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January 23, 2020 | Fed’s Repos Drop to Oct Level, T-Bills Surge, But MBS Fall, and Total Assets Decline Further

The Fed had doused the market with $410 billion in liquidity between September and January 1 through its repo operations and its T-bill purchases. Market hype had expected this blistering pace of money-printing to continue, but wait… While T-bill purchases continue, the repos on the Fed’s balance sheet are getting unwound, its mortgage-backed securities (MBS) […]

January 5, 2020 | Carmageddon Spreads to Canada

Sales of passenger cars and light trucks in Canada fell 3.7% to 1.91 million vehicles in 2019, the second year in a row of declines, and were down 6.1% from peak-year 2017, according to industry data compiled by Des Rosiers Automotive Consultants: These sales are new vehicles that dealers delivered to their customers, or that […]

January 1, 2020 | The Most Splendid Housing Bubbles in America, Dec. Update

Powered by the innumerable millionaires and multimillionaires that the mega IPOs would be suddenly printing in 2019, home prices in the San Francisco Bay Area would be doomed to surge this year, thus exacerbating the “housing crisis,” as it’s called locally, even further, the media have promised us incessantly earlier this year, having fallen once […]

December 24, 2019 | What Options Do Mall Landlords Have When Brick & Mortar Retail Melts Down on Them?

Mall investors have long denied it. But year after year, ecommerce has been eating up brick-and-mortar retail sales, in the third quarter faster than ever, and in the fourth quarter, according to early indications, even faster. Turns out, ecommerce is a structural change that grew out of the arrival of the Internet, has been underway […]

December 21, 2019 | Below-the-Surface Struggles in Manhattan Housing Bust Seep to the Surface

That the Manhattan market for condos and co-ops has been heading lower is no secret. The price and sales data I’m going to briefly lay out here is just to provide a backdrop for what comes next – the struggles below the surface that rarely make it to the surface. But this time they did. […]

December 14, 2019 | The State of the Canadian Debt Slaves, How They Compare to American Debt Slaves, and the Bank of Canada’s Response

Canadian households, rated near the top of the most indebted in the world, accomplished something awe-inspiring: They got even more indebted and their leverage rose to a new record, according to data released today by Statistics Canada. The portion of their disposable income (total incomes from all sources minus taxes) that Canadian households spent on […]

December 9, 2019 | Accounting Fraud & Freight Recession Topple Celadon, Largest Truckload-Carrier Bankruptcy in US History

Celadon Group, one of the larger full-truckload operators in the US with about 3,000 drivers and about 2,700 tractors, said today – confirming days of rumors – that it filed for Chapter 11 bankruptcy and is ceasing operations. This is the largest truckload carrier ever to file for bankruptcy in US history. The drivers, hauling […]

December 5, 2019 | Fed Goes Hog-Wild with T-Bills, But Repos Drop from a Month Ago, and MBS Shrink by $22 Bn

The total amount of repurchase agreements (“repos”) on the Fed’s balance sheet as of December 4, released today, declined to $209 billion, from $215 billion a month ago. These repos included: $70 billion in overnight repos, issued on Wednesday morning that unwound today; all prior overnight repos had already unwound. $88 billion in multi-day repos […]

November 26, 2019 | Despite Startup Millionaires, the Most Splendid Housing Bubbles in America Deflate. Crushed Markets Scramble Higher

“The boom and bust patterns of home price growth in the West appear to be now solidly on the bust side,” said Ralph McLaughlin, deputy chief economist for CoreLogic, in a statement about today’s release of the firm’s Case-Shiller Home Price Index. So here we go. San Francisco Bay Area House Prices House prices in […]

November 19, 2019 | Canada’s Most Splendid Housing Bubbles v. Its Other Markets, October Update

Vancouver has tiny uptick after 14 declines. Toronto dips below July 2017 peak. Victoria ekes out new high. Calgary, Edmonton stuck below oil-boom peaks years ago. Quebec City flat for 6 years. Montreal ticks down from high. Ottawa ekes out new high but remains low. House prices in Greater Vancouver ticked up 0.2% in October […]

November 6, 2019 | Yield Curve Un-Inverts, 10-Year Yield Spikes, Middle-Age Sag Disappears

Yield Curve Spaghetti! It happened. Hallelujah. Or maybe better: Watch Out! The yield curve, after having been at least partially inverted all year, un-inverted today. The yield curve still kind of flat at the short end, but the middle-aged sag is gone, and the long end with maturities of seven years and up is higher […]

October 30, 2019 | Dallas, Minneapolis, Chicago, Charlotte, Atlanta, Detroit, Cleveland: From Smaller Housing Bubbles to Crushed Markets

Prices in red-hot Dallas slow. Chicago condos flat for the year. Formerly crushed Detroit up 100% in 7 years. Cleveland struggles out of crushed status. Yesterday, we did The Most Splendid Housing Bubbles in America — such as the San Francisco Bay Area, New York City metro, the Miami metro, Seattle, and other markets that […]

October 26, 2019 | Subprime Auto Loans Blow Up, 60-Day Delinquencies Shoot Past Financial Crisis Peak

Santander Consumer USA is on the forefront of souring subprime-auto-loan backed securities. Santander Consumer USA, one of the largest subprime auto lenders and the largest securitizer of subprime auto loans, is not alone. But it’s on the forefront. It had $26.3 billion of subprime auto loans as of June 30 that it either owned and […]

October 15, 2019 | Dual-Track Economy: Slowdown in Industrial Sectors Hits Truckers & Railroads. But Consumers Are Still Buying Stuff

The hangover after the tariff-front-run boom last year. Freight shipments by all modes of transportation – truck, rail, air, and barge – within the US fell 3.4% in September 2019, compared to September last year, according to the Cass Freight Index for Shipments. For the index – which tracks shipment volume of consumer and industrial […]

October 12, 2019 | Global Air Freight Sinks into Longest Recession Since 2008

US-China trade war, falling business confidence, slowdown in China, German exports, and new: the temporary shutdown of Hong Kong’s airport, the largest cargo hub in the world. Demand for global air freight, domestic and international, as measured in freight tonne kilometers (FTKs), fell by 3.9% in August compared to August last year, the 10th month […]

October 1, 2019 | Tariff-Front-Running Hits US Manufacturing, after Causing Biggest Surge since 2004

Supply chains begin to shift back to US suppliers, “due to tariffs.” Two US manufacturing reports were released this morning, one showing the fastest decline since June 2009, and the other showing an increase in growth, and given the bad numbers recently, the fastest growth in five months. So get ready for mild whiplash. The […]

September 17, 2019 | Debt-Wracked Chinese Companies Dump US & Other Foreign Assets, Become Net Sellers Overseas for First Time

Another piece in the Chinese capital-flow puzzle. Chinese conglomerates that had gone on a debt-fueled buying binge over the past decade but have come under heavy pressure from the government to sell their overseas holdings in order to reduce their astronomical debts – well, they’re doing it. In the US, Chinese conglomerates have dumped $26 […]

August 27, 2019 | The Most Splendid Housing Bubbles in America, August Update: West Coast Markets “See the Dip”

Seattle house prices fall year-over-year. New York condos drop to Aug 2017 level. San Francisco Bay Area near-flat. Los Angeles, Denver, Boston reach new highs. Las Vegas, Phoenix dream of crazy Housing Bubble 1. Miami stalls “Prices are cooling, and Western states are starting to see the dip,” said CoreLogic in a statement when it […]

August 20, 2019 | Canada’s Most Splendid Housing Bubbles, July Update

Vancouver sags. Calgary, Edmonton down from many years ago. Toronto rises but below 2017 peak. Montreal, Ottawa at new highs. July is seasonally a strong month in the Canadian housing market, as tracked by the Teranet–National Bank National House Price Index. Over the past 21 years, the composite index for the metros has risen on […]

August 14, 2019 | Subprime Auto Loans Blow Up, Delinquencies at 2009 Level, Biggest 12-Month Surge Since 2010

But these are the good times. Automakers are not amused. The auto industry depends on subprime-rated customers that make up over 21% of total auto-loan originations. Without these customers, the wheels would come off the industry. And tightening up lending standards to reduce risks would cause serious damage to the undercarriage. Subprime lending is very […]

August 7, 2019 | The State of the American Debt Slaves, Q2 2019

The bifurcation among consumers. Consumer credit – auto loans, student loans, and revolving credit such as credit card balances and personal loans, but not housing-related debt such as mortgages and HELOCs – grew 5.4%, or by $208 billion, in the second quarter compared to a year ago, to a new record of $4.06 trillion (not […]

August 3, 2019 | Heavy-Truck Orders Collapse Stunning 81%. Lowest Since 2010

Order backlog still feeds truck makers, but they don’t disclose for how long. Orders for Class 8 trucks – the iconic trucks that haul part of the economy’s goods across the country – collapsed by 81% in July compared to July last year, to 9,800 units, the lowest since 2010, according to FTR Transportation Intelligence […]

July 18, 2019 | US Home Purchases by Chinese, Other Foreigners Plunge Below 2012 Level. And the (for me) Chilling “Chinese Reaction” to it from the Largest Chinese Portal for US Homes for Sale

“For developers and agents in most parts of the country who rely on foreign buyers, there is really no alternative to buyers from China”: CEO of Juwei.com The puzzle in the US housing market was this: Mortgage rates have dropped since November, and as expected mortgage applications to buy homes have surged, and this was […]

July 8, 2019 | Update on the Worsening Housing Bust in Vancouver, Canada: Spring Hopes Got Crushed

But it’s curing a housing crisis where middle-class households are priced out of a market, inflated by rampant international speculation and large-scale money laundering, says BC’s Finance Minister. In the City of Vancouver, BC, Canada, condo sales in June plunged 28% from the already weak June last year to just 343 units. Inventory for sale […]

July 6, 2019 | Fed Sheds $38 Billion in Treasuries and MBS in June, Dumps MBS at Record Pace, Exceeding “Cap” for First Time

Where is the Fed’s “U-Turn” that Wall Street promised us? In June, the Fed shed Treasury securities at the slower pace announced in its new plan for QT, but it dumped Mortgage Backed Securities (MBS) at the fastest rate since the QE unwind started, breaching its “up to” cap for the first time. And it […]

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