Japanese Economy Contracts Bigger than Expected 7.1% in 2nd Quarter; Really Bad Theories
By now it should be pretty clear that Abenomics is a complete failure. Abenomics did not spur lending, investment, hiring, or wage growth.
It’s one touted “success” is that prices have gone up. And for cash-strapped consumers facing higher taxes, that alleged “success” is actually a disaster.
Japanese Economy Contracts Bigger Than Expected 7.1% in Second Quarter
Please consider Japan says economy contracted 7.1 percent in April-June on bigger drop in business investment.
Japan’s economy contracted at a larger than earlier estimated annual rate of 7.1 percent in April-June, as companies and households slashed spending following a tax hike.
The revised data released Monday show business investment fell more than twice as much as estimated before, or 5.1 percent, while private residential spending sank 10.4 percent, in annual terms. The earlier estimate showed the economy contracting 6.8 percent.
The recovery of the world’s third-largest economy has slowed following the increase in the sales tax to 8 percent from 5 percent on April 1.
Read more at http://globaleconomicanalysis.blogspot.com/2014/09/japanese-economy-contracts-bigger-than.html#3hbGVq5FEcYw98gr.99
Big money investors pull out of California real estate dramatically – sales are down by over 80 percent
We have 2.3 million adults living with parents because they simply don’t have the money to buy. Investors are largely exiting because of perceived values.
Follow the big money has been an adage on Wall Street for many decades. If that philosophy holds true for real estate as well, big money investors are signaling something regarding California real estate. Big investors have entered the single family housing market in a way that is unparalleled in history. We truly are in uncharted waters here. It is clear that the investors pulled the market upfrom the graveyard and gave it a substantial boost. It is no surprise then, as investors exit the California housing market that sales have waned and inventory has slowly started to pick up. A good way of seeing big money demand is to look at purchases made under LLCs or LPs since these are your big money Wall Street and hedge fund players. They are interested in deploying large sums ofmoney versus your crap shack aspiring flipper or buyer. What is clear is that large buyers have pulled back in a dramatic fashion.
Big money pulling away from California
Wall Street is obsessed with profitability and examines things like price-to-earnings ratios. For rentals, your earnings come from rents and your price is the market value of a home. Simple enough. The fact that housing values inflated very fast has put the question of valuation to the forefront of these big investors that scour the numbers carefully. The results? Purchases from LLCs and LPs are down by over 80 percent from their peak in 2012.
The drop in big money purchases is rather clear:
http://www.doctorhousingbubble.com/big-investors-california-llc-lps-purchase-volume-cash-sales/
Europe Is Coming Apart
The big news at the moment is in the UK, where it looks like there’s a real chance that Scotland might vote to leave Great Britain in a referendum that’s coming up on Sept. 18. Up until very recently, the conventional wisdom was that it would be a fairly close vote, but that really the pro-independence campaign had very little shot. Now people are treating it more like a coin flip.
But you shouldn’t let the possible breakup of the Sterling-zone distract you from the mess elsewhere.
In France, a new poll shows that Marine Le Pen is the current favorite in the 2017 Presidential elections. 2017 is a long time from now, but for those who don’t know, Le Pen is the head of France’s ultra-right National Front party, which was founded by her anti-Semitic, Holocaust-denying father Jean-Marie Le Pen. Marine is not as extreme as her father, but she’s sharply anti-eurozone and holds other right-wing views.
Meanwhile in Germany, the anti-eurozone party AfD (Alternative For Deutschland) won a shocking 10% of the vote in the Eastern German state of Saxony. It became the first anti-eurozone party to win a seat in a regional parliament, according to the BBC.
Read more: http://www.businessinsider.com/europe-is-coming-apart-2014-9#ixzz3CmxR0YPV
Investor Sentiment In Europe Crashes
Here’s a chart from Pantheon Economics:
Pantheon
http://www.businessinsider.com/investor-sentiment-in-europe-crashes-2014-9
JPMorgan Stunner: “The Current Episode Of Excess Liquidity Is The Most Extreme Ever”
Headlines:
- Japan Says Economy Contracted 7.1 Percent in 2Q
- Japan’s current-account surplus misses forecast
- OECD indicators point to muted global outlook
- Venezuelan Default Suggested by Harvard Economist
- Brazil’s Economic Growth Forecast Reduced Again
- Mark Zandi: U.S. corporate tax code to blame for inversion trend
- Companies race to adjust health-care benefits as Affordable Care Act takes hold
- Lew: ‘Imperative’ for Congress to Solve Inversions Problem
