Housing Prices

Tyler Durden's picture

China's Red Capitalism Is The New Black Swan

From the bowels of Australia’s iron ore mines to the top of Dubai’s pointless 100 story office towers, the entire warp and woof of the global economy has been distorted and bloated by the central bank money printing spree of the last two decades, led by the red credit machines of Beijing. Everywhere economies have succumbed to over-building, over-consumption, over-financialization and endless dangerous, unstable speculation. Stated differently, China’s red capitalism is the new black swan. There is nothing rational, stable or sustainable about it.

Tyler Durden's picture

Getting History Right - Saving Capitalism From Monetary Mismanagement

Capitalism isn’t – wasn’t – the problem. The culprit instead was unsound finance and deeply flawed monetary management. In short, Capitalism cannot function effectively within a backdrop of unfettered cheap finance. Things appear miraculous during the boom, and then the bust discombobulates. Contemporary central bank rate administration essentially abandoned the self-adjusting and regulating market system for determining the price of finance – so fundamental to Capitalism.

Tyler Durden's picture

How Much Longer Can Our Unaffordable Housing Prices Last? (Spolier Alert: Not Much)

This globalization of regional housing markets is pricing the middle class out of housing in areas that also happen to be strong job markets. Many commentators are concerned that a nation of homeowners is being transformed into a nation of renters, as housing is snapped up by hedge funds and wealthy elites fleeing China and the emerging markets. But will current conditions continue unchanged going forward?

Tyler Durden's picture

This "Unlivable $350,000 Shack" Is The Cheapest Home In San Francisco

This worn-down, decomposing wooden shack that was built in 1906, and the interior is unlivable in its current condition. The San Francisco house is also selling for $350,000.

Vitaliy Katsenelson's picture

Shadow Over Asia

Having government control over the levers of the economy can have advantages. For example, by taking prompt action, the Chinese government was able to pull the economy out of the recession remarkably fast, basically by fire-housing the stimulus package that was equivalent to 12% GDP. That’s the advantage. The only problem is that these kinds of short-term advantages come with long-term, painful consequences.

Tyler Durden's picture

Austrian Economics, Monetary Freedom, & America's Economic Roller-Coaster

It is time for a radical denationalization of money, a privatization of the monetary and banking system through a separation of government from money and all forms of financial intermediation. That is the pathway to ending the cycles of booms and busts, and creating the market-based institutional framework for sustainable economic growth and betterment. It is time for monetary freedom to replace the out-of-date belief in government monetary central planning.

Tyler Durden's picture

Fed Hike - Now Or Never

While Fisher, among others, believes that the recent fall in inflation is solely due to collapsing energy and crop prices, the issue of weakening economic data on a global scale, particularly that of China, may suggest much less transient nature. As we stated previously, we think the Fed realizes that we are likely closer to the next recession than not. While raising interest rates may accelerate the pace to the next recession, it is better than being caught with rates at zero when it does occur.

Tyler Durden's picture

The Great Wall Of Money

Since the GFC, 'The Great Wall of Money' that Bretton Woods II has furnished via its vendor-financing relationship, has masked the deleveraging of our world economy. The Great Wall is about to collapse and fall.

Tyler Durden's picture

Frontrunning: August 19

  • $1 trillion in Emerging Market outflows in the past 13 months (FT)
  • German lawmakers back third Greek bailout (Reuters)
  • Dutch government faces test in "junkie" Greece debate (Reuters)
  • China c.bank offers selected banks medium term lending facility (Reuters)
  • Another "expert network" busted: Promontory settles over StanChart probe (FT)
  • Angola to Ship Most Crude in Four Years to Meet Asian Demand (BBG)
  • Hackers dump data online from cheating website Ashley Madison (Reuters)
  • Yuan’s Devaluation Brings Losses for Some (WSJ)
Sprott Money's picture

U.S. Wages Have Fallen EVERY Quarter of the 'Recovery'

For 6 ½ long years, we have been bombarded with the mythology known as “the U.S. economic recovery” by the mainstream media. 

Phoenix Capital Research's picture

Greece's Collapse Was a Reversion to the Mean… Who's Next?

In simple terms, Greece from 2003-2010 was an economic boom driven by incomes, which were in turn driven by cheap debt NOT real organic growth. Thus, the collapse in GDP was yet another case of “price discovery” in which asset prices fall to economic realities…

Tyler Durden's picture

"This Is The Largest Financial Departure From Reality In Human History"

We have lived through a credit hyper-expansion for the record books, with an unprecedented generation of excess claims to underlying real wealth. In doing so we have created the largest financial departure from reality in human history. Bubbles are not new – humanity has experienced them periodically going all the way back to antiquity – but the novel aspect of this one, apart from its scale, is its occurrence at a point when we have reached or are reaching so many limits on a global scale. The retrenchment we are about to experience as this bubble bursts is also set to be unprecedented, given that the scale of a bust is predictably proportionate to the scale of the excesses during the boom that precedes it. Deflation and depression are mutually reinforcing, meaning the downward spiral will continue for many years. China is the biggest domino about to fall, and from a great height as well, threatening to flatten everything in its path on the way down. This is the beginning of a New World Disorder…

Tyler Durden's picture

Fed Admits Economy Can't Function Without Bubbles

The Fed would have needed to hike rates by 800 bps in the wake of the dot-com collapse in order to prevent the housing bubble. That would have purged the system and gradually, the FOMC could have eased by around 300 bps over the next four years. That policy course would have prevented the speculative bubble that brought capital markets the world over to their knees in 2008. And why didn’t the Fed do this? Because "such a large increase in interest rates would have depressed output more than the Great Recession did." In other words, thanks to Alan Greenspan, the US economy cannot function under a normalized monetary policy regime.

Tyler Durden's picture

Rent Bubble = Housing Bubble = Rent Bubble

Both bubbles (rents and housing) are vulnerable to popping. The real test of valuation is: what's it worth in a recession, after all the easy money and the jobs that depended on easy money have vanished?

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