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February 21, 2022 | The Most Splendid Housing Bubbles in Canada as Bank of Canada Begins QT, Yields Spike

Canada’s housing bubble had been waning before the pandemic, particularly in Vancouver, but then came the crazy monetary policies of the pandemic, the tsunami of global free money, including from the Bank of Canada, and BOOM goes the housing bubble in Vancouver and some other markets – but not in all markets. A year ago, […]

February 18, 2022 | Margin Debt Plunged as Stocks Tumbled and High-Fliers Got Crushed. But Leverage Still Gigantic, Long Way to Go

The only measure of stock market leverage that is reported monthly is margin debt at brokers, via FINRA. Much of the stock market leverage isn’t reported, such as Securities Based Lending, and even banks and brokers that fund this leverage don’t know the leverage in the overall market, or even the leverage of their client […]

February 8, 2022 | Used Vehicle Prices Finally Hit Resistance, at Ridiculous Levels

Used car and truck wholesale prices that had gone berserk last year were essentially flat in January, the first hesitation since August, at ridiculously high levels, as pricing resistance in face of this craziness is finally setting in. Two months ago, I noted the first signs of softening of some of the beneath-the-surface pricing-dynamics. And […]

January 19, 2022 | Most Splendid Housing Bubbles in Canada: Mad Scramble to Lock in Rising Mortgage Rates as Bank of Canada Is Set to Tighten

Potential homebuyers and speculators in Canada are now looking at rising interest rates coming their way, which is a dreadful sight with house prices at these ridiculous levels in the big markets. As is typically the case early in rate-hike cycles, there is now a mad scramble underway to buy a house now, no matter […]

January 12, 2022 | Purchasing Power of the Dollar Goes WHOOSH!

The broadest Consumer Price Index (CPI-U) jumped by 0.5% in December from November, and by 7.04% from a year ago, the highest since June 1982, according to data released by the Bureau of Labor Statistics today. But there’s a big difference between now and 1982. Now, the inflation index is spiking, and has been getting […]

January 4, 2022 | What I See for 2022: Interest Rates, Mortgage Rates, Real Estate, Stocks & Other Assets as Central Banks Face Raging Inflation

Super-inflated asset prices such as housing, stocks, and bonds; massive inflation; and central banks that have started to react. Many central banks have started pushing up interest rates; others have ended asset purchases. And Quantitative Tightening (QT) – central banks shedding assets – is on the table. Rising interest rates in the US won’t catch […]

December 27, 2021 | My “Wealth Effect Monitor” & “Wealth Disparity Monitor” for the Fed’s Money-Printer Economy: December Update

My “Wealth Effect Monitor” uses the data that the Fed releases quarterly about the wealth of households. The Fed, after having released the overall data for the third quarter earlier in December, has now released the detailed data by wealth category for the “1%,” the “2% to 9%,” the “next 40%” (the top 10% to […]

December 19, 2021 | Most Splendid Housing Bubbles in Canada, November Update, after Bank of Canada Ended QE and Put Rate Hikes in Sight

In an amazing development for the Canadian housing market where prices have relentlessly exploded higher – fueled by money printing and interest rate repression that started in March 2020 – prices in November didn’t explode higher in all cities, but only in a few, and “paused” in some, and declined in others. In the most […]

December 14, 2021 | Vehicles in Operation and Registrations in 2021 by Automaker and Segment. Where’s Tesla?

At the end of the third quarter, there were 283.8 million vehicles in operation (VIO) in the US, of all model years, from the oldest still-registered classic to new vehicles that were just sold, up from 281.6 million vehicles a year earlier, according to Experian’s quarterly report, based on registration data. And over the 12-month […]

November 30, 2021 | The Most Splendid Housing Bubbles in America, November Update: Another Holy-Cow Moment

“After 14 consecutive months of acceleration, the S&P CoreLogic Case-Shiller index finally took a turn,” said CoreLogic Deputy Chief Economist Selma Hepp today. But wait… Instead of spiking at a rate of 2% or more from month to month, the national index spiked by only 1.0% in the latest month, whittling down the year-over-year spike […]

November 26, 2021 | Red Friday: A Little Dip and Already the Crybabies on Wall Street are Clamoring for the Fed to Soothe their Pain

Stock markets closed at 1 p.m. today, and there wasn’t enough time to rectify this evil situation that has emerged on Black Friday, when stocks were supposed to be meandering higher on very low volume, driven by a few algos that would make sure stocks meandered higher to easily book another winning day and a […]

November 17, 2021 | The Most Splendid Housing Bubbles in Canada “Pause” after Bank of Canada Ends QE, Starts Unwinding its Balance Sheet

So this is something that hasn’t happened in the Canadian housing market since 2019: The Teranet-National Bank House Price Index for October, released today, failed to rise from the prior month. The index for Vancouver, a red-hot housing market, fell for the second month in a row, something the market hasn’t seen since September 2019. […]

November 8, 2021 | Used Vehicle Wholesale Prices Spiked by the Most Ever in October. Retail Prices to Follow

Used vehicle wholesale prices spiked by 9.2% in October from September, the biggest month-to-month spike in the data going back to 1997, after having spiked by 5.3% in September, according to Manheim, the largest auto auction operator in the US. Year-over-year prices spiked by 38% from the already sky-high levels last October. Compared to October […]

November 4, 2021 | The Fed Lost Control of the Inflation Narrative

The story being propagated by the Fed is that the supply-chain nightmare caused this burst of inflation, the worst in decades. Inflation is taking off in other countries as well, with multi-decade highs in Germany, in Europe generally, in Canada, and other places. This has spread across big parts of the globe. But the Fed […]

October 28, 2021 | Suddenly Hawkish Bank of Canada Ends QE, Moves Rate Hikes Forward. 1-Year and 2-Year Yields Spike

Following its policy meeting today, the Bank of Canada announced that it would end QE outright beginning November 1. And – unexpected by economists – it moved rate hikes closer, with April 2022 now showing up as the expected date of a liftoff, up from the second half in 2022, with four rate hikes expected […]

October 17, 2021 | Not Getting Better: Relentless Retail Inventory Squeeze amid Shortages & Supply Chain Chaos

The holiday selling season is approaching, and a whole litany of weird shortages is ricocheting through the economy. Stuff suddenly gets hung up somewhere, on a ship, or in a port, and then ends up somewhere else, or it’s on backorder for months, as manufacturers are struggling with material shortages and in in Asia with […]

October 16, 2021 | Banks Disclose Tidbits of Hidden Stock Market Leverage, as Known Stock Market Leverage Surges

No one knows how much total leverage there is in the stock market. Only fragments are reported. Margin loans are reported monthly, and they provide a general idea of the trend in stock market leverage. Some types of leverage are not disclosed at all until something implodes spectacularly, such as Archegos. Other types of leverage […]

October 5, 2021 | Just Keeps Getting Worse: Services Trade Surplus, the American Dream-Not-Come-True, Worst in 10 Years. Imports Worst Ever. Trade Deficit Worst Ever

Back when offshoring production by Corporate America to cheap countries was hailed as good for the overall economy, rather than just good for Corporate America, any fears about potentially exploding trade deficits were papered over with visions of the new American Dream: America was great at producing and selling high-value services – the financialization of […]

September 26, 2021 | Suppliers in China for Apple, Tesla, Intel, Nvidia, Qualcomm, NXP, Infineon, ASE Forced to Halt Production amid Energy Crackdown

Amid China’s many crackdowns is a crackdown on energy consumption, motivated by a slew of reasons, including most pressingly, spiking prices for coal and natural gas, particularly Liquefied Natural Gas. China is the second largest importer of LNG behind Japan. As Europe and Asia compete for supply, the price of LNG for November delivery to […]

September 22, 2021 | Home Sales Fall from Year Ago, Prices Down for 2nd Month, Price Reductions Jump: This “Deceleration” Despite Massively Negative Real Mortgage Rates

Sales of single-family houses, condos, and co-ops fell by 2.0% in August from July, and by 1.5% from August last year, to a seasonally adjusted annual rate of 5.88 million homes, according to the National Association of Realtors today (historic data via YCharts): Sales of single-family houses fell 1.9% in August from July and by […]

September 15, 2021 | What a Collapse of China’s Evergrande Would Mean

Property development has been a huge factor in China’s economic growth. It accounts for 28% of GDP. And much of it has been funded by debt, including dollar-debt, and much of it is now blowing up. Foreign investors piled into the property sector over the years, buying hundreds of billions of dollars in bonds, including […]

September 8, 2021 | New Vehicle Sales Plunged Further in August amid Inventory Shortages & Production Cuts: Chip Shortage Wreaks Havoc

It has been one heck of a year so far for automakers, with sales surging early in March and April to very high levels, only to get smacked down brutally by the inventory shortages that resulted from the semiconductor shortages that were triggered by the record mind-blowing spike in sales of durable goods more broadly […]

September 2, 2021 | The Monstrous Flow of Free Money and the Shortages

The shortages are not at Costco or Safeway, though they too might run out of a few weird items here and there. But other retailers are complaining about them, including apparel retailers and shoe retailers – yup, it took five weeks for my running shoes to arrive after I ordered them online, when normally I’d […]

August 24, 2021 | End of the Era of Voracious Corporate Appetite for Office Space

It has been nearly 18 months that many big-company offices became no-go places, and the temporary disruption that was supposed to last only a few months has been dragging on and on. The vaunted and repeatedly delayed “return to the office” – as flexible, partial, and “hybrid” as it was supposed to be – is […]

August 19, 2021 | The Extra $300/Week Unemployment Benefits Encouraged Many to Not Work: Details about the “Labor Shortage” Pile Up

In the 27 states that have ended the extra $300 a week in federal unemployment benefits, paid on top of the regular state unemployment insurance, people are returning to work at a much faster rate than in states where the extra $300 a week are still being paid: this was further confirmed today by the […]

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