Real estate

The Jobs Number Is BS Says Former Head Of BLS

After every non-farm payroll report we provide our own breakdown of what the real unemployment rate is in a country in which the labor force participation rate has not been adjusted to normalize for the Second Great Depression. In the most recent such endeavor we found the "Real Unemployment Rate" to be 11.3%. Today, courtesy of the Post's John Crudele we find that our estimate was spot on not just from anyone, but the former head of the BLS himself: Keith Hall.

Frontrunning: July 18

  • MSM always "ahead" of the curve: Fed’s Messages Raise Volatility in Threat to Profits (BBG)
  • Bernanke Plays Down Link Between Jobless Rate, Fed Moves (WSJ)
  • Draghi to Carney Face Test Backing Guidance on Rates (BBG)
  • House Republicans Vote to Delay Obamcare Mandates (Reuters)
  • China media accuses Japan PM of dangerous politics (Reuters)
  • China will replace America as the leading superpower, global attitudes survey finds (SCMP)
  • Nonqualified mortgages make up as much as $1.5 trillion of the $10 trillion home-loan market (BBG)
  • Dell $24.4 Billion Buyout Plan Is a Nail-Biter as Vote Looms (BBG)
  • Republicans could see more bruising Senate primaries (Reuters)
  • GM delays Chevy Cruze debut by a year (Reuters)
  • Peltz needs support for PepsiCo restructuring dealsa (FT)
  • Sweaty Wall Streeters Skip Booze for Spin-Class Meetings (BBG)

10 Things Most Americans Don't Know About America

In an effort to soften the blow to our American readers, here is an analogy: You know when you move out of your parents’ house and live on your own, how you start hanging out with your friends’ families and you realize that actually, your family was a little screwed up? Stuff you always assumed was normal your entire childhood, it turns out was pretty weird and may have actually screwed you up a little bit. The point is we don’t really get perspective on what’s close to us until we spend time away from it. Just like you didn’t realize the weird quirks and nuances of your family until you left and spent time with others, the same is true for country and culture. You often don’t see what’s messed up about your country and culture until you step outside of it. And to our foreign readers, get your necks ready, because this is going to be a nod-a-thon.

On China's 'Superficial' Bulls And 'Broken Clock' Bears

"It is not true that those who worried about the rise of consumer credit in the US in the mid 2000s were “wrong” until the stopped clock eventually was right," this strikes me as an incredibly superficial analysis, explained only by the fact that many of us expect economic analysis merely to predict whether the stock market will rise or fall this week. Those who worried about rising consumer credit in the US were not wrong every single year until 2007-8, when they accidentally became right. They were right every single year, and were proven right in 2007. Those who have been arguing that China is experiencing an unsustainable increase in debt have not been wrong every quarter that China has not collapsed. They are almost certainly right and it is hard even for the most foolish of bulls any longer to deny it."

Frontrunning: July 15

  • An actual Bloomberg headline: Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong (BBG)
  • Gay delivers further body blow to troubled sport (Reuters)
  • China Wealth Eludes Foreigners as Stocks Earn 1% in 20 Years (BBG)
  • Bernanke Boom Signaled by Yield Surge as Market Recalculates (BBG)
  • Portugal's Parties Set Deadline for Pact (WSJ)
  • Corporate Spending Set to Surge in U.S. (BBG)... or not at all based on the actual corporate data
  • Legal Fears Slowed Aid to Syrian Rebels (WSJ)
  • A mega-camp adds to the Boy Scouts’ troubles (Reuters)
  • GSK accused of being ‘ringleader’ in China probe (FT)
  • 19 Hospitalized in US-Ukraine Army Exercise - Ministry (RIA)
  • Egypt Islamists march as senior U.S. official visits (Reuters)
  • German spies made use of U.S. surveillance data (Reuters)

10 Reasons Why Sharknado Is Coming To The Global Economy

Have you ever seen a disaster movie that is so bad that it is actually good? Unfortunately, we are witnessing something just as ridiculous in the real world right now.  In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is "accelerating" (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week.  The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon.  The conditions for a "perfect storm" are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with.

What Is A "Liquidity Trap" And Why Is Bernanke Caught In It?

Much has ben written lately about the fact that the Federal Reserve is beginning to realize that they are caught in a "liquidity trap."  However, what exactly is a "liquidity trap?" And perhaps more importantly how did we end up in it - and how do we get out?

Spanish "Bad Bank" Fairy Tales

Spain, as you know, and no matter how the story is fabricated, was bailed out by the European Union. The money was lent to the banks so that Spain does not have to count it as sovereign debt even though the country guaranteed the loans. Madrid, however, tells the truth in the same manner as a sardine naturally climbs mountains. Spain has set up a "bad bank" known as Sareb (Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria). This operation has $66 billion of Real Estate loans and property as their assets we are told. So far they have sold 700 properties and they claim they can achieve an annual return on equity of 13%-14% over its fifteen year tenure. The truth - so far - is unbelievably worse than expected.

David Stockman: "The Born-Again Jobs Scam"

No, last week’s jobs report was not “strong”. It was just another edition of the “born again” jobs scam that has been fueling the illusion of recovery during the entire post-crisis Bernanke Bubble. In short, the US economy is failing and the welfare state safety net is exploding. And that means that the true headwind in front of the allegedly “cheap” stock market is an insuperable fiscal crisis that will bring steadily higher taxes, lower spending and a gale-force of permanent anti-Keynesian austerity in the GDP accounts. And for that reason, the Fed’s strategy of printing money until the jobs market has returned to effective “full employment” is completely lunatic. The bottom-line is that Bernanke is printing money so that Uncle Sam can keep massively borrowing, and thereby fund a simulacrum of job growth in the HES Complex. Call it the Bed Pan Economy. When it finally crashes, Ben Bernanke will be more reviled than Herbert Hoover. And deservedly so.

Chinese Ghost Cities Coming To The Las Vegas Housing Market

Let’s face it, the Las Vegas real estate market has gone full Chinese.  By full Chinese, we mean a centrally planned bubble has been created that is just asking to blow up.  We’ve covered the renewed insanity of the Las Vegas market before, but this article from yesterday’s Wall Street Journal provides even more detail.  In a nutshell, as a result of Assembly Bill 284, which essentially made foreclosures impossible in Nevada, extremely delinquent homes are not coming for sale, and this phony market signal is leading to rampant overbuilding and price speculation. Bubbles and bullshit.  It’s the American way.

Frontrunning: July 11

  • Bernanke Supports Continuing Stimulus Amid Debate Over QE (BBG)
  • Portugal president wants 'salvation' deal, including opposition (Reuters)
  • Egypt has less than two months imported wheat left - ex-minister (Reuters)
  • A rise in long-term interest rates is creating challenges and opportunities for the largest U.S. banks. (WSJ)
  • BoJ says Japanese economy is ‘recovering’ (FT)
  • More Chinese cities likely to curb auto sales (Reuters)
  • PC Shipments Fall for 5th Quarter (BBG)
  • Property Crushes Hedge Funds in Alternative Markets (BBG)
  • New aid gives Greece summer respite before showdown (Reuters)
  • Rajoy Punishes Exporters Sustaining Spain’s Economy (BBG)