says something that would disrupt the calm that’s settled over financial markets.

Futures Levitation Continues As Brent Rises Above $50 For First Time Since November

In what has been another quiet overnight session, which unlike the past two days has not seen steep, illiquid gaps higher in US equity futures (the E-mini was up 3 points and accelerating to the upside as of this writing so there is still ample time for the momentum algos to go berserk), the main event was the price of Brent rising above $50 for the first time since November with WTI rising as high as $49.97.

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)