Posts Tagged ‘real estate market’

Recession 2010?

Recession 2010?

Courtesy of Michael Snyder at The Economic Collapse

If you watch any mainstream news program these days, it is almost a certainty that someone will mention the word "recession" before a half hour passes.  In fact, it seems like almost everyone is either predicting that we are going into a recession, or they are warning of the need to avoid a recession or they are proclaiming that we are still in a recession.  So will the U.S. economy once again be in recession in 2010?  When you consider all the signs that are pointing that way, the evidence is compelling.  The truth is that there is bad economic news wherever you turn.  There is bad news in the housing industry.  There is bad news in the financial markets.  There is bad news in the banking system.  There is bad news coming out of Europe.  There are even signs that the bubble in China may be about to burst.  Plus, the economic impact of the Gulf of Mexico oil spill could end up being the straw (or the gigantic concrete slab) that really breaks the camel’s back.  So there are certainly a lot of pieces of news that "gloom and doom" economists can hang their hats on these days.  There is a very dark mood in world financial markets right now, and it seems like almost everyone is waiting for the other shoe to drop.  But does all of this really mean that we are looking at the start of another recession before the end of 2010?   

The truth is that nobody really knows.  Things certainly look very ominous out there.  The dark clouds are gathering and the economic winds are starting to blow in a bad direction.  The following are 24 pieces of evidence that do seem to indicate that very difficult economic times are imminent….

-U.S. Treasury yields have dropped to stunning new lows.  So why are they so low?  Well, it is because so many investors are anticipating that we are headed into a deflationary period.  In fact, many economists are warning that the fact that Treasury yields are so low is
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Beijing Real Estate Association Admits There’s A ‘Big Bubble’…

Beijing Real Estate Association Admits There’s A ‘Big Bubble’, Supports New Measure To Ban Home Buying

beijing, clusterstock photo Courtesy of Vincent Fernando at Clusterstock 

Beijing on Friday announced a ban on families buying more than one home, in addition to other measures aimed at cooling the city’s hot property market.

China Daily:

As of Friday, "one family can only buy one new apartment in the city for the time being," the municipal government said in a statement. The government also ordered the implementation of central government policies that ban mortgages for purchases of a third or third-plus home.

It also instigated a central government ban on mortgages to non-local residents who cannot provide more than one year of tax returns or proof of social security payments in Beijing. The statement called for "resolutely curbing unreasonable housing demand." It ordered the implementation of measures earlier unveiled by the State Council on second-home purchases.

One of these days, property market tightening measures are going to hit the market hard. It’s fat chance that these regulatory efforts can perfectly balance out the market so that prices simply stop rising and all is calm.

The latest measures, more harsh than those released by the State Council, are aimed clearly at curbing speculation and promoting healthy and stable development of the property sector, Chen Zhi, deputy secretary-general of Beijing Real Estate Association, told Xinhua.

Speculation is the main reason behind high home prices in Beijing, Chen said.

"There exists a rather big bubble in the city’s real estate market. Housing has become more unaffordable for many," he added.

So even the Beijing real estate association is worrying about a bubble. At least give them some credit here. Did America’s National Association of Realtors (NAR) ever caution that the U.S. housing market has a ‘big bubble’? If they did, we don’t recall it.

****

See also:  Beijing city limits home-buyers to one new apartment: Media

In The Economic Times

BEIJING: The city of Beijing has issued rules limiting families to one new apartment purchase as authorities try to rein in rampant property speculation and soaring prices, state media reported Friday.  More here.>>


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UPDATING OUR OUTLOOK ON HOUSING

UPDATING OUR OUTLOOK ON HOUSING

Courtesy of The Pragmatic Capitalist 

In 2006 when housing prices were at their peak I wrote:

“The credit driven housing bubble remains the greatest risk to the equity markets at this time.”

Since the government stimulus programs kicked in around late 2008 I turned mildly bullish on U.S. housing.  With the understanding that government backstops would likely bolster the market I said:

“Housing [will remain] in a steep decline, though the rate of decline slows substantially by the middle of 2009.  The market does not rebound, but false hope of a sharp turnaround appears possible by the end of 2009.”

Earlier this year I wrote:

“While we believe housing markets could show signs of life this Spring we continue to think the recovery in housing is almost entirely stimulus based and the long-term bear market in housing is still very much alive.  The laws of supply and demand have been temporarily lifted as the government attempts to price-fix a broken market.  In the long-run, however, the market is likely to return to its negative trends as the second round of mortgage resets and inventory overhang impose their will on a still very fragile U.S. consumer.  All of this adds up to a potentially bullish H1 in housing followed by a potentially treacherous 2011.”

In our 2010 outlook I said the government’s stimulus programs would continue to bolster asset prices (including equities).   But with the housing tax credit coming to a close in the next few days it’s finally time to take a look at these markets for what they really are and not what the government has been making them out to be.  In other words, the laws of supply and demand will come back to some semblance of reality.

As I’ve maintained, the price stability in housing has been primarily government induced.  The “false dawn” we have been seeing has been primarily due to in incentives bolstered market and government spending that papered over the weakness in the private sector.   Housing is notoriously seasonal and in my opinion the government couldn’t be stepping aside at a much worse time.

Although we’ve seen some certain signs of stability in recent months we’re also beginning to see some signals that could be forecasting the next leg down in the housing market.  The following chart shows the housing loan performance index compared to the Case…
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Case-Shiller: housing double dip threat as only 4 of 20 markets rise

Case-Shiller: housing double dip threat as only 4 of 20 markets rise

Courtesy of Edward Harrison at Credit Writedowns 

The December 2009 data for the widely followed S&P/Case-Shiller Indices were released this morning.  The data are showing a mixed picture. On the one hand, the unadjusted numbers are down on both a month-to-month and year-over-year basis (Composite-10 and Composite-20 respectively down 2.5% and 3.2% versus December 2008). Only four of twenty markets saw price increases. However, the seasonally-adjusted data do show a slight improvement in markets on a month-to-month basis, despite year-over-year price declines.

Below are the non-seasonally adjusted data:

case-shiller-2009-12

What is clear from the numbers is that the markets in which prices are now doing the best are mostly the same ones that had both experienced the greatest carnage and had also experienced a prior price bubble. This includes Phoenix, LA, San Diego, San Francisco, and Las Vegas. You see yearly home price increases in California for example. Moreover, the only four markets where prices increased month-to-month were in the previously devastated bubble markets of Phoenix, Las Vegas, San Diego and Las Vegas.

The breadth of price increases has now narrowed to 4 of twenty markets. And that has to be worrying whether you are looking at unadjusted winter month data or seasonally-adjusted data. Since June, the number of markets in the Composite-20 where prices have risen has gone from 18 in June to 18 in July, 17 in August, 10 in September, 8 in October, 5 in November and 4 in December.

Some analysts are unfazed by the fall in the number of markets with price increases. They believe the declines are seasonal in nature and that by Spring the market will be back to rising modestly. However, I believe a housing double dip is a distinct possibility given recent concerns about shadow inventory, strategic defaults and rising option-ARM resets.

The underlying U.S. economy sans fiscal and monetary stimulus is weak. Moreover, U.S. consumer confidence is fragile. In this environment, any renewed price declines in home prices will leak into the real economy. So, this data series bears watching.


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China: Economic Catastrophe Unfolding

China: Economic Catastrophe Unfolding

china real estateBy Terence Doherty, guest author

Here’s some recent news about the real estate markets in China. I think it is fascinating watching how these things unfold. This proves once again that the lesson of history is that we don’t learn the lessons of history.

I predicted over 2 years ago that the Chinese stock markets would implode dramatically, much to everybody’s disbelief and skepticism. It began a few months sooner than I thought, but, that is exactly what has happened. Now for the last year or so, I have predicted that things will get VERY bad in the Chinese real estate markets over the next several years. Again, most people I have talked to about this (especially Chinese) have almost universally dismissed this notion as absurd.

But this is not just a guess.  When you read these articles, you will see just some of the evidence that leads me to this conclusion. There are a lot of data on this, and most of it comes from statistics issued by various Chinese government agencies. But it is not advertised by the mainland press or TV.   So, many Chinese are not at all aware, and think that everything will soon be wonderful, because that is pretty much what they constantly hear from the official media.

That is one thing I noticed immediately about China: there is a constant barrage everywhere you turn—-TV, advertisements, magazines, newspapers, billboards, etc.—-that essentially suggests that everything is wonderful and getting more wonderful all the time, and everybody is just happy, happy, happy, and China is getting better and better and stronger and stronger.  I was really struck by this. It was like living in a never-ending infomercial. Maybe some go to China and are not very aware of this, but to me it was like a constant din.

Actually, at least some of this data is readily available on the mainland. But it requires digging.  The official news agencies like Xinhua and the People’s Daily just keep repeating the same mindless mantra in endlessly varying ways every day: “Everything is good, there are only a few small little problems, but the Motherland is unstoppable and will just get mightier and mightier.” If the Falun Gong would just chant that mantra, they would get to keep their organs and they would have no more problems in China. 

 

 

The news here…
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Phil's Favorites

Boeing 737 Max: The FAA wanted a safe plane - but didn't want to hurt America's biggest exporter either

 

Boeing 737 Max: The FAA wanted a safe plane – but didn't want to hurt America’s biggest exporter either

Boeing is accused of not being fully forthcoming about changes it made to the 737 Max. AP Photo/Ted S. Warren

Courtesy of Susan Webb Yackee, University of Wisconsin-Madison and Simon F. Haeder, West Virginia University

Recent incidents aside, air travel ...



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Zero Hedge

For The Average Investor, The Next Bear Market Will Likely Be The Last

Courtesy of Lance Roberts, RealInvestmentAdvice.com

Just recently Anna-Louise Jackson published an interesting article asking if “The Financial Crisis” still haunted your investing...

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ValueWalk

Is Tesla's New Enhanced Summon Feature A National Security Risk?

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing Tesla‘s enhanced summon feature and why the company’s stock is likely to drift down.

Discussion on Tesla’s Enhanced Summon feature

One of my friends (who’s bullish on Tesla) sent me a link to this web page, Watch this Tesla Model 3 drive to its owner on Enhanced Summon in latest video, which has two ...



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Kimble Charting Solutions

Shanghai Index; White Hot Market Peaking?

Courtesy of Chris Kimble.

Is one of the hottest stock indices in the world about to peak? Possible.

The S&P is off to a great start this year, up over 12%. Yet the Shanghai index is white hot, up around 22%, almost twice as much as the S&P 500!

This chart looks at the Shanghai Index over the past 25-years on a weekly basis. It has spent the majority of the past 25-year above rising support line (1). It hit this rising support line in December, where a very strong counter-trend rally has taken place.

Over the past 4-years, the index has created a series o...



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Chart School

Weekly Market Recap Mar 24, 2019

Courtesy of Blain.

It was looking like another week of Federal Reserve Kool Aid and crushing bears .. until Friday.  On the back of bad economic news out Europe, the yield curve inverted on the 3 month vs 10 year bond – before you fall asleep to that news, it is a quite important indicator for the economy (not necessarily the stock market… yet).   More on that in a bit.  As you can see the action in the bond market Friday was quite severe so it will be interesting to see the move in the coming few days.

As for the Federal Reserve:

The Federal Reserve signaled no more increase in interest rates this year and just one in 2020, according to its new ‘dot plot,’ and the bank said it would...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga.

  • Buckingham cut the price target for Trinity Industries Inc (NYSE: TRN) from $32 to $26. Trinity Industries shares closed at $22.96 on Thursday.
  • Canaccord Genuity lowered the price target for Biogen Inc (NASDAQ: BIIB) from $396 to $275. Biogen shares closed at $226.88 on Thursday.
  • H.C. Wainwright cut the price target on Conatus Pharmaceuticals Inc (NASDAQ: CNAT) from $8 to $1.50. Conatus Pharmaceuticals shares closed at $2.91 on Thursday.
  • Wedb...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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