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Mike 'Mish' Shedlock

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Mish Talk - New home sizes peaked between 2014 and 2015. A distinct down-sizing is now underway. What’s going on? The National Association of Homebuilders (NAHB) reports Declining New Home Size Trend Continues. After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the third quarter of 2017. […]

Mish Talk - Flagstar bank in Michigan will “gift” down payments to low-income borrowers to buy a house. What can possibly go wrong? Housing Wire reports Flagstar rolls out zero-down mortgage with closing cost aid for low-income borrowers. Flagstar Bank is targeting low- to moderate-income borrowers with a mortgage offer that’s seemingly too good to be true. The […]

Mish Talk - Chicago Fed chief Charles Evans is worried about the lack of inflation primarily because he is clueless about where to find it. As further proof of his economic illiteracy, Evans says “Low inflation expectations keep inflation down”. Bloomberg reports Evans Says Fed Must Convince Public It Will Allow More Inflation. The Federal Reserve should take a […]

Mish Talk - Junk bonds have been underperforming lately as widely noted. Albert Edwards at Society General also notes the underperformance of companies with poor balance sheet fundamentals. Edwards Comments “With bullishness sentiment at extremes, is it significant that my colleague Andrew Lapthorne noted in his widely read “Global Market Arithmetic” that despite the overall equity market continuing […]

Mish Talk - Serious mortgage delinquencies are leveling off and remain one recession away from a serious upswing. Credit card and auto loan delinquencies are already on the rise. Bloomberg reports Subprime Auto Delinquency Is Near Crisis Levels at Non-Bank Lenders. There’s a growing rift in car debt: Delinquent subprime loans are nearing crisis levels at auto finance […]

Mish Talk - Rumors of a dividend cut at GE have been swirling all year. Today, we had an announcement that GE would cut its dividend for only the second time since the great depression. GE also announced it was shedding assets. The announcement was not priced in. Shares dipped another eight percent. The New York Times reports […]

Mish Talk - There are significant differences between the House and Senate versions of the tax overhaul. Unlike the House, Senate Republicans cannot afford to lose more than two votes. Also unlike the House, the Senat has budget rules that must be met. Will the differences be resolved in reconciliation? The Wall Street Journal reports Senate Tax Plan […]

Mish Talk - Through the third quarter, 6,752 locations were scheduled to shutter in the US according to the International Council of Shopping Centers. That’s more than double the 2016 total and is close to surpassing the all-time high of 6,900 in 2008, during the depths of the financial crisis. Bloomberg writers Matt Townsend, Jenny Surane, Emma Orr […]

November 8th, 2017 | Good News For Treasury Bulls

Mish Talk - Money managers pulled $1.2 billion from the iShares 20+ year Treasury Bond ETF last week, the most on record, and the second-largest withdrawal among U.S.-listed exchange-traded funds across asset classes. In what I view as a strong contrarian indicator, Long Treasury ETF Posts Record Outflow in Duration Rotation. Some investors are paring exposure to longer-maturity […]

Mish Talk - Traders have spent about $4.5 million on call options wagering on copper climbing above $10,000 a metric ton by December 2018. That would be a rally of 46%. But to make a profit, held to completion, the price needs to rise even more. Please consider High-Flying Bets on Copper. The frenzy in the copper market […]

Mish Talk - The bitcoin debate goes on and on. Some claim it’s a bubble. Others say it isn’t. Still others say it can never be a bubble. Very Definition of a Bubble On November 2, Credit Suisse CEO, Tidjane Thiam jumped on the bubble bandwagon with this statement: Bitcoin Is the ‘Very Definition’ of a Bubble. “From […]

Mish Talk - The president of the Federal Reserve Bank of New York is set to announce he will retire next year, about six months earlier than scheduled, adding to an unusual wave of turnover among the central bank’s top monetary and regulatory decision makers and ushering in new uncertainty about its policy cour The Wall Street Journal […]

Mish Talk - Household formation, as measured by occupied housing units, shows the weakest annual growth since 2010. Owner Occupied Housing Rental Housing Given masses amounts of student debt, low household formation is hardly surprising. Yet, it’s interesting precisely how that is happening. A decline in rental occupied units has been matched by a rise in owner-occupied units. […]

Mish Talk - Tesla suffered its worst percentage day ever and homebuilders took a dive on news that energy credits would vanish and mortgage tax breaks reduced under the new GOP tax overhaul. Homebuilders and electric car producers were hit hard today by GOP tax reform proposals. The lead-in image above is from the CNN article Homebuilder Stocks Rocked […]

Mish Talk - Ford, Toyota, Honda, and Nissan reported monthly gains in the U.S., setting the stage for a strong industry finish in 2017. Economists misinterpret this hurricane-related impact with actual, ongoing strength. The Wall Street Journal reports Auto Sales Continued Hot Streak in October. Ford Motor Co. was the lone Detroit competitor posting an October gain, reporting […]

Mish Talk - The Fed meets today and Fed Chair Janet Yellen will make another superficial statement of some sort. Most likely, she will reiterate some mush about transitory low inflation while noting a surge in consumer spending. It’s the jump in consumer spending that’s likely to be transitory. Target practice Image from MarketWatch The Wall Street Journal […]

Mish Talk - In the wake of the hurricanes, consumers tapped savings to spend at the fastest paces since August 2009. Core PCE inflation (not counting food and energy) was 0.1% but overall PCE inflation was 0.4%. The savings rate is the lowest since 2008. The BEA’s Personal Income and Outlays report for September shows: Personal income increased […]

Mish Talk - Jeff Desjardins, the Visual Capitalist posted a nice chart of global debt on his website on Friday. I added lines in blue to group the Eurozone countries for comparison purposes. Poland is not on the Euro, but rather the Zloty. Clean boundaries were visually difficult in a single shape. US is the leader in global […]

Mish Talk - Round robin speculation on the next Fed chair shifted for the third time this past week. In April, Gary Cohn had the inside track. Then speculation shifted to John Taylor. Now the speculation is on Fed governor Jerome Powell. President Donald Trump said Friday he would announce his choice for the next leader of the […]

Mish Talk - Additional cracks are starting to appear in the global economy. In the UK, retail sales plunged the most in eight years. Consumers also becoming worried about falling house prices. I propose consumers should have been worried home prices did not tank long ago. Bloomberg notes that U.K. Retail Sales Plunge at Fastest Annual Pace in Eight […]

Mish Talk - Pending home sales for September, an advance indicator of existing home sales was flat for the month. Economists expected a gain. The Econoday pending home sales consensus for september was a gain of 0.4% in an extremely wide range of -1.9% to +1.9%. The NAR reports the index was flat vs August at 106.0, down from a […]

Mish Talk - Even before the emergence of Bitcoin and the growing plethora of cryptocurrencies, several attempts had been made in the past to create digital currencies based on gold, but none of them gained widespread support. Will blockchain and Bitcoin succeed where other attempts failed? One of the common criticisms and challenges of bitcoin and other cryptocurrencies […]

Mish Talk - The Illinois legislature is in recess right now. Other than disbanding the body, that’s the best place for them. When they return, they are going after your pocketbook in the form a gas tax hike. Not to be outdone, Chicago Mayor Rahm Emanuel is pondering property tax hikes. In July, the State legislature overrode Governor […]

October 23rd, 2017 | Fed-Proof Bond Bet?

Mish Talk - The yield curve is the flattest since 2007. Nonetheless, traders think it will get flatter. The bond bet du jour is the next Fed chair will keep hiking but not as much as the Fed thinks. Bloomberg calls this setup a “Fed-Proof” Bond Bet. Whether President Donald Trump nominates Fed Board Governor Jerome Powell, Stanford […]

October 22nd, 2017 | Acting Man Defends Marc Faber

Mish Talk - Acting Man founder Pater Tenebrarum (an alias name) defends Marc Faber. Tenebrarum says the Faber quotes are out of context. He provides a link to the complete statements. The October issue of the Gloom Boom Doom report was an in depth look at some of the more important economic and social questions of our day, […]
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