Fathom Consulting: "There Is A Bubble In Everything Except Housing"

Presented with minimal comments, the following 'picture' from Fathom Consulting paints a thousand words of unsustainability and delusion...

h/t @Schuldensuehner

While we agree with most of the chart above's content, we note that the call on the 'housing' non-bubble all depends on which market you are looking at...

 

Of course, the charts above are merely the symptoms.

This is the cause...

Compared to the 'normalized' movement in central bank balance sheets before Lehman; the current (and utterly ridiculous) size of the G-3 central banks balance sheet is 47 standard deviations above trend!!

So where is the real 'disease' that needs to be cured? "I'm the hero of the new world" ... "No, you're the disease..."

Comments

GodHelpAmerica (not verified) Wed, 09/13/2017 - 21:48 Permalink

Know how to pop the everything bubble without crashing it all? Pop the dollar bubble first.

Manthong BandGap Wed, 09/13/2017 - 22:18 Permalink

  Well, I guess from my perspective is that even if the housing market crashes by 40%... my mortgage balance is still only 10% of the equity value and the monthly payment is less than most youngsters pay to rent a 2 bedroom apartment. ..and I still am trying to explain to the missus the only reason I keep the loan going is that it is super cheap money and every month another thousand or more goes into equity.   ..one of the benefits of being a bit older….    Butt…….. If we could fix the system and lock up the big MC bankers, the kids would have an opportunity to enjoy this kind of long term investment, too. …….and it starts at the Fed and their “owned” politicians 
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and oh... if one of you guys know a way to extend the screen life of f'ng Windows 10 without going into the registry… I would like to know it.   a good link would do....  I  have not found one yet 

In reply to by BandGap

Pool Shark evoila Thu, 09/14/2017 - 03:33 Permalink

Housing isn't in a bubble???

I call BS.
The article agrees that housing WAS in a bubble in 2007, and then shows the second to last chart where US home prices are currently HIGHER than they were in 2007.

How is that NOT A Bubble???!!!

[Oh, by the way, the current median home price to median US income ratio is AT AN ALL TIME HIGH.

Not a bubble???]

In reply to by evoila

Sick Monkey Manthong Thu, 09/14/2017 - 07:34 Permalink

The problem with your rational is there not enough discretionary to sustain at least half the business community. If you shackle the youth trying to build a base for the future your only recourse is financial which as we all know is cyclical. Now you have a devastating crash every 5-10 years. Doesn't inspire a lot of confidence. They couldn't bleed us to death by taxation so now they bleed us to death by real inflation via credit. Can work for a while but we are destroying innovation of new products and services. Basically our best minds do not have the support they need to develop real solutions to everyday hurdles like transportation and energy. Free trade is for the week minded who don't have the balls to protect what they have fought for. Don't let these feeble politicians with no fore site convince you that throwing away all intellectual property is for the good of all mankind. Smiley and popular will give a warm fuzzy feeling for about one generation then one day you find yourself wearing a grey uniform worshiping someones idiot son. 

In reply to by Manthong

ET (not verified) Wed, 09/13/2017 - 21:49 Permalink

Robert Shiller, Yale economist and author of Irrational Exuberance, has this to say.THE S&P CORELOGIC CASE-SHILLER NATIONAL HOME PRICE INDEX RISES AGAIN TO ALL TIME HIGHNEW YORK, AUGUST 29, 2017 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for June 2017 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.http://us.spindices.com/documents/indexnews/announcements/20170829-5743…

ebworthen Wed, 09/13/2017 - 21:49 Permalink

I'm not certain which is the bigger bubble, equities or housing, but since they are inextricably linked by FED and Treasury money printing and the bailing out and propping of the bank/corporation/insurer Death Star Bubble I don't think it matters.

canisdirus Wed, 09/13/2017 - 21:49 Permalink

All cities with jobs have completely detached from reality on the housing front in the US. We're talking 15-20% YoY gains for 5-6+ years now in a couple of them, where crap shacks that should be dead average for the country at like $200k go for $1.2M... When it pops (there are tons of things that could pop it, since it's all around tech and VC money), the fallout will be epic.

Dickguzinya Wed, 09/13/2017 - 22:04 Permalink

The Fed, via monetary policy, needs to contract the money supply.  This will result in less money circulating the economy, thus strengthening king dollar.  Next, hyperdeflation of assets:  i.e. housing, equities, commercial property.  When baby boomers attempt to sell their massively over valued homes, this will result in excessive supply, coupled with minimal demand, leading to a precipitous drop in value.  Taking into consideration the fact that, worldwide, economies are contracting, unemployment very high, economic growth slows.  Those that are working, won't make enough to buy housing.  Not a pretty picture.

TheMexican Wed, 09/13/2017 - 22:08 Permalink

The housing market is unaffordable in many areas for many reasons that have to do with free money. Ok it is not a bubble, what difference does it make TO THE CHILDREN when mom and dad both work and can not afford anything, have no time for them and THE CHILDREN have no future in that area.

Note from baby Johnny.
Mom and dad if you can hear me, please get out if you can because I want a future.

Bill of Rights Wed, 09/13/2017 - 22:52 Permalink

And of course housing is not a bubble, those real estate assessment valuations need to remain high after all your local City and Town depends on that revenue... or else.

El Hosel Thu, 09/14/2017 - 05:47 Permalink

You assholes wouldn't know an synchronized global recovery if it had you by the ass.... and you were brain washed..... and the Markets were rigged to reflect one for eight years... Fuck