I Know What the Economy Did Last Summer Part 2: The Real Estate Rollover

By David Haggith – Re-Blogged From Great Recession Blog

In fact, I knew what the economy did last summer before summer even began. Since the beginning of the year, I have been writing that it appeared housing was reaching a new bubblicious peak and that the real estate market was getting ready to roll over. Just before the start of the summer, I confirmed that prediction by saying that it looked like that process had begun. I anticipate it will be a slow turnover at first, just as it was in 2007, which did not reach free fall until late in 2008. Likewise, I anticipate the present decline will not reach free fall until 2018.

While housing played out about as I expected this summer (see below), the more obvious collapse right now is developing in metropolitan commercial real estate, particularly in retail space due to the retail apocalypse. Even longtime commercial real-estate mogul Sam Zell warned last week that he would not consider investing any capital in retail real estate. In Zell’s words, the real estate landscape looks “like a falling knife.”

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Carmageddon And The Retail Apocalypse

By David Haggith – Re-Blogged From http://www.Silver-Phoenix500.com

Summer closed in a whirlwind of weather chaos for the United States and its territories. At the start of the summer, the US economy began to show signs that it was flying apart. The two most obvious were the big blowouts in the auto industry and in retail, not all of which could be attributed to a shift to online sales.

The auto industry rolled over this year and began a decline similar to the one we experienced at the start of the Great Recession…. In response, car markers started offering record incentives (like $0 down, 0% interest on a 80-month loan), which brought an improvement to sales in July. You have to ask, just as I did back in 2007, “What is the end game when such incentives take profit down to nil?”

…Even with such pricing and financing incentives, one firm, SouthBay Research, threw cold water on the Census Bureau’s July sales report, declaring the figures “unbelievable.”

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Is The Economy At The Cusp Of The Next Recession…Or Maybe Worse? (Part II)

By Burt Coons (AKA the Plunger) – Re-Blogged From

http://www.Silver-Phoenix500.com

Part II takes a look at the macro economic backdrop for the trade of the year. Spoiler alert- its not a pretty picture, but don’t think doom and gloom, instead embrace crisis and opportunity! With our understanding of the history of oil we now focus on the macro backdrop for our Big Trade.

When the tide goes out you find out who has been swimming naked”– Warren Buffet

“This time around everything gets revealed in the next recession”-Plunger

In the next recession those leaning the wrong way… the levered players, will be forced to heave out their non-productive assets at fire sale prices. Commodity producers with entrenched costs will have to increase production as lower prices beget even lower prices since insufficient cash flows can only be recovered through higher volume production.

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What’s Left To Drive The Recovery? Not Much

By John Rubino – Re-Blogged From Dollar Collapse

US growth, such as it is, has lately been driven by a handful of hot sectors. Car sales have set records, high-end real estate is generally way up, and federal spending – based on last year’s jump in the national debt – is booming.

But now the private sector part of that equation is shifting into low gear. Cars in particular:

Economy Will Miss That New-Car Smell

(Wall Street Journal) – The annual pace of light-vehicle sales fell to a seasonally adjusted 17.2 million in the first quarter from 18 million. That the decline has come despite generous incentives from car companies and still-low gasoline prices suggests that sales are past their peak.

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