The short answer is in parts of Seattle, Charlotte, Phoenix, Atlanta, Tampa, Cincinnati, Raleigh, N.C., Houston, Denver, Columbus, Ohio, Sarasota-Bradenton, Fla., Raleigh, N.C., Chicago, and Winston-Salem, N.C. Among the 2,490 zip codes nationwide with at least one single family purchase by the top four institutional investors between January 2012 and October 2014, the top 50 zip codes with the highest percentage of purchases by the four largest institutional investors were in those metro areas. “The institutional investors kick-started the housing recovery by buying homes in bulk at the lowest point and holding them as rentals,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market. Los Angeles County was among the top 10 for most purchases by institutional investors over the past three years, with 6,152. “As the market continues to climb, we expect these investors to start to sell off their inventory to capture the gains made in the past couple of years.”
Because nothing says "recovery" like the record-breaking surges in sales of Rolls-Royce luxury vehicles juxtaposed by the highest level of auto loan delinquency since the 2008 crisis peak...
- Global Debt Crisis II – Total Global Debt to GDP Ratio Over 300% - Risk of Bail-Ins in 2015 and Beyond - Currency and Gold Wars - $1 Quadrillion “Weapons of Mass Destruction” Derivatives - Cold War II and New World Order as China and Russia Flex Geopolitical Muscles - Enter The Dragon – Paradigm Shift of China Gold Demand - Forecast 2015: None. Forecast 2020: Gold $2,500/oz and Silver $150/oz
For those wondering why average hourly earnings in December plunged by -0.2% on expectations of a 0.2% increase and why the November "Green shoot" surge in wages of 0.4%, which everyone took as a signal of imminent wage inflation was cut in half here is the answer: in December the number of workers employed in Food Service and Drinking Places, i.e., sub-minimum wage waiters and bartenders jumped by 43,600: the highest monthly increase since 2012.
Non-Farm Payrolls Rise By More Than Expected 252K, But Hourly Earnings Plunge Most In At Least 8 YearsSubmitted by Tyler Durden on 01/09/2015 08:39 -0500
On the surface, the December jobs report was good, with 252K jobs added, higher than the 240K expected, leading to a fresh cycle low unemployment rate of 5.6%, down from 5.8% and below the 5.7% expected, and with the November data revised to a whopping 353K from 321K, a net change of 50K including the October revision. However it was the average hourly earnings where the real details were hid, and it was here that Wall Street was expecting a 0.2% increase. Intead the BLS reported a whoppping 0.2% decline in average hourly earnings, with the last month's 0.4% jump revised lower by half to 0.2%.
- Police Surround Paris Terror Suspects Near CDG Airport (BBG)
- ECB Said to Study Bond-Purchase Models Up to 500 Billion Euros (BBG)
- How OPEC Weaponized the Price of Oil Against U.S. Drillers (BBG)
- German Industrial Production Falls Amid Plunge in Energy Output (BBG)
- Car Loans See Rise In Missed Payments (WSJ)
- Jim O'Neill threatens he will replace BRICs with ICs (BBG)
- Oil heads for seventh weekly loss as supply glut drags (Reuters)
- Armed man takes hostage in kosher grocery in Paris (AFP)
- Janus Chairman Didn’t Know Details of Gross’s Investment (WSJ)
- Kaisa Bondholders Dream of White Knight as Default Becomes Real (BBG)
While the trading world, or at least the kneejerk reaction algos, is focused on today's US nonfarm payrolls due out in just 2 hours (consensus expects 240K, with unemployment declining from 5.8% to 5.7%) the key event overnight came out of China, (where inflation printed at just 1.5% while PPI has imploded from -1.8% in September to -2.2% in October to -2.7% in November to a whopping -3.3% in December because as per BofA "soft domestic demand over-capacity issue have kept inflation pressures low") and Europe, after a Bloomberg report that as recently as Wednesday, ECB staff "presented policy makers with models for buying as much as 500 billion euros ($591 billion) of investment-grade assets... options included buying only AAA-rated debt or bonds rated at least BBB-, the euro-area central bank official said. Governors took no decision on the design or implementation of any package after the presentation." In other words less than two weeks before the fateful ECB meeting and Mario Draghi not only still hasn't decided on which of three public QE version he will adopt, but the ECB has reverted back to a private QE plan. Not surprisingly the EURUSD jumped back over 1.18 on the news (and USDJPY and stock markets dropped) on the news that Europe still is completely unsure how to proceed with QE despite the endless jawboning.
What's the difference between a non-voting and a voting dovish member of the Federal Reserve? About 20 S&P 500 points...
It is important to remember that the supportive underpinnings are deteriorating. Valuations are elevated, bullishness and complacency are high, and deviations are at extremes. The combination of these ingredients has never led to a profitable conclusion and expecting a different outcome this time will likely lead to excessive disappointment.
All of this makes no sense at all until you consider that ALL Central Banking actions have been focused on one thing: making sure the global bond bubble DOESN’T IMPLODE.
With QE terminated and expectations of a near-term rate hike looming, the Fed “put” is now much further out-of-the-money. More importantly, the discounting function for future cash flows is moving away from zero. In addition, as the Fed’s policy pivot is tightening the spigot of easy money, share buyback programs that have enhanced the illusion of the power of the equity market will wane. Going forward, prices will have to be supported by fundamental values rather than easy money and speculation. The upside vs. downside distribution now looks skewed to the ‘left-tail’. The Junk bond market started declining last June. The bottom line is that we expect a large equity price adjustment (down) to occur imminently.
Market Wrap: Evans' "Catastrophe" Comment Blasts Overnight Futures Into Overdrive, 10-Year Rises To 2%Submitted by Tyler Durden on 01/08/2015 06:56 -0500
After subdued trading in the overnight session until a little after 8pm Eastern, algos went into overdrive just around the time the Fed's 2015 voting member and uberdove Charlie Evans told reporters that "raising rates would be a catastrophe", hinting that the first rate hike would likely be - as usual - pushed back from market expectations of a mid-2015 liftoff cycle into 2016 or beyond (but don't blame the US, it is the "international situation's" fault), in the process punking the latest generation of Eurodollar traders yet again. Whatever the thinking, S&P futures soared on the comments and were higher by just under 20 points at last check even as Crude has failed to pick up and the 10Y is barely changed at 2.00%.
Cry if you want to, but the dollar is stronger. Deny it if you want to, but the US economy is more vibrant now than the Europe or Japan. This is what is shaping the investment climate, if you are interested.
The structure of history is held together by two essential and distinct kinds of links, two moments in time to which no one is immune: moments of epiphany, and moments of catastrophe. Sometimes, both elements intermingle at the birth of a singular epoch. Men often awaken to understanding in the midst of great crisis; and, invariably, great crises can erupt when men awaken. These are the moments when social gravity vanishes, when the kinetic glue of normalcy melts away, and we begin to see the true foundations of our world, if a foundation exists at all. That time is now...
"We’ve read a lot of silly articles since oil prices started falling about how U.S. shale plays can break-even at whatever the latest, lowest price of oil happens to be. Doesn’t anyone realize that the investment banks that do the research behind these articles have a vested interest in making people believe that the companies they’ve put billions of dollars into won’t go broke because prices have fallen? This is total propaganda."