A Decade Of Fallacy—-When The Bear Stearns Mortgage Backed Hedge Funds Collapse
Ten years ago yesterday, Bear Stearns sent a letter to shareholders of two specific hedge funds that it sponsored. Whenever anyone brings up the name now, you immediately know where this is going. That wasn’t the case in 2007, however. Whatever the world may think of Bear in hindsight, a decade ago it was a highly reputable firm.
No, Corporate Earnings Are Not Breaking Out To The Upside
There is no arguing corporate profitability improved in the first quarter as oil prices recovered. The recovery in oil prices specifically helped sectors tied to the commodity such as Energy, Basic Materials, and Industrials. However, such a recovery may be fleeting as the dollar remains persistently strong which continues to weigh on exports and the recovery in oil prices continues to remain muted.
Carmageddon Update: New U.S. Subprime Boom, Same Old Sins: Auto Defaults Are Soaring
It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017. A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.
What’ll Happen to US Commercial Real Estate as Chinese Money Dries Up?
In the second quarter in Manhattan, Chinese entities accounted for half of the commercial real estate purchases with prices over $10 million. By comparison, in 2011 through 2014, total cross-border purchases from all over the world (not just from China) were in the mid-20% range….(Yet)At the end of the first half of 2017, the annualized forecast of total transaction volume was on pace to be 40% lower than 2016, and a 60% drop-off from 2015. At the current pace, 2017 is shaping up to have the lowest sales count since the period from 2008 to 2010, the last market trough.
Why Mad Dog Mattis Doesn’t Understand Iran or “Moderate Arab Regimes”
During his presidential campaign Donald Trump repeatedly expressed his desire not to get the United States involved in another destructive war in the Middle East. He expressed his opposition to the invasion of Iraq in 2003; he was opposed to the NATO intervention in Libya……Alas, everything changed as soon as Trump took office. The President’s national security team, from Defense Secretary James Mattis, to CIA Director Mike Pompeo and Director of Middle East affairs at the national security council, Derek Harvey, is virulently anti-Iran
Student Debt Is a Major Reason Millennials Aren’t Buying Homes
College tuition hikes and the resulting increase in student debt burdens in recent years have caused a significant drop in homeownership among young Americans, according to new research by the Federal Reserve Bank of New York. The study is the first to quantify the impact of the recent and significant rise in college-related borrowing—student debt has doubled since 2009 to more than $1.4 trillion—on the decline in homeownership among Americans ages 28 to 30. The news has negative implications for local economies where debt loads have swelled and workers’ paychecks aren’t big enough to counter the impact. Homebuying typically leads to additional spending—on furniture, and gardening equipment, and repairs—so the drop is likely affecting the economy in other ways
Red Ponzi Update—half Of China’s rich Plan to Move Overseas
Half of Chinese millionaires are considering moving overseas, and the U.S. remains their favorite destination, according to a new survey. Among Chinese millionaires with a net worth of more than $1.5 million, half either plan to or are considering moving abroad, according to a survey from Hurun Report in association with Visas Consulting Group. The survey suggests that the flow of wealthy Chinese and Chinese fortunes into U.S. homes and buildings is likely to continue, helping demand and prices in certain real estate markets — especially in the U.S.
America’s Disneyland Economy
Disneyland is known as a place “where dreams come true” and where every story always has a happy ending. But there is going to be no happy ending for the U.S. economy. Wishful thinking has resulted in one of the greatest stock market rallies in history in recent months, but like all childhood fantasies, it won’t last. The real economy continues to deteriorate, and we can see this even right outside of the gates of Disneyland. Every night growing numbers of homeless people sleep on the pavement just steps away from “the happiest place on Earth”. It can be fun to “play make believe” for a while, but eventually reality always catches up with us.
Japan Central Bank’s ETF Shopping Spree Is Becoming a Worry
Some officials at the Bank of Japan are increasingly concerned about the sustainability of the BOJ’s purchases of exchange-traded funds, according to people familiar with discussions at the central bank…..Concerns include the risk that the central bank could end up owning such large amounts of the free-floating shares of some listed companies in the Nikkei-225 Stock Average that it could seriously distort the market,
Netanyahu Pushes Trump Toward Wider Wars
A weakened, even desperate President Donald Trump must decide whether to stand up to Israeli Prime Minister Benjamin Netanyahu or to repudiate the Syrian partial ceasefire, which Trump hammered out with Russian President Vladimir Putin on July 7.Whether intentionally or not, this crossroads is where the months of Russia-gate hysteria have led the United States, making Trump even more vulnerable to Israeli and neoconservative pressure and making any cooperation with Russia more dangerous for him politically.
