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Wolf Richter

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On his site WOLFSTREET.com, Wolf Richter slices into economic, business, and financial issues, Wall Street shenanigans, complex entanglements, debacles, and opportunities that catch his eye in the US, Canada, Europe, Japan, and China. He lives in San Francisco.

Wolf Street - Oops, they’re already rising. The US government bond market has further soured this week, with Treasuries selling off across the spectrum. When bond prices fall, yields rise. For example, the two-year Treasury yield rose to 2.06% on Friday, the highest since September 2008. In the chart, note the determined spike of 79 basis points since […]

HoweStreet.com Radio - US Treasuries not dependent on China

Wolf Street - But this time, there’s no Financial Crisis, and no QE in sight. The asset class of beautiful machines is suffering. These assets range from a rare 1962 Ferrari 250 GTO Berlinetta, which sold for $38.1 million with impeccable timing in August 2014 before the peak, to American muscle cars that can be acquired for a […]

Wolf Street - Tesla gets crushed by the big boys. Total new-vehicle sales in the US fell 5.2% year-over-year in December to 1.6 million units. For all of 2017, sales declined by 320,000 vehicles, or 1.8%, to 17.23 million units. It was the first overall decline since the Financial Crisis. Compared to 2015, sales fell by 249,033 vehicles, […]

Wolf Street - During prior incidents of an “inverted” yield curve, the Fed had no tools to get the market to push up long-term yields. Today it has one: the QE Unwind. The price of three-month Treasury securities fell and the yield — which moves in the opposite direction — rose, ending the year at 1.39%, after having […]

Wolf Street - No flashy announcement, to avoid alarming the markets. After years of blistering asset purchases, the Bank of Japan disclosed today that it held a total of ¥521.6 trillion in assets as of November 30, including Japanese Government Bonds (JGBs), gold, corporate bonds, Japanese REITs, equity ETFs, loans, etc. That is quite a pile, so to speak. […]

Wolf Street - Hackers are dogging cryptocurrencies. It starts with nightmarish messages like this: Yesterday, we discovered that funds were improperly removed from the Tether treasury wallet through malicious action by an external attacker. Tether integrators must take immediate action, as discussed below, to prevent further ecosystem disruption. Disappeared: $31 million in tether tokens. This was reported Monday night […]

Wolf Street - But there is no Financial Crisis. These are the boom times. Given Americans’ ceaseless urge to borrow and spend, household debt in the third quarter surged by $610 billion, or 5%, from the third quarter last year, to a new record of $13 trillion, according to the New York Fed. If the word “surged” appears […]

Wolf Street - Banks have started to tighten lending standards for prime and subprime borrowers, and it shows. Banks are further tightening their lending standards for prime and subprime auto loans. This process started in Q2 2016, when auto lending had reached the apogee of loosey-goosey underwriting that had boosted sales of new and used vehicles to record […]

Wolf Street - But what’s happening with mortgage-backed securities? Thursday afternoon, the Fed released its weekly balance sheet for the week ending November 1. This completes the first month of the QE unwind, or “balance sheet normalization,” as the Fed calls it. But curious things are happening on the Fed’s balance sheet. On September 20, the Fed announced […]

Wolf Street - I don’t remember ever having seen crazier times of more pandemic proportions. “It is the biggest scam ever, such a huge gigantic scam that’s going to blow up in so many people’s faces. It’s far worse than anything I was ever doing,” explained Jordan Belfort concerning ICOs (initial coin offerings) of cryptocurrencies. The former penny-stock […]

Wolf Street - Curious things are happening on its balance sheet. The last Fed meeting ended on September 20 with a momentous announcement, confirming what had been telegraphed for months: the QE unwind would begin October 1. The unwind would proceed at the pace announced at its June 14 meeting. It would shrink the Fed’s balance sheet – […]

October 10th, 2017 | It’s Over for Sears Canada

Wolf Street - Brick and mortar meltdown. Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to […]

Wolf Street - Missing Chinese money? Hardest hit is the priciest segment: detached houses. Home sales in the Greater Toronto Area plunged 35% in September compared to a year ago, to 6,379 homes. The plunge in volume was spread across all types of homes. Even condos got hit: Detached houses -40.4% Semi-detached houses -30.2% Townhouses -34.4% Condos -27.5%. […]

Wolf Street - GM cuts entire shift at factory for crossovers due to “moderating” sales, layoffs not temporary. For the first eight months of the year, car sales by GM and Ford plunged 19%. Industry car sales fell 11%, despite record incentives. Sales of trucks – pickups, SUVs, crossovers, and vans – have been the big hope. Total […]

Wolf Street - They did the same in January 2000 just before the dot.com crash. For years, individual investors in the US have been a dreary bunch, as stocks soared relentlessly since bottoming out in 2009. But 18 months ago, in February 2016, they finally caught the bug, and now optimism has surged at a record pace. Optimism […]

Wolf Street - This is how monetary policies have crushed the value of labor. For the good folks who hope fervently that the Fed doesn’t have reasons to raise rates or unwind QE because there isn’t enough inflation, here is an update on one aspect of inflation – asset price inflation, and particularly house price inflation – where […]

Wolf Street - What happens to prices when the biggest, reckless buyer walks away? China’s State Council has issued guidelines on what Chinese companies can and cannot acquire overseas. The purpose is to “promote healthy growth of overseas investment and prevent risks.” These risks would be that the $18 trillion of Chinese corporate debt will balloon further, though […]

Wolf Street - It depends on the value of the home. What happens to home prices during the current housing boom and the next housing bust depends to some degree on whether the home is relatively “affordable” — whatever that means at today’s prices — or more expensive. This is an important data point in the consideration for […]

Wolf Street - But not every automaker got crushed. Every month in 2017, auto industry data providers have given dismal forecasts of auto sales. And every month, these forecasts weren’t nearly dismal enough. On July 27, Kelley Blue Book forecast that total new vehicle sales in July would fall 5.7% year-over-year. It would be the worst year-over-year decline […]

Wolf Street - See Manhattan. In the second quarter in Manhattan, Chinese entities accounted for half of the commercial real estate purchases with prices over $10 million. By comparison, in 2011 through 2014, total cross-border purchases from all over the world (not just from China) were in the mid-20% range. “At a time when domestic investors have pulled […]

Wolf Street - Forget “legal tender.” “We’re focused on putting cash out of business,” Visa’s new CEO Al Kelly said on June 22 at Visa Investor Day. Pushing consumers into digital and electronic payments is the company’s “number-one growth lever.” Visa has been dogged by the stubborn survival of cash and checks, despite widespread government and corporate efforts […]

Wolf Street - So let’s see how we can put a positive spin on this Ford, GM, Hyundai and others tried hard to curtail their sales to rental car companies, or whatever. That’s was the theme among analysts on Monday, after automakers reported crummy June new vehicle sales. What really happened? Rental car companies continued to trim their […]