KeNo's Housing and Economic Portal: Tuesday November 11 Housing and Economic stories

Monday, November 10, 2014

Tuesday November 11 Housing and Economic stories

[Pesek] Japan Creates World's Biggest Bond Bubble - (www.bloomberg.com) Ten years from now, will Bank of Japan Governor Haruhiko Kuroda be regarded as a genius or a madman? Kuroda's shock-and-awe stimulus move on Oct. 31 delighted markets and won him plaudits as a monetary virtuoso. Japan, the conventional wisdom tells us, has finally gotten serious about ending deflation, and isn't it wonderful. But what happens when a central bank buys up an entire bond market? We're about to find out as Kuroda, like some feverish hedge fund manager, corners Japan's. Neglected in all the celebrating: To reach a 2 percent inflation goal that's both arbitrary and meaningless, the BOJ is destroying Japan's standing as a market economy. In announcing that it will boost purchases of government bonds to a record annual pace of $709 billion, the central bank has just added further fuel to the most obvious bond bubble in modern history -- and helped create a fresh one on stocks. Once the laws of finance, and gravity, reassert themselves, Japan's debt market could crash in ways that make the 2008 collapse of Lehman Brothers look like a warm-up.

Singer's Elliott Says U.S. Growth Optimism Unwarranted as Data ‘Cooked’ - (www.bloomberg.com) Paul Singer’s Elliott Management Corp. said optimism on U.S. growth is misguided as economic data understate inflation and overstate growth, and central bank policies of the past six years aren’t sustainable. The market turmoil in the first half of October may be a “coming attractions” for the next real crash that could turn into a “deep financial crisis” if investors lose confidence in the effectiveness of monetary stimulus, Elliott wrote in a third-quarter letter to investors, a copy of which was obtained by Bloomberg News. “Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,” New York-based Elliott wrote. “When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.”

Short Seller Expects GoPro Shares To Tumble To $30 - (www.businessinsider.com) GoPro shares are going to $30. According to a report released by short sellers Citron Research on Tuesday, shares of the wearable camera company will fall to $30 within 12 months. In afternoon trade on Tuesday, GoPro shares were unchanged near $84.50. In its report, Citron wrote that currently, investors are not only looking at the company as a camera hardware company, but also a social media company. Citron isn't convinced. Taking GoPro as a hardware company, Citron compares the company to Beats, which was recently acquired by Apple at 2 times its annual revenue.

Petrodollars leave world markets for first time in 18 years - BNP - (www.reuters.com) Energy-exporting countries are set to pull their "petrodollars" out of world markets this year for the first time in almost two decades, according to a study by BNP Paribas. Driven by this year's drop in oil prices, the shift is likely to cause global market liquidity to fall, the study showed. Brent crude futures have fallen 23 percent this year, with 2014 promising to be only the second year since 2002 that crude prices will end the year lower than they began it. This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows – (www.zerohedge.com) The Millennials (one of the biggest generations in US history) are just not getting with the status quo program.As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted thatfirst-time homebuyers plunged to the lowest level in 27 years. The blame - of course - rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price competition from 'investors' and too "stringent credit standards," perfectly mirroring FHFA's Mel Watt's Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 - smack in the middle of the Millennial collapse.

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