"The equilibrium, for now, is QE infinity – but political risk could be the breaking point"...
There is ample evidence suggesting that Millennials simply do not want the same things as their Taco Tuesday baby boomer parents. And many simply don’t want the McMansion aspiration since many are going to have small families. This is an interesting shift. Boomers are trying to off load larger crap shacks to an audience that is more interested in smaller more centrally accessible properties.
China's Manufacturing Misses; Nonmanufacturing Worst Since 2008 Despite Unprecedented $1 Trillion "Debt Injection"Submitted by Tyler Durden on 11/01/2015 08:38 -0500
The most anticipated economic release over the weekend was the early glimpse into China's manufacturing and non-manufacturing sectors via the two key PMI surveys released by China's National Bureau of Statistics, to get a sense if the slowdown across China is stabilizing or, as some have suggested, rebounding. It did not: overnight the NBS reported that the manufacturing PMI remained unchanged in October at 49.8 missing consensus estimates of a modest rebound to 50.0, its third consecutive month in contraction territory.
Shantytown, Stockton, California, USA
The Fed's confidence trick this week was, once again, the Keyser Soze gambit (via Beaudelaire)- "convincing the world of Yellen's hawkishness, when no such character trait exists." However, unlike the movies, stocks and FX markets have already seen through the con, leaving Fed Funds futures alone to believe the hype. As we noted previously, "The Fed Can't Raise Rates, But Must Pretend It Will," repeating its pre-meeting hawkishness to dovishness swing time and again in a "Groundhog Day" meets "Waiting For Godot"-like manner. Time is running out Janet, tick tock...
"House prices have decoupled most from local incomes in Hong Kong, London, Paris, Singapore, New York and Tokyo. Buying a 60-square-meter apartment exceeds the budget of most people who work even in the highly-skilled service sector. Loose monetary policy has prevented a normalization of housing markets and encouraged local bubble risks to grow"
A bursting of property bubbles in London and New York would be expected to have an impact on national economies and indeed on national property markets. Sentiment would be badly impacted. Caution should be the order of the day.
World's Largest Sovereign Wealth Fund Has Worst Quarter In 4 Years After Losing 21% On Chinese StocksSubmitted by Tyler Durden on 10/28/2015 12:41 -0500
Norway's $860 billion sovereign wealth fund (tasked with managing the country's vast oil wealth) just had its worst quarter in 4 years and its first back-to-back quarterly loss since 2009 after an array of EM bets went awry. Meanwhile, the government is set to start making withdraws from the fund as slumping crude prices have effectively reduced inflows to zero.
"The nightmare for the Riksbank board is maybe something like this: they are gathered in the south of Sweden, looking out over the Baltic Sea, when they see a giant wave of money coming in from the euro zone and try to fight it with a hose."
"We can look forward... not precisely to a 1929-type depression, but to an inflationary depression of massive proportions."
Can the stock market completely ignore these five key changes and keep powering higher on the fumes of Mario Draghi's promises?
With crude prices still stuck in the doldrums, economists at Handelsbanken say the Norges Bank will soon be forced to cut rates to zero in order to stave off a looming recession. What we want to know is this: if the housing bubble that the Norges Bank has helped to inflate bursts, how does the central bank plan to deal with the fallout (which will be amplified by the economic drag from low oil prices) when it has exhausted its counter-cyclical capacity by cutting rates to zero?
Property prices in Copenhagen have risen 40-60 percent since the middle of 2012, when the central bank first resorted to negative interest rates to defend the krone’s peg to the euro.