Real estate

The fact is that the US has been on a slippery slope for decades, and it's about to go over a cliff. However, our standard of living, while declining, is still very high, both relatively and absolutely. But an American can enjoy a much higher standard of living abroad. On the other hand, if I were some poor guy in a poverty-wracked country with few opportunities, I'd want to go where the action is, where the money is, now. Today, that means trying to get into the United States. The US is headed the wrong direction, but it's still a land of opportunity and a whole lot better than some flea-bitten village in Niger...This is one of the advantages of studying history, because it shows you that things like this rarely happen overnight. They are usually the result of trends that build over years and years, sometimes over generations. In the case of the US, I think the trend has been downhill, in many ways, for many years. Pick a time. You could make an argument, from a moral point of view, that things started heading downhill at the time of the Spanish-American War. That was when a previously peaceful and open country first started conquering overseas lands and staking colonies. America was still in the ascent towards its peak economically, but the seeds of its own demise were already sewn, and a libertarian watching the scene might have concluded that it was time to get out of Dodge –

Have we set the MSM on FIRE! Let's see if a trend was created. 18 hours after warning on the insurance sector, record losses were announced!!!

Is idiosyncracy the substitute for a fledgling Sovereign Bond Market?  Including our recommendations for 2012

Writing as someone who was strongly stock-oriented for most of a long investing career, I can assert that at today's low dividend yields, it is difficult to see stocks as strong trees on which to rely. The Smithers parameters provide cautionary evidence for the bulls who point to current "low" price-earnings ratios and "sunny skies almost forever" views of corporate profits and predict stock market returns well above bond yields for years to come.

The iconoclastic outcast being called in to shake things up a little. I'll appear on CNBC @2:30 with my outlook for 2012. I'm not shy about my track record & here's what I'll have to say.

Once upon a time,...

When it comes to corruption, cronyism and general muppetry in Washington D.C., the only real question is 'where does one start?' Yet one has to start somewhere to conclude with a list of the ten most corrupt and despicable marionettes in D.C. Which is precisely what JudicialWatch has done in its annual compilation of the "Top 10 Most Corrupt Politicians in Washington D.C." for 2011. And confirming what everyone knows, that both the left and right are merely irrelevant names for the same general social affliction, or should we call it by its true name - wealth pillage - the split is even between democrats and republicans. In no particular order, the winners of 2011 are...

The new year’s worldwide economic downturn has an interlocking effect: every national economy is searching to accommodate itself politically as well as economically to what looks to be an extended period of low growth. After longer or shorter periods of historically unrivaled prosperity, they are feeling for a “bottom” – a level to wait out new growth. That is the proverbial “soft landing”.

The fact of the matter is that there is a very fundamental, and sparsely recognized reason for overbuilt retail commercial real estate to take a tumble - in addition to the more recognized massive headwinds.

Many don't understand how connected the financial fates of the US and the EU actually are. Those that don't have another think coming.

As I listen to all types of perma-bull talk about how the S&P would be at 1400 if it wasn't for Europe (which is the equivalent of: if my wife was 100 pounds lighter... she'd be a supermodel), I can't help but pulling my hair out.  The situation in Europe is clearly bad, and after reading Michael Lewis' new book... appears almost impossible to be resolved without massive defaults.  However, the other domino in the equation is the Chinese real estate market. The 'global growth engine', China, is running out of steam.  Their policy of placing market orders on anything and everything to inflate stimulate the economy - surprise, surprise - is proving to be unsustainable.

Everyone hoping that the last quarter of the year would start on an optimistic note was disappointed following not just the continuation of last week's manipulations now that hedge funds have their marching orders from their LPs, who are certainly seeking to redeem tens if not hundreds of billions in capital, but also from Bill Gross' monthly letter who in "Six Pac(k)in'" writes that "there are no double-digit investment returns anywhere in sight for owners of financial assets. Bonds, stocks and real estate are in fact overvalued because of near zero percent interest rates and a developed world growth rate closer to 0 than the 3 – 4% historical norms. There is only a New Normal economy at best and a global recession at worst to look forward to in future years." And pontificating on a theme started many months ago by Zero Hedge with observations on the relative contribution to income from labor and capital (a modern day warning to Marxists), Gross warns that "both labor and capital suffer as a deleveraging household sector in the throes of a jobless recovery refuses – if only through fear and consumptive exhaustion – to play their historic role in the capitalistic system. This “labor trap” phenomenon – in which consumers stop spending out of fear of unemployment or perhaps negative real wages, shrinking home prices or an overall loss of faith in the American Dream – is what markets or “capital” should now begin to recognize" His conclusion: "A modern day, Budweiser-drinking Karl Marx might have put it this way: “Laborers of the world, unite – you have only your six-packs to lose.” He might also have added, “Investors/policymakers of the world wake up – you’re killing the proletariat goose that lays your golden eggs." More or less reminds us of the warning above the gates of hell in Dante's Inferno...

Perhaps the most defining features of an asset bubble is a marked and persistent deviation from the underlying metrics that once determined fundamental value.  We know how real estate in Canada stacks up when compared to GDP, personal disposable income (cities and provinces), rents (cities and provinces), and inflation.  It's not pretty.  As with any real estate bubble, the overvaluation is most extreme in a handful of cities.  The regional data can be seen in the highlighted links.  Certainly not all areas of the country have experienced a massive divergence from underlying fundamentals, but it is extensive enough to concern us.

Trading the CAC40 vs witnessing The Inevitable Pan-European Real Estate Collapse

"By suggesting, without adequate support, that the registries are full of fraudulent and defective documents, clouding thousands of titles, YOU are adding to the public's confusion and hesitancy to re-enter the real estate market."