Tag: news

A month ago, the Bank of England’s Cunliffe dismissed UK realtors’ fears of a central bank-driven bubble in housing, by stating confidently that “it is not a boom or a bubble. It is a market correction, albeit a fairly quick one.” But now, the man really in charge of the liquidity pedal, the BoE head Mark Carney has proclaimed: 

• BOE’S CARNEY SAYS CONCERNED ABOUT POTENTIAL DEVELOPMENTS IN UK HOUSING MARKET
• BOE’S CARNEY: WANTS TO AVOID HOUSING MARKET MOVING TO ‘WARP SPEED’

In the speech at the New York Economic Club, Carney went on note that this BoE-created bubble could be popped by raising capital requirements against the housing sector if need be; but we suspect the faster way to pop the momentum-chasing hot-money frenzy will be to pass the foreign homebuyers’ capital gains tax.

 

So, it would appear, that unlike his brethren in the US, Carney is able to see bubbles – and it seems is capable and ready to react to them…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PIa-udKxhGA/story01.htm Tyler Durden

A month ago, the Bank of England’s Cunliffe dismissed UK realtors’ fears of a central bank-driven bubble in housing, by stating confidently that “it is not a boom or a bubble. It is a market correction, albeit a fairly quick one.” But now, the man really in charge of the liquidity pedal, the BoE head Mark Carney has proclaimed: 

• BOE’S CARNEY SAYS CONCERNED ABOUT POTENTIAL DEVELOPMENTS IN UK HOUSING MARKET
• BOE’S CARNEY: WANTS TO AVOID HOUSING MARKET MOVING TO ‘WARP SPEED’

In the speech at the New York Economic Club, Carney went on note that this BoE-created bubble could be popped by raising capital requirements against the housing sector if need be; but we suspect the faster way to pop the momentum-chasing hot-money frenzy will be to pass the foreign homebuyers’ capital gains tax.

 

So, it would appear, that unlike his brethren in the US, Carney is able to see bubbles – and it seems is capable and ready to react to them…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PIa-udKxhGA/story01.htm Tyler Durden

While Newport Beach Lamborghini dealerships may be engaging in marketing gimmicks such as exchanging the ‘explosively volatile’ Bitcoins for Teslas; the true Bitcoinaires opt for something more internally combustible…

 

 

h/t @PharmakoiBoy

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VADLWS2G_Vs/story01.htm Tyler Durden

 

 

 

 

 

 

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CeFwTGgUM70/story01.htm williambanzai7

The quarterly Flow of Funds report by the Fed has been released and the latest household net worth numbers are out. While not nearly quite as dramatic as last quarter’s wholesale dataset revision, which saw all of America suddenly worth $3 trillion more primarily due to a change of how “pension entitlements” (formerly “pension reserves”) are calculated (more more in the full breakdown from September), with the resulting total net worth rising to a total of $74.8 trillion, according to the just released data, in the third quarter, US housholds, or rather a very tiny subset of them, saw their net worth rise once again, this time to $77.3 trillion from a revised $75.3 trillion.

The reason for this increase, and why we say a “subset” is because virtually all of the net worth increase was the result of a $1.5 trillion bounce in financial assets (read: capital markets) to a new all time high of $63.9 trillion. As most know by know, the bulk of the exposure to this asset class is held by the ultra wealthy, particularly in the form of Corporate Equities, the category which rose by the single largest amount in the quarter, or $600 billion. Away from financial assets, the remainder, or $500 billion of the increase, was due to a rise in real estate values to $21.6 trillion, still over $3 trillion lower than the all time high for the category reached in Q4 2006.

Curiously enough, the ongoing increase in assets, and thus net worth, continues without any comparable increase in liabilities, as total household debt rose by a minuscule $116 billion, of which the $71 billion increase in consumer credit (read student and car loans) was the biggest offset to net worth growth.

This is how the US household balance sheet looked like at September 30, 2013:

 

This is how this chart looked last quarter:

Finally, putting it all together, when looking at the assets and liabilities of the US household on a very simplified basis, recall what Citigroup pointed out recently: “the rich hold assets, the poor have debt.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z739bidmvfo/story01.htm Tyler Durden

Submitted by Simon Black of Sovereign Man blog,

Mohamed Bouazizi. It’s not a name that means much to most people. But you’ll recall his story.

Frustrated with the absurd amount of regulation and corruption that prevented him from being able to put food on the table for his family, Bouazizi was the 26-year old Tunisian fruit merchant that set himself on fire in 2011.

In doing so, all the pent up frustration across the Middle East and North Africa erupted all at once; the entire region immediately plunged into multi-year revolution which became known as the Arab Spring that has since toppled a number of governments.

Like individual people, societies have their own breaking points. They build up anger and frustration for years… sometimes decades. Then all it takes is one spark. One catalyst. And it all becomes unglued.

Just yesterday, a 33-year old Indian man got hit by the proverbial bus in Singapore’s Little India neighborhood. That was the catalyst. What transpired for the next several hours was a full blown riot… the first of its kind since 1969.

Several hundred rioters stormed the streets. They started off smashing the up the bus that was still on the corner of Hampshire Road and Race Course Road. Then they started throwing objects at the ambulance staff who were unsuccessful in extracting the man in time to save his life.

By the end of the evening, an angry mob had lit five police vehicles on fire, plus the ambulance, leaving the streets in a towering inferno.

 

 

The government immediately went into damage control mode trying to explain what happened. But the explanation is really quite simple.

Singapore has had years of tensions building. The wealth gap is growing like crazy. Wealthy people are becoming ultra-wealthy, while the majority of folks see the cost of living rise at an alarming rate.

Strong ideological and ethnic differences are boiling over. And backlash against immigrants, especially from certain countries, is becoming an acute and obvious problem.

These issues are commonplace. Ideological differences. The wealth gap and economic uncertainty. Immigration challenges.

They’re the same issues, for example, that have plunged much of Europe into turmoil, including the rise of a blatantly fascist political party in Greece.

And these same issues exist, in abundance, in the Land of the Free… where a number of serious ideological divides are becoming obvious social chasms.

Printing money with wanton abandon. Racking up the greatest debt burden in the history of the world. Doling out wasteful and offensively incompetent social welfare programs at the expense of the middle class. Brazenly spying on your own citizens. These are not actions without consequences.

And if it can happen in Singapore – one of the safest, most stable countries on the planet, it can happen anywhere. Even in a sterile American suburb.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/lD2gzxITtLI/story01.htm Tyler Durden

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden