Finally – news so bad it's GOOD!
Commercial Real Estate is down 14% in China so far this year with Residential right behind, down 13.5% – all on 11.8% fewer sales than last year. Foreign investment in Chinese properties has dropped 42.9% year to date. China's main banks are not lending any money – due to lack of demand, not supply and 45% of Chinese companies predict a slowdown this year and next. Brazil is right behind China with their own real estate market collapsing and the IMF is racing over to Australia to assess the damage done to their banks by the bursting property bubble and EU property values are also off 20% from their 2007 peaks – even in London and Frankfurt – which were supposed to be "immune" from this nonsense.
Good – let's get it all out in the open finally!
Italian Banks are in turmoil and their Government is considering using troops to protect the Banksters after one was shot last week. There is a run on the Greek Banks with almost $900M withdrawn this month and virtually no liquidity should people want more. Meanwhile, The Institute of International Finance has estimated that the global cost of a Greek exit could hit $1,300,000,000,000. When Argentina defaulted in 2001, foreign debtors lost around 70% of their investments. Is $1.3Tn finally a number that matters?
That's right folks, the Global situation is a complete and utter disaster – which is why we went long on the Russell Futures (/TF) at 775 and Oil Futures (/CL) at $92.50 in Member Chat this morning. Where the Hell else are you going to put your money if not in US Equities? That was my conclusion at 11:54 in yesterday's Chat, when I said to Members:
Nice pop off the EU close – still seems like people are abandoning the sinking ship of state over there and money has nowhere to go but US equities (but TBills and Dollars are getting some love too). With gold, silver, oil and copper all looking weak – where the hell are people supposed to put money?