November 16, 2016

The Only Way To Sell, Or They Will Lose More

A report from Bloomberg on the UK. “Land values in central London’s best districts fell 10.3 percent in the year through September, the biggest drop in at least five years, as higher taxes and the Brexit vote caused luxury home prices to decline. Banks are less willing to lend for site acquisitions and construction, fueling the decline in values, broker Knight Frank LLP said in a report. Developers are also paying less for land because they need to raise their profit margins as a buffer against any further falls in home prices, the broker said.”

“The number of unsold central-London homes under construction will reach a record high this year, increasing the risk that developers’ bets on rising demand for luxury properties will go sour. Shares of property developers with large projects in the U.K. capital’s best districts have lagged competitors since the referendum after they began to write down the value of their holdings on falling sale prices.”

“The number of unsold homes under construction in the U.K. capital’s best districts will hit almost 11,000 this year, according to data compiled by Molior London. Selling high-end homes in London remains ‘challenging’ because of market conditions, Barratt Developments Plc said in an earnings statement.”

From Mansion Global on Turkey. “Political unrest in recent months and an oversaturated market have stifled Turkey’s once blossoming residential real industry that saw years of development and foreign investment. ‘We see a slowdown and even in some cases a freeze in sale prices of new projects,’ said Kerim Bertrand, the country manager for Turkey from REIDIN, a real estate research firm.”

“According to the Turkish government, real estate sales to foreigners totaled $2.64 billion in 2012. Year on year growth in that period also boomed: 2013 house sales exceeded 2012 levels by 65%, according to the consulting firm Deloitte. And Turkey topped the list of countries in Knight Frank’s Global House Price Index for four consecutive quarters. Home prices grew by 15% in the first three months of 2016 compared with the same period in 2015, Knight Frank reported.”

“‘İstanbul turned into a construction site, particularly in the last 10 years,’ Mr. Bertrand said.”

“The city grew from both public and private investment, according to Ozlem Atalay, a researcher at Pamir & Soyuer. In Istanbul, the private luxury market, in particular, was blossoming to the point of oversaturation. Buildable land in the city is extremely limited, so to cover the cost of construction, developers skewed to the high end. Savvy buyers may be the ones to benefit. ‘2017 will be probably a hard year as much as 2016, due to both domestic turmoils and global context,’ said Ms. Atalay. ‘Foreign demand for property has been down by at least 20% on 2015. It will be a buyers’ market.’”

The Economic Times in India. “With the government’s clampdown on black money, property brokers have started getting calls from their clients to keep their deals on hold, at least for now. Investors, who meant to close their deals with the cash component, would much rather wait now, given the uncertainty.”

“‘It’s obvious that the deals structured earlier with the cash component will not go through now. Some buyers are asking sellers to accept old notes, but sellers aren’t ready for this and are now asking the entire payment to be made in cheques. A lot of deals have been put on hold and many may also get cancelled,’ said Yashwant Dalal, president, Estate Agents Association of India.”

“What’s worse, any hope of a demand resurgence has been dampened now with the currency ban. While primary residential markets that depend on end users may not take a big knock, secondary residential sales that rely heavily on black money is likely to be severely affected.”

“‘There will be a price correction in the secondary market in the coming quarters due to the liquidity crunch, leading to price correction in the primary market. The real estate sector is headed for tough times with transactions drying up. Over the next six to nine months, we will see a significant impact on the sector as people recalculate their savings,’ said Nishant Singhal, director-strategy, Investors Clinic.”

The Global Times on China. “When commodities are associated with coupons, it reminds older Chinese of a time when food and other goods were scarce in China - so scarce that the government issued ration coupons, such as ‘rice tickets,’ to cope with the shortage of material goods and to encourage frugality.”

“‘But a scarcity of housing was the last thing the government of Erdos, North China’s Inner Mongolia Autonomous Region, was worrying about when it rolled out a housing coupon system this April. The local government hopes that transforming part of its huge inventory of unoccupied housing into ‘fangpiao,’ literally ‘housing tickets,’ will help reduce their massive glut of unsold homes.”

“Data from China’s statistical authorities showed that the country had an unsold housing inventory equivalent to 709 million square meters by the end of August, only 9.8 million less than at the end of last year. Most of the sales occurred in first- and second-tier cities, as demand remains low elsewhere. ‘Housing coupons are, in nature, a type of cash compensation which aim to help the city digest its housing oversupply,’ Li Jingguo, a professor at the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, told the Global Times.”

“Many real estate developers have asked to be included in the government housing coupon system, even though this means their property will be sold at a lower price. ‘The price offered by the government is relatively low, but still, most of the owners of the 80-odd real estate projects now on our platform came to us first, as they know the government platform is the only way for them to sell their inventories. Or they will lose more,’ Geng Tao, an official at Dongsheng’s housing and land exchange certificate management center, told thepaper.cn.”

“Li Chun, CEO of Inner Mongolia’s Zhengyuan Real Estate Company, thinks the system is a good idea. Li currently has three unfinished real estate projects in Erdos, all of which have been stalled for four years. He also hopes his projects can be included in the government platform. ‘We will earn no profits with the price that the government offers us. But it’s good enough to get rid of the stocks,’ he said.”

“But the circulability of these coupons have also given rise to agents and speculators who buy the coupons up at a relatively lower price, and sell them at a higher price. Because housing coupons have limits in terms of the housing projects they can be used on, owners of coupons usually try to sell them at a lower price.”

“Wang Rui, a real estate agent, has invested 1.8 million yuan in buying cheap housing coupons from buyers, according to DragonTV. ‘Even though the price of housing coupons are dropping, the government won’t allow it to drop too low because then people won’t agree to be relocated,’ he told the news channel.”




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81 Comments »

Comment by Ben Jones
2016-11-16 18:58:41

‘Shares of property developers with large projects in the U.K. capital’s best districts have lagged competitors since the referendum after they began to write down the value of their holdings on falling sale prices’

Check out the percentages in the article: they aren’t small.

Comment by Professor Bear
2016-11-17 07:41:49

And the market won’t clear, even after price reductions. Nobody wants to catch a falling knife.

Comment by Jingle Male
2016-11-19 05:22:08

A lot of people do…..without knowing it.

 
 
 
Comment by Raymond K Hessel
2016-11-16 19:12:40

Londonistan naturally opposed Brexit, but foreign oligarchs parking their money in London’s high-end real estate market - especially the Russians - have to be factoring in the risk that a rising tide of populism could make the UK a less desireable or secure location going forward, especially if geopolitical tensions between Russia and the west heat up.

 
Comment by Neuromance
2016-11-16 19:15:57

No side effects, I’m sure.

BOJ Announces First Unlimited Bond Purchases After Yields Jumped
Bloomberg
November 16, 2016
A selloff in Japanese bonds had threatened to test Governor Haruhiko Kuroda’s determination to keep yields stable with unlimited debt purchases — a weapon he had so far kept in reserve. He had said in September that the bank would hold unlimited purchases as needed, setting a fixed rate, in order to control yields.

http://www.bloomberg.com/news/articles/2016-11-17/boj-announces-first-unlimited-bond-purchases-after-yields-jumped

=============
The Market Won’t Play Ball with BOJ’s New Rate Regime
September 30, 2016
Reuters via Fortune Magazine

“The BOJ can prevent interest rates from rising by printing money to an unlimited extent. But there’s doubt whether the BOJ can keep them from falling by reducing bond buying,” said Noriatsu Tanji, senior bond strategist at Mizuho Securities.

http://fortune.com/2016/09/30/boj-bank-of-japan-bonds/

Comment by Raymond K Hessel
2016-11-16 19:19:33

Which central planners are going to be the first to lose control?

Comment by azdude
2016-11-17 06:31:24

how does a bank with an unlimited supply of money lose control?

Comment by Professor Bear
2016-11-17 07:09:12

Ask a Zimbabwean central banker.

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Comment by 2banana
2016-11-17 08:00:51

Maybe coming here…

Yahoo,com - 11/17/2016

—-

In the past week, mortgage rates have spiked tremendously, now averaging 4.02% for a 30-year fixed-rate, up from 3.77% before the election of Donald Trump.

According to David H. Stevens, president and CEO of the Mortgage Bankers Association, it’s the biggest week-over-week increase since the “taper tantrum” in June 2015. “Investor expectations of faster growth and higher inflation are driving the jump up in rates,” he said in a press release. “[It’s] spurring a commensurate drop in refinance activity.”

Not only are people wary of refinancing amid higher rates, regular mortgage applications have taken a hit as well. In the past week, the MBA noted a massive 9.2% drop week over week, seasonally adjusted.

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Comment by Ben Jones
2016-11-17 08:05:25

“In reality, [applications] have been on a downtrend since June/July,” he told Yahoo Finance in an email. Since the summer, rates had already been firming in anticipation to moves by the Fed—the election has just gave them a push.’

http://finance.yahoo.com/news/what-you-should-do-about-exploding-mortgages-144417713.html

 
Comment by oxide
2016-11-17 08:41:32

Since when is a quarter-point rate increase a “spike” or an “explosion?” Is life for these journalists so free and easy that they don’t know what a real spike or explosion is?

 
Comment by Professor Bear
2016-11-17 09:29:48

A 25 basis point rate increase in one week is huge, especially off such a low level, thanks to convexity. Did you miss my post about the $1500 bn lost in the global bond markets since Election Day?

And by the way, housing is quite similar to bonds in terms of investment properties. Both have valuations that are inversely and convexly related to interest rates, but housing is illiquid with much slower price discovery than highly liquid government debt or MBS.

 
 
 
 
Comment by Ben Jones
2016-11-16 19:33:55

I posted this on the previous thread:

‘The Trump Effect: Negative-Yielding Debt Plummets ‘

‘Investors have watched warily at how negative-yielding bonds might perform in a market downdraft. Now they know the answer.’

Negative interest rates are going down in history as the stupidest investment ever and the biggest sign of greater fools.

Comment by Raymond K Hessel
2016-11-16 19:46:51

Our Keynesian central planners have failed miserably, yet keep doubling down on the same failed policies. I’m astonished that it’s taken so long for the sheeple to figure out they’re being ripped off and to start fighting back. First BREXIT, then Trump - will the Italians be the next to rise up against globalism and supranational schemes that are ruinous to the nation-state and sovereign peoples?

http://www.cnbc.com/2016/11/16/euro-zone-break-up-fears-back-on-the-table-with-italy-expected-to-reject-reforms.html

Comment by oxide
2016-11-17 13:23:08

Keep in mind that those same sheeple who voted for Trump also voted for their Republican senators and representatives. You’re not out of the woods yet. I believe that the establishment Congress will continue with globalism as usual, right behind Trump’s back.

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Comment by Professor Bear
2016-11-17 07:46:35

Trump or no, negative yielding debt was doomed to plummet from the git-go. Trump’s election simply provided the expectations shock that toppled the central banking cartel’s house of cards.

 
 
 
Comment by ZH
2016-11-16 19:21:15
Comment by Professor Bear
2016-11-17 07:49:07

It seems as though the one-way bet on ever lower, and even negative, interest rates has run into a brick wall.

 
 
Comment by Mafia Blocks
2016-11-16 19:23:39

More positive economic news!

“Natural Gas Prices Fall”

http://www.wsj.com/articles/natural-gas-prices-fall-on-mild-weather-forecasts-1478619700

 
Comment by Mafia Blocks
2016-11-16 19:26:57

Lending rates up up up! Dollar up up up! King Dollar my friends….. King Dollar.

“Dollar Rises as Bond Prices Fall”

http://news.morningstar.com/articlenet/article.aspx?id=780593

Comment by Professor Bear
2016-11-17 07:13:27

A rising dollar and falling real estate prices the world over naturally coincide.

Comment by sleepless_near_seattle
2016-11-17 10:10:38

Makin’ it rain up in hur…

 
 
 
 
Comment by Overbanked
2016-11-16 20:55:21

90% of the work performed in the economy does not require 12 years of education, let alone 16 years.

It may be true that today one “cannot get a job” without a bachelor’s degree, but that is a symptom of macro malinvestment, corporate bureaucracy, unregulated immigration/etc.

Comment by Karen
2016-11-16 22:30:28

It is also due to civil rights legislation. To avoid hiring people who become difficult to discipline or fire without being accused of bias, companies found ways to avoid hiring them legally.

Comment by rms
2016-11-17 03:01:04

Good point!

 
Comment by MacBeth
2016-11-17 05:30:59

Now THAT is one interesting comment!

 
Comment by In Colorado
2016-11-17 09:49:03

Also, restricting entry level hiring to people from “elite” schools helps legally keep the “riff-raff” out.

 
Comment by Professor Bear
2016-11-17 11:06:36

Brilliant insight.

However, credentials still matter, at least in skilled occupations. If you doubt this, ask yourself whether you would let a surgeon without an MD operate on you.

 
 
Comment by JudoCHOP!
2016-11-16 22:34:36

True, and I’ve argued for years that the eggheads in ivory towers have been too focused on designing jetsons solutions for a flintstones world. I know, I’ve spent time in both the tower and the real world. There’s some good stuff created, but most of it gets shelved and too much time is spent reinventing the wheel. There needs to be a better conduit for bringing this stuff to market.

Comment by taxpayers
2016-11-17 06:58:11

whitey had wheel

Comment by rms
2016-11-17 08:58:26

Hehe.

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Comment by ibbots
2016-11-17 07:52:36

I was talking to a guy at my daughter’s birthday party recently. He is a 4 year air force vet with a degree who is having trouble locking down a good job. He has a new borne daughter. I suggested he learn a trade like plumbing or hvac. A good plumber can make good money either as an independent or with an outfit. Granted it isn’t glamorous but a good plumber will stay busy.

Bachelors are over valued. We should definitely be doing something like Europe and steering youngsters to trade school etc.

Comment by Overbanked
2016-11-17 08:36:16

What job is glamorous? I might say medicine, or an EMT, someone that actually saves lives, but who else? I wouldn’t even count a Deputy District Attorney, hell they have the full power of the state and the police force to nail anyone they want.

Plumbing is a real craft.

Comment by snake charmer
2016-11-17 09:03:59

Being an EMT is not glamorous, especially working a 4 a.m. to 4 p.m. shift at $11 per hour. But being a flight paramedic still has a big pull on people, even though those positions are in short supply.

I agree that learning a trade, especially if you are on-time, conscientious, and present as professional, often can be a much better bet than going $25,000 in debt for a degree. And some technicians, once they’ve spent a few years learning a business, go on to found their own companies. College is not for everyone, and shouldn’t be.

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Comment by redmondjp
2016-11-17 11:09:41

You left off a zero on your amount of debt for a degree.

 
 
 
 
Comment by new attitude
2016-11-17 10:48:41

You get paid what you deserve.

Comment by butters
2016-11-17 18:34:13

300k per speech?

 
 
 
Comment by AbsoluteBeginner
2016-11-16 21:13:57

Fake news

Comment by butters
2016-11-17 18:35:16

Still better than Faux news

 
 
Comment by Raymond K Hessel
2016-11-17 05:18:08

What’ll happen to Housing Bubble 2.0 now that mortgage rates are jumping?

http://wolfstreet.com/2016/11/16/whatll-happen-to-home-price-bubble-2-when-mortgage-rates-jump/

Comment by Rental Watch
2016-11-17 10:09:25

I would argue that rates haven’t risen enough to make a difference (after all, borrowers have been pushing shorter amortization periods–indicating little payment stress), BUT, if they go back up to 4.5-5%, we will have a meaningful test of whether high prices are largely driven by rates. If prices stay where they are in the light of rates that are in the 4.5-5% range for a 30-year mortgage, then I would say general lack of supply is a meaningful factor.

Also, it will be interesting to see if the trend toward people having shorter amortization periods continues…or if people start sticking with 30-years, or moving to ARMs, etc. In which case, people are clearly being effected by the higher rates in terms of how they are borrowing.

Comment by scdave
2016-11-17 10:20:09

rates that are in the 4.5-5% range for a 30-year mortgage, then I would say general lack of supply is a meaningful factor ??

Who is going to leave a 3% mortgage to go borrow the same amount of money @ 5% ??

Comment by Professor Bear
2016-11-17 11:13:06

“Who is going to leave a 3% mortgage to go borrow the same amount of money @ 5% ??”

That is true, except lots of people in the 65+ age range these days (such as my parents back in fall 2015) will be forced to move in the coming years due to lifestyle considerations. Not everyone has the discretion to enjoy the low payments on their 3% mortgage forever.

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Comment by scdave
2016-11-17 12:26:43

will be forced to move in the coming years due to lifestyle considerations ??

Taxes play a role in the decision sometimes…

 
Comment by Professor Bear
2016-11-17 12:44:39

I’m talking about when elderly couples reach the point where they can no longer assume normal responsibilities of owner-occupancy. It eventually happens to all of us, whether due to death or disability.

 
Comment by Mugsy
2016-11-17 14:25:11

Death will never stop me from mowing my lawn!

 
 
Comment by Rental Watch
2016-11-17 14:31:44

Who is going to leave a 3% mortgage to go borrow the same amount of money @ 5% ??

From a refinance perspective? No one.

However, where you are in your life will still drive many decisions. If you are living in a 2 bd/1ba home, with a 3% mortgage, and you just had your second child, you very well sell, and move into a larger home, even if the rate is 5%.

Happens all the time.

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Comment by Professor Bear
2016-11-17 11:11:02

“If prices stay where they are in the light of rates that are in the 4.5-5% range for a 30-year mortgage, then I would say general lack of supply is a meaningful factor.”

If general lack of supply is a meaningful factor, then it is already priced in.

What an increase in rates to 5% would do is hammer demand. If you took Econ 01 in college, then you can draw yourself a graph with fixed (vertical) supply and downsloping demand, and quickly deduce what would happen to prices if demand shifted to the left.

Comment by Rental Watch
2016-11-17 15:04:42

PB-

I have a BA and MS in econ and a related field. I get it. But there is a big difference between theoretical supply/demand and pricing and what happens in real life.

You are missing one major point:

When it takes a long time to add supply of a product, markets do not reach the supply/demand equilibrium immediately.

The fact that prices have been rising faster than inflation despite interest rates being roughly flat for the past 4 years, strongly implies that we haven’t reached a supply/demand equilibrium.

The supply/demand imbalance is even greater for lower price tiers…in other words, while there is an overall supply/demand imbalance at current prices and interest rates, it is even greater for lower priced homes–strongly implying that there is excess demand at current prices. In other words, if we haven’t reached equilibrium overall, we certainly haven’t reached it at the lower price tiers.

FRED has data series for different price tiers…I picked LA, but my guess is the same dynamic is at play in other markets.

The homes in the “lowest price” tier are going up by 9.5% per annum (Aug-15 to Aug-16).

https://fred.stlouisfed.org/series/LXXRLTSA

Middle Tier homes are going up by 6.5% per annum.

https://fred.stlouisfed.org/series/LXXRMTNSA

High Tier homes are going up by 4.7% per annum.

https://fred.stlouisfed.org/series/LXXRHTNSA

Just to make sure I didn’t pick the one MSA for which this is true, I looked at Chicago too (where there are barriers to build, but unfavorable economic climate):

High Price: up 3.1%
Middle Price: up 5.9%
Low Price: up 9.9%

And Las Vegas (where there are few barriers to entry, but an OK economy)

High Price: up 3.0%
Middle Price: up 6.8%
Low Price: up 8.8%

Will higher interest rates cool things off? Sure, but since we are not at supply/demand/price equilibrium, you can’t conclude that prices will fall, nor can you even guess how much higher rates will cool things off.

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Comment by tj
2016-11-17 16:58:08

The fact that prices have been rising faster than inflation

since the founding of the fed in 1913, gold has gone up around 60 times in terms of dollars.

in the same period, gold is about .9 where it was in terms of money.

now what can you say about ‘inflation’?

 
Comment by Rental Watch
2016-11-17 23:57:16

“now what can you say about ‘inflation’?”

The more dollars exist in the economy, the less each one is worth in terms of exchange. Relative values of everything else (like how many apples can you exchange for a motorcycle) act similarly…the more apples in existence, the more you need to trade for a motorcycle.

How’s this then:

Prices in dollar terms for homes have been rising faster than prices in dollar terms for everything else (on average).

This is indicative precisely the same dynamic regarding the supply/demand balance for housing.

 
Comment by tj
2016-11-18 07:59:41

The more dollars exist in the economy, the less each one is worth in terms of exchange.

not necessarily true. what if dollars increase in value faster than they are created?

Prices in dollar terms for homes have been rising faster than prices in dollar terms for everything else (on average).

ok, but..

what if there’s a more stable yardstick to use to measure value than dollars? are you more interested in convenience or accuracy? or.. wouldn’t a different more accurate perspective help you make better decisions?

what does gold being worth only 0.9 its 1913 value in terms of money mean to you?

 
Comment by tj
2016-11-19 04:33:48

two things.

even if you are truthfully told that the difference between x and y is 5, you still don’t know what x and y are.

and,

the price of anything can’t tell you what the value of the dollar is.

 
 
Comment by Eddie89
2016-11-17 16:07:28

Sadly, the insanity we have going on today is far from standard Econ 101.

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Comment by Raymond K Hessel
2016-11-17 05:26:56

Our globalist masters have our best interests at heart. We must embrace our open borders, unrestricted immigration, multiculturalism, and fundamental transformation.

http://www.breitbart.com/london/2016/11/16/translator-migrants-hate-christians/

 
Comment by Raymond K Hessel
2016-11-17 05:39:21

Meanwhile, the poors keep losing ground as our “recovery” that benefits only the .1% continues.

http://www.marketwatch.com/story/wal-mart-revenue-falls-short-of-estimates-2016-11-17

 
Comment by Raymond K Hessel
2016-11-17 05:42:40

Rates on PIIGS 10-year bonds keep marching higher. How long can Yellen and Draghi maintain ZIRP and NIRP when borrowing costs are rising?

http://www.marketwatch.com/investing/Bond/TMBMKIT-10Y?countrycode=BX

 
Comment by Raymond K Hessel
2016-11-17 06:09:23

Yellen the Felon is back with her “Lucy and the Football” routine about a mythical rate hike. Only this time around the bond market may force her hand. Pop goes the Ponzi!

http://www.marketwatch.com/story/feds-yellen-repeats-that-rate-hike-could-come-relatively-soon-2016-11-17

Comment by jerzdebil
2016-11-17 10:41:21

((Yellen)) is such a worthless sack. More people are waking up to the true origins of corruption, Frank Raymond points it out @ 49 minutes in
https://www.youtube.com/watch?v=Ntosk72rQOw

Whole video is worth listening to, interesting observations from a guy who has lived in India as well as the west.

Comment by MightyMike
2016-11-17 11:51:18

Where do you find these wretched people?

 
 
 
Comment by Apartment 401
2016-11-17 06:45:24

“Many cities have calculated that dwindling populations and labor shortages can be ameliorated by immigrants, undocumented or not. The mayors must calculate the point at which resistance harms the communities they’re fighting to protect. The evolving confrontation exposes states’ and cities’ vulnerability to losing some of the $650 billion in federal funds they receive for everything from police to sidewalks as they confront pension obligations and shrinking budgets.”

http://www.bloomberg.com/politics/articles/2016-11-16/sanctuary-city-mayors-gird-for-fight-as-trump-threatens-budgets

Comment by palmetto
2016-11-17 07:39:50

Heh-heh, wouldn’t surprise me if there were a mayor or two who, while outwardly espousing the sanctuary city resistance line, are inwardly breathing a sigh of relief.

Oh, they’ll give fiery, defiant speeches about “nation of immigrants” and all that, just before they shed crocodile tears and bow to the “will of the people” and the “rule of law” (and the pocketbook). Inwardly they’ll be relieved at having their fat pulled out of the fire.

 
Comment by snake charmer
2016-11-17 09:09:08

What city has a labor shortage? Is that like the housing shortage real estate salespeople love to allege exists? The problem, all over the world, is that we have more people than jobs, and more products than consumers who can afford them.

Comment by Overbanked
2016-11-17 10:34:27

“we have more products than consumers who can afford them.”

Explain Like I’m 5.

I’ve got a factory that produces 1,000 widgets a day. There’s overhead that incurs every day even if the factory is idled, rent/structure depreciation, property taxes, insurance, base utilities, etc. If I can sell 1,000 widgets at enough gross margin to cover that overhead, why wouldn’t I? I suppose I may decide to wait out an American or Japanese recession so I don’t have to sell at lower prices to Iran or Ecuador…

 
 
 
Comment by Professor Bear
2016-11-17 07:39:38

“Data from China’s statistical authorities showed that the country had an unsold housing inventory equivalent to 709 million square meters by the end of August, only 9.8 million less than at the end of last year. Most of the sales occurred in first- and second-tier cities, as demand remains low elsewhere. ‘Housing coupons are, in nature, a type of cash compensation which aim to help the city digest its housing oversupply,’ Li Jingguo, a professor at the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, told the Global Times.”

Google sez the average urban Chinese home size is 60 square meters. At that average size, 709 million square meters translates into 11.8 million homes in unsold inventory. Sounds like alot, but this is China, home to 1.357 billion (1,357 million) people. Perhaps not many of them can afford to buy a home without a government-issued coupon in hand.

 
Comment by ZH
2016-11-17 09:16:08

Wells Fargo New Account Openings Down 44%; Credit Card Applications Plunge By 50%

http://www.zerohedge.com/news/2016-11-17/wells-fargo-new-account-openings-down-44-credit-card-applications-plunge-50

Comment by new attitude
2016-11-17 10:47:40

Thanks Elizabeth, stopping the scams one bank at a time.

Comment by Raymond K Hessel
2016-11-17 16:38:20

Fauxahontus Warren hasn’t stopped anything, least of all her incessant bloviating. Consumers who don’t like being ripped off are voting with their checkbooks.

 
 
Comment by redmondjp
2016-11-17 11:10:55

Well, now that they don’t have associates creating thousands of phony new accounts, what did you expect?

 
Comment by sleepless_near_seattle
2016-11-17 11:22:30

And yet their stock price is being bid up by the dummies thinking it’s been a bargain of late due to this scandal.

Of course, it was probably my $40 limit-buy order that sent it scurrying in the opposite direction.

 
 
Comment by ZH
2016-11-17 09:20:56

Saudis, China Dump Treasuries; Foreign Central Banks Liquidate A Record $375 Billion In US Paper

http://www.zerohedge.com/news/2016-11-16/saudis-china-dump-treasuries-foreign-central-banks-liquidate-record-375-billion-us-p

Comment by Professor Bear
2016-11-17 09:40:32

Liquidating Treasuries merely sells future dollars in exchange for current ones, as a Treasury is simply a promised fixed stream of future payments in dollars.

Maybe this helps explain why the dollar has rallied on Trump’s victory.

 
 
Comment by ZH
2016-11-17 09:23:05

Illinois Pension Funding Ratio Sinks To 37.6% As Unfunded Liabilities Surge To $130 Billion

http://www.zerohedge.com/news/2016-11-16/illinois-pension-funding-sinks-376-unfunded-liability-surges-130bn

Junk assets? How many mortgages?

Comment by Professor Bear
2016-11-17 09:56:31

Higher interest rates will shrink pension liability down to size. Of course the flip side of the equation is that pension assets tend to be held in investments like stocks, bonds and real estate, whose values decrease with higher rates. However, the net effect of higher rates on underfunded pension plans should be favorable.

Comment by new attitude
2016-11-17 10:44:50

Banks pay 1% today and need to be at >5% to make a difference. National debt interest payment goes way up too.

Comment by Professor Bear
2016-11-17 11:14:43

What does that have to do with pension liabilities?

(Comments wont nest below this level)
Comment by new attitude
2016-11-17 11:53:34

money for nothing and the chicks for free

 
 
 
 
Comment by 2banana
2016-11-17 10:00:54

No bailouts under Trump.

Can Chicago hang on for eight years?

While losing millions of Federal monies being a criminal invader sanctuary city?

Comment by new attitude
2016-11-17 10:40:17

bank bailouts will stay on the table as his team is full of wall st insiders.

The swamp is expanding and the deficit will triple. (see Reagan)

 
 
 
Comment by new attitude
2016-11-17 10:06:32

What type of Gov is in Venezuela?

https://www.cato.org/publications/commentary/corruption-democracy-venezuela

“Corruption”

Private corporations that deal with the government are owned by government officers. Government officers own companies that do business with the government, but conceal this fact by working through private intermediaries. Kenneth Rijock, a financial analyst, notes that these types of corporations have sprouted under Chavez. He mentions major agribusiness organizations such as ProArepa, the main supplier of food for government handout programs. Rijock also points to a large grain transport group “rumored to be owned by Chavez’s brother, Adan.” Officers of record of ProArepa include Ricardo Fernandez Berruecos, whose private jet recently was detained by the U.S. government at a Florida airport for not having the proper documentation of ownership. Journalist Patricia Poleo mentions the case of the brother of Chacón, who made a $10,000,000 offer to buy INDULAC, a large milk producer, without the source of the funds being known.

 
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