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Squeezing The Consumer From Both Sides

Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com, The Federal Reserve raised the Federal Funds rate on December 13, 2017, marking the fifth increase over the last two years.  Even with interest rates remaining at historically low levels, the Fed’s actions are resulting in greater interest expense for short-term and floating rate borrowers. The effect of […]

Canadian Housing Affordability Hits 27 Year Low

Authored by Steve Saretsky via VanCityCondoGuide.com, Nothing says Merry Christmas like a 27 year low for Canadian housing affordability. That’s right, real estate across Canada has not been this un affordable since the year 1990 per RBC. Spoiler alert house prices tumbled shortly thereafter. RBC Bank released their updated Q3 numbers for housing affordability. To […]

Canadian Homeowners Take Out HELOCs To Fund Subprime Purchases

Authored by Steve Saretsky via VanCityCondoGuide.com, The HELOC (Home Equity Line of Credit) has been a blessing and a curse for Canadian households. While it has helped spur house prices and simultaneously provided consumers the ability to tap into their new found equity, it has also crippled many Canadian households into a debt trap that seems […]

These PE Firms Are About To Get Crushed By Their Subprime Auto Bets

In the aftermath of the ‘great recession,’ private equity firms placed massive bets on subprime auto finance companies with the typical “thesis” going something like this: “well, people have to get to work don’t they?”…genius, if we understand it correctly. Of course, the “thesis” seemed to be confirmed when auto securitizations performed relatively well throughout […]

Homebuilder Optimism Soars To Highest Since 1999… There’s Just One Thing

And so it appears that America’s homebuilders – cock-a-hoop over tax reform (which caps the mortgage interest deduction?) – aren’t concerned about affordability, about rising rates, and stagnant incomes. In fact they have not been this optimistic since December 1999. There’s just one thing… as University of Michigan consumer confidence data shows, for the ‘average […]

Abracadabra – Uncovering The Fed’s ‘Magnificent Fraud’

Authored by James Howard Kunstler via Kunstler.com, And so, as they say in the horror movies, it begins…! The unwinding of the Federal Reserve’s balance sheet. Such an esoteric concept! Is there one in ten thousand of the millions of people who sit at desks all day long from sea to shining sea who have […]

How “Ghost Collateral” And “Yin-Yang” Property Deals Will Collapse China’s Credit Bubble

One lesson from the 2007-08 crisis was that the vast majority of financial market participants, never mind the general public, were unfamiliar with subprime mortgages until the crisis was underway. Even now, we doubt many have much understanding of repo, the divergence between LIBOR and Fed Funds from 9 August 2007 and Eurodollar liquidity. In […]

Second Cockroach: Canadian Mortgage Lender Crashes After Admitting Mortgage Fraud

Back in April/May, Canada's biggest mortgage lender, Home Capital Group, crashed its way into the headlines, coming clean over its balance sheet-full of liar loans, suffered a bank run, and was forced  to take emergency liquidty from taxpaying pensioners, and was eventually bailed out by good old Warren Buffett. "Probably nothing…" Well just when everyone […]

California Residents Increasingly Ditching Their Massive Tax Bills And Unaffordable Housing For Las Vegas

Los Angeles residents have apparently had just about enough of their city’s excessive home prices, unaffordable rents, crushing personal and corporate tax rates, overly burdensome regulations, polluted air, etc. and are increasingly leaving for a better life in Sin City.  As Los Angeles Times columnist Steve Lopez puts it, “the rent steals so much of […]

“Hong Kong House Prices Could Soar Another 10% Next Year” – Have They Just Rung The Bell?

Hong Kong property was in Algebris Investments’ top tier of six most inflated bubbles from its longer list of the world’s fourteen biggest bubbles. The territory is ranked as the most expensive housing market in the world for the seventh successive year in 2017, with the medium home price selling for 18.1 times the median […]

Blain: “The High-Yield Market Is Where The Bond Supernova Will Erupt”

Blain’s Morning Porridge, submitted by Bill Blain of Mint Partners It’s a US holiday and markets will be thin through today. To show my solidarity with our American cousins, I’m off for a proper lunch with clients in the West End and Malbec rules* will probably apply. What happened in China this morning? Stocks down […]

This Michigan Bank Just Brought Back The Zero-Down Mortgage; They’ll Even Cover Your Closing Costs

A small savings bank in Michigan, Flagstar Bank, has come up with a genius, innovative new mortgage product that they believe is going to be great for their investors and low-income housing buyers: the “zero-down mortgage.”  What’s better, Flagstar is even offering to pay the closing costs of their low-income future mortgage debtors.  Here’s more […]

So Why Did Capital One “Suddenly” Exit Mortgage Lending??

Last week, Capital One Financial (COF) announced that is was formally withdrawing from the residential mortgage loan market.  Some observers mistook this announcement for news, thinking that COF had actually been engaged in residential lending in a serious way.  Housing Wire, for example, reported that COF had “suddenly” exited the mortgage and home equity business. […]

Sweden: The World’s Biggest Housing Bubble Cracks

Sweden’s property bubble is probably the world’s biggest, despite which it gets relatively little coverage in the mainstream financial media – although that might be about to change. Warnings about this bubble are not new. In March 2016, Moody’s issued a very explicit warning that Sweden’s negative interest rates were propagating an unsustainable housing bubble. […]