The Housing Market In 2006-2007 And 2018-2019

As can be seen in the graph below, there is an almost uncanny similarity between housing prices at the 2006-2007 peak, and current home prices.

The biggest difference is that current home prices are substantially higher. Should we be worried about a repeat scenario – and another six year decline in home values?

This analysis explores in detail the similarities between 2006-2007 and current home prices, on a national average basis. When we dig beneath the surface, we also find some major differences as well, which means that the next round could be quite different than the last round.

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The Relentless Road to Recession

By David Haggith – Re-Blogged From The Great Recession Blog 

“Show me the data,” demand those who cannot see a recession forming all around them and who keep parroting what they are told about the economy being strong because it is what they want to believe; yet, the data look like an endless march through a long summer down the road to recession.

And that is what you are going to get in this article, a seemingly endless parade of data along the recessionary road. This is for the data hounds.

As we end the summer of our discontent when few would deny that most economic talk turned toward recession and, as we begin the time when I said the stock market appears it may fulfill my prognostication of another October surprise, it’s time to lay out — again — the latest data that support my summer recession prediction. We’ll have to wait until next year for the government to officially declare a recession if one did start in September. (Yes, September is a summer month.) In the meantime, the data stream is a long line of confirmation.

Why are Bonds Going for Broke?

One argument for last week’s extraordinary plunge in bond prices, which I explored as something that might happen this time of year in one of my earlier Premium Posts, was that bond prices could get crushed by the supersized US treasury auctions planned for September and October as the government makes up for its inability to issue new debt during the debt-ceiling standoff.

While pointing out the concern to patrons, I decided in the end for my own investment purposes that the Fed’s termination of quantitative tightening and its return to reducing interest rates would likely offset the impact of the government’s sudden debt expansion. Evidence is solid so far that the ballooning treasury auctions have not been the cause of the sudden collapse in bond prices (rise in yields).

(I also got out before the carnage of last week.)

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Dancing Closer to the Exits

By Rick Mills – Re-Blogged From Ahead of the Heard

When Americans elect or re-elect a president in the fall of 2020, there is a very good chance the closest thing to their hearts – their wallets – will be top of mind.

 

That’s because many are predicting the longest-running economic expansion in US history is about to slam on the brakes. It’s been over a decade since The Great Recession of 2007-09 plunged the world into monetary despair. That downturn was particularly bad because it combined an economic slowdown with problems in the financial system, rudely exposed by the sub-prime mortgage crisis.

 

In this article we are asking, what is the best indicator for predicting the next recession? What does the current data say about a recession?

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The Economy Continues To Deteriorate

By Dave Kranzler – Re-Blogged From Gold Eagle

Trump’s trade advisor, Peter Navarro, was on CNBC today asserting that the economy was expanding at an unprecedented rate.  Either Navarro is tragically ignorant or an egregious liar. Either way he looks like an idiot to those us who study the real numbers and understand the truth.

The Global Manufacturing PMI (Purchasing Managers Index) dropped to 50.4 – the lowest since July 2016. It’s been falling almost nonstop since mid-2017. The current period of decline is the longest in the 20-year history of the index. The index includes the purchase of inputs for the manufacturing of consumer goods, investment goods (capex material) and intermediate goods (semi-finished goods used as inputs for final goods).

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You Know Things are Falling When…

…when the stock market’s decade-long bottom trend becomes its new top trend and then it can’t even make it back up to that line as a top trend.

We’re sloughing away now, and it can be a long slide to the bottom or endless side-winding of big ups and downs that go nowhere, just as the market has now gone nowhere for fifteen months.

Yes, if you bought in January, 2018, (when I said the market would fall) and held, you have made nothing (unless you did well on dividends)! If you continue to hold, the odds are you will do worse than nothing; but, hey, you did get to enjoy a heck of a roller-coaster ride. If, on the other hand, you sold in January of 2018 and put your money in cash, you made 2% a year with worry-free smooth sailing every day of the year. Here’s the proof on stocks:

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The US Economy Is In Big Trouble

By Dave Kranzler – Re-Blogged From Gold Eagle

“You’ve really seen the limits of monetary and fiscal policy in its ability to extend out a long boom period.” – Josh Friedman, Co-Chairman of Canyon Partners (a “deep value,” credit-driven hedge fund)

The Fed’s abrupt policy reversal says it all. No more rate hikes (yes, one is “scheduled” for 2020 but that’s fake news) and the balance sheet run-off is being “tapered” but will stop in September. Do not be surprised if it ends sooner. Listening to Powell explain the decision or reading the statement released is a waste of time. The truth is reflected in the deed. The motive is an attempt to prevent the onset economic and financial chaos. It’s really as simple as that. See Occam’s Razor if you need an explanation.

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