January 26, 2016

Over-Reliance Upon One Asset Does Not Make It Immune

Investors Business Daily reports on China. “China’s capital outflows jumped in December, with the estimated 2015 total reaching $1 trillion, underscoring the scale of the battle facing policymakers trying to hold up the yuan amid slower economic growth and slumping stocks. ‘The immediate trigger for a pickup in capital outflows toward the end of the year was the People’s Bank of China’s poor communication over its shift in currency policy,’ said Mark Williams, chief Asia economist for Capital Economics Ltd. in London, who previously worked on China issues at the U.K. Treasury. ‘Outflows are likely to remain strong because the People’s Bank still has not been able to generate confidence among investors that it knows what it’s doing or that it’s able to achieve its policy objectives.’”

Stuff in New Zealand. “Crashing stockmarkets and a crackdown on cash leaving China could disrupt plans for development and investment in New Zealand. Economist Shamubeel Eaqub said the outflow of foreign investment from China was ‘massive’ in 2015, but new rules and regulations would rein it in. ‘They’ve really tightened up in terms of letting money leave the country,’ he said.”

“The impact is already being felt. Late last year, Chinese investor He Run International pulled the plug on a proposed $80 million dairy factory development in Otorohanga. Minority local shareholders were told the plan fell over due to the stock market crash in China, and restrictions on withdrawing funds. ‘We suspect the funding issue was the biggest issue because of what is occurring in China with the stock exchange and the flow of money out of China. It is nearly impossible to get any funds out to do what they wanted to do here in New Zealand,’ local investor David Carey said.”

“Massey University’s Yuanfei Kang, a senior lecturer in the School of Management, said the extent of any capital restrictions would be linked to the fortunes of China’s economy. ‘If the economic situation becomes worse, further measures will be taken,’ Kang said.”

The Singapore Business Review. “The supply glut won’t ease anytime soon. Developers will have to grapple with an intense oversupply of new homes over the next three years, according to a report by Maybank Kim Eng. ‘Together with the net increase in executive condominiums (ECs) and public housing, we forecast an annual net increase of 41,400 homes for the next three years. This is double the 21,800 in the past decade,’ Maybank Kim Eng said.”

The Strait Times on Australia. “Australia’s surging property prices have led to spiralling mortgages and left the nation’s households ranked as the most indebted in the world, prompting concerns that the market is in a bubble. Most analysts are forecasting a ‘cooling off’ period, saying the nation’s 15-year run of soaring home prices will finally end due to stagnant rental yields and low affordability. An expert on Australia’s real estate economics, Dr Nigel Stapledon from the University of New South Wales, said the market appeared to have finally peaked last year and had begun to slow.”

“Dr Stapledon said a lot of apartment blocks are due to be completed and come onto the market in Sydney and Melbourne this year and in 2017, which will significantly add to supply. Also, he said, the end of Australia’s mining boom has dampened the economy and slowed immigration growth, which has affected demand for housing and rentals. ‘I don’t think policymakers have any reason to stop a reversal,’ Dr Stapledon said. ‘State governments should continue to re-zone and open up land for housing. What is the problem with prices dropping? If houses lose a chunk of their recent gains, it is a good thing.’”

The Peninsula Qatar. “Qatar’s real estate prices softened a bit during the final quarter of 2015 compared to the previous quarter, after hitting a record peak in November 2015. ‘These are interesting times for Qatar,’ said DTZ Qatar’s new Residential Agency Head, Bashir Jama. ‘On one hand, developers have tended to be drawn towards the upper and prime housing sector, whereas the real opportunity presents itself in the demand/supply gap in the lower end of the housing market. The difficulty is the price of land; developers focus on the higher end markets as the high-end market is perceived to provide higher returns.’”

From Letting Agent Today in the UK. “Typical rents in Scotland are down from £757 per month to £747 according to Citylets - just as the Private Housing (Tenancies) (Scotland) Bill is being considered, with a provision for rent caps. Average rents in Aberdeen have fallen 15.9 per cent over the last year, largely because of oil price falls dragging down the local economy. ‘We generally report on what we have seen but it isn’t hard to foresee annual growth for Scotland tending towards zero later in 2016. Aberdeen has further to fall’ warns Citylets founder Thomas Ashdown.”

The Western Morning News. “It is interesting how the Brits’ fascination with property has evolved over time. At present prices, UK residential property is now ‘worth’ about £5trillion (£5,000 billion) and about 65% is owner occupied. Commercial property, all those shops, factories, offices, plant is ‘only’ £400billion. The London Stock Exchange, which includes multinational giants with most of their assets and income overseas, is only worth £2.25trillion. British Government Bonds are £1.5trillion. There is approximately £700billion of cash on deposits held by individuals.”

“It is interesting how something in which we live – and costing us considerable upkeep – has become so significant in terms of our societal structure. I am very alarmed at the excessive price levels of the average ‘home’ but our governments must be concerned that so much of our economics are impacted by what is happening in housing – and the confidence of those who own it. We should all never forget that over-reliance upon one economic asset, a simple box in which to live, however pretty or comfortable, does not make it immune from irrational excess and frankly, the figures are all out of kilter regardless of the lack of enough new homes being built and the insatiable demand for them – apparently (but never forget that all the people here at the moment do have somewhere to live).”

“However, in reality, the order of asset values should perhaps be: stock market (the base of all our commerce), residential property, commercial property, government bonds. You can see the model requires some considerable re-balancing but perhaps a doubling of the stockmarket is more unlikely than a halving of the value of homes (though the latter would still constitute significant ‘value’ though I shouldn’t wish even to countenance what that would mean for the economy and bad debts). Sadly though, this may be the necessary adjustment required to return to ‘normality’ so watch-out as each could indeed arise.”

“Yes, indeed, what we think we know – and like – is property, so do I. However, that leads to excessive emotional dependence upon a judgement where we don’t ever want to be wrong and of course, we live in one too and feel snug about the thought of making money whilst we sleep as these things always go up, don’t they.”

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Comment by Ben Jones
2016-01-26 04:07:55

I saw this at a Financial Times article:

‘Perhaps most of all, many investors now fret that they are operating without a safety net they had grown attached to during the post-financial crisis era.’

Comment by Ben Jones
2016-01-26 04:15:45

‘the People’s Bank still has not been able to generate confidence among investors that it knows what it’s doing’

That’s because they are dummies.

‘With China’s housing market in disarray in 2014, authorities invited investors to shift their capital to the sharemarket and then took a series of steps to facilitate high returns. When the market started to nose-dive last northern summer, officials wouldn’t let the bubble that had inevitably formed burst fully. Instead they suspended trading for some companies, mopped up shares, ordered large shareholders not to sell and accused market analysts of spreading false rumours.’

‘Regulators were at it again earlier in January, delaying the trading of stocks that had been frozen since last northern summer and even declaring suddenly that the market would halt trading temporarily if the Shanghai index rose or fell 5 per cent. All this did was to give investors just enough time to hit the sell button when markets restarted. About four days after it was started, this tool was abandoned without apology. Some investors have lost their shirts, but no regulators have lost their jobs.’

‘China’s currency missteps have been equally maddening…’

‘Based on my interviews, Chinese officials believe these steps are preserving economic stability and facilitating gradual change, while investors who see policies change constantly with little apparent rationale have had their confidence in officials’ ability badly shaken.’

These are bloated bureaucrat communists who never had a job and never had to make anything work. It was all globalist apple pie handed to them because they held the yolk on a billion poor workers. Now everybody is wondering why they are dummies.

Comment by Ben Jones
2016-01-26 04:24:27

It’s funny to watch it dawn on people:

‘Matt O’Brien: As growth slows, China is digging itself an even bigger hole’

‘China has forgotten the first law of holes. It’s in one, but it’s still digging.’

‘Specifically, China is adding debt at a pretty fast pace even though it’s already done too much of that the last seven years. And it’s doing it even though the economy is slowing - on Tuesday, the country reported that its economy expanded at 6.9 percent in 2015, the slowest pace in a quarter century.’

‘Despite that slow growth - which many analysts say actually is better than the reality - new borrowing has climbed to its highest level in six months.’

‘Now wait a minute. Why is China racking up so much debt? Well, the simple story is that Beijing has tried to replace all the foreign customers it lost during the financial crisis with even more spending on roads, buildings and other infrastructure until Chinese customers are ready to take their place.’

‘But that last part is a lot trickier than it sounds.’

‘It means building a stronger safety net so people feel like they can spend. And letting zombie companies go out of business so there’s room for actually successful ones that can afford to pay workers more….’

And on it goes. Why, why! They are dumb. Terrible investors. Superstitious, frivolous. Greedy and lazy. Fearful of hard choices, unless it’s killing somebody or making them disappear.

Just who exactly does the media think we are dealing with when it comes to the Chinese government? Why are their rich people so afraid and stampeding to get out?

Comment by In Colorado
2016-01-26 08:58:28

Why are their rich people so afraid and stampeding to get out?

The proverbial canary in the coal mine. When $1Trillion is fleeing a supposedly growing economy, you know that something is very wrong and that official economic stats are worthless.

It will be interesting to see if the anticipated crowds show up to spend western style in Shanghai Disneyland when it opens later this year.

Comment by taxpayers
2016-01-26 09:50:33

Case shiller has denver prices now above 06 peak

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Comment by Puggs
2016-01-26 10:42:38


Comment by In Colorado
2016-01-26 10:47:20

Case shiller has denver prices now above 06 peak

I believe it, my coworkers are giddy over their “equity”.

Comment by Mafia Blocks
2016-01-26 11:47:43

Are you sure?

Denver, CO Housing Prices Crater 5% YoY


Comment by snake charmer
2016-01-26 15:06:21

No joke, a Hunger Games-themed theme park is planned for China. Also Atlanta. Wouldn’t that seem to contradict one of the messages of the books and films? Resistance against totalitarian government, and independence from manipulated mass entertainment spectacle, now just two more revolutionary ideas that must be commoditized. May the odds be ever in your favor, especially if you buy an annual pass.


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Comment by azdude
2016-01-26 09:00:06

Just think if china’s currency was the same value as ours. Would they be able to sell all that stuff so cheap at walmart and the dollar store?

They kept the yuan undervalued and printed yuan to make up the difference in the currency values.

So essentially the inflation was exported over there.

It has caught up to them.

Comment by Puggs
2016-01-26 12:45:29

Goodbye Ant. Well, hello Grasshopper.

Comment by Professor Bear
2016-01-26 07:42:49

Isn’t the inevitability of yuan devaluation a big driver of capital flight?

Comment by Ben Jones
2016-01-26 04:28:36

‘ADO Den Haag is facing financial difficulties because Chinese owner Hui Wang still has not transferred any money to the club.’

‘Tom de Bruijn, alderman of finances in The Hague, fears that the club will soon not be able to pay salaries. “If there isn’t a solution soon, the club will have problems with paying salaries in February already”, the alderman said to newspaper AD after a shareholders meeting at the Kyocera Stadium about the club’s financial trouble on Wednesday. Wang was not at the meeting.’

‘The financial difficulties are largely due to the club still waiting for a 3.7 million euro payment from United Vansen, Wang’s company. Wang promised to pay over 1.9 million euros of that money. But because this hasn’t happened yet, ADO is facing a liquidity deficit of 1.3 million euros and the club may be placed under strict KNVB supervision in Category 1.’

“Category 1 is inevitable”, Jan Willem Wigt, general director of ADO, said to VI. “Only if Wang still comes with an investment or we come up with a suitable solution ourselves, there will be a safety net to accelerate the step back to category 2. We are working on various solutions and it looks positive.”

‘Wigt is hopeful that they will be able to discuss the matter with Wang soon. “Wang opted out of today’s meeting. He invited us to come to China, which is definitely being discussed. There are also rumors that he will come to Europe next week, so that can already be a solution.”

All these “businessmen” have been disappearing. Where did he go? Who will run the company, where is the money?

A real mickey mouse operation here Dan.

Comment by Ben Jones
2016-01-26 06:11:01

‘ADO Den Haag is 110-year old club from the Dutch heartland playing in the top flight Eredivisie. Early in 2014 Wang Hui arrived in The Hague with the promise of turning the club into a new powerhouse…but 18 months after Wang’s installation at the helm little support remains for the Chinese.’

‘new player arrivals have dried up and Wang has failed to meet several deadlines for promised payments. Wang, who owns marketing company United Vansen International Sports which helped organise the closing ceremony of the 2008 Beijing Olympics, didn’t invest a projected €3.7 million in September. He then failed to raise the money again in both November and December.’

“The club thinks in a very simple way, ‘You’ve said you will invest, so you should invest,’ ” continued Wang. “But they are intervening the boss’s decision-making process. You can offer suggestions. But now the circumstances are different, and I need to adjust my strategy.”

‘The financial problems at ADO are acute with an imminent danger of unpaid salaries by the end of February. The Dutch FA KNVB has threatened to put ADO into administration if the club can’t bridge €1.3 million in debts soon. Last week Wang didn’t attend a shareholders meeting, claiming that he was too busy.’

‘Wang remains unperturbed in the face of a possible liquidity crisis.’

Everybody together: stamp your little feet!

Comment by snake charmer
2016-01-26 08:04:03

Cue the square dancers! Doing one of the twelve state-approved dance routines of course.

Comment by The Central Scrutinizer
2016-01-26 17:58:53

I guess they got ‘Wanged’

Comment by Ben Jones
2016-01-26 04:34:33

‘It’s a good news to be a tenant with rental rates hitting record low growth as new housing and stock comes online. Rental growth across Australia was lacklustre at best in the past year, rising just 0.3 per cent. End of year figures reveal a 50/50 split among capital cities, between those in positive and negative territory, according to the latest CoreLogic RP Data Rent Review.’

‘Brisbane was one of those to hit negative territory with rents down 0.3 per cent on the same time last year. ‘Not exactly the news investors are looking to read about but good news for those looking to rent,’ CoreLogic RP Data research analyst Cameron Kusher said. ‘We’ve never seen rental growth as sluggish as it is at the moment. Furthermore, we’re expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates.’

‘The good news for those looking to rent is the possibility that rental rates will fall even further over the coming year. “The large pipeline of residential construction activity and recent high levels of investment demand means that renters are likely to continue to have plenty of choice,” he said.’

‘We’ve never seen rental growth as sluggish as it is at the moment’

Well Cameron, I’d say you haven’t been around very long. Oh, what a 15 year boom will do to the memory.

Comment by taxpayers
2016-01-26 04:40:30

Weirdly ,inventory has dropped in my hood

Comment by Jingle Male
2016-01-26 05:10:18

Lower inventory is happening in many areas. Sacramento and Phoenix have joined the list.

Comment by Mafia Blocks
2016-01-26 05:54:30

Lower inventory is prices are happening in many areas. Sacramento and Phoenix have joined the list.

Fixed for you Jingle_Fraud.

Comment by Ben Jones
2016-01-26 04:59:54

‘Death and Heirs: A View from the San Francisco Housing Market’

‘Listed for $338,000, at that moment the lowest price in the city, the house was called a “contractor’s special;” two of its three bedrooms were qualified on the listing agent’s half-assed flier as “legality unknown.” When we went to the open house, the same agent eyed my eight-months-pregnant stomach and advised me to cover my mouth and nose before stepping inside.’

‘We punched numbers into questionable online mortgage calculators and began touring open houses. Houses that listed for $279,000 and sold for $365,000 (East Oakland). Houses that listed for $365,000 and sold for $500,000 (West Oakland). Houses that listed for $499,000 and sold for $700,000 (San Francisco, barely). And these were the low, low prices of 2014. Median home prices reached $1.3 million at the end of last year.’

Check out the photos and the comments.

Comment by Jingle Male
2016-01-26 05:12:10

There is no point in looking to buy housing in San Francisco unless you have funny money stock options.

Comment by Ben Jones
2016-01-26 06:01:50

‘With Fidelity marking down the value of its Snapchat stake by 25 percent and mobile-payments provider Square floating below previous valuations, the investor chill surrounding U.S. technology companies isn’t exactly a secret.’

‘And yet, despite its volatile stock market, China seems to keep churning out tech stars, at least if you believe the headlines. Look more closely, and in fact winter is beginning to descend on Chinese startups as well, with bankers saying that fundraising has become tough as investors cross-examine them on heady valuations.’

‘Data from KPMG shows that even as fundraising in China reached a record last year, investor interest had begun tapering off by the fourth quarter. Just like their North American counterparts, Chinese startups have seen a drop in venture capital enthusiasm.’

‘Look at Beijing-based Yirendai, the first Chinese fintech company to go public. After selling shares at $10 apiece, it made its New York debut on Dec. 18. The stock closed that day at $9.50 and on Monday at $7.00. Ouch.’

Comment by Ben Jones
2016-01-26 06:05:38

‘Despite a rip-roaring 2015, something peculiar happened this month: Apple’s stock value dropped to below $100 for the first time since October 2014. That was down from a high of just over $132 last May.’

‘The reliance on the iPhone is what worries investors most. But it’s now seeing a plateau when it comes to bringing in new customers. Which is why China is so important. Apple now makes more money in China than it does in the whole of Europe, and it’s well on course to overtake the US.’

“If China falls so does Apple,” says Apple investor Daniel Ives, from FBR Capital Markets.’

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Comment by Professor Bear
2016-01-26 07:45:24

Expatriated Chinese cash will do.

Comment by In Colorado
2016-01-26 09:03:56

Expatriated Chinese cash will do.

The $1T fleeing China has to go somewhere.

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Comment by rj chicago
2016-01-26 09:10:16

Ben -
You catch an article on Dr. Housing Bubble last week about a burnt out crap shack in SF that is literally a tear down - think it sold for over 600k. Advertised as a contractor tear down -
What the F is going on out there?

Comment by The Central Scrutinizer
2016-01-26 18:02:07

Thousands of people with 200k incomes for sitting in a chair pushing plastic buttons, that think this will last for 30 years.

Comment by rms
2016-01-27 03:04:08


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Comment by Bluto
2016-01-26 12:32:59

Thanks, a very good article on the current madness in San Francisco. FWIW moved out of my native S.F. 20 years ago largely due to housing costs, at that time rental prices were not too bad but buying was out of the question for me with a middle class income. S.F. has not always been this way, as a kid growing up there in the ’60’s and 70’s life was about like what she alludes to in the Beverly Cleary books, many neighborhoods were middle class or blue collar and buying or renting was generally affordable if you had a decent job.

Comment by In Colorado
2016-01-26 13:01:49

many neighborhoods were middle class or blue collar and buying or renting was generally affordable if you had a decent job

It was probably more affordable than most podunk towns in flyover are these days.

Comment by rms
2016-01-27 03:03:00

“Check out the photos and the comments.”

So many educated people, yet none understand why prices are so high.

Comment by Ben Jones
2016-01-26 05:02:34

I read yesterday 2,800 was a critical support:

Shanghai Composite Index



-188.73 -6.42%


Comment by Jingle Male
2016-01-26 05:13:21

Let the meltdown begin…..continue? Accelerate?

Comment by Ben Jones
2016-01-26 05:49:11

‘China’s fickle stock markets have now slumped about 22 percent so far this year on concerns about the slowing economy and confusion over the central bank’s foreign exchange policy.’

‘Many investors have lost the stomach for the market after a wild ride since last summer, when shares crashed 40 percent. Beijing intervened to stem that rout and orchestrate a recovery of sorts, but anyone who mistook that for a bottom and bought in will have lost their shirt again in January.’

“We’ve seen another stampede driven by panic,” said Yang Hai, analyst at Kaiyuan Securities. “There’s no good news in sight,while investors are being affected by the global ‘risk-off’ mood.”

‘The slump has triggered a lot of forced liquidation, he added.’

‘Indeed, China’s outstanding margin loans - money investors borrow to buy stocks - declined for 16 consecutive sessions to Jan. 22, the longest losing streak on record, with 209 billion yuan ($32 billion) worth of leveraged bets unwound during the period.’

Second time in two days I’ve seen these words:

‘forced liquidation’

Comment by Ben Jones
2016-01-26 05:54:09

‘It was the first time the SCI had fallen below 2,750 since late 2014, early in the boom that briefly took it above 5,000 points last June, before it fell back sharply. Some analysts said worries that China might increase tax on oil-related products had added to market anxieties. The fall came in spite of a major injection of funds into the markets by China’s central bank on Tuesday.’

‘Analysts at Guojin Securities, meanwhile, said sentiment had been affected by a recent scandal at the Beijing branch of Agricultural Bank of China, in which 3.9 billion yuan (more than $590 million) in acceptance bills went missing from the bank’s coffers.’

‘The apparent suicide of an official from Changjiang Securities, who was reported to have been under investigation, may also have added to worries about the impact of an official crackdown on corruption in the market, according to Shanghai-based news website The Paper.’

On this:

‘more than $590 million in acceptance bills went missing from the bank’s coffers’

Do you know what they replaced it with? Newspaper. Then they took the money and lost it in the stock market. They were hoping to win big and put the notes back afterward.

Comment by Ben Jones
2016-01-26 05:56:46

‘In the afternoon, however, the selloff gathered pace and became more panic-driven as signs grew that authorities weren’t planning to use state-backed funds—dubbed the “national team”—to prop up the market as they had done several times last year, according to Zhang Xin, an analyst at Guotai Junan Securities.’

‘The Shanghai stock market has completely wiped out its surge in the first half of 2015 after shares Tuesday plunged to their lowest level in more than a year. Shanghai stocks have lost nearly half their value since last summer, reversing a sharp rise that had been fueled by Chinese investors who, with government encouragement, piled up debt to buy shares.’

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Comment by Professor Bear
2016-01-26 07:50:00

‘The apparent suicide of an official from Changjiang Securities, who was reported to have been under investigation, may also have added to worries about the impact of an official crackdown on corruption in the market, according to Shanghai-based news website The Paper.’

I thought it was illegal to report on suicides related to the Chinese stock market meltdown?

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Comment by Professor Bear
2016-01-26 07:47:27

Oh bugger…

Comment by Ben Jones
2016-01-26 05:07:25

‘The rampant real estate market has presented a golden opportunity for criminals to launder millions of dollars in drug money in Australia over the past 12 months, according to police. Evidence of criminal cash entering the already inflated local housing market has emerged as the federal government considers imposing tighter regulations to prevent properties being bought with the proceeds of crime.’

‘A report by the NSW Crime Commission found criminal gangs have exploited the property market as surging prices increased demand for funds into Australia. “This has provided greater opportunities for organised crime syndicates to launder millions of dollars,” the Commission found.’

‘The flow of money out of Australia to settle drug transactions and the use of so-called “remittance agents”, who facilitate the movements, have entangled legitimate offshore investors in money laundering schemes. The Commission used the example of an “individual of significant wealth” based overseas who recently bought into the Sydney real estate market.’

‘The man transferred his own funds outside the mainstream banking sector to take advantage of better exchange rates offered by remittance agents. But the funds stayed in his country and a deal brokered between agents meant the money that purchased his new home was drug money made in Australia but used to settle a debt overseas.’

“The Commission suspected that the funds deposited into the Australian bank accounts were proceeds of drug sales. The deposits were characterised as cash, with most below the reporting limit, and were made by various individuals within Australia. The owner of the funds was implicated unwittingly in money laundering through the transfer of funds for a legitimate property transaction in Australia,” the Commission found.’

“It is likely that this is not an isolated incident and that the transfer of legitimate off-shore funds to Australia presents a very low risk opportunity for organised crime to launder drug proceeds within Australia.”

‘Federal authorities are considering extending anti-money laundering requirements that already cover banking, remittance and gaming to real estate agents, lawyers, accountants and precious stones dealers. Consideration of stricter rules follows a scathing report by the Paris-based Financial Action Task Force last year as the money pouring into Australian property and gems from China set new records.’

Comment by snake charmer
2016-01-26 08:23:38

This is the second time this week you’ve reported on a situation where real estate enjoys an exemption from anti-money laundering regulations. What a lobby they’ve got.

The number of attorneys and accountants involved in these transactions, by the way, has to be dismaying.

The West decided to suspend the rule of law, and cater to financial criminals, as a way out of the Great Recession. It was one poor choice out of many.

Comment by In Colorado
2016-01-26 13:03:35

‘A report by the NSW Crime Commission found criminal gangs have exploited the property market as surging prices increased demand for funds into Australia. “This has provided greater opportunities for organised crime syndicates to launder millions of dollars,” the Commission found.’

If it keeps the prices up, what’s the problem? ;-)

Comment by Jingle Male
2016-01-26 05:07:44

‘I don’t think policymakers have any reason to stop a reversal,’ Dr Stapledon said. ‘State governments should continue to re-zone and open up land for housing. What is the problem with prices dropping? If houses lose a chunk of their recent gains, it is a good thing.’”

Did HA move to Australia and get his doctorate?

Comment by Ben Jones
2016-01-26 05:10:05

Beyond a doubt, home prices are falling.

Comment by Jingle Male
2016-01-26 05:29:12

I have heard reports that housing in China is 25% vacant. Can we fund a HA junket (pun intended) to China so he can investigate!!!

“When developers climb on the bandwagon to lower prices, homes in the secondary market will come under even greater pressure….”.

More fun to come as the home owner eventually learns he is the last hold out in a declining market!

Comment by Mafia Blocks
2016-01-26 05:34:59

Houses depreciate Jingle_Fraud. Even your run down underwater shanties.

Sacramento, CA Housing Prices Crater 7% YoY


Comment by Double Flip Triple Gainer
2016-01-26 07:17:36

Copper back over $2. I get the sense Apple will report a massive earnings beat this afternoon and the market will get miracle rally #3245. Move will be further bolstered by a fairly dovish fed tomorrow. Perhaps this will be the last big bounce, but it almost seems inevitable to me.

Comment by Professor Bear
2016-01-26 07:53:31

Given that everyone expects a panicked, dovish Fed tomorrow, isn’t liftoff postponement already priced in?

Comment by Double Flip Triple Gainer
2016-01-26 07:57:42

According to the fed funds futures, yes. But when you have this kind of volatility, a little sentiment can still go a long way.

Comment by azdude
2016-01-26 08:56:09

yesterday some big wig money changer was saying yellen was to hawkish.

I wish me could get a clear picture so I could put a value on something.

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Comment by Double Flip Triple Gainer
2016-01-26 11:40:25

S&P testing the 1907 resistance. Very interesting to see if it holds. If it gets through there it’s 15 points higher to an old gap that has to be filled, and 45 or so points higher to some old highs. If forced to guess, this thing is going to 1950 in fairly short order, but I leave that up to the ‘professionals.’

Comment by rj chicago
Comment by Ben Jones
2016-01-26 09:26:13

When I posted the source article (Bloomberg) the other day I asked if the sad pandas were sadder about lower income people being thrown under the bus:

“Last year’s decision to lower premiums was designed to open the door to those previously priced out of homeownership,” HUD Secretary Julian Castro said’

Note the lift off January 2015, just when most markets were rolling over. Now who appointed Castro? Who appointed Mel Watts and Janet Yellen?

Comment by Puggs
2016-01-26 10:39:34

Seems about right though.

Aren’t we coming up to the seven year mark when a lot of these sub-primies started going belly up? Rinse and repeat.

I would NOT want to take on a 30 year mtg after the age of 40. Ouch!

Comment by Mafia Blocks
2016-01-26 09:34:53

ZH is a bit late with the news considering FHA’s 3% DP mortgages have been the bulk of mortgages since 2009. Remember….. 3% down payment mortgages are the definition of sub prime.

“3% Downpayment FHA Loans Surge As Subprime Buyers Are Back In The Housing Market”


Comment by Mafia Blocks
2016-01-26 10:19:00

San Jose, CA Housing Prices Crater 8% YoY


Comment by Senior Housing Analyst
2016-01-26 10:40:16

Los Angeles, CA Real Estate and Homes for Sale- 23,690 properties found


Los Angeles, CA Price Reduced Homes for Sale- 6,413 properties found


27% of Los Angeles area sellers reduced their price at least once

Comment by Puggs
2016-01-26 12:43:54

The fun really begins when they get rolled back to 2012…

Comment by Double Flip Triple Gainer
2016-01-26 14:50:55

Over the past decade, Apple has tended to blow out earnings and revenue expectations. Well, they just came up short on both revenue and iPhone shipments.
Paging ADan…how come the Chinese aren’t buying their iPhones??? My guess? Houtui…it’s Mandarin for recession.

Comment by Mafia Blocks
2016-01-26 15:29:34

Hello $15/bbl oil.

“Crude Plunges After API Reports Biggest Inventory Build Since 1996″


Comment by azdude
2016-01-26 18:46:36

Will never happen GARTMAN.

Comment by Mafia Blocks
2016-01-26 19:26:22

Falling prices Poet. Falling prices.

Comment by Mafia Blocks
2016-01-26 19:29:35

“US, China Stocks Tumble After Industrial Profits Plunge”


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