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January 31, 2023 | The Most Splendid Housing Bubbles in America, January Update: Now Phoenix, Las Vegas, San Francisco, Seattle, San Diego Plunge Fastest

Housing Bubble 2 continues to deflate relentlessly, no matter what data set we’re looking at. Today we got the S&P CoreLogic Case-Shiller Home Price Index for “November,” which is a three-month moving average of home sales that were entered into public records in September, October, and November, reflecting deals made largely in August through October. Prices in all […]

January 26, 2023 | Bank of Canada: “We’re Pausing to Assess Whether We’ve Done Enough,” Hikes by 1/4% to 4.5%, QT Continues

he Bank of Canada hiked its policy rates by 25 basis points on Wednesday, the 8th rate hike in a row, totaling 425 basis points in 10 months, bringing the target of the overnight rate to 4.5%. QT will continue and “is complementing the restrictive stance of the policy rate,” the BOC said in the […]

January 15, 2023 | Hangover Time for Used-Vehicle Dealers. For Buyers, Patience Will Pay Off

The used-vehicle market now has a huge hangover: The price spike from August 2020 till early 2022. Over this period, retail prices spiked by mind-boggling ridiculous amounts – 40% per the average used vehicle listing price, according to Cox Automotive; 53% per the used-vehicle CPI, according to the Bureau of Labor Statistics – though there […]

January 8, 2023 | Wild Ride of US Auto Sales in 2022 below 1977. Charts for GM, Toyota, Ford, Stellantis, Hyundai-Kia, Honda, and Nissan oh Dear

The thing about new vehicle sales in the US is that even in good years, they’re bad, and in bad years, they’re terrible. In 2022, total new vehicles delivered to retail customers and fleets (dominated by rental fleets), fell by 8% from the already terrible 2021, to 13.7 million vehicles, below where deliveries had been […]

December 31, 2022 | 2022, Year of Face-Ripping Bear-Market Rallies that Got Crushed

The year 2022 ended with: S&P 500 Index: -19.4% from a year ago, -20.3% from its high on January 3, 2022. Nasdaq Composite: -33.1% from a year ago, -35.4% from its high on November 22, 2021. The whole mess started in that infamous February 2021, with the popping of the bubble of the most ridiculously […]

December 22, 2022 | How Strung-Out Are Households with their Debt Service & Financial Obligations as the Miracle of Free-Money Fades?

hat is the burden on households from servicing their debts and other financial obligations, in terms of their disposable income? That’s perhaps the most important debt measure, and the question we’re going to grapple with in a moment. The pandemic-era policies left households flush with money, allowed them to catch up with past-dues, and allowed […]

December 17, 2022 | The Most Splendid Housing Bubbles in Canada: December Update on a Housing Bust

The Canada MLS Home Price Index, which tracks all types of homes, dropped by 1.3% in November from October, and is now down 16.4% from the peak in March 2022, according to data from the Canadian Real Estate Association (CREA). This brought the year-over-year decline to 4.4%. In Canadian dollars, the composite benchmark price dropped […]

December 14, 2022 | Fed Pivots even More Hawkish, Sees Peak Rate above 5%, No Rate Cuts in 2023. Powell Brushes Off Raising Inflation Target

This has now been the rule for Fed meetings since the fall of 2021, when it stopped brushing off inflation. At every meeting since then, the FOMC pivoted more hawkish than at the prior meeting: Each “dot plot” projected a higher peak interest rate than the prior dot plot, and it projected staying there for […]

December 9, 2022 | How Big Are the Fed’s Losses and Where Can We Go See Them?

A collapse-chart has been making the rounds in the social media, financial blogs, and the like. It’s being handed around without context, as if self-explanatory, sort of like, look, the world is collapsing. It’s from the St. Louis Fed’s data depository. The title of the chart says, among other things, ominously, “Liabilities: Remittances Due to […]

November 20, 2022 | The Most Splendid Housing Bubbles in Canada, November Update: Fastest 5-Month Plunge on Record

The overall 11-City Teranet-National Bank House Price Index dropped 0.8% in October from September, and is down 7.7% from the peak in May, the largest five-month drop in the history of the data going back to 1997. It slashed the year-over-year gain to 4.9%, from the 19% range in March and April. Nine of the […]

November 18, 2022 | Home Sales Plunge, Investors Pull Back Too, Prices Drop 8.4% in 4 Months, Active Listings & Price Cuts Rise Further

Sales of all types of previously owned homes – houses, condos, and co-ops – fell by 5.9% in October from September, the ninth month in a row of declines, to a seasonally adjusted annual rate of sales of 4.43 million homes, just a hair above the lockdown-month of April 2020, according to the National Association […]

October 26, 2022 | “No Easy Outs to Restoring Price Stability”: Bank of Canada Hikes by 50 bpts to 3.75%, More Hikes to Come, QT to Continue, as “Unsustainable” Home Prices Plunge, GDP “Stalls”

The Bank of Canada hiked the target for its overnight rate for the sixth time in a row, today by 50 basis points, to 3.75%, the highest since 2008, following the 75-basis-point hike in September and the 100-basis-point hike in July. Since it started the rate-hike cycle in March, the BOC has jacked up its rate […]

October 21, 2022 | The Most Splendid Housing Bubbles in Canada, October Update: Prices Plunge at Fastest Pace on Record

anada’s housing market is trying to figure out where reality is? After the era of ridiculous house-price spikes, triggered by the Bank of Canada’s interest rate repression and QE, the BoC now gets to grapple with raging inflation by hiking interest rates and shedding assets (QT), which has been pushing up mortgage rates, which renders […]

October 18, 2022 | Housing Bubble Woes: Plunge in Buyer Traffic & Homebuilder Confidence a Lot Faster than During Housing Bust 1

Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, according to data today from the National Association of Home Builders. The NAHB index for traffic of prospective buyers dropped to […]

October 13, 2022 | Services Now Drive Inflation: Worst in 40 Years Services CPI & “Core CPI” Show Inflation Is Entrenched in Broad Economy. Some Goods Prices Fall, Gasoline Plunges

Nearly two-thirds of consumer spending goes to services. And they’re now the driver of inflation. The CPI for services spiked in September for the 13th month in a row, and by the most since 1982, and it accelerated month-to-month. Housing costs spiked, but also all kinds of other services, such as health insurance (+2.1% month-to-month […]

October 5, 2022 | Housing Bubble Woes: Mortgage Demand Plunges, Rates Near 7%, Spread Between Mortgage Rate & 10-Year Treasury Yield Blows Out Most since Dec. 2008 and 1986

In the week ended September 30, demand for mortgages to purchase a home plunged by 13%, seasonally adjusted, from the already beaten-down levels in the prior week, according to the Mortgage Bankers Association today. Compared to the same week last year, purchase mortgage applications dropped by 37%. They fell through the lows during the lockdowns […]

September 30, 2022 | Amazon to Close 4 of its 5 US Call Centers, Shifts to Work-from-Home, after Closing 44 Warehouses, Halting Construction on 7 Office Towers

Amazon, which booked net losses in Q1 and Q2 totaling nearly $6 billion and whose shares are down 38% from their high in July last year, is undertaking large-scale efforts to cut costs – including commercial real estate costs. It is closing or cancelling 44 warehouses across the US; it’s halting construction on six office […]

September 23, 2022 | The Most Splendid Housing Bubbles in Canada, September Update: House Prices Plunge

In Hamilton, Ontario, after a ridiculous mind-bending spike, prices plunged 5.8% in August from July, and are down 10.5% in three months. In Toronto, prices plunged 4.0% in August from July, and are down 8.3% in three months. In Vancouver, prices dropped by 2.0% in August from July; in Ottawa by 3.1% in August; in […]

September 20, 2022 | Housing Bubble Woes: Home Builders Cut Prices, Pile on Incentives, amid Plunging Traffic of Buyers, Spiking Cancellations, Holy-Moly Mortgage Rates

“Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households,” according to the National Association of Home Builders this morning regarding its survey of home builders. Incentives: “In another […]

September 14, 2022 | Gasoline Demand Destruction Accelerates Despite Plunge in Prices: Consumption Drops to August 1997 Level

Over the four weeks through September 9, gasoline consumption dropped by 11.7% from the same four-week period in 2019, to 8.56 million barrels per day on average, below the same periods in 2020 and 2021, according to EIA data today. The EIA measures gasoline consumption in terms of barrels supplied to the market by refiners, […]

September 7, 2022 | Bank of Canada Hikes by 75 Basis Points, Brushes Off Housing Woes, Dip in CPI, Slowing Growth

The Bank of Canada hiked the target for its overnight rate for the fifth time in a row, today by 75 basis points, to 3.25%, the highest since 2008, following the 100-basis-point monster hike at the last meeting, which got everyone’s attention. In the statement, the BoC said that its policy interest rate “will need […]

August 28, 2022 | QT at the Bank of Canada: Assets Down 24% from Peak. Spiraling Losses on Bonds, to Be Paid for by Canadians

On the Bank of Canada’s balance sheet released Friday, total assets of C$439 billion were down by 24% from the peak in March 2021 (C$575 billion). By comparison, the Fed’s balance sheet peaked in April 2022. The BoC’s Quantitative Tightening (QT) started in essence in April 2021 and is way ahead of the Fed’s QT. […]

August 23, 2022 | Sales of New Houses Collapse (in the West by 50%!) Inventories & Supply Spike to High Heaven, Worst since Peak of Housing Bust 1

The plunge in home sales is just stunning. Sales of new single-family houses collapsed by 12.6% in July from the already beaten-down levels in June, and by nearly 30% from July last year, to a seasonally adjusted annual rate of 511,000 houses, the lowest since January 2016, and well below the lockdown lows, according to […]

August 18, 2022 | “Housing Recession”: Sales Plunge to Lockdown Levels, Active Listings Surge, Prices Begin to Dip as Price Reductions Spike, Investors Pull Back

Inventory and supply of previously-owned homes of all types – single-family houses, condos, co-ops, and townhouses – surged, and sales plunged, amid sky-high prices that have been made impossible by 5%-plus holy-moly mortgage rates. And so the red-hot housing market turns into a “housing recession,” as the National Association of Realtors called it today, after […]

August 5, 2022 | Recession Mongers Shocked & Horrified by this Surge in Employment

It wasn’t the hottest growth in jobs ever, but it was big and exceeded the pre-pandemic average job growth. Employers added 528,000 workers to their payrolls in July, and 2.79 million over the past three months. Wages jumped, but less than raging inflation, and the number of unemployed people actively looking for work fell to […]

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