Housing Market

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)

Global Stocks, Futures Rally, Ignore Sharp Yuan Devaluation On Hopes Fed Is Right This Time

The single biggest event overnight was the PBOC's devaluation of the Yuan to the lowest since March 2011, setting the fixing at 6.5693, the highest in over 5 years and in direct response to a stronger dollar, which however if one looks at the DXY remains well below the recent highs in the 100 range, suggesting for China this is only just beggining. However, the fact that there was not more volatility in onshore and offshore overnight FX also comforted the market that at the same time as its was devaluing the PBOC was also intervening in the FX market, thus providing some assurance it would not allow runaway "risk off" sentiment prevail, nor would it promote another blitz round of capital outflows, leading to another gradual levitation in overnight risk.

Brexit Scaremongering Taken To New Level With Threat Of "Year Long Recession"

The last few weeks have seen 'Project Fear' taken to all new levels by the UK establishment as doom-mongering over a possible Brexit conjure images of post-apocalyptic movies. UK PM Cameron and Chanceller Osborne's latest op-ed tirade warns of 800,000 jobs lost and an "immediate year-long recession" if the Brits exercise their democratic right to vote for sovereignty over tyranny. Judging from the polls, which show Brexit odds tumbling, the fear-mongery is working, however, the markets disagree as forward volatility measures near 2016 highs.

Existing Home Sales Tumble In South, West Regions; Condo Sales Soar

Single-family existing home sales rose just 0.6% MoM in April with The South and The West regions seeing notable declines in sales (down 2.7% and down 1.7% respectively). What saved the headline priont was a 10.3% surge in Condo sales - among the best monthly spikes since the crisis helped by a spike in sales in The Midwest - where prices are most affordable. While headline data beat expectations, NAR's Larry Yun warned that "the temporary relief from mortgage rates currently near three-year lows has helped preserve housing affordability this spring, but there's growing concern a number of buyers will be unable to find homes at affordable prices if wages don't rise and price growth doesn't slow."

Fed Up With The Fed

Destroying our ability to discover the real cost of assets, credit and risk has not just crippled the markets--it's crippled the entire economy.