Bubble Versus Bubble
Readers were full of questions for this weekend. “China Property bubble vs US Property bubble vs Japan Property bubble.”
One asked, “Is a QE3 taper postponement rally in the cards for the near term?”
A reply, “Put a different way, the bond market has reacted in anticipation of the punch bowl being taken away, or at least spiked with a less potent view. Will it actually happen, and what will be the consequences if it does?”
One said, “State of your hood- inventory- bidding wars , or normalization?”
And finally, “So why is the spring selling season in the fall this year?”
The Associated Press. “Banks that have largely overlooked delinquent borrowers in small housing markets are now turning their attention to the regions, leading to yet another spike in foreclosures in Eastern Oregon’s Umatilla County, say real estate agents and a housing counselor. ‘Some people haven’t made payments in a long time and the bank just hasn’t made them the priority,’ said Denise Jerome, housing solutions manager for Community Action Program for East Central Oregon.”
“Foreclosures peaked in Umatilla County in 2010 with 328, and are on the rise again in 2013, the East Oregonian reports. They have already eclipsed last year’s count, and are on pace to be the third-highest of the last decade. There are 212 active judicial foreclosures in the county.”
“‘Since the housing market has started to solidify and come back, I think the banks have decided they want to get rid of those from their inventory,’ said Lewis Key, a real estate broker for John L. Scott Oregon Real Estate in Milton-Freewater.”
From Quartz. “Ireland’s housing market remains a terrible mess. The latest numbers from the Central Bank of Ireland out today show that 12.7% of all mortgages in Ireland were 90 days or more behind on payments in the second quarter. Some analysts argue that the official statistics understate the true extent of the problem, suggesting they don’t fully capture loans that are in forbearance for instance. (That’s when banks essentially stop collecting payments.) S&P has suggested that as much as 25% of Ireland’s mortgages are in some kind of trouble.”
“Why? A host of reasons: A loophole in Irish law currently makes repossessions all but impossible. And banks claim many mortgage holders are gaming the system by simply ceasing to make their mortgage payments. ‘If someone is just not paying their mortgage then we will take a robust line,’ David Duffy, chief executive of Allied Irish Bank said earlier this month. ‘There is no rent-free option available any more.”
From Money Morning. “The Chinese obsession with all things property has led to a possible credit bubble in the shadow banking system. One of the stimulus measures touted by Beijing is the push for more urbanisation. That means moving citizens from rural areas to soak up the excessive supply in existing urban areas and to create fresh demand to justify more development.”
“The transition to consumption will take time. So the authorities have resorted to the tried and true practice of building more ’stuff.’ This is an easy way to create the jobs needed to maintain social stability and retain their power base. There is no question this formula has been successful in achieving this objective.”
“Over the past five years, the IMF estimates emerging economies (of which China is by far the largest) have accounted for three quarters of global growth. Little wonder the west is so keen for this ‘growth’ story to continue.”
“However, the economic platform China has built isn’t a stable or sustainable model for the future. At some point (and some argue this has already happened) they’ll reach saturation point – they won’t need any more train lines, shopping centres, skyscrapers etc.”
“Transitioning to a consumption based economy is a great theory but in reality it’s not easy with a rapidly aging (and relatively poor) population. Consider how much more difficult that situation would become if China experienced a hard landing from a property bubble bursting. Millions would hit the unemployment queues and take to the internet to vent their anger (similar to the Arab Spring). How do you tame 1.3 billion people?”
“The bull in China is nothing to do with a raging market. It’s everything to do with the highly massaged economic data that the gullible West accepts. The West accepts it because they don’t want to think about the alternative.”
‘As warnings continue to be sounded about the bubble in China’s housing market, real estate industry insiders are warning of another, but one that few people are aware of. That bubble has formed in the market for urban complexes in second and third- tier cities. Urban complexes are modern developments covering large areas that usually bring together residential blocks, offices, shopping malls and entertainment facilities such as cinemas and clubs.’
‘George Yeung, managing director in North China for Colliers International, said so many urban complexes have sprung up across the country that the market is almost at saturation point. ‘If bubbles in residential properties burst, people can still sell them if the sticker price is low enough, because people always need a place to live,’ Yeung said. ‘But once the commercial property market crashes, nobody is willing to rent a shop that loses money every day, when there is no customer but accumulating rental and utility fees.’
‘In Hohhot, in the Inner Mongolia autonomous region, more than 30 urban complexes are being built for an area whose population is only 3 million. The problems that those numbers present become clearer when you consider a rule of thumb in the industry: an urban complex can have a direct influence on about 300,000 residents, which means three or four complexes would be enough for a city with a population of 1 million.’
http://www.chinadaily.com.cn/business/2013-09/02/content_16936292.htm
I wonder if the Chinese are like Americans, betting all their net worth in one asset class? Real Estate, and if they think a box called ” a home” is the way to pay for retirement. I do admire people who are moderate in their financial planning. 100% in anything is right, until it is not right, then it’s plain foolish.
A few things I heard about the Chinese bubble that I thought were interesting:
1. If you want to attract a wife, you better own a home/condo/whatever. Part of the reason is all the missing girls in China (ie. infanticide, and selective abortion), which is a result of the one child policy. Makes it awfully competitive if you are a man looking for a woman.
2. It is very common for people to use their own savings, or borrow large sums from family members to buy the home/condo/whatever. Mortgages only represent approximately 15% of GDP (as of Q1 2012 - from a Milkin Institute report). Compare this to the US, which is over 80% (from the same report, which I’ll post subsequently).
3. The home ownership rate in China is higher than the US (80% or so).
In 1990 when I was 31 I figured I would be more of a hit with women if I bought a house. So I did buy a house. But I did not tell the gals I own a house for some reason. As soon as I moved in I decided it’s no big deal.
http://www.milkeninstitute.org/pdf/China-HousingMarket.pdf
The paper on the Chinese Housing Market from the Milkin Institute.
‘That bubble has formed in the market for urban complexes in second and third- tier cities. Urban complexes are modern developments covering large areas that usually bring together residential blocks, offices, shopping malls and entertainment facilities such as cinemas and clubs.’
Chinafornia has too many urban complexes? Oh my!
The myth that the Fed can indefinitely control interest rates at all durations on the yield curve is crumbling.
This short-term trend will quickly reverse once the Fed clarifies that its taper plans are on hold until next year.
Analysis: Latest bond market rout unhinges U.S. short-term yields
By Richard Leong
NEW YORK | Thu Sep 5, 2013 8:08pm EDT
(Reuters) - The punishing sell off in the U.S. Treasury market has taken a surprising turn, with yields on shorter maturities getting swept higher at a startling pace. The rise defies a widely held view that they would remain anchored at historic lows by the Federal Reserve’s pledge to keep a lid on short-term rates.
In what some see as investors second-guessing the Fed’s resolve, the 2-year Treasury note yield on Thursday jumped above 0.50 percent for the first time since June 2011.
It has risen 0.20 of a percentage point in a little more than three weeks, and is now roughly double its average level over the past year of around 0.27 percent.
The move could have broad implications for consumers and businesses. On the upside, interest rates on everything from savings accounts to money market funds that have been negligible for nearly five years could finally start to rise. At the same time, borrowing costs for short-term loans, including those between banks, would increase, potentially pinching corporate profit margins.
“The market is beginning to believe that if the Fed starts to taper (its bond purchases) in 2013 that they will likely begin to raise the Fed Funds rate by the end of the 2014,” said Tom Sowanick, co-president and chief investment officer with OmniVest Group LLC in Princeton, New Jersey.
…
“The myth that the Fed can indefinitely control interest rates at all durations on the yield curve is crumbling.”
eh heh. Just help it along…. delay consumption… don’t borrow…recruit new non-thinkers and develop into thinking people wherever possible…….. Grant to Caesar…..
Not borrowing is not thinking? You are sounding unhinged.
Avoiding debt is thinking.
How can you tell whether the Housing Bubble is over?
One way: If you do a routine Google search on the words “housing bubble” and current news stories from far-flung corners of the globe appear at a higher level of precedence than the link to the HBB, it ain’t over yet.
News for housing bubble
Shiller Warns of Housing Bubble After 225% Surge: Brazil Credit
Bloomberg - 1 day ago
Robert Shiller, who predicted the collapse of the U.S. housing market, is warning that a bubble is emerging in Brazil at a time when a sluggish …
Scotiabank CEO says rate hikes best tool to avert housing bubble
Reuters - 1 day ago
If Norway’s housing market isn’t a bubble, what is?
Quartz - 19 hours ago
We’re in this familiar phase, with the media and government asking, is it a bubble? Naaa. What you don’t hear is ‘if it’s a bubble, what will happen?’
Similarly, with the terrible jobs numbers, the question is ‘will the Fed taper?’ Not asked is, hasn’t the central bank policy to raise employment via housing failed?
It reminds me of those people in Thailand who saw the ocean draw back thousands of feet and then walked out to look at the fish flopping on the sand.
“It reminds me of those people in Thailand who saw the ocean draw back thousands of feet and then walked out to look at the fish flopping on the sand.”
Can you picture a bubble tsunami? Imagine your town suddenly engulfed in a towering wall of frenzied froth!
Bubble trouble: 50ft tsunami of foam sweeps through village after chemical spill
- Wall of bubbles sparked panic in China’s Guangdong province as it swept along a river
- Suds are thought to have been created when a chemical was swept into the river by heavy rainfall
- Officials in Xintang said the mass of foam was ‘harmless’
PUBLISHED: 08:18 EST, 29 September 2012 | UPDATED: 08:25 EST, 29 September 2012
This wall of foam sparked widespread panic among locals as it rushed along a river in southern China.
The mass of soapy suds blanketed the water in Xintang, in China’s Guangdong province, leading to evacuations along the banks of the river.
But officials have now said the only threat posed by the foam - thought to have been caused by chemicals washed into the river - was the possibility of ‘one or two dead fish’ lurking in the bubbles.
The bizarre scene is thought to have been caused after heavy rainfall washed a non-toxic chemical deodorant from a household rubbish tip into the river.
The bubbles were created when the chemical was swept over a waterfall, officials said.
A spokesman said: ‘People are right to be cautious but it is harmless. It made very large bubbles when it went over a waterfall, but apart from one or two dead fish, it is harmless.’
…
Neuromance (2013-09-06 09:48:42): What exactly was the expected result of QE, and what is the actual result? And how to explain the discrepancy?
Perhaps it might be time to re-examine the strategy?
Carl Morris: Do you mean the expected result they said they expected, or the expected result they actually expected? It may be going exactly according to plan…the real plan, that is.
The big players walked away unscathed. Enriched even. The Fed, asleep at the switch, enabling even, got yet more power. Any attempt at structural reform is pushed down the road. Reform is undermined or revealed as the trojan horse it is (i.e. QM/QRM). The currency firehose from the taxpayer to Wall Street continues unabated.
No criminal charges against anyone involved in packaging and selling fraudulent mortgages and MBS. A civil suit against Fabrice Tourre, one of the more loquacious of the FIRE mafia, so perhaps unavoidable. But no criminal charges.
So… perhaps things are actually going exactly according to plan.
As always, one must ask, “Cui Bono”?
The world is transitioning into a quite different environment. Despite desperate measure after desperate measure, a most over-extended global Bubble is convulsing erratically. The economic pie is stagnating - and on its way to contracting. This dynamic ensures an increasingly powerful pull of diverging interests, disagreement, fragmentation and confrontation.
Difficult Decisions Ahead
http://www.prudentbear.com/2013/09/difficult-decisions-ahead.html
‘Over the past year, incredible measures by the ECB, Fed and BOJ have had major effects. EM “terminal phase” Bubble excess was granted a bonus year to wreak havoc. In the U.S., stock prices inflated about 30%, as speculation went into overdrive. Throughout the U.S. corporate debt market (and only to a somewhat lesser extent globally), Bubble excesses ran wild’
He’s touching on a lot of bases that concern me. The junk bond market. Have you looked at the chart of the Indonesian stock market? Now we read of currency plunges in the BRICs. It’s entirely normal for the public to be complacent at this point. Money has been flowing for many years.
^JKSE plunged by 20% since May and is now lower than the level on the first trading day of January.
Yes, but relative to the S&P 500, I prefer buying emerging market sector, since the U.S. will have a severe stock bear market again. Wall street is very obviously pregnant. Anyone with new money to invest should mostly be putting that new money into the emerging economies sector, precious metals, and T-bills (cash).
If my choices were to invest in international developed sector or the U.S. broad markets for new money, I vote for international developed.
Someone on a blog made a good point for stacking precious metals. Bullion is not an investment, but it is insurance. However, it is better than Most insurance. You don’t get unused car insurance or health insurance back. With metals, you get it back, plus or minus a certain percentage.
Gold bulls don’t consider the nice thing about T-bills. T-bills are far better than cash. Cash under the mattress and accumulated for decades loses a great deal of purchasing power and may end up being worth what it would take to buy a new mattress! T-bills over the long haul tend to keep up with the CPI-U. IIRC, we had 3% 52 week bills within the last ten years. I d agree with gold bugs that gold does far better than cash, and better than T-bills.
‘Newly cheap currencies may soon start to boost emerging markets’ exports but for many that will only soften the bigger blow of imported inflation and the higher interest rates needed to stabilize their exchange rates. Currencies from the Indian rupee to the Brazilian real have lost 12-20 percent of their value against the dollar this year in a rout that has wiped billions of dollars off stock indices and put investors to flight right across emerging markets.’
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20130908179693
IMO this is what 14 central bank QE’s have done, all around the globe. Here’s a key part:
‘Bhanu Baweja, head of emerging debt and currency strategy at UBS, points out that US import demand - the biggest magnet for emerging manufacturers - is these days mainly in sectors that developing countries typically do not supply - heavy machinery and transport for shale gas production. Besides, the slow-burn recovery has so far brought little new spending power to the average US or European worker.’
‘Crucially though, an export-led recovery looks unlikely for countries that have been forced to tighten policy to defend their currencies because these steps are pushing up borrowing costs, potentially choking domestic credit and consumer demand.
‘Baweja notes that after the 2008 crisis, credit rather than exports became the main growth driver for many countries and this is now under threat. “As US rates rise, EM rates rise too so although exports may recover, domestic demand will slow and at the margin this second dynamic may be dominant,” he said. “It is unlikely that the strength of the export rebound will be strong enough to counter a decline in EM domestic demand.”
‘after the 2008 crisis, credit rather than exports became the main growth driver for many countries and this is now under threat’
‘while property prices are going down, the loans are becoming costlier. A tricky situation for someone planning to buy a residential property at this point. While Riten Ghosh, general manager, home loans, State Bank of India, India’s largest lender in the country, doubted that interest rates will go down immediately, he said a good buying opportunity should not be missed. We may see further correction in real estate prices.’
“It is established that we are in a freefall and in these kind of situations, developers pick up expensive debt to pay for old obligations in an attempt to avoid default,” said Sanjay Dutt, executive managing director, South Asia, Cushman and Wakefield, a real estate consulting firm. He cited similar experiences back in 2009.’
‘In these circumstances, developers welcome equity and venture capital for the first six-seven months but once these dry up, they hit the retail market. So this could be the phase when end-users will see real correction, which was not visible until now.’
http://www.hindustantimes.com/business-news/BusinessRealEstate/Wait-for-home-prices-to-correct-further/Article1-1118549.aspx
‘The most recent survey across India by the National Housing Board makes for very grim reading. It details property prices dropping in 22 key marketplaces, including all the touted bellwethers of the nation’s ‘new economy’. After a full decade of non-stop growth that seemed to have no upper limit, the country is now clearly experiencing a significant correction to its real estate market.’
‘Now the rupee is plummeting in value (it could well drop another 20-25% by the end of the year) right alongside Brazil’s real, Indonesia’s rupiah, South Africa’s rand, the Turkish lira, and dozens of other emerging market currencies…the biggest of all Indian bubbles is steadily deflating right in front of our eyes. It was always going to happen, the only question was when. Despite unceasing hype from promoters that “you can never go wrong with property,” it has long been apparent that property prices in India-and especially Goa-have long since departed from reality, when compared to per-capita income and every other crucial economic indicator.’
‘Many months ago, this column warned that rent yield was rapidly declining to levels unseen anywhere else in the world. Compared to 4.7% in the USA, and 4.5% in Japan (both countries dealing with acknowledged crisis in the sector), let alone Indonesia’s comparatively robust 9.3% and Philippines 8.6%, India’s overall yield now languishes an abysmal 2.7%. It is even worse in Goa, where apartments and villas ostensibly worth multiple crores can easily be rented for tens of thousands of rupees per month. Huge numbers of properties actually lie vacant because there are no interested renters. That’s the very definition of an unsustainable, overheated marketplace experiencing a bubble.’
‘The ridiculously outsized apartment blocks that are coming up like outstandingly ugly concrete turds in locations across the state-Dona Paula and Reis Magos in North Goa, and the “suburbs” of Margao in South Goa seem disproportionately affected-are heading straight for the same fate as similarly ill-conceived monstrosities in Noida, Gurgaon et al. In those irresponsibly overbuilt North Indian locations, prices have already declined 20% in a few months, and are entering a dangerous downward spiral.’
http://timesofindia.indiatimes.com/city/goa/Goa-property-prices-facing-turbulence-in-age-of-bubbles/articleshow/22406847.cms
‘outstandingly ugly concrete turds’
It’s interesting how the mood changes when bubbles pop.
“20% in a few months” sounds like a serious mood changer.
‘The most recent survey across India by the National Housing Board makes for very grim reading. It details property prices dropping in 22 key marketplaces, including all the touted bellwethers of the nation’s ‘new economy’. After a full decade of non-stop growth that seemed to have no upper limit, the country is now clearly experiencing a significant correction to its real estate market.’
So India’s housing bubble is deflating? Perhaps it is not too late for Indian investors to snatch up Coastal California housing as a hedge.
I see emerging market stocks languishing while developed market stocks are near all time highs. Cycles. Plan accordingly.
The mother of one of my kids friends used to work with a family of international mutual funds. In her opinion, India’s small cap market is CHEAP.
What if we, as a society, have come to a place where when once it took 100 people to feed the village, now it only takes 50? And this is the case even without relying on cheaper foreign labor because of increases in productivity due to mechanization, computers, better science and collected wisdom?
Where does that lead? Make the standard work week 20 hours instead of 40 like something out of the Jetsons so you can still keep all 100 employed? Allow the remaining 50 to be provided for on the dole?
I think some of this is dealt with by planned obsolescence and continually introducing new bells and whistles no one really wants or needs to keep the price of the computer, refrigerator, car, tv, whatever at a certain level.
While I take Darryl’s many points about trade imbalance being important, I think we’ve also reached a place where an ever smaller number of workers can provide many of the necessities now.
While I take Darryl’s many points about trade imbalance being important, I think we’ve also reached a place where an ever smaller number of workers can provide many of the necessities now.
Yes. And then…as I like to bring up…what is the more likely scenario? That we let everyone work less for the same standard of living? Or instead we use the excess productive capacity to undercut the value of everyone’s labor until the only choices left are to invent a new way to entertain the holders of the capital or starve? In the past there was always the third option to just head it into the woods and clear some land and live off it. That’s gone now…
In a situation where there are plenty of resources to provide for the masses i think there would be revolution long before any large amount of starvation.
Maybe the answer is letting everyone work less for the same standard of living. This would mean certain people’s oxes getting gored, but I just don’t think it makes sense to have the kind of society where we pay farmers not to grow food or whatever other subsidies are being used to counteract this trend such as bailouts for the auto industry. At some point productivity is so great that a pretty high standard of living can be achieved for all with just those 50/100 working. Computers to do the basic things most people want are ridiculously cheap compared to only 10 years ago. Tablets are even cheaper. Flat screen tvs almost as big as your wall, again pretty cheap and getting cheaper. Free wifi in a ton of places and growing rapidly. Where does it end once most of the basic necessities are covered? Maybe we are already there if the inefficiencies and make work and misguided regulatory burdens and requirements are stripped out.
Can planned obsolescence, new bells and whistles, ponzi scheme economy we have going now continue forever convincing people they need more and more and “better” and “better” when the average person on some level now lives better than emperors did a hundred years ago?
At some point productivity is so great that a pretty high standard of living can be achieved for all with just those 50/100 working.
But will we allow everyone to have a high standard of living without working? Or will the system try to enslave them instead? All in the name of not giving anybody a free ride…
They would be working, just working less. If you knew that changing to a 30 hour work week would produce more jobs and cause those now on the dole to become working people would you go for it?
If you knew that changing to a 30 hour work week would produce more jobs and cause those now on the dole to become working people would you go for it?
Sure, *I* would. I just question whether those in power would. The instinct to enslave is strong.
All in the name of not giving anybody a free ride…
Like an Obamaphone or a SNAP card. Makes the cuckoos support the .01%ers, it upsets them so.
Maybe we could get some reasonable vacation time too, like the rest of the world. So we could, you know, enjoy life a little.
I know the puritans won’t like it…
The thing you miss is that it leaves the other 50 with the time to come up with other forms of products
In computer programing, I remember how visual programming was supposed to put software developers out of work. Well that it’d not happen. It freed software developers to come up with interesting worthwhile software instead of focusing on widgets, callbacks, threads, timers, and components.
Sometimes at this point I write small Programs for client/server applications. Other times I don’t program but come up with implementation schemes about how to upgrade a Linux kernel and keep the integrity to be sure the update is not tampered. That is my current task, in fact.
Maybe some can come up with new fun things and products. But I don’t think most of them can or even have that kind of entrepreneurial spirit. But before where there would have been more jobs available, now there will be fewer and fewer. I don’t think your average American is the type to only eat what they kill. Certainly not now.
And beyond more jobs creating more and more ways to entertain ourselves through games and media and tv and websites and blogs and apps and the like, I’m talking about our ability as a society to now provide for the basic needs of the masses with fewer and fewer workers. Most of those trying to make some scratch providing content (and there are millions of them across all topic areas) are making little or nothing and producing garbage. Even so, that entertainment space seems pretty full. There are thousands of books, games, apps, blogs, movies, tv shows, music, Shakespeare lectures, etc., etc. Enough entertaining material to last your average person many lifetimes already right now.
I want to see innovation and new artists producing new things, but I don’t think this can ever be more than a smallish fraction of our economy.
Point taken. Tell me. Did you hear of the Internet before 1993? What was your life like before the web browser? Mine was radically different for sure. My home computer was mostly a toy. Yes I could do bulletin boards like back in the 80s in college, but web browsing was confined to text. Millions of new jobs were created because of people like Bill Gates, Steve Jobs, and Steve Wozniak, plus Mark Andreeson (original Mosaic/Netscape guru).
‘A controversial return to 95 per cent mortgages – levels last seen before the credit crunch – has been defended by Lloyds Banking Group chief Antonio Horta-Osorio. Lloyds is regarded as the most influential lender as it supplies a quarter of all mortgages in the UK. The bank, which is 38 per cent owned by the Government after being bailed out by the taxpayer at the start of the financial crisis in 2008, is also a strong supporter of the Help to Buy scheme. This is aimed at first-time buyers, but is available to anyone buying a property worth up to £600,000.’
‘Help to Buy is currently only for purchasers of new homes. From January buyers will be able to get a Government guarantee for part of their home loans for purchases of all homes.’
http://www.thisismoney.co.uk/money/markets/article-2414970/Were-happy-offer-95-mortgages—wont-housing-bubble-Lloyds-chief-shrugs-fears-return-pre-credit-crunch-style-loans.html
“I think, given that this market anomaly is just a temporary problem, it makes sense to have a temporary scheme,’ he said”
The papers and journals are all memorializing the 5th year anniversary of the banking crisis. Five years is an awfully long temporary problem, especially when the path to normality can not be distinguished. Denial of this is quite strong in Europe, and it may be another five years before the political and administrative class admits and accepts that the new normal has been here all along.
Interesting mention of the title problem in Ireland. Just like in the states the banks do not have the capacity to manage or even know much about the repossessed collateral. The same banks then decline to lend money secured by such dubious collateral.
The EU banking system also works a bit differently than the US, as the ECB controlls the money supply rather than the fed reserve banks. Thus you do not have such a flexible system as you get with American fractional reserve lending. The distance between collateral being questionable and undeniable insolvency for the banks is a good bit shorter. Here, the banks don’t believe their own mortgages are any good, but don’t dare admit it.
“The same banks then decline to lend money secured by such dubious collateral.”
It’s a nick-nack Patty Wack give the frog a loan.
as the ECB controlls the money supply rather than the fed reserve banks. Thus you do not have such a flexible system as you get with American fractional reserve lending.
One central bank or another central bank—what is the difference, really?
Can you elaborate? I didn’t get your point at all.
Can you elaborate? I didn’t get your point at all.
I assume Greece would be an example. What might be good for them might not be so good for other countries in Europe that run the ECB. So Greece can’t do what it would do if it had its own CB (ie print money). They’re chained to a CB that puts other countries’ interests before theirs.
‘The IMF has told Norway to act to deflate its housing bubble, which it warns is the second biggest in the world after Canada. In its latest report on the oil-rich Nordic country, the fund estimates that property prices are as much as 40 percent overvalued, up from 15 percent over-valued in 2011.’
http://www.thelocal.no/20130906/norway-has-worlds-second-biggest-housing-bubble–imf#disqus_thread
The comments:
‘They’re not kidding about us in Canada. A tiny townhome that went for 170,000 CAD now goes for over 300,000. Meanwhile, real wages have barely kept up with increases in food and fuel.’
‘It’s interesting to see politicians doing their job instead of waiting for the inevitable collapse.’
‘It’s interesting to see politicians doing their job instead of waiting for the inevitable collapse.’
The problem is that politicians’ personal interests are often aligned more with their big contributors than with their constituents.
The problem is that politicians’ personal interests are often aligned more with their big contributors than with their constituents.
Their constituents are watching their home equity go up. They’ll punish anyone that attempts to stop it.
‘The IMF has told Norway to act to deflate its housing bubble, which it warns is the second biggest in the world after Canada.’
Meanwhile Canada’s bubble keeps growing and growing…
Judging by the number of for sale signs I saw in Victoria a few months back, it’s not growing any more.
Canada is falling. The media is doing everything it can to cover that up.
How did the media become an equal partner in Realtor® lies and deceptions?
Check out the top line in both of the following data tables from the Bank of Canada.
Latest household credit numbers in Canada to the end of July 2013
http://credit.bankofcanada.ca/householdcredit
Latest business credit numbers in Canada to the end of July 2013
http://credit.bankofcanada.ca/businesscredit
The total government (federal, provincial, and municipal), business, and household debt numbers for Canada (to the end of June 2013) are going to be released next week. If no one else posts these numbers I will do so next weekend.
A Depression-era program intended to save the nation’s farmers from ruin has grown into a 21st-century crutch enabling affluent growers and financial institutions to thrive at U.S. taxpayer expense
http://www.businessweek.com/news/2013-09-08/taxpayers-turning-u-dot-s-dot-farmers-into-fat-cats-with-crop-subsidies
Our friends to the North have a serious housing bubble, I agree with Ben. Real estates, media, banks you name it haven’t come to terms with it.
The days of being on cable network Homes International and buying and selling overpriced property is history.