Jan062016
Extremely weak sales is the new normal in housing
After nine consecutive years of extremely weak sales, low sales rates are starting to look like the new normal.
A lie, if repeated often enough, becomes accepted as truth. The mainstream media is reporting that home sales are strong and demand is robust. Compared to the depths of the housing bubble crash, sales are up somewhat, mostly due to investor demand, but sales are still very low by historic standards, and we’re nowhere near a healthy real estate market. If not for the dearth of inventory, the anemic demand wouldn’t be pushing prices up at all.
Just how anemic have sales been? The percentage of houses sold each year, the turnover ratio, plummeted during the bust, and over the last nine years, it’s remained 37% below the average of the 8 years that preceded.
The period from 1998 to 2005 marked the recovery from the previous California housing bubble. Perhaps if you consider recession sales normal, then the recent nine-year lull is not out of the ordinary.
It’s not only Orange County that’s seen this decline in turnover.
New home sales aren’t doing any better.
The mainstream media doesn’t want to analyze the data and provide a true picture of sales health. They would rather paint a Pollyanna picture of a recovering housing market to make everyone feel good. So be it.
Home sales are stronger than they were in 2008, but they are still far weaker than normal — unless you believe the last 9 years establish a new normal, then everything is copacetic.
Housing affordability in 2016: Increasing rents, home prices will drive more people away from O.C.
Jeff Collins, Jan. 3, 2016
Xochitl Collazo won’t be spending 2016 in Orange County, her home of three decades.
Instead, the longtime Santa Ana resident plans to move in with a friend in central Arizona, driven away by unaffordable rents and high health insurance premiums.
“It just doesn’t make sense for me to be struggling like that anymore,” said Collazo, 36, who could barely afford her $1,000-a-month rent from what she earned managing a Mission Viejo doctor’s office. “What am I supposed to do? Have no savings? Have nothing? It literally makes no sense.”
At the very bottom of the housing ladder, those buyers who can only afford the least expensive properties get priced out by higher wage earners substituting downward. If the inventory restriction is bad enough, large swaths of wage earners are priced out of the market, prompting many to leave the state. (See: Tepid wage growth and rising house costs prices out low-income households)
If forecasters are right, there’s little relief in sight for Orange County residents who, like Collazo, struggle to find affordable housing. …
“We expect housing to remain strong in Orange County and also in California,” said Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast. “There will be appreciation in both rent and home prices.”
If mortgage rates remain low, he will be correct. If rates rise above 4.75%, he will be wrong.
Lawrence Yun, chief economist of the National Association of Realtors, said that because Orange County is such a sought-after market, housing here “will always be expensive.” …
Lawrence Yun’s comments on Orange County provided the best laugh I had in 2015.
Home sales
Local forecasts didn’t include a sales projection for Orange County. But demand will be highest for houses in the $600,000 to $800,000 price ranges, said First Team Real Estate agent Dean Lueck.
“Everybody wants that below-$1 million single-family home,” Lueck said. “I don’t think we’ll see that part of the market slow down.”
Realtor economists expect sales of existing houses to be up this year in both California and the nation as a whole. They project that the number of existing California homes sold will rise 6.3 percent to 433,000. Their forecasts show existing U.S. house sales rising to 5.4 million or 5.5 million units – a 2 percent to 4 percent gain from 2015 levels. …
Does that agent or the realtor association have any credibility? Given their terrible track record, I wouldn’t feel much comfort in their assurances. I believe home sales will decline in 2016. What happens in housing in 2016 depends almost entirely on what happens with mortgage interest rates. Affordability will be the major housing market issue of 2016, and the inescapable math of higher mortgage rates means that rising mortgage rates will hurt sales or prices.
Affordability
Rising home prices and increasing rents are taking a toll on house and apartment hunters. Both local and state forecasts predict that housing will be less affordable this year. …
“In spite of low mortgage rates, housing affordability has declined sharply since 2012, when home prices rebounded and income growth was stagnated,” the Chapman forecast said.
As more and more marginal buyers get priced out, sales volume necessarily suffers. I don’t have much confidence that prices and rents will necessarily rise.
Homebuilding
After hitting a 13-year high in 2015, Orange County homebuilding is projected to decrease slightly this year, according to Chapman economists.
Yes, homebuilding will decline because prices are too high. (See: OC new home sales crater due to high prices)
They predict residential building permits will total 11,936 units in 2015, the most since 2002 and up 12.2 percent from 2014. But their forecast for this year shows developers pulling 11,522 permits – down 3.5 percent from last year’s projected total, though still the second-highest pace of construction since 2002.
The Chapman forecast shows construction jobs in Orange County rising to almost 91,000 this year, the most since the recession.
U.S. housing starts are projected to hit 1.4 million units this year – again, the most since the recession – according to the NAR forecast.
Gullible homebuilders always believe overly optimistic bullshit, and the NAr is happy to provide it. There is little chance of hitting 1.4 million units next year.
That gives you a sense of just how delusional these guys are. Someone out there looked at today’s conditions and the trend in place and somehow concluded building starts would increase 50% next year — in the face of rising interest rates.
We need strong job and wage growth and interest rates near 4% for a few years to finally get back to a “normal” market, whatever that is.
[dfads params=’groups=3&limit=1&orderby=random’]
[dfads params=’groups=23&limit=1&orderby=random’]
[listing mls=”OC15267218″]
MBA: Mortgage applications plummet 27%
Seasonal adjustments make this report meaningless
Mortgage applications tumbled 27% from two weeks earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Jan. 1, 2016.
These results include an adjustment to account for the New Year’s Day holiday, while the previous week’s results were adjusted for the Christmas holiday. Last week is the only week of the year that the MBA doesn’t release a mortgage application report.
The refinance index dropped 37% from two weeks ago, compared to the seasonally adjusted purchase index, which decreased 15% from two weeks earlier.
Yes, but HousingWire never misses an opportunity to use the word ‘plummet’ in a headline. I can’t wait for next week’s ‘suprise’ surge in applications.
I was thinking the same thing. We will get a plethora of stories about a resurgent housing market next week as applications soar.
How debt, the dollar, and China could tie the Fed’s hands
The Federal Reserve’s recent rate hike is symbolic, intended to signal the end of the financial crisis and the start of normalization.
The rise will have minimal effect on consumption and investment. Analysts have already moved beyond the Fed’s well-telegraphed decision, focusing on the future trajectory of U.S. monetary policy.
The Fed forecasts around four additional rate increases in 2016 and a similar number in 2017. This would mean that U.S. official rates would be around 1.375% and 2.375% by the end of 2016 and 2017, respectively. The median estimate for the longer-term federal funds rate is around 3.5%.
Yet the central bank’s moves may be more gradual than most Fed-watchers expect. Here’s why:
1. Economic activity is patchy: The Fed accentuates the positive — solid employment growth, strong auto sales, and improvements in housing. But it ignores weaknesses in manufacturing, high inventory levels, and uncertain consumption.
2. The Fed’s preferred inflation measure is well below its 2% target
3. U.S. debt levels are high
4. The natural interest rate may be lower than prior to the financial crisis
5. Risk is increasing
6. External shocks: The major international concern is emerging markets, especially China, while worsening European debt problems also cannot be discounted. A rapid slowing in growth reflects weak export markets, low commodity revenues, high debt levels, and unresolved structural weaknesses. Falling local currencies and large capital outflows are likely to expose problems on uncovered foreign currency, primarily dollar denominated, debt. Higher U.S. rates and a stronger dollar will only accentuate the problems.
How China accumulated $28 trillion in debt in such a short time
Bank of America Merrill Lynch became the most recent financial institution to start sounding scared about China’s debt.
While no one is panicking just yet, there sure are an increasing number of people — including analysts at UBS and Macquarie — who are talking about when it might be appropriate to consider panicking.
To recap, China’s total debt is about $28 trillion, or roughly half the world’s entire debt.
Until recently, most people have reassured themselves that Chinese debt isn’t something to worry about because the economy is growing, which means it’s easier to pay back as time goes by. Also, the debt is spread around in various sectors — corporate, consumer, government — rather than in one systemically threatening toxic dump.
Now, the Chinese economy is slowing. But China hasn’t stopped adding more debt. About five years ago, Chinese debt levels began accelerating far faster than GDP was growing. In other words, as time goes by China adds more debt and becomes less and less able to pay it off.
Nomura analysts Wendy Liu and her team just did us all a huge favour by calculating all of China’s debts, over time, in these two charts. We’ve added some highlights to draw your attention to the most dramatic bits.
Some Chinese companies have doubled their debt loads since 2010:
http://static2.businessinsider.com/image/568d01a1dd08958c268b4594-1050-551/screen_shot_2016-01-06_at_11_39_48.png
When you add in government debt, China added 61 percentage points of debt to GDP in just the last 5 years:
http://static2.businessinsider.com/image/568d0e9edd08953f608b4588-1064-457/2screen_shot_2016-01-06_at_11_39_37.png
In 2005, China’s debt was 164% of GDP. Now it’s 236% of GDP. It’s not the scale that’s worrying. Many countries have debt that is twice GDP. It’s the speed at which it is changing, compared to the slower pace of economic growth.
China’s “zombie” problem
The fact that a lot of this debt is sitting in local government or state-owned enterprises has been reassuring, until now. The assumption has been that government debt is the government’s problem, not everyone else’s. The government can let its “zombie” entities stumble on as debt-paying vehicles or maybe occasionally let a couple default without any systemic contagion.
But yesterday the Chinese government again began buying stocks to prop up its plummeting stock market. No one thinks that is sustainable. And my colleague Linette Lopez noted yesterday that there is a capital-flight “doomsday scenario” being floated by BAML which suggests that China only has about a year, to a year and a half, of currency reserves on hand if it needs to defend a run against the yuan.
So now that government debt doesn’t look so isolated. China might need its money back, suddenly.
The problem with debt, even government debt, is that it isn’t just an accounting problem. It’s a real thing. Sure, the government may be forced to take a few haircuts on bad bets — but that will filter through the system, eventually. The government is a huge economic player in the Chinese economy. Bad debt won’t just disappear into thin air.
The question is whether the effect of that debt can be smoothly managed away before things get worse.
28 Trillion is peanuts … Goldman Sachs holds almost twice that amount in derivatives:
http://www.ibanknet.com/scripts/callreports/filist.aspx?type=derivatives
Those Chinese Bitches ain’t got nothing on our US Banks.
Allan Zeman Sees The Future Of The Mall As Less Retail, More Lifestyle And Entertainment Spaces
Irvine Spectrum follows this trend
In the digital age, traditional malls in China are becoming passé. At the real estate conference MIPIM Asia last month, Lan Kwai Fong Group’s chairman Allan Zeman claimed the future of the mall will be more lifestyle and entertainment-orientated than the retail dominated spaces of the past.
“This is how it worked in the old days: you built an [integrated] mall based on a simple formula that it had office buildings, some residential [housing] and a retail mall, and that 70% of the mall was retail and around 30% was food and beverage [venues],” explains Zeman. However, consumer behavior has changed. The evolving purchasing habits of the younger generation of shoppers in China have disrupted this mall ratio.
“Online shopping has become a very big problem for most traditional shopping malls,” explains the Hong Kong nightlife district pioneer. “In the last year, every shopping mall in China has been going down; I have had calls from so many developers asking me what they should do,” he said.
The former fashion entrepreneur says the traditional mall format – where 70% spaces are dedicated to retail tenants – no longer works. He cites success stories like Alibaba as an example of the rise of online shopping in China, particularly how the e-commerce giant’s Singles Day event generated a record-breaking $14.6 billion in sales late last year, as an indicator of this shift. Zeman adds that the continuing rise of e-commerce is a global trend and cites Amazon’s gargantuan market dominance in the U.S. as another example of how traditional mall formats must adapt to this trend.
He claims the latest incarnation of the mall should be a reverse of the old formula. Around 35% to 40% of mall tenants should be retail, and up to 65% should be dedicated to entertainment and food and beverage spaces.
“Retail is changing because luckily people can’t eat off the internet, so they still have to go out for entertainment and restaurants,” he says, adding that dining venues in the mainland are doing very well. He also cites China’s anti-corruption drive which has impacted luxury shopping, as another factor that has redefined the retail landscape on the mainland.
This makes so much common sense but most U.S. mall owners will fight it to the nth degree. This is because many malls in the U.S. are owned by REITS that want to maximize the income of every square foot in the mall. That’s the reason why restrooms are so far back from the main walking areas of the mall. In Europe malls have an area dedicated to food/grocery sales and are linked to mass transit stops. This means that you don’t need to make that extra stop on the way home to get milk or bread or something you might need in the morning. But grocery stores cannot pay the same rents that typical retail tenants pay, so that’s not considered a viable option. Same thing with other service-type tenants like dry cleaners, drug stores, etc.
Another problem this creates is mall parking. A restaurant uses 10 stall per 1000 square feet whereas a retail store uses 3 or 4. Each mall space that converts to a restaurant increases the parking demand threefold, which is why the Irvine Spectrum has such parking problems.
Trees grow towards the sun. The changing consumer environment will shape the malls of tomorrow. Reits that get it right will be the most profitable. If more parking is required, then build a parking structure, on or off-site parking with shuttle service. Building more parking spaces costs money, but so does having vacant stores. There is a happy median somewhere. Besides that, more restaurants don’t necessarily mean more demand for parking spaces. Any given geographic area will support only so many patron meals. If you double the restaurants you will only shift the people around from current restaurants and the utilization will fall from 100 to 50%.
At some point, the traffic from restaurants also stimulates retail. As you noted, they must find a balance point, but most will underpark their facilities and miss the mark.
Why China’s growth could be over
Independent analyses by both the University of California macroeconomist James Hamilton and the Bank of England have fingered weak demand as the chief cause of low oil prices. Given that China is the driver of incremental demand for most commodities, weak prices must therefore be principally attributed to weakness in the Chinese economy.
But what sort of weakness is this? The thinking splits two ways. Many analysts anticipate a gradual slowdown in China’s underlying growth rate as it migrates from an investment-led to a consumer-led economy. By this view, China is facing a structural re-alignment, with the shift requiring another two to four years. Things are slowing down, but it’s nothing serious.
A darker view sees a credit bubble emanating from years of misguided over-investment in China’s infrastructure, housing and manufacturing. China has created an unsustainable credit bubble, and this will come crashing down, taking the Chinese—and by implication, East Asian—economy with it. This view does not deny the need to restructure the Chinese economy, but anticipates a cyclical downturn, a financial crisis along the lines of 1998. The Chinese economy will not see a “soft landing,” but rather a full-blown crash.
We have proposed the third hypothesis. The collapse of commodity prices from mid-2014 corresponded to an oil supply surge and the failure of China to devalue the yuan in line with the yen, won and euro. By this line of thinking, China made a simple policy mistake which killed its exports, and with it, the incremental demand for commodity imports. Thus, if China devalues, then all should be well and commodity prices should recover about half their losses since summer 2014. If this is true, China is not in such bad shape. All the country needs is a quick, if painful and politically awkward, devaluation.
However, a fourth theory also merits consideration: leadership has taken the country in a new direction, and this is dampening China’s growth. From Deng Xiaoping until the current Xi administration, China has been ruled by an economically liberal philosophy emphasizing economic growth, global integration, and harmonious relations with other countries. With the Xi administration, however, the social compact has become conservative. Nationalism, not economic liberalism, now seems the driver of policy decisions.
How affordable housing mandates make housing more expensive
This month the U.S. Supreme Court will decide whether to hear a legal challenge to San Jose’s controversial inclusionary housing ordinance. Enacted in 2010 and upheld by California’s top court in June, this zoning law requires housing developers of 20 or more units to sell 15% of them at prices far below their market value or pay a six-figure fee instead.
More than 170 California communities impose similar mandates and set-asides, but the net effect isn’t more affordable housing for all. Rather it is a reduction in the construction of new homes, which pushes prices upward.
This is hardly a solution to a housing affordability crisis. It’s also an unconstitutional government taking of private property without just compensation, and a violation of several precedents specifically, which is why the San Jose case deserves consideration by the Supreme Court.
If you think affordable housing mandates can’t do much harm in regions where home prices are already among the highest in the nation, think again. In a Reason Public Policy Institute study that investigated the impact of housing set-asides in the San Francisco Bay Area from 2003 to 2007, economists Benjamin Powell and Edward Stringham found that the volume of new home construction dropped on average 30% in the first year after such a law passed, and prices rose 8%.
In a study looking at Southern California, Stringham and Powell found that housing starts in eight cities dropped off significantly after the inclusionary zoning went into effect. In the seven years before the law, over 28,000 new homes were built. In the seven years after? Only 11,000. Yes, 770 “affordable” units were constructed, but what’s more important is the 17,000 homes that weren’t built at all, making the housing shortage more acute and pushing up prices.
California lawmakers propose $2 billion plan to aid homeless
SACRAMENTO – California would spend more than $2 billion on permanent housing to help the nation’s largest homeless population, under a proposal outlined by state senators on Monday.
The housing bond would be enough to construct more than 10,000 housing units when it’s combined with other federal and local money, estimated Senate President Pro Tem Kevin de Leon, D-Los Angeles.
The bond would be repaid with money from Proposition 63, the 2004 ballot measure that added a 1 percent tax on incomes over $1 million to pay for mental health treatment.
Homelessness has become a growing issue across the state.
Backers say about 114,000 people are homeless in California, more than a fifth of the nation’s homeless population.
Los Angeles’ homeless population increased more than 10 percent in the last two years, to more than 40,000.
The Los Angeles City Council declared a homelessness crisis in November as it prepared to change city ordinances to let people temporarily live in their cars and sleep on sidewalks. In October, the Los Angeles County Board of Supervisors declared a “shelter crisis” because of concerns that strong winter storms could flood homeless camped along riverbeds and storm drains.
Neighboring Orange County is buying a $4.25 million warehouse for a 200-bed homeless shelter.
Sacramento police have clashed in recent days with homeless camped outside City Hall to protest an ordinance prohibiting such urban camping.
“It is despicable that in the richest state, that is the state of California, that just last night thousands of Californians laid their tired bodies on a sidewalk or on a cardboard,” Sen. Ricardo Lara, D-Bell Gardens, said during a news conference broadcast from Los Angeles’ Skid Row.
Aussies embrace HELOC Abuse
Luxury car sales in Australia soared in 2015
Ferrari sales in Australia soared to a record last year and demand for Porsche sports cars jumped as the country’s property boom encouraged homeowners to splash out.
Ferrari NV notched up 167 sales in 2015, a 48 percent increase from the previous year, according to a report released Wednesday by the Federal Chamber of Automotive Industries in Australia. Demand for Audi, BMW and Mercedes-Benz brands also surged, outstripping a 3.8 percent nationwide increase in total new vehicle sales.
The Reserve Bank of Australia, which has cut interest rates to record lows, last year found a strong link between home-price increases and rising car sales. Sydney house values climbed 12 percent last year, extending a three-year boom that has pushed the median price in Australia’s largest city to A$935,000 ($670,000), according to CoreLogic Inc.
“People are looking at the value of their home,” said Craig James, a senior economist at the securities unit of Commonwealth Bank of Australia. “Home prices have been recording good gains, so they’ve seen their wealth levels rising. That’s also rationalizing their choice in going a little bit upmarket.”
This will end badly for them.
The Impact of the Fiduciary Standard on the Finance Industry
Here’s a recent headline from Investment News:
http://awealthofcommonsense.com/wp-content/uploads/2015/12/Screen-Shot-2015-12-31-at-10.29.47-AM.png
Now here’s an alternative headline and byline:
DOL fiduciary rule could add $2.4 billion to retirees’ pockets
Implementing the standard on retirement accounts could help investors lower their costs by more than twice the current estimates, according to new research
It’s all about how you look at it. Morningstar estimates that the rule could affect around $3 trillion of client assets and $19 billion of revenue at full-service wealth management firms. Here’s more on this research from Investment News:
The DOL’s proposed conflict-of-interest rule “could drastically alter the profits and business models of investment product manufacturers like BlackRock and wealth management firms like Morgan Stanley that serve retirement accounts,” according to Stephen Ellis, director of financial service equity research at Morningstar Inc. “Current government and financial industry reports have a high-end annual cost of $1.1 billion,” but the low-end impact could be more than double that at $2.4 billion, Mr. Ellis wrote in a research note issued yesterday.
The $2.4 billion number is Morningstar’s low-end estimate of prohibited mutual fund front-end load commissions and mutual fund 12b-1 fees paid to full-service wealth management firms for commission-based IRAs. It is a revenue number, according to Morningstar. Some industry groups have interpreted the lost revenue to financial advisory firms as a cost of the proposed regulation.
Front-end loads and 12b-1 fees fall in the I-can’t-believe-these-still-exist category. Again, this is a huge positive for financial consumers. They will no longer have to pay these worthless, excessive fees.
The fiduciary standard legally obligates those offering financial advice to act for the sole benefit of the client. It’s amazing to me that this rule has to be legislated in the first place, but the finance industry has a history of putting their own profit motives ahead of their client’s best interests.
The problem is that many clients don’t know that there isn’t a fiduciary rule already in place. Studies show that 87% of people who speak with someone affiliated with their workplace retirement plan believe that person is obligated to give advice in their best interests. Also, 67% of people believe anyone who calls themselves a ‘financial advisor’ is obligated to give advice in their best interests. And 67% of people believe that insurance agents are obligated to do the same.
Dave Ramsey routinely defends front-end loads of 5%+! His argument is that these funds will beat the index and justify their monstrous expense and that you need to be in this type of fund so that your adviser can prevent you from selling in downturns.
Good luck beating the market (broad low-fee no-load index funds). I wish you well; but you don’t need to be in a loaded fund to have an adviser who’ll prevent you from selling.
If this weren’t sufficiently insane, he even includes 5%+ front-end load funds in his company’s 401k options! This shouldn’t even be allowed.
I like most of Dave Ramsey’s advice, but this one is puzzling. Given how difficult it is to consistently beat a low-fee index fund, why would anyone start by digging such a deep hole?
There is probably some merit to the argument that people won’t abandon these funds as readily in a downturn. Most people don’t understand the concept of a sunk cost and realize that whatever they have into the asset is irrelevant to it’s future performance.
I’m convinced that his philosophy on stock investing is something he developed in the mid-80’s and hasn’t bothered to revisit since then.
Nonsense; he gets a kickback from those loaded funds so they are very profitable for him.
That’s true.. His endorsed local providers have to pay to play, but in regards to his narrow advice to plow everything into growth mutual funds, that’s great advice during a strong bull market, but not so great during a lost decade like we experienced from 2000 to 2010.
Stock Futures Get Pummeled
The link takes you to Bloomberg’s stock futures quotes. It’s ugly right now.
http://www.businessinsider.com/richard-fisher-fed-comments-2016-1
We front-loaded some folks…
Wow!
The FED’s economic model suggest it takes about 300 basis points to stave off a recession. Here’s the problem … today the FED is at 25 basis points, with 4.4 trillion on the books. How are they going to fight off global DEFLATION when their ammo has already been used? I have been saying this for 5 years, and now their time is up.
IMO, The only way the FED can create inflation is to send BIG checks directly to consumers.
This ponzi scheme is unwinding … tic, tic, tic
This is where the people who benefited from quantitative easing finally get their comeuppance.
Monetary policy stimulus isn’t the only way to stimulate the economy.
Federal, state and local governments can reduce tax burdens to stimulate spending. Higher spending generates greater monetary velocity which increases prices and wages. Higher sales volumes, prices, and wages result in greater tax revenues than before the tax cut.
Falling energy prices are also good for the broader economy since consumer balance sheets improve and production costs fall. There is a lag as companies stop producing energy related products, and consumers have not yet fully increased their spending. As consumer demand rises companies will produce more consumer goods offsetting the loss in energy production products.
A stronger dollar increases import purchase power, which improves consumer and corporate balance sheets.
Online retailers are selling and delivering goods to end users at lower costs than traditional retailers. Lower costs mean lower prices in a competitive environment. Online shopping makes price comparison easier and prices more competitive than driving to the few stores within driving distance. In this sense price deflation is not deflationary inre wages since prices are falling in response to falling costs. Consumer demand rises with falling prices, generating more sales.
Paradoxically, profits can rise even though prices fall because the marginal costs to produce one more widget are minimal when capacity is underutilized. Some businesses are unprofitable if volumes are too low. As volumes rise, profits can rise disproportionately. As volumes fall, the opposite occurs.
The stock market is falling because investors fear the impact global tensions will have on consumer spending. They also fear the impact that a strengthening dollar will have on corporate profits if the Chinese devalue their currency. Now that the US economy is recovering, the rest of the world is looking to use our domestic recovery to facilitate their own. Since we are the largest economy, I’m not surprised by this. How else? In my opinion, this will be a short-lived correction as the dual-effects of a strong dollar and cheap oil spill over into consumers pockets. Oh, and rates are crazy-low.
The FED lost … and it may time to pay the piper.
Beijing Muddles Markets With Mixed Signals
A sense of déjà vu is haunting Chinese markets, with the first days of 2016 looking a lot like midyear 2015.
Chinese authorities, who took extraordinary measures to prop up plunging stock prices half a year ago, appeared to be at it again, scrambling to stem equity flight with moves that had the effect of confusing many investors rather than reassuring them.
In a burst of activity, the central bank on Tuesday injected nearly $20 billion into the country’s financial system and moved to shore up the Chinese yuan, while the securities regulator said it was reviewing a stock-selling ban for major shareholders slated to expire later this week.
A day earlier, investors had been spooked about the state of China’s economy and Beijing’s priorities as the central bank unexpectedly decided not to renew a big credit line to a major policy bank and let the yuan weaken to a psychologically important level against the dollar. It didn’t help that both the finance minister and the Communist Party’s mouthpiece newspaper put cold water on hopes Beijing would take aggressive steps to pump up growth. Chinese equities responded with their worst-ever start to a year, setting off a world-wide selloff.
Tuesday’s moves appeared to be aimed at undoing the effects of those on Monday, illustrating Beijing’s persistent problem with delivering clear signals to the market as it tries to guide the world’s No. 2 economy through a long-pledged restructuring.
http://www.wsj.com/articles/beijing-muddles-markets-with-mixed-signals-1451980578
Larry,
Do you have numbers for inventory changes throughout orange county?
I don’t, but Zillow does:
For-Sale Inventory (Raw) County level
Other data
There data page also breaks these numbers down by city and zip code.
[…] home prices are a direct result of reflating the housing bubble to bail out the banks. The dismal turnover rate and lack of first-time homebuyers is strong evidence that the increase in price had nothing to do […]