Commodity Trade Mantra

Posts Tagged ‘Housing Bubble’

Could China's Housing Bubble Bring Down the Global Economy?

China’s stated intent is to move from a fixed-investment/export dependent economy to a consumer economy. But if we consider what happens when housing slows or even grinds to a halt, we realize the impact on incomes, wealth and consumption will be extraordinarily negative, not just for China but for every nation that sells China vehicles and other consumer goods.

The Echo Bubble in Housing Is About to Pop

Here’s the knife in the heart of the Echo Housing bubble: household income– stagnating for decades for 90% of households has declined since the Bubble Top when adjusted for inflation. Please explain how declining real income can support nosebleed home prices now that mortgage rates have bottomed & started their inevitable rise from absurdly low levels.

The Aussie Dollar Gold Just Broke Out to Multi-Month Highs

After putting in a panic low in Nov last year, Aussie dollar gold soared, peaking in late January of this year. A strong rally in Aug followed by more gains in Sept, gave the upward trend a push. US dollar gold price strength, combined with a weaker Aussie dollar, sent the Aussie dollar gold price to an eight month high overnight. It closed the US trading session at $1,641 an ounce.

A Major Cause of the Financial Crisis is Coming Back

One of the biggest causes of the financial crisis is back. Lenders aren’t giving people subprime loans to buy houses anymore. They’re lending to people to buy cars & to buy stuff on their credit cards. If a big financial institution takes a big risk and it pays off, it keeps the profit. If it takes a big risk and blows up the financial system, the government will bail it out…like it did in 2008.

The Fed Admits Economy Can't Function Without Bubbles

Wild swings in asset prices over the past 20 years and the associated boom-bust cycles have sparked considerable debate about how monetary policy might play a stabilizing role. In other words, thanks to Alan Greenspan, the US economy cannot function under a normalized monetary policy regime, “roughly speaking.”

Will the Oil Patch Bust Trigger US / Global Recession?

Since early 2010, energy producers have raised $550 billion of new bonds & loans as the Federal Reserve held borrowing costs near zero. This seemingly inexhaustible credit line is now drying up, with severely negative consequences for oil producers with debt that’s coming due. Could the oil patch bust triggered by oil plummeting to $50/barrel kick the U.S. into recession?

Is Greece Finally Ready to Do the Right Thing & Leave the Euro?

The euro is one of the greatest monetary frauds in history & its managers have waged one of the greatest campaigns of financial terrorism in history. They have persuaded just about everyone on the planet that exiting the euro would be an unmitigated disaster for the Greek people. This is absolutely opposite of the truth.

Central Bank Credibility, The Equity Markets, And Gold

Coming out of the Great Recession, central bank credibility – their ability to “pull us out” of the Recession – was being severely questioned by investors. Thus, a good portion of investor money found its way into gold. That changed in 2011. Central bank credibility is at a peak, so gold is in the dumps.

Freddie And Fannie Reform – The Mortgage Monster Has Arrived

As promised, the Johnson/Crapo bill has finally arrived. The Bill is going to increase mortgage compliance costs. It will confuse, rather than clarify, the mortgage application and approval process. It is a disaster. Fortunately, I opine the Bill has no chance of passing in its present form.

The "Institutional Investor" Housing Bubble Just Burst

With retail buyers long out, cash & institutional investors on their way out, QE fading & with it the MBS bid, not to mention the surge in foreclosure exits & the flood of foreclosed properties about to hit the market, things for the US housing market are about to get very messy.

How Dangerous Is The Credit Bubble In China For The World?

On any list of banking accidents waiting to happen, China is assured a place at the very top. But could a crash there take the entire global economy down with it? There’s no doubt that there are going to be massive problems in China. What’s more, China could trigger a huge global meltdown.

The Legacy of Ben Bernanke : A Weak and Mediocre Economy

If there was no pre-crisis credit boom, there would have been no large financial crisis and thus no need for Bernanke to have done better during and after. Bernanke’s policy is also rightly criticized as the great cost of these post-crisis policies is the intrusion of the Fed into politics and fiscal policy.

China Households Massively Exposed To Housing Bubble That Has To Burst

China’a housing market is clearly oversupplied. Existing housing stock is sufficient for every household to own one home, and China is supplying about 15 million new units a year. The housing bubble has to burst & the hit to household wealth will have a long term negative impact on consumption.

An Update On The Much "Hoped For" Housing Recovery

The rising risk to the housing recovery story lies in the Fed’s ability to continue to keep interest rates suppressed. With each tick higher in mortgage rates, so goes the monthly mortgage payment. Also the housing recovery is ultimately a story of the “real” employment situation.

JPMorgan Urged to Pay More in Mortgage Deal

After JPMorgan raised its total offer to $11 billion, the disparity in negotiating positions narrowed significantly – And the size of the fine is not the central negotiating point for JPM. JPMorgan is focused on using the pact to resolve many investigations it faces.

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