Real estate

Frontrunning: December 22

  • Police officers' slaying raises pressure on New York mayor (Reuters)
  • People Call for Cooling of Racial Tensions After Murder of NYPD Officers (BBG)
  • The $6.3 Trillion Frenzy That Vanquished Treasury Bears (BBG)
  • China Investigates Possible Stock-Price Manipulation (WSJ)
  • Citigroup Was Wary of Metals-Backed Loans (WSJ)
  • UPS Turns Parking Lots Into Sorting Centers to Add Speed (BBG)
  • U.S. Move to Normalize Cuba Ties Boosts Firms’ Asset Claims (WSJ)
  • Meredith Whitney’s Fund Said to Drop 11% as Office Put on Market (BBG)
  • Railcar Bottleneck Looms for Oil (WSJ)

"Houston, You Have A Problem" - Texas Is Headed For A Recession Due To Oil Crash, JPM Warns

Fast forward to today when we are about to learn that Newton's third law of Keynesian economics states that every boom, has an equal and opposite bust. Which brings us to Texas, the one state that more than any other, has benefited over the past 5 years from the Shale miracle. And now with crude sinking by the day, it is time to unwind all those gains, and give back all those jobs. Did we mention: highly compensated, very well-paying jobs, not the restaurant, clerical, waiter, retail, part-time minimum-wage jobs the "recovery" has been flooded with. Here is JPM's Michael Feroli explaining why Houston suddenly has a very big problem.

2014 Year In Review (Part 2): Will 2015 Be The Year It All Comes Tumbling Down?

Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."

"I’m tired of being outraged!"

2014 Year In Review (Part 1): The Final Throes Of A Geopolitical Game Of Tetris

Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. "I have not seen a year in which so many risks - some truly existential - piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows..."

The Burning Questions For 2015

"Most investors go about their job trying to identify ‘winners’. But more often than not, investing is about avoiding losers. Like successful gamblers at the racing track, an investor’s starting point should be to eliminate the assets that do not stand a chance, and then spread the rest of one’s capital amongst the remainder." So as the year draws to a close, it may be helpful if we recap the main questions confronting investors and the themes we strongly believe in, region by region.

I'm Not Buying It - Not The Wall Street Rip, Nor The Keynesian Rap

The current illusion of recovery is a result mainly of windfalls to the financial asset owning upper strata, the explosion of transfer payments funded with borrowed public money and another supply-side bubble - this time in the energy sector and its suppliers and infrastructure. But that’s not real growth or wealth. Indeed, the desultory truth about the latter is better revealed by the fact that the American economy is not even maintaining its 20th century level of breadwinner jobs. And the real state of affairs is further testified to by the lamentable trend in real median household incomes. That figure - not distorted by the bubble at the top of the income ladder - is still lower than it was two decades ago. So much for the Keynesian rap. Yet that’s about all that underpins the latest Wall Street rip.

Frontrunning: December 17

  • Citigroup is pleased: Obama signs $1.1 trillion government spending bill (Reuters)
  • Oil holds below $60 as OPEC, Russia keep pumping (Reuters)
  • 5 Things to watch at the December Fed Meeting (WSJ)
  • Russia Tries Emergency Steps for 2nd Day to Stem Ruble Rout (BBG)
  • Ruble crisis could shake Putin's grip on power (Reuters)
  • Apple Curbs Russia Sales as McDonald’s Lifts Prices (BBG)
  • Traders Betting Russia’s Next Move Will Be to Sell Gold (BBG)
  • China Warms to a More Flexible Yuan (WSJ)

When The Tide Rolls Out - COO, CEO & Chairman Flee FBI-Probed REIT

Run away... just 6 weeks ago when we first highlighted the FBI was probing multi-billion-dollar REIT American Realty Capital, the company's stock crashed, wiping out billions leading the CEO to note, "we don't have bad people, we had some bad judgment there." Now, as The WSJ reports, it appears the CEO David Kay, COO Lisa Beacon, and founder & Executive Chairman Nicholas Schorsch have all decided to "stabilize the company and... strengthen future leadership and strategy," by jumping ship. We are sure their jets will be fueled up and ready for the nearest extradition-free nation...

Why Milennials Are Stuck Living At Home With Parents

The Federal Reserve conducted a study on Millennials and tried to ascertain why so many of them are living at home. Is it too much student debt? Lower incomes? Or is it that home prices are simply unaffordable? The study finds that all of these factors have a big impact on why many Millennials are living at home and why the first time home buyer market is performing so badly. (Hint: EB-5)

Democrats Who Voted For The Cromnibus Received Double The Money From Wall Street Than "No" Voters

It should come as no surprise that Republicans would be willing to vote for a bill that seeks to indemnify Wall Street from future failure. After all, Wall Street's proximity to the GOP, and vice versa, is hardly a contentious issue. And yet, it was "only" 162 republicans who voted for the Cromnibus - some 67 voted against. Which means that whipping the 57 democrats who also voted for the Bill to get the crucial 218 passing votes was far more critical to assure passage of the swaps push out provision.  What exactly motivated those 57 Democrats to break ranks with the rest of their party - the 139 democrats voted against the spending bill - and to be not only on the receiving end of Elizabeth Warren's ire, but also accountable for dumping a few hundred trillions of derivatives into the laps of US taxpayers. The answer, what else: money.

Crude Drops, Yields Slump, Futures Tumble

Anyone who was hoping the market would rebound on last-minute news that the US government has gotten funding for another 9 months, will be disappointed this morning, when futures are finally starting to notice the relentless decline in crude, and with Brent down another 1% as of this writing following yet another cut in the forecast of Global oil demand by the IEA (the 4th in the last 5 months) and with Chinese industrial production also missing estimates (recall that the Chinese slow-motion hard landing has been said by many to be the primary catalyst for the crude collapse) which however pushed Chinese stocks higher on hopes of even more stimulus, the S&P is trading lower by some 14 points, the 10 Year is in the red zone at 2.12%, and the USDJPY is close to session lows. In short: Kevin Henry's "ETF" desk at the NY Fed will have its work cut out to generate one of the now traditional pre-weekend feel good, boost confidence stock market ramps.

Duck And Cover - The Lull Is Breaking, The Storm Is Nigh

The central banks are now out of dry powder - impaled on the zero-bound. That means any resort to a massive new round of money printing can not be disguised as an effort to “stimulate” the macro-economy by temporarily driving interest rates to “extraordinarily” low levels. They are already there. Instead, a Bernanke style balance sheet explosion like that which stopped the financial meltdown in the fall and winter of 2008-2009 will be seen for exactly what it is—-an exercise in pure monetary desperation and quackery. So duck and cover. This storm could be a monster.

GoldCore's picture

Respected economic historian and author of the “Gloom, Boom and Doom Report,” Dr Marc Faber has warned about the continuing and coming decline of western economic power.

He believes that the generation of young people starting to work today will be the first in two hundred years to have a lower standard of living than their parents had. He believes dividend paying Asian stocks will grow wealth in the coming years and remains an advocate of owning physical gold.