The “Mortgage Equity Withdrawal” Boom…Here we go Again?
Remember the great “housing ATM”? Well, according to Goldman Sachs, we’re starting to see that effect again.
FT Alphaville’s Cardiff Garcia has a nice piece summarizing a recent Goldman note in which they make the case that housing could boost GDP. Here’s the key section:
“First, the impact of housing is shifting into positive territory. The overall impact averaged around -1/4 percentage point in [...]
We will share much more of Jeremy Grantham‘s latest just released must read letter shortly, but for now the following section will suffice because, in short, we agree with every single word said in it.
The economic environment seems to be stuck in a rather unpleasant perpetual loop. Greece is always about to default; the latest bailout is always about to save the day and yet never seems to; China is always about [...]
Thanks to a bleak macro environment and triple-digit penetration rates (the result of consumers owning multiple devices), some countries are actually reporting subscriber declines. Meanwhile, competition remains intense, and mobile data adoption is both pressuring voice revenue and leading to escalating capex needs. This could prove a toxic mix for debt-laden incumbents such as TEF, TI, and FTE.
More on Cisco’s IP traffic forecast: While the 29% growth rate forecast by [...]
Editor’s Note: Keith Jurow has been posting articles regularly for the past two years on BUSINESS INSIDER. He is the author of Minyanville.com’s Housing Market Report.
After being the only analyst who was spot-on correct in stating for the past two years that there is no housing bottom in sight, it’s time for me to tell you what I see ahead.
Housing pundits are nearly unanimous in declaring that housing markets are [...]
Sy Harding: Consumers understandably like to see pricesfor commodities decline, the more the merrier, particularly gasoline (NYSEARCA:UGA) and energy costs (NYSEARCA:XLE).
Many analysts also take commodity price declines as a positive for the economy, on the theory that consumers will have more spending money in their pockets, and manufacturers will have lower costs, so hopefully greater earnings.
Investors tend to also take declining commodity prices as a positive for the stock market [...]
By Martin Katusa of Casey Research
Which Stocks Will Lose the Most in the Coming Energy Bloodbath
Yesterday, I made a prediction that should scare a lot of investors.
I predicted a massive loss in market valuation for some of North America’s largest energy producers. You might own some of these names yourself.
I’ll share some specific names with you in a moment… But before we cover them, it’s important you know the dynamics that will drive [...]
WASHINGTON (Reuters) – Global food prices are rising again, pushed higher by costlier oil, strong demand from Asia and bad weather in parts of Europe, South America and the United States, the World Bank said on Wednesday.
The latest World Bank food price index showed the cost of food rose 8 percent between December and March. In the previous four months, prices had declined. Even after the latest rise, food prices [...]
WASHINGTON (AP) — Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven’t been enough to boost prices.
The Standard & Poor’s/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.
The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged [...]
It is now cheaper to buy a home than to rent in 98 of the 100 largest U.S. metropolitan areas. Years of post-bubble price declines, alongside stable or rising rents, have pushed down price-to-rent ratios across the country, according to Trulia’s Winter 2012 Rent vs Buy Index. The index tracks whether it is more affordable to rent or to buy a home by looking at asking prices on Trulia.com for rentals [...]
People’s Daily: New home prices ceased growing in most of 70 major Chinese cities in February, the National Bureau of Statistics (NBS) said Sunday…
On a year-on-year basis, 27 cities saw new home price declines in February, up from 15 in January, the NBS said.
Month over month % change in new residential property values across major cities (source: NBS)
Interesting piece by Barry Ritholtz, complete with some eye-popping charts….
We suspect the Great Depression housing bust didn’t have the government props to soften the blow as we do today, which, therefore, on a relative basis, makes the current bust much worse. The prior conditions to the current bust must have been much worse than those before the Great Depression. The Council of Economic Advisers (CEA) do note,
…during the Great Depression, [...]
By Jeff Clark, BIG GOLD
I’ve told more than one concerned investor that when the gold price falls, they should “come back in three months” and see if they’re still worried. The idea is that the daily and monthly gyrations are nothing to fret over, that the price will recover and, in time, fetch new highs.
That advice has worked every time gold underwent any significant correction (except [...]
This article originally appeared in the Daily Capitalist. It was written by DoctoRx who writes market commentary for us.
On Monday, Sept. 19, I suggested that the price of gold was vulnerable, and also suggested that the stock prices of miners were a better intermediate-term bet. This was two days before the FOMC meeting, which much of the “smart money” expected would produce a Jobsian “one thing more” [...]
WASHINGTON (AP) — Spring buying pushed home prices up for a third straight month in most major U.S. cities in June. But the housing market remains shaky, and further price declines are expected this year.
The Standard & Poor’s/Case-Shiller home-price index shows prices increased in June from May in 19 of the 20 cities tracked. A separate figure shows prices rose [...]
The risk of double dip recession is rising.
And while economists disagree on just how likely the U.S. economy is to fall into another downturn, they generally agree on one thing — a new recession would be worse than the last and very difficult to pull out of.
“Going back into recession now would be scary, because we don’t have the resources or the will to respond, [...]
Almost 40% of homeowners who took out second mortgages—extracting cash from their residences to cover everything from vacations to medical bills—are underwater on their loans, more than twice the rate of owners who didn’t take out such loans.
The finding, in a report to be released Tuesday by real-estate data firm CoreLogic Inc., illustrates the consequences of easy borrowing amid the housing boom’s inflated prices. The [...]
Looking at the relative prices of buying and renting homes in Silicon Valley, Manhattan and a few other places is enough to make you wonder whether parts of the housing market are still due for a crash. To consider that question in more detail, I had a conversation with Mark Zandi, the chief economist at Moody’s Analytics, which provided much of the data for my column:
Q. I’m [...]
1) Moody’s: US Municipal Sector To See Toughest Year Since 2008
“Moody’s Investors Service said it expects 2011 will be the toughest year for U.S. state and local governments since the economic downturn began in 2008, as states cope with weak revenue growth, significant spending obligations and the loss of federal stimulus funding.”
2) Home prices falling in most major US cities
“Home prices are falling in most major [...]
NEW YORK (AP) — Home prices are falling in most major U.S. cities, and the average prices in four of them are at their lowest point in 11 years.
The Standard & Poor’s/Case-Shiller 20-city index shows price declines in 19 cities from December to January. Eleven of them are at their lowest level since the housing bust.
Home values in Atlanta, Las Vegas, Detroit and Cleveland are now [...]
BDI drops to pre-QE level:
Emerging markets = commodities. Like a giant puzzle, if BDI is down due to less stockpiling by China and reduced manufacturing demand, then emerging market stocks will decline causing money flows back to the U.S., as investors seek safety and better returns. Money supply in the U.S., previously subdued despite massive liquidity injections because of capital flight, ramps [...]
Underneath the Happy Talk, Is This As Bad as the Great Depression?
The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:
Fed Chairman Ben Bernanke
Former Fed Chairman Alan Greenspan (and see this and this)
Former Fed Chairman Paul Volcker
Economics scholar and former Federal Reserve Governor Frederic Mishkin
The head of the Bank of England Mervyn King
DEFLATION REMAINS THE PRIMARY RISK
The San Francisco Fed just published another great report titled The Breadth of Disinflation.
The fact that one of the most reliable research departments within the Fed system could publish such a report two years into the greatest experiment with fiscal, monetary and bailout stimulus and reflationary policies speaks volumes. Frankly, what it tells us is that the 4.3% yield on the [...]
by Karl Denninger
I’d pay attention to these…..
That’s IQI, a levered municipal bond fund.Â It yields 6.5% at present – totally unsustainable in today’s ZIRP environment.Â At that discount (from recent price destruction) you’re either getting the buy of the century or the portfolio is about to detonate in your face.Â Pick one.
This would be California municipal debt run by PIMCO.Â Yielding 7.8% (!!!)Â Again, [...]
1) New York Lawmakers May Resort to Bonds to Bridge Budget Deficit
“June 12 (Bloomberg) — New York state may close a budget deficit with sales of bonds for the second time in seven years. The bonds may be backed by tobacco-settlement payments or income taxes, as lawmakers seek to avoid spending cuts.”
2) Illinois suffers new credit rating blow
“IllinoisÃ¢â‚¬â„¢ unwillingness to tackle its budget woes prompted Fitch [...]