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February 20, 2019 | Forced End of “Ponzi-Like Leverage” & “Fraudulent Lending” Turns Australia’s House Price Bubble into “Property Bloodbath

What banks & housing markets in Sydney and Melbourne are facing in 2019. As investors are fleeing Australia’s housing bust, sales of new houses have plunged to record lows, and home prices in the Sydney and Melbourne metros have dropped 12% and 9% from their respective peaks in mid and late 2017. Combined, the two […]

February 13, 2019 | Mortgage Applications Drop Despite Lower Mortgage Rates: Industry is Baffled

The hope in early January has been unwound. A month ago, mortgages reappeared in the housing-hype circus, when it was widely reported that mortgage applications “soared” and “jumped.” Both types of mortgage applications did so: those used to purchase a home (purchase mortgages) and those used to refinance an existing mortgage (refinance mortgages). The jump […]

February 6, 2019 | Phenomenal Trucking Boom Ends, Trucking Bust Starts

So that U-turn was fast, even for the legendarily cyclical trucking business. In January, orders for Class-8 trucks — the heavy trucks that haul trailers with goods of all kinds across the US — plunged by 58% from a year ago, to just 15,642 orders. It was the lowest number or orders since October 2016, […]

January 29, 2019 | The Most Splendid Housing Bubbles in America Shrink

Seattle prices drop 5.1% in five months, most since Housing Bust 1; San Francisco Bay Area, Los Angeles, San Diego, Denver, Portland all decline. This is the most obvious one: Seattle. House prices in the Seattle metro dropped 0.7% in November from prior month, according to the Case-Shiller Home Price Index released this morning. It […]

January 14, 2019 | China’s Consumers Rattle Global Automakers as Sales Plunge

Welcome to the Big Club of Saturation & Decline. For the month of December, light new-vehicle sales in China plunged 13%, compared to a year ago, to 2.23 million vehicles, the China Association of Automobile Manufacturers (CAAM) announced on Monday. Sales through June had risen 6%, but then came July, and now there have been […]

January 2, 2019 | iPhone Sales Croak, China’s Economy Deteriorating Faster than Expected, Apple Warns. Shares Plunge

“We did not foresee the magnitude of the economic deceleration.” Oh dude, starting the year out on the right foot. On Wednesday after the market closed, Apple released a letter to shareholders in which it said that revenues are going to be a lot worse in the quarter ended December 29 than its guidance two […]

December 26, 2018 | The Most Splendid Housing Bubbles in America Decline

Seattle house prices drop 4.4% in four months, biggest drop since Housing Bust 1; Prices deflate in San Francisco Bay Area, San Diego, Denver, and Portland. Some of the markets in this select group of the most spending housing bubbles in America have turned the corner, according to the S&P CoreLogic Case-Shiller Home Price Index, […]

December 22, 2018 | Nothing Goes to Hell in a Straight Line, Not Even Stocks

But a whole generation of investors has never been through a Nasdaq-bubble unwind, and they’re shocked. I just dug out my “Dow 20,000” hat, but I might not need it for a while because nothing goes to hell in a straight line. And I still have my “Dow 10,000” hat somewhere just in case, though […]

December 15, 2018 | The Trucking Boom Ends

But no letup in freight rates yet. In November, according to transportation data provider FTR, orders for new Class-8 trucks — the heavy trucks that haul the products of the goods-based economy across the US — plunged nearly 50% from July and August, 35% from October, and 15% from November 2017, to 27,500 orders, the […]

December 6, 2018 | Fed’s QE Unwind Reaches $374 Billion

But how low might the Fed’s balance sheet go? The Federal Reserve shed $54 billion in assets over the five weekly balance sheet periods that encompass the calendar month of November. This reduced the assets on its balance sheet to $4,086 billion, the lowest since January 15, 2014, according to the Fed’s balance sheet for […]

November 29, 2018 | Treacherous Times for Bond Funds Ahead

Bond ETFs and open-end bond mutual funds sound conservative in marketing materials, but they pack special risks & surprises in a downturn that can entail a catastrophic loss for investors. Exchange-traded bond funds and bond mutual funds are big business. They’re a lot easier for retail investors to buy and sell than the actual bonds, particularly […]

November 23, 2018 | 438 Stocks on the NYSE Have Already Plunged 40%-94% from 52-Week Highs

Bloodletting beneath the surface. Big names too. Here they are. It’s barely a correction, technically speaking, with the S&P 500 down 9.9% from its all-time closing high, the Dow down 9.2%, the Nasdaq down 14%, and the Russell 2000 small-caps index down 15%. But beneath the surface, there has been some serious bloodletting for many […]

November 11, 2018 | Anatomy of the Housing Downturn in Vancouver, Canada

It’s not pretty. In 2018, “each month has brought weaker than normal sales, rising inventory, and continued downward pressure on prices” in Vancouver, British Columbia, writes Steve Saretsky, a Vancouver Realtor and publisher of real-estate blog, Vancity Condo Guide. The market faces another headwind: “With the Bank of Canada determined to reach a neutral rate […]

November 7, 2018 | The State of the American Debt Slaves, Q3 2018

Consumers are being lackadaisical again with their plastic. Consumer debt – or euphemistically, consumer “credit” – jumped 4.9% in the third quarter compared to the third quarter last year, or by $182 billion, to almost, but no cigar, $4 trillion, or more precisely $3.93 trillion (not seasonally adjusted), according to the Federal Reserve this afternoon. […]

October 30, 2018 | Declines Hit the Most Splendid Housing Bubbles in America

Seattle prices fall sharply. New York condo prices nearly flat for the year. First feeble declines in San Francisco, Dallas, Denver, etc. Something is afoot. On the surface, it still looks strong. Single-family house prices in the US rose 5.8% in August compared to a year ago (not seasonally-adjusted), according to the S&P CoreLogic Case-Shiller […]

October 24, 2018 | Sales of New Houses Plunge, Pile of Unsold Homes Highest since January 2009, Prices Drop from Year Ago

Hot air is hissing out of this market. Sales of new single-family houses in September plunged 18% from September a year ago, not-seasonally adjusted, to just 41,000 new single-family houses, according to estimates that the Census Bureau and the Department of Housing and Urban Development jointly reported this morning. In terms of the seasonally adjusted […]

October 18, 2018 | Implosion of Stock Market Double-Bubble in China Hits New Lows, Authorities Busy Elsewhere Keeping China Miracle from Unraveling

Bigger issues than propping up the stock market beckon. Today, the Shanghai Composite Index dropped another 2.9% to 2,486.42. In the bigger picture, that’s quite an accomplishment: Lowest since November 27, 2014, nearly four years ago Down 30% from its recent peak on January 24, 2018, (3,559.47) Down 52% from its last bubble peak on […]

October 10, 2018 | How Will 6% Mortgage Rates Deal with Housing Bubble 2?

What many in 2016 thought would never happen again is now reality. It finally happened – a line in the sand has been breached. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment did what people had thought in 2016 we’d never see again: It […]

October 3, 2018 | Powell Explains Just How Hawkish the Fed is Getting

“But we’re a long way from neutral at this point.” When asked how much he worried about another “financial crash,” Fed Chairman Jerome Powell told PBS News Hour that the “next set of problems” wouldn’t “look a lot like the last set of problems we had.” It would be “something else, a cyber-attack, some type […]

September 26, 2018 | What Will Surging Mortgage Rates Do to Housing Bubble 2?

5% is here, 6% beckons as the next target. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment jumped to 4.97% for the week ending September 21, the Mortgage Bankers Association (MBA) reported this morning. A week ago, it was still at 4.88%. This is […]

September 20, 2018 | HELOCs in the US & Canada: As “Scarred” Americans Learned Bitter Lesson, Canadians Went Nuts

Home-equity-loan balances in Canada per capita are now 3.3 times what they were in the US during HELOC peak before it all collapsed. Home Equity Lines of Credit – the infamous HELOCs Americans used as endless ATMs to draw equity out of their homes before home prices collapsed – played a role in the US […]

September 17, 2018 | Meanwhile in China, Implosion of Stock-Market Double-Bubble

Bubbles don’t end well for those who don’t get out in time. US tariffs and threats of more tariffs have not been particularly well received in China, which is already being rattled by corporate credit problems, quakes in the shadow banking system, a peculiar Enron-type phenomenon at provincial and municipal governments called “hidden debt,” and […]

September 6, 2018 | The Fed’s QE Unwind Hits $250 Billion

Here’s my math when this “balance sheet normalization” will end. In August, the Federal Reserve was supposed to shed up to $24 billion in Treasury securities and up to $16 billion in Mortgage Backed Securities (MBS), for a total of $40 billion, according to its QE-unwind plan – or “balance sheet normalization.” The QE unwind, […]

August 27, 2018 | US Yield-Curve Looks Hell-Bent on Inverting, “Flattest” Since Aug 2007

How does it compare to German, Japanese, and Chinese yield curves? On Friday, the US Treasury 2-year yield rose to 2.63% and the 10-year yield remained at 2.82%. This squeezed the spread between them to just 19 basis points, the lowest since August 2007. This is a further step in the “flattening yield curve,” where […]

August 24, 2018 | My Inner Contrarian Wakes Up: Gold Short Positions Hit Record

Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. First things first: I want to thank the many readers who have expressed their interest in an article about my views and theories on gold and silver. In fact, the response has been so strong that I decided […]

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