Already, Some Are Reselling At A Loss
A report from Bloomberg on Australia. “The Reserve Bank of Australia frequently seeks feedback on the health of the economy. It might want to call the debt counselors soon. Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders’ bad debt provisions have increased and personal insolvencies are near an all-time high. ‘Its steadily out of control — I don’t know of too many financial counseling services where demand doesn’t exceed supply,’ said Fiona Guthrie, chief executive officer of Financial Counselling Australia, who says the biggest increase in calls is from people suffering mortgage stress. ‘There are more people who have got mortgages that they can’t afford to pay.’”
“Australians’ private debt has soared to 187 percent of their income, from around 70 percent in the early 1990s, encouraged by low interest rates. The jobless rate rose for the second straight month in December to 5.8 percent, while underemployment — the number of workers wanting more hours — is near an all-time high. At the same time, wages growth is the lowest on record. Moody’s Investors Service and S&P Global Ltd. have both said that 30-day arrears on Australian mortgages packaged in securities they track are at multi-year highs.”
“Unsurprisingly, the worst hit areas are in Western Australia, where 2.03 percent of mortgages were in arrears, up 48 percent year-on-year, S&P said in December. In New South Wales, the strongest economy, mortgage arrears were up 11 percent. Australia & New Zealand Banking Group Ltd. Chief Executive Officer Shayne Elliott said in November he saw ‘emerging signs of stress’ in the economy, citing both households and small businesses. Citigroup banking analyst Craig Williams pointed to potential areas of concern in apartment construction and unsecured personal lending when he said ‘the credit cycle has turned’ last month.”
From Domain News. “Australia’s three biggest capital cities will all face falls in property prices as record levels of apartment building translate into an oversupply, economists claim. An overwhelming majority of 26 housing experts and economists surveyed by comparison website Finder believe there is an oversupply of apartments in Melbourne and Brisbane. Already, some property owners who bought off-the-plan in Brisbane in the past five years are reselling their properties at a loss, BIS Shrapnel senior manager residential Angie Zigomanis said.”
“His research into inner Melbourne re-sales of new apartments bought since 2011 found more than 50 per cent of vendors were selling for less than they bought the properties for in areas such as Southbank, Docklands and the CBD. In Brisbane, about 20 per cent of those buying since 2011 were selling at a loss, but that figure likely understated the nature of the oversupply due to strong price growth in 2012 and 2013. ‘People pay a premium to buy new and there have already been people who have taken a hit,’ Mr Zigomanis said. But he said the effect was limited to the inner suburbs, rather than a city-wide oversupply.”
The Canberra Times. “Property investors speculating on capital gains need to be careful as rental yields in Sydney and Melbourne hit record lows. CoreLogic figures show the ‘gross’ yield – before costs – on both houses and units reached record lows in January across Sydney and Melbourne. The gross yield on Sydney houses in January was 2.8 per cent and in Melbourne it was 2.7 per cent. Sydney units recorded a gross yield of 3.8 per cent and in Melbourne it was 4 per cent.”
“‘While rental yields plumb new lows, investment in the housing market has been consistently ratcheting higher, which implies that investors are speculating on further capital gains in the housing market,’ says Tim Lawless, the head of research at CoreLogic.”
“CoreLogic figures show 40 per cent of off-the-plan settlement valuations are coming in under the contract prices across the Melbourne, Brisbane and Perth. Buyers who receive a valuation lower than the original contract price will generally require a larger-than-expected deposit in order to meet the loan-to-valuation ratio required by the lender, Lawless says. As units in areas with a lot of supply come to settlement, the risk of buyers receiving a ‘finance shock’ is heightened, Lawless says.”
“Sam Lally, a buyer’s agent at Buyer’s Advocate Australia in Melbourne, says areas like St Kilda Road, Docklands and Southbank are ‘fraught with danger because of the supply of apartments.’ ‘And we don’t touch-off-the plan – it’s just too risky for our clients,’ he says.”
The Chinchilla News. “A decision to not change the First Home Buyers Grant, after pressure from the Gladstone mayor, has been slammed by a leading property market group. REIQ says the State Government is not listening to regional Queenslanders, after a suggestion to extend the First Home Buyers Grant to existing homes was ruled out last week. REIQ CEO Antonia Mercorella said, ‘Our concern is for the long-term impact and the bigger picture in regional Queensland, where new construction is exacerbating the oversupply issues that these markets are facing. House values are falling, with some markets as much as 30% below levels five years ago. Continuously adding supply of housing to oversupplied markets is irresponsible and will slow down any future recovery.’”
From Nestegg. “Basis Point general manager CT Johnson has flagged the Chinese government’s move to restrict foreign outflows of Chinese capital as an underlying risk for the Australian property market. ‘There’s been increasing problems for Chinese people who wanted to buy property. The main problem there has been that over the last 18 months, the Chinese government has started to squeeze on their ability to get money out of the country,’ Mr Johnson said at the company’s annual Australia-China Investment round-up.”
“That combined with APRA’s decision to prevent Australian banks’ capacity to loan to foreign investors should see reduced property demand. ‘That is a double whammy to a lot of Chinese people wanting to buy off-the-plan properties,’ Mr Johnson said of APRA’s decision.”
‘Australia has forced the foreign owners of 15 illegally bought properties to sell, as the government tries to placate voters unhappy about a lack of affordable housing. The government is ramping up enforcement of overseas investment rules that have until last year been rarely applied.’
‘The latest round, announced by Treasurer Scott Morrison on Monday, takes the total number of forced property sales to 61 since May last year with a combined value of A$107 million (S$115.6 million), the government said.’
‘The latest 15 properties were owned by nationals of China, India, Indonesia, Iran, Malaysia, the United Kingdom and Germany.’
Why does Uncle Sam care more about the residential investing opportunities of foreign nationals than the housing needs of hard working, tax paying American citizens?
Sum fing wong.
They continue to buy even if China, it had to do with a massive trade surplus
http://www.chinadaily.com.cn/china/2017-02/08/content_28138640.htm
Uncle Sam? Do you mean Crocodile Dundee…..or maybe Aunt Koala?
No. I meant Uncle Sam. If Oz can proritize the housing needs of its citizens over foreign investor interests, then perhaps it can happen here in America as well.
O.K., I see your point now.
Boulder, CO Housing Prices Crater 10% YoY
http://www.zillow.com/boulder-co/home-values/
Pretty soon there will be hundreds of thousands of people commuting 75 miles each way to Denver every day:
http://www.thedenverchannel.com/news/local-news/colorado-springs-real-estate-trends-home-prices-rise-as-inventory-drops
Longmont, Firestone, Berthoud, Johnstown, Loveland and even Fort Collins are a lot closer than Springs, plus there’s no Monument Hill to content with in the winter.
Everything aus sell a went in the tank 2 years ago.
Will Midland,nd,odessa be saved by $52 oil?
Not sure but the American economy will be saved by falling prices to dramatically lower and more affordable levels.
Gasoline prices are up about 3.5 cents a gallon just today.
Raindrops in the desert considering retail fuel is down 50% in just 18 months my friend.
Are you a day trader or not?
Gasoline is not up about 5 cents a gallon. I will day trade but I am not a day trader. I was thinking of doing it today but the EIA petroleum site went down before I was able to look at the data.
not=now
They’ve been hovering around $2 per gallon for most of the past two year in my neck of the woods. It was a but lower (~1.75) during winter 2015/16. But prices right now at the pump are just under $2 in Longmont, which is where I usually fill up on my way to the the office in Broomfield.
Nationwide it is up 53 cents a gallon over the last year:
http://www.eia.gov/petroleum/gasdiesel/
central bankers have made u look like fools!
The great sucking sound…
Chinese money leaving the local real estate market.
The trouble with investment tsunamis is that the flood of money that lifts property prices to astronomical levels on the way in leaves a trail of financial destruction in its wake on the way out.
I guess that explains why Mr Market needs bailout authorities like the Fed.
It must be nice to enrich yourself knowing the outcome of markets.
Hard to say, this is from the same site as the other real estate post about rich young Chinese woman buying houses, is it good news or bad news for real estate outside of China when the Chinese want to depress their real estate prices? Money wants to find the best return and with China’s high savings rate and large trade surpluses, the Chinese people want to find that return:
China started increasing real interest rates by raising the rates of standing lending facility, a liquidity support tool, last week, a move that many say will deal a potentially heavy blow to the real estate market.
So will housing prices come down?
Analysts agree that if the overall monetary stance continues to be tightened, it will mark a real turning point in the country’s monetary environment, leading to rising mortgage rates for homebuyers and causing the real estate market to really cool down.
Indeed, the tightening measures adopted by several municipal governments in October and the signal sent out by the Central Economic Work Conference late last year that “houses are built to be inhabited, not for speculation” have made those who want to settle down in the cities hopeful that property prices would become more affordable. However, the history of China’s commercial housing market since the late 1990s tells us that it is difficult to bring down housing prices, especially at a time when many people have no choice but to flock to the real estate market to find a haven for their money.
Four months after the tightening measures were adopted in October, many media reports say that housing prices have dropped－even sharply in some cities. And official data show that prices have really come down in most major Chinese cities, suggesting the price control measures have taken effect. Some major cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, saw a month-on-month drop in new commercial housing prices in December. In Beijing, prices of new commercial housing dropped by 0.1 percent month-on-month in December, the first fall since March 2015.
But a closer look at the market will lead us to a different conclusion.
Many people have complained through social media and micro blogging platforms that in reality housing prices have continued to rise－in some parts of the cities, they have risen sharply in recent months. The local real estate management authorities are yet to respond to such online complaints and questioning. But if you use the websites of major real estate agents, such as lianjia.com, to check out housing transaction prices, you will see that housing prices in many parts of Beijing have risen significantly compared with those in September.
The public is still searching for the reasons for such an information gap. But policymakers could have been misled by the official data on housing prices and reached the wrong conclusion that their tightening policies have been effective. If that has happened, policymakers could misjudge the situation and stop taking new tightening measures, which will create more price bubbles and give rise to more serious risks in the sector that may ultimately affect the country’s overall economic and financial stability.
Admittedly, a brisk real estate market is crucial to China’s efforts aimed at stabilizing its GDP growth, especially at a time when its other major drivers of growth seem to have lost steam. But housing prices in the major cities, by any standards, have become too high for ordinary buyers to afford. If policymakers fail to grasp the real situation and implement truly targeted and effective policies to combat rising prices, then the entrenched market expectations will further inflate the housing price bubbles and create serious troubles for the property sector, and the Chinese economy as a whole.
Such a price would be dearer than the loss of its contribution to GDP growth.
‘Admittedly, a brisk real estate market is crucial to China’s efforts aimed at stabilizing its GDP growth, especially at a time when its other major drivers of growth seem to have lost steam’
Still believing in the central planning there comrade? I thought you said 7% GDP was in the bag.
I have not believed in 7% growth for several years. When the facts change my opinion changes. However, I said at the time that after the 7% year, I believed they would slowly lower the target year after year. That is exactly what happened not the collapse most on this board expected. No, overall I do not believe in a planned economy, however as long as we allow Chinese goods in this country without high tariffs I expect very high growth rates year after year.
Ahem. $80 oil in 2016 was not your only incorrect prediction.
“in the bag”
So far, they’ve been able to buy whatever GDP number they wanted with credit expansion.
Works until credit saturation and “all the new loans are going to service the old loans.”
Works until credit saturation and “all the new loans are going to service the old loans.”
Yes and as Keynes said in the long run we will all be dead. I never said China will never have a major recession but I have said it will not be imminent, several years later I can say I was right and you were wrong.
Some Australian miners might think your “crowing” unjustified.
Brazil was hurt too, but I said it would be in a recession didn’t I? Sorry if miners in both countries were counting on 10% per year growth, I said that could not continue. I have neither been a permanent bull or a permanent bear on China. I do not let ideology blind me to the facts. You have honestly admitted you hate China and I think that blinds you to any fact that does not show China will imminently collapse. In is human nature to ignore inconvenient facts, I have learned to not filter out facts I do not like.
Actually I did not say I hate China. I have grown up with a sobered view of the character of their rulers. This means I do not trust them still, and do not believe their official statements, upon which you seem to base your so-called predictions. I was reading for a long time a rather candid blog commentary on what was going on in China. That window has been closed. I don’t accept the China Daily version of anything at face value, which means I am always suspicious of your conclusions in the matter. That’s all. The back pedaling doesn’t help.
I have a Chinese nephew by the way and respect his honesty tremendously.
My sources on China are multiple including people from both China and Taiwan. China is still rising, the government is actually an impediment to that but nevertheless the intelligence of the people and the still low wages for quality people means the Chinese will continue to close the wage gap between us and them and that means the country will continue to grow.
When the ChiComs stop building ghost cities I’ll believe their GDP numbers.
Look when we built two million housing units per year it still counted in our GDP even if they were not needed. You may call them a misallocation of capital but it is not a lie to include them in the GDP
In is human nature to ignore inconvenient facts, I have learned to not filter out facts I do not like.
It is human nature to automatically (subconsciously) ignore and filter out any facts which the brain considers “irrelevant” to personal priorities.
Scientists call this feature of our brains “inattentive blindness”.
Interestingly, only about 15-20% of people tend to notice things even when not actively looking for them. The rest are oblivious and victims of their filters.
Dont be a DebtDonkey.
“Australia’s three biggest capital cities will all face falls in property prices as record levels of apartment building translate into an oversupply, economists claim.”
That’s awesome news. I can’t wait for the oversupply tsunami to hit San Diego shores.
If San Diego demand falls and prices drop, We’re in for a condo in Little Italy. Please keep us informed! I don’t understand how and oversupply tsunami will hit the San Diego shores, but I am open to the event.
In the more desirable areas (very near the coast) I expect prices to be stickier and in less desirable areas (Escondido, Santee, Spring Valley, etc.) is expect them to be a lot less sticky. But that much is obvious. In any case, even after a 50% haircut, places like La Jolla and Del Mar will remain absurdly overpriced.
When complaining about sticky prices in desirable places, does anyone take into account how many more people there are now, compared to 10 and 20 years ago?
The U.S. population grew by 55 million (20%) from 1996.
That’s a lot of new demand. The new housing, that gets built to meet this new demand, is usually not located in old established desirable neighborhoods. More people per same amount of housing equals very sticky prices.
Sound observation. It usually is quite simple to pick housing markets which will be going up they are areas with increasing population and job growth. But for the immigration into this country housing prices would be much lower. We would have ZPG or even NPG without it. One the reasons I think environmental groups have sold their souls by being for open borders, so they can be in the Democrat’s coalition.
We would have ZPG or even NPG without it.
In which case we would be struggling like Japan, or worse.
No new young people to work and support the retiring aging baby boomers equals depression instead of growth.
Allowing 1% of the present immigration numbers would give us 95% of the benefits and eliminate about 100% of the liabilities. Japan is not suffering as much as the press likes to state, people can afford housing etc. and the weakness in the economy is more due to competition from China than due to demographic factors. Americans would have more children if they could afford them and they could if we had not open our borders to people that decrease the IQ of the nation. People like you are an asset most of our immigration, which is family reunification based, is not.
People with lower IQ tend to have more children, so limiting immigration to high IQ would not help population growth as much.
Family-reunification based immigration is what used to lead to faster and better immigrant integration (compared to other countries).
While I agree that a lot of current immigration policies need to be fixed, I doubt that limiting immigration to just 1% of current numbers would be enough to solve a problem of the aging population.
It would not solve the problem of an aging population but it would not add the additional problems we are experiencing
War refugees from ravaged third-world regions usually have mental baggage that makes them spoiled-goods. Besides they’ll never make the leap to tech based employment. Hence, it’s a welfare for life situation.
“Australians’ private debt has soared to 187 percent of their income”
What a shame. About 30 years ago I checked and the easily findable cousins of mine from the bank robbing side of the family were in residence. England dumped their ancestors there. I guess it was cheaper than housing them in prison.
My how the tables have turned.
What is meant by private debt? Almost anyone with a new mortgage has that amount of private debt. Or is that an average over all Aussies including CC debt?
Non governmental debt is private debt it is as simple as that.
The article is talking about “Household Debt”. Yes that includes mortgages.
I have no debt, so somebody that borrowed 4X income for a house must be making up for me.
Good point Oxy. My debt is about 3.38X’s my income. 1.87X’s seems like a reasonable number. Maybe it includes all men, women and children. Assuming 4.23 people/household, that is a bigger number, depending on if both adults work and the children do not.
Mine is about 1.8 my income.
http://www.investorwords.com/3852/private_debt.html
Another dead-on AB Dan call.
Oh, wait….
http://www.businessinsider.com/crude-is-getting-crushed-2017-2
It’s almost as though him resurfacing here was a shoeshine boy moment for the next leg down in the cratering crude.
Last line is the most important. While the rebalancing will be done by the middle of the year, the market will anticipate this even before then. Simple profit taking on spurred by temporary increases in shale oil production and resulting localized storage builds.
http://oilprice.com/Energy/Energy-General/Russia-Claims-Global-Oil-Output-Down-By-14M-Bpd.html
Crow is served.
Have fun eating yours.
You should increase your investment horizon, if you think a few days trading moves is significant. If you are day trading fine and I do that every once in a while but usually I have a multiple year horizon. I have some stocks that I have owned for decades but still hold but write calls on when I think they might be overvalued, only if I believe they are way over valued do I sell them outright:
https://www.bloomberg.com/news/articles/2017-02-07/u-s-crude-output-seen-rising-as-drillers-respond-to-opec-cuts
I bought VGENX in Feb 2016 for $40. Now that I have LTCG treatment, would you recommend selling at $52 for a 30% annual gain?
As an attorney I have to say I am not licensed to give investment advice and you need to do your own due diligence. I have optioned up my energy holdings since I do not see a lot of upside over the next six months due to the overvalued stock market and the fact energy stocks have moved a great deal the last few months. I do not know your position but if you can reduce exposure without getting entirely out that is what I would do. A year from now it should be higher but three months from now it may be lower. It all depends when and if you may need the funds before a year is out. It is the reason I like individual stocks, you can write option on them for times like this. Then, if the stocks go up you still enjoy at least part of the increase. If they go slightly south or stay flat, the person buying the call eats the lost.
Even with stocks like HL I have written calls, I have mostly 7s written on HL with some lower written over a year ago. I received almost 10% per year for the option premium and the appreciation and future appreciation of the stock up to 7. It looks like I will make about 20% year, great return but it does not make you wealthy overnight.
Oil still above 50 is not being crushed. Shale oil wells have a very short life that is the key.
I told these folks to buy oil at 15 and they thought it was going to zero and they missed a huge move again. Now they sit here and say its drastically overpriced everyday.
Yes. It does not pay to be either a permanent bull or a bear.
It does not pay to be either a permanent bull or a bear.
True, and in any market, including RE.
It only pays in terms of a broken clock being right once a day.
I am glad you are still with us.
But the clock is right twice a day, which is two times more than Professor Bear.
In my best WV vernacular… I enjoy all y’all.
I am glad you are still with us.
Probably not for long. I might not fit neatly into the party agenda.
I had enough of that crap of “about Great Leader, either well or nothing” where I came from, anyway.
“….I told these folks to buy oil at 15.”
What? When did oil get to $15? No one would have bought on your advice, because it never got below $28, which happened in February of 2016.
But the time to buy was when large number of people were predicting $15 a barrel oil.
That is the time to buy.
With a record global oil glut and collapsing demand, what do you expect?
No different that housing.
I don’t think you want to make that comparison. Demand for oil is greater than supply.
I just did. Housing demand is cratering with record housing supply. Just like oil.
Are you honestly claiming that you are paying less for gasoline than you were paying last year at this time?
Falling housing and oil prices my friend. Falling housing and oil prices. It accelerates the economy like nothing else can.
Sure, gasoline up 53 cents a gallon in a year is falling prices.
That is very true, but at $60 per barrel, there is a ton of fracking that will take place. It will be a long time (IMHO) before we see $100 oil again.
That is very true, but at $60 per barrel, there is a ton of fracking that will take place. It will be a long time (IMHO) before we see $100 oil again.
If someone blows up a main pipeline in Saudi Arabia you could have $100 a barrel within a week. However, ignoring that is this key fact: The entire oil reserves in the United States are less than the world uses in one year. While the resource is much greater than that, shale oil cannot hold oil prices down for long. Canadian oil sand projects are much more likely to keep oil prices under $100 but the projects have long lead times so in the short term $100 oil depends on a black swan event which by definition cannot be predicted. However, $100 a barrel within the next ten years is a virtual certainty since we are running out of oil at prices below that number. In the short term Canadian oil sands will set the price which will require oil in the $70 to $85 range based on the source.
Used house salespeople are rookies compared to this guy:
https://www.youtube.com/watch?v=GyxTG1mucfs
Get a girl with far away eyes
dude should have peddled stocks.
anyone else think CAT is the poster child for a grossly overvalued market?
This just screams bubble.
“‘While rental yields plumb new lows, investment in the housing market has been consistently ratcheting higher, which implies that investors are speculating on further capital gains in the housing market,’ says Tim Lawless, the head of research at CoreLogic.”
As the night follows the day, today’s Ponzi finance is tomorrow’s Minsky moment.
Mark Hanson @MrMarkHanson 11h11 hours ago
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Mark Hanson Retweeted Nick Timiraos
Mortgage Lending at FHA is so easy it makes 2006 FHA lending guidelines look punitively tight.
<b Kirkland, WA Housing Prices Nosedive 24% YoY
http://www.movoto.com/kirkland-wa/market-trends/
David Stockman @DA_Stockman 14h14 hours ago
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Chart of the Day: Worst Post-Recession Wage Recovery Since 1965
http://davidstockmanscontracorner.com/chart-of-the-day-worst-post-recession-wage-recovery-since-1965/ …
the only thing that recovered was asset prices because of trillions in debt to prop them up.
monetary policy will never fix the problems in the real economy.
Regulation has buried the economy.
the central banks have made these bears look like total idiots.
I’m not saying its right but you cannot deny it . They have been calling for doom and gloom for the whole length of this boom.
Markets have climbed a wall of worry for like 7 years. when complacency sets in look out below.
Extend and pretend is running out of road. The long-deferred financial reckoning day, when it arrives, is going to be cataclysmic for the central bankers’ Ponzi markets and asset bubbles.
http://wolfstreet.com/2017/02/07/what-would-it-cost-a-country-to-leave-the-euro-thats-what-everyone-suddenly-wants-to-know/
‘They have been calling for doom and gloom for the whole length of this boom’
Who is they? I’ve bought more houses for people in the past three years than you will in your life. Your shtick is tired.
David stockman, peter schiff, jim grant, jim rogers, ron paul, bill fleckenstein etc
Great people but they have been wrong. Its not their fault due to the enormous interventions. Things have really changed with central planning.
I have been wrong too. Is it time to be a bull at the top of a market, well of course not. Just admit you got it wrong and move on.
Who are these people you are representing buying all these homes?
‘David stockman, peter schiff, jim grant, jim rogers, ron paul, bill fleckenstein’
I haven’t read anything these guys have said in years. I don’t have time for it. Get a new shtick!
Remember….. Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
So cheer up Poet and have another drink. http://bit.ly/2h4KLpv
do you have some recommendations for that new shtick?
Get hoofin’ Poet. Haul that DonkeyCart.
No. But I can say this: the age of central bank-ism is over. I remember when Maestro was what they called Greenspan. People have rejected the “wealth effect” economy because it hasn’t worked. Young people aren’t happy, and for good reason. If you don’t believe me that it’s over, go look at the glum faces at Davos. They had seminars on “How do we make globalism work for every one?”
OK, 40 or 50 years into this thing and NOW you are gonna figure that out? Even the Mexican people have started to realize, “hey, we can make it on our own, why don’t the people we elect make that happen?” The idea that owning stocks or houses is the only way to get ahead doesn’t work because the majority of people don’t own stocks or houses.
I am apparently on the Fed’s email list. Case in point:
‘This Chicago Fed Letter investigates the evolution of longer-run economic projections made by participants of the Federal Reserve’s monetary policy committee, the Federal Open Market Committee (FOMC), in its Summary of Economic Projections (SEP), and by the private sector. Over the past few years, the FOMC’s longer-run projections for economic growth, unemployment, and the federal funds rate have fallen quite dramatically. We verify that these views are shared by the private sector and show that the declines are not unprecedented in magnitude, but the projections have reached historical lows.’
https://www.chicagofed.org/publications/chicago-fed-letter/2017/375
Globalism was like an attempt to re-institute the system of Royalty. It was never intended to “work for everyone”.
‘People have rejected the “wealth effect” economy because it hasn’t worked. Young people aren’t happy, and for good reason.’
Those wealth effects look more like a wealth transfer every day.
But of course globalism was never intended to work for everyone! Just a happy utopia of 7 billion global citizens — all of equal intelligence and drive and goodness of course — filling their happy little niche in the collective, goods and services whizzing effortlessly round the world, while a chosen class of benevolent slightly superior beings manage their perfect vision from above, allowing prosperity to trickle down to all…
Oh bah, what am I thinking. They effed us over with the $40 hot dogs.
http://www.shanghaidaily.com/business/biz-special/New-twist-gold-bitcoin-packets/shdaily.shtml
Hey AB Dan,
Next time you self-exile to Butthurt Island, please give my regards to Sweet William, whose harangues about me being a Yellen toadie unless I converted my dollars into Bitcoin are still ringing in my ears.
http://www.zerohedge.com/news/2017-02-08/bitcoin-slides-after-chinas-central-bank-holds-closed-door-meeting-exchanges
Butthurt island, isn’t that your vacation spot? Give my regards to Lola when you hang out there.
You may have noticed that the imagine-currency has achieved a double top.
Oh dear. How the mighty are falling.
http://www.telegraph.co.uk/property/house-prices/house-prices-fall-market-cools-correction/
how does that affect our home prices and my pocketbook?
‘the ‘gross’ yield – before costs – on both houses and units reached record lows in January across Sydney and Melbourne. The gross yield on Sydney houses in January was 2.8 per cent and in Melbourne it was 2.7 per cent. Sydney units recorded a gross yield of 3.8 per cent and in Melbourne it was 4 per cent’
Meaning the net yield is negative on every one.
From a week ago:
http://thehousingbubbleblog.com/?p=9981
‘More homebuyers are missing loan repayments, with mortgage defaults soaring a whopping 25 per cent across Australia in a year. Debt-ridden families are struggling to pay off monster mortgages as cost-cutting bosses slash their work hours and overtime. And global credit ratings giant Standard & Poor’s (S & P) is warning that even more Aussies will fall behind in their mortgage payments this year. Home loan ‘delinquencies’ rose by one-quarter in the 12 months to November, with one in every 87 mortgages at least one month in arrears, S & P revealed. The number of homeowners more than three months behind in payments jumped 41 per cent’
As I said the other day, one in every 87 makes Las Vegas look timely during the worst of the bust.
What’s the point of even having markets if they are always so distorted?
Maybe the commies are right, and all prices for all things should be set by decree. Perhaps that’s the point of all this distortion — screw up markets so much, people willingly move to a command-economy instead of a market-economy.
People starve in command economies.
Coral Gables, FL Housing Prices Crater 15% YoY As Housing Demand Plummets
https://www.zillow.com/coral-gables-fl/home-values/
Jesse Colombo liked
Trader Joe @TraderJoeBlow
@TheBubbleBubble
“there is no common frame of reference for other generations to be wiped out twice in 10 years as you start life/come of age”
I’ve been wondering about this. Much has been written about how the GFC is what spurned this wave of populism. That people have been deeply scarred by it. How will they feel if it happens again?
Spawned?
when it happens?
‘In Brazil, recession and housing cuts push families onto the street’
So we are told that China is firing on all cylinders, yet its suppliers are hurting and commodity prices are down.
Someone isn’t buying raw materials.
Because they developed mines assuming ten percent growth in China for more years than what actually occurred. Growth in demand has continued but just not at the 10 per cent rate.
I would think that if Brazil was still selling timber and ore to China at the same pace as before, they wouldn’t be in a recession. As far as excess capacity, that would have sorted itself out by now.
Chinese GDP growth has primarily been in the services and high tech not big uses of steel which has not increased iron ore much but demand over the last few years has been going up overall, it is just too many mines have been brought on line which has cratered the price per ton. Here is the graph on iron ore:
http://marketrealist.com/2017/02/iron-ore-demand-outlook-mean-cliffs/
For Chinese Home Buyers, Seattle Is the New Vancouver
Canadian city’s tax-policy changes appear to be driving overseas investors south
By LAURA KUSISTO and KIM MACKRAEL
Updated Feb. 7, 2017 6:34 p.m. ET
https://www.wsj.com/articles/for-chinese-home-buyers-seattle-is-the-new-vancouver-1486500393
It’s a good article. They mention open houses in bellevue where every single family is chinese. I’ve been to the same open houses and they’re right. I look around and think ‘I can’t compete with this’
‘Is Beijing Using Smog Cover as an Excuse to Crack Down on Rural Migrants?’
‘A new police taskforce will target open-air barbecues, burning trash, and dusty roads—minor pollution sources associated with the city’s most marginalized residents.’
“While the Chinese police in the Maoist era were primarily concerned with oppression of anti-revolutionaries and class enemies, their overriding mission in the reform era is to secure a stable and ordered social environment for achieving economic prosperity,” Qian wrote. “The complicity between the police and developmentalism renders it seemingly inevitable that the priority of police actions is largely placed on ensuring the propertied classes to comfortably and safely enjoy the fruits of economic growth, while interests of the have-nots are often ignored.”
‘And in 2010, while Shanghai was preparing for its World Expo, Chinese journalist Gao Yubing wrote in the New York Times about the city’s war on pajamas. To create a more cosmopolitan atmosphere—a more refined urban image—the city would be pushing against the common practice of wearing pajamas out in public.’
“Catchy red signs reading ‘Pajamas don’t go out of the door; be a civilized resident for the Expo’ are posted throughout the city,” Yubing wrote. “Volunteer ‘pajama policemen’ patrol the neighborhoods, telling pajama wearers to go home and change. Celebrities and socialites appear on TV to promote the idea that sleepwear in public is ‘backward’ and ‘uncivilized.’”
Yubing wrote. “Volunteer ‘pajama policemen’ patrol the neighborhoods, telling pajama wearers to go home and change. Celebrities and socialites appear on TV to promote the idea that sleepwear in public is ‘backward’ and ‘uncivilized.’”
I wish someone would do that here, I am tired of seeing obese people walking around in their pajamas.
Four words: Don’t go to WalMart.
While Walmart is a target rich environment, I have even seen that behavior at the Hotel Del Coronado.
An odd narrative considering collapsing housing demand and falling prices don’t you think?
‘Big Investors Cut Back on Commercial Property as Bull Market Loses Steam’
“Asset managers at pension funds and endowments, as well as private-equity firms and other big investors, are throttling back on new acquisitions, selling more assets and shifting to less risky strategies as a way to protect against potential losses in a downturn. Additional selling could put stress on the market because demand for property has started to flag, especially at current price levels.”
“Deal volume decreased by $58.3 billion, or 11%, in 2016, the first annual decrease since 2009, according to data firm Real Capital Analytics, a sign that investor appetite is waning. Investors that have picked up the pace of selling to lock in profits include private-equity firm Blackstone Group LP, real-estate giant Brookfield Asset Management, United Parcel Service Inc.’s pension trust and Harvard Management Company, which manages Harvard University’s endowment. When these big investors do buy, they are focusing more on niche properties such as self-storage warehouses and biomedical facilities, which haven’t seen the sharp price rise of trophy office buildings and rental apartments.”
Ashland, OR Housing Prices Crater 10% YoY
https://www.zillow.com/ashland-or/home-values/
Back of the excel spreadsheet numbers for preliminary subdivision approvals in Charlotte are higher than 2007 by 10-15%. Interestingly, townhouse proposals are down 85% since 2007. No new condos proposed since 2010 (600 in 2007,556 in 2008,nothing 2009,15 in 2010).
Market fell from 2008 to bottom in 2011,then shot back up through 2015. I think luxury peaked in 2015,at least single family,based upon pricing, days on market, % close vs new listing, etc. Question is whether it levels and heads back up or turns over. Won’t know until November.
Funny going back through all local boys that lost their asses then sold out to the shitty national boys that came in and threw up crap shacks, and proceeded to are printing money