Commodity Trade Mantra

Posts Tagged ‘Housing Market’

The Fed's Measure of Inflation is Furthest from American Reality

Ben Bernanke first set an official inflation target in January 2012, aiming at 2%. Has it been achieved? Well, it depends on how you measure inflation. There are many to choose from. The Fed has chosen the one that is most suppressed and furthest from the experience of most American households. So the Fed can pretend that inflation is “too low,” whatever that means.

Giant Financial Bubbles created by Central Banks are Fracturing

Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy & elsewhere in Europe & the sudden trading suspensions by three UK commercial property funds. It’s beginning to feel like August 2007 all over again. Of course, central banks have nothing to do with it at all!

Buy Silver With Both Hands On This Manipulated Sell-Off

I suggested at the beginning of the year that buying silver now would prove to be the trade of the decade. I maintain that call and currently is up over 8% YTD. I would suggest that all sell-offs in silver should be bought. Gold has been hit for as much as $23 last week and silver for 66 cents. You can leverage your trade in silver with mining stocks.

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.

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.

Chinese Devaluation Extends To 3rd Day - Yuan Hits 4 Year Low

Having devalued the Yuan fix by 3.5% in the last 2 days, China did it again, shifting Yuan to 4 year lows. While confusion reigns over why PBOC would intervene at the close to strengthen the Yuan last night, the reality is the commitment isn’t to a devaluation for China’s exports, but its actions are directed toward trying to keep the wholesale finance interfaces somewhat orderly.

Commodities are at the Cheapest since around 2002

Jeremy Grantham says the current commodities bear market is a consequence of the record-breaking bull market that came before it & was further exaggerated by a sustained slowdown in demand from China. But it seems that the worst is over & that commodities are likely close to a bottom. Investment attitudes are extremely negative, which is, as always, a requirement for change.

China Cuts Interest Rates - 21 Central Bank Easings In 2015 Till Now

The decision to cut benchmark interest rates again has been widely expected by the market. There was also some speculation that the deposit rate ceiling would be increased. The cut to the benchmark lending rate is also smaller than the last cut in November (40 bps). This may make some observers view the move as cautious.

Can Money Printing Cause Deflation?

Over the last 45 years I have observed that, in countries with high monetary inflation, real wages and incomes have tended to decline. Incidentally, this has also been the case since the turn of the millennium in the US, a period in which there has been a colossal expansion of money and credit.

Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows

Despite an improving job market and low interest rates, the share of first-time buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential, according to an annual survey released today by the National Association of Realtors.

Does This Look Like A Housing Recovery To You?

The chart that you are about to view is clear evidence that we are in the midst of a long-term economic decline. It shows what has happened to the homeownership rate in the U.S. since the year 2000, and as you can see it has been collapsing since the peak of the housing market back in 2007. Does this look like a housing recovery to you?

Federal Reserve Policies Cause Booms and Busts

Federal Reserve monetary expansion & artificially low interest rates generated wide imbalances between investment & housing borrowing on the one hand & low levels of real savings in the economy on the other. It was inevitable that reality of scarcity would finally catch up with all these mismatches between market supplies & demands.

Six Myths About Money and Inflation

Its a myth that increasing aggregate demand through increasing the money supply will lead to more spending, higher employment, increased production & a higher overall standard of living. Here are 6 of the most prevalent economic myths about money & inflation that appear time and again in the mainstream media.

Copper and Aluminum Rally on Supply Deficit

Copper prices have been rebounding as demand for copper expands to a record in China & use in the U.S. climbs to the highest since 2009. Global copper inventories have fallen by almost half this year & are near the lowest since 2008. Aluminum rose to the highest in 18 months as global production trails consumption.

How Important is Housing to the American Economy?

Nothing moves the economic needle like housing. No wonder every Fed chairman has lowered rates to try to crank up housing activity. All claims to the contrary, the disappointing first-quarter housing numbers expose the Federal Reserve as impotent at influencing GDP’s most important component.

Why Market Bulls Should Hope Interest Rates Don't Rise

There is a very high correlation, not surprisingly, between these three components (inflation, economic and wage growth) and the level of interest rates. Interest rates are not just a function of the investment market, but rather the level of “demand” for capital in the economy.

Why Housing Has Stalled — And Why Everything Else Will Follow

The US housing market is weak and getting weaker. But the real question is what this means for the rest of the economy. Is housing a discrete sector dealing with its own supply/demand issues, or is it a sign of things to come for consumer spending, government tax revenues, and business investment?

US Government Backing for Toxic Mortgage Securities?

The stated goal of the Johnson-Crapo bill is to “overhaul” mortgage giants Fannie Mae & Freddie Mac so that “private capital can play the central role in home finance.” The real objective is to hand over the profit-generating mechanism to the private banks while the red ink is passed on to the public.

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.

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