by
Adam Taggart
Housing
by
JHK
by
Chris Martenson
Executive Summary
- The central-planning Status Quo will fight to the bitter end in order to keep stock and housing prices elevated
- HFT algorithms dramatically increase the odds of immediate "air pockets" in stock prices
- Persistently high gasoline prices are choking economic growth
- A parade of economic headwinds (weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, chronic unemployment) are blowing increasingly stronger
- Powerful TBTF ("too-big-to-fail') interests are likely supporting the Fed's current efforts to boost asset prices
- Both near-term and long-term history tell us that the more asset prices are artificially increased, the farther they eventually fall, as intervention hits its point of diminishing returns
- Why you don't want to be long in this market when that happens
If you have not yet read Part I: Warning: Stocks Likely to Crater from Here, available free to all readers, please click here to read it first.
Hey, Where's My Cheap Gasoline?
Expensive energy is a serious drag on economic growth. It always has been and always will be, for obvious reasons.
The average person can be forgiven for being confused by the recent spike in gasoline prices. Since early 2012, there has been a concerted effort to tell the tale that the U.S. is producing more oil than it has in a long time and is on track to rival Saudi Arabia.
Literally hundreds of articles have breathlessly repeated the same information over and over again, like all good marketing programs should. But here in 2013, gasoline is on track to set price records and possibly make this year the most expensive one in history for gas prices:
How can this be? What is going on? How do we reconcile all the reports of record-breaking advances in U.S. oil production with these concurrent record-high gasoline prices?
The answer starts with the fact that the U.S. still imports 40% of its daily oil supply and is nowhere near energy independence when it comes to petroleum. This means that the U.S. remains wedded to the world price of oil, which remains quite elevated in price – with Brent crude remaining stubbornly elevated between $110 and $120 a barrel over the majority of the past year…
How the Market Failure Will Happen
PREVIEW by Chris MartensonExecutive Summary
- The central-planning Status Quo will fight to the bitter end in order to keep stock and housing prices elevated
- HFT algorithms dramatically increase the odds of immediate "air pockets" in stock prices
- Persistently high gasoline prices are choking economic growth
- A parade of economic headwinds (weakening GDP growth, higher taxes, the impact of Obamacare, sequester cuts, chronic unemployment) are blowing increasingly stronger
- Powerful TBTF ("too-big-to-fail') interests are likely supporting the Fed's current efforts to boost asset prices
- Both near-term and long-term history tell us that the more asset prices are artificially increased, the farther they eventually fall, as intervention hits its point of diminishing returns
- Why you don't want to be long in this market when that happens
If you have not yet read Part I: Warning: Stocks Likely to Crater from Here, available free to all readers, please click here to read it first.
Hey, Where's My Cheap Gasoline?
Expensive energy is a serious drag on economic growth. It always has been and always will be, for obvious reasons.
The average person can be forgiven for being confused by the recent spike in gasoline prices. Since early 2012, there has been a concerted effort to tell the tale that the U.S. is producing more oil than it has in a long time and is on track to rival Saudi Arabia.
Literally hundreds of articles have breathlessly repeated the same information over and over again, like all good marketing programs should. But here in 2013, gasoline is on track to set price records and possibly make this year the most expensive one in history for gas prices:
How can this be? What is going on? How do we reconcile all the reports of record-breaking advances in U.S. oil production with these concurrent record-high gasoline prices?
The answer starts with the fact that the U.S. still imports 40% of its daily oil supply and is nowhere near energy independence when it comes to petroleum. This means that the U.S. remains wedded to the world price of oil, which remains quite elevated in price – with Brent crude remaining stubbornly elevated between $110 and $120 a barrel over the majority of the past year…
by
charleshughsmith
Executive Summary
- Intervention in the housing market by central planners is experiencing diminishing returns
- The four major trend reversals most likely to depress housing prices in the coming future
- The power deflationary force of reversion to (or perhaps below?) the mean
- Why demographics do not support rising prices
If you have not yet read Part I: The Unsafe Foundation of Our Housing 'Recovery', available free to all readers, please click here to read it first.
In Part I, we sketched out the larger context of the housing market: the dramatic rise of mortgage debt, the stagnation of income for 90% of households and the unprecedented scope of Central Planning intervention in the housing and mortgage markets.
In Part II, examine what will likely cause this nascent rise in housing prices to reverse, and to resume the decline Central Planning halted in 2009.
Intervention Has Only One Way to Go: Diminishing Returns
As noted in Part I, every Central Planning support of the mortgage and housing markets has already been pushed to the maximum, so there is nowhere left to go. Interest rates are already negative, over 90% of the mortgage market is backed by Federal agencies, the Fed has already pledged to buy trillions of dollars in mortgages, etc.
Four years of this massive intervention has stripped the mortgage and housing markets of the ability to price risk, capital, and assets. This has created a culture of supreme complacency, as participants have come to believe interest rates will stay near-zero for the foreseeable future and Central Planning intervention is permanent.
But nothing is permanent in life. And the current extremes of intervention and complacency have set the stage for some important reversals:
The Forces That Will Reverse Housing’s Recent Gains
PREVIEW by charleshughsmithExecutive Summary
- Intervention in the housing market by central planners is experiencing diminishing returns
- The four major trend reversals most likely to depress housing prices in the coming future
- The power deflationary force of reversion to (or perhaps below?) the mean
- Why demographics do not support rising prices
If you have not yet read Part I: The Unsafe Foundation of Our Housing 'Recovery', available free to all readers, please click here to read it first.
In Part I, we sketched out the larger context of the housing market: the dramatic rise of mortgage debt, the stagnation of income for 90% of households and the unprecedented scope of Central Planning intervention in the housing and mortgage markets.
In Part II, examine what will likely cause this nascent rise in housing prices to reverse, and to resume the decline Central Planning halted in 2009.
Intervention Has Only One Way to Go: Diminishing Returns
As noted in Part I, every Central Planning support of the mortgage and housing markets has already been pushed to the maximum, so there is nowhere left to go. Interest rates are already negative, over 90% of the mortgage market is backed by Federal agencies, the Fed has already pledged to buy trillions of dollars in mortgages, etc.
Four years of this massive intervention has stripped the mortgage and housing markets of the ability to price risk, capital, and assets. This has created a culture of supreme complacency, as participants have come to believe interest rates will stay near-zero for the foreseeable future and Central Planning intervention is permanent.
But nothing is permanent in life. And the current extremes of intervention and complacency have set the stage for some important reversals:
by
Adam Taggart
by
Adam Taggart
by
Adam Taggart
by
Adam Taggart
Bob Wiedemer, author of the best-seller The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy, regards the 2007 puncturing of housing market prices and the 2008 financial market swoon as the precedents to two much larger and much more dangerous bubbles.
These more pernicious threats are the dollar bubble ("printing money") and the government debt bubble ("borrowing money"). While both are expanding at a sickening pace, in the near term they deceptively make things seem much better than they are.
But, like all bubbles, they are unsustainable. And when these collapse, they are going to take the entire financial system, and very possibly the currency, with them (a.k.a. the "aftershock")
Bob predicts that the rupture of both these bubbles will most likely happen in the next 2-4 years and accelerate astonishingly rapidly once it begins.
Robert Wiedemer: Awaiting the Aftershock
by Adam TaggartBob Wiedemer, author of the best-seller The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy, regards the 2007 puncturing of housing market prices and the 2008 financial market swoon as the precedents to two much larger and much more dangerous bubbles.
These more pernicious threats are the dollar bubble ("printing money") and the government debt bubble ("borrowing money"). While both are expanding at a sickening pace, in the near term they deceptively make things seem much better than they are.
But, like all bubbles, they are unsustainable. And when these collapse, they are going to take the entire financial system, and very possibly the currency, with them (a.k.a. the "aftershock")
Bob predicts that the rupture of both these bubbles will most likely happen in the next 2-4 years and accelerate astonishingly rapidly once it begins.
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