New Normal

"The Deals Are Collapsing" - Vancouver's Housing Bubble Has Burst

As a new dawn breaks in Metro Vancouver’s real estate market, realty companies are reporting the first anecdotes of deals falling through as foreign buyers forfeited deposits on binding deals rather than pay the new tax, while local buyers withdraw offers in expectation that the market will tumble. In short: the Vancouver housing bubble has burst.

The Car Bubble... And Cash For Clunkers II?

The economic backwash of too-expensive new cars and the reappearance in the marketplace of affordable alternatives (good used cars) is causing sales of new cars to wilt, probably precipitously, as invariably happens in a Boom Bust cycle. The car industry will squeal for help from Uncle Sam – just like back in the early 2000s. And Uncle will be happy to oblige, as he always is... But Uncle’s “help” always comes at a cost.

US Personal Income Growth Slumps To Lowest Since 2013, Spending Rises

Savings are slumping (which means credit is surging) as the American consumer keeps on spending (+3.7% YoY near highest since May 2015) despite income growth at its slowest since Dec 2013 (+2.7% YoY). The diverging trend of the last 6 months (higher spending, lower income) is unlikely to last but with the savings rate at 5.3% (down from 6.2%)at March 2014 lows, we suspect the run way is running out.

US Admits It "Found A Problem" In Calculation Of GDP

For years we have complained against both the BLS' and the BEA's comical seasonal adjustments, which "serve" just one purpose: to goalseek the data to a desired, politically-mandated outcome, and which culminated last May when the Department of Commerce announced it would seasonally adjust last year's woeful Q1 GDP data not once but twice in order to get a better result.  Now, it appears that there indeed was a problem.

These Are The Best And Worst U.S. Cities To Own A House

For those lucky Americans who can afford to own a house instead of being stuck renting the New Normal American dream where they are prohibited from peddling fiction as their annual rent increases by 10% or more each year, here is the breakdown of the best and worst cities for home price appreciation in the U.S.

Vancouver Finally Cracks Down On Chinese Home Buyers With 15% Real Estate Tax

The British Columbia government finally took our advice to stem hot money inflows into real estate by announcing a 15% transfer tax on foreign nationals who buy real estate in Metro Vancouver.  Finance Minister Mike de Jong unveiled the tax, which will take effect on August 2nd, after recent housing data revealed that foreign nationals spent more than $1 billion on British Columbia property between June 10 and July 14, or a mere $28.6mm per day.

DNC Chairwoman "Quarantined" From Convention After Sanders Demands "Someone Be Held Accountable" For Emails

In a shocking turn of events for the new normal, it appears that Bernie Sanders' campaign demands that "someone in the DNC be held accountable" over the leaked emails showing collusion to undermine any Clinton opposition, have been heard. As CNN reports, DNC Chair Debbie Wasserrman Schultz will not speak at or preside over the party's convention this week. As one top Democrat said "she's been quarantined."

Erdogan Goes Too Far, Market Warns As Lira, Turkish ETF Suddenly Tumble

While so far the Western diplomatic response to Erdogan's unprecedented putsch has been mostly stunned silence (with just the U.N. human rights chief expressing alarm about the mass suspension or removals of judges so far), the market is starting to get concerned, and moments ago the Turkish Lira suddenly tumbled, sliding below Friday's closing level, while at the same time the MSCI Turkish ETF plunged as well.

Treasuries Will Tell You All You Need To Know

Even with the S&P 500 hovering at all time highs and currencies moving all over the place, Bloomberg's Richard Breslow says the only asset class that is dispositive right now is bonds.

Weekend Reading: If I Was Janet Yellen

Unfortunately, for Janet, this is the 'trap'. The liquidity will dry up, the inventory restocking cycle will end, and the next “crisis” will be on the horizon with Ms. Yellen remaining stuck near the “zero bound.”  The past opportunities to “normalize” interest rate policy have come and gone. This opportunity will likely pass also and, as always, the Fed will realize far too late they are trapped. But by then, it won’t matter much to investors, or what’s left of them, anyway.

Germany Is About To Sell Zero-Coupon 10 Year Bonds For The First Time Ever

On Wednesday morning Germany will sell 10-year bonds with a zero coupon for the first time, as a rally in fixed-income securities pushes investors to forgo annual interest payments in order to hold the safest assets. The nation is selling €5 billion of zero percent bonds due in August 2026 on Wednesday, after yields in the secondary market dropped to an all-time low of minus 0.205% last week.

Kyle Bass Was Right: Here Is SocGen's Primer How To Trade The Biggest Yuan "Depreciation Wave" Yet

The new risk scenario for CNY is 8.0 (20% increase in USD-CNY). The caveat is that the pain threshold for the market appears to be much higher than before and the implications for the global financial markets will primarily depend on the speed of depreciation. We believe that it would take significantly more pressure on capital flows than what we have seen over the past few years, or an economic hard landing, for our risk scenario to unfold.

Saudi Strategy Working: OPEC Captures Largest Market Share Since 1975

OPEC has captured its largest share of the oil market since 1975, which could be seen as a vindication of the cartel’s strategy over the past two years. But it also creates vulnerabilities for the U.S. and others, who are once again increasingly dependent on the Middle East for oil.

Sovereign Credit Is Deteriorating At A Record Pace

Culminating with the tipping of the UK's numerous real estate fund "dominoes" and the subsequent fallout in the wake Brexit, Fitch has been on a ratings-slashing spree, having cut the credit ratings on 14 nations so far in 2016, most recently that of the United Kingdom - a record downgrade pace for the rating agency.