Tuesday October 25 20916 Housing and Economic stories

TOP STORIES:

China House Price Bubble Soars Most Ever, Government Freaks out, Preannounces Plunge - (www.wolfstreet.com) As a consequence of a dizzying buying frenzy in September, the average price of new homes in China soared 11.2% from a year ago, after a 9.2% jump in August, the National Bureau of Statistics reported today. It was the 12th month in a row of year-over-year gains, and the largest increase on record. The average price of new homes rose in 63 of the 70 cities in the index. It dropped in six cities and remained flat in one. But all heck broke lose in tier-one cities: In Beijing, the average price skyrocketed 27.8%, in Shanghai 32.7%. This comes after authorities have unleashed a tsunami of liquidity that triggered a record borrowing binge. In response to the prior deflation of China’s house price bubble, and the social unrest it began to entail as folks saw their life savings evaporate, the People’s Bank of China cut interest rates six times in the eleven months leading up to October 2015. The benchmark mortgage rate dropped to a historic low of 4.9%. Last month, the medium- and long-term loans to households, mostly mortgages, ballooned by 571 billion yuan, as the total value of new homes sold (a function of price and volume), according to Bloomberg calculations, soared 61% year-over-year, nearly double the increase in August.

Head Of Democratic Party Makes Stunning Admission: "The People Are In Despair About How Things Are" - (www.zerohedge.com) While readers may be used to tin-foil-hat-wearing digitial dickweeds and alt-right bloggers seeing through the veil of ignorance and media hype that hides a considerably uglier economic reality than The White House (and the stock market) might suggest, many Democrats may be shocked to discover that none other than now-acting chair of the Democratic National Committee Donna Brazile agrees...

In an email to Clinton campaign chair John Podesta from February 2016, released Friday by WikiLeaks... Donna Brazile (who has had a tough week trying to defend her cheating allegations for giving Hillary debate questions) admits... “I think people are more in despair about how things are - yes new jobs but they are low wage jobs... HOUSING is a huge issue. Most people pay half of what they make to rent,” Such honesty from such a vocal and public cheerleader for the Obama administration is sure to embarrass the White House, and, as Lifezette notes, contradicts the official Democratic Party line that Obama is some sort of economy-saving superhero.

Germany’s Long-Suffering Savers Have Real Cause to Complain – (www.bloomberg.com) In Germany, fretting about inflation is a political currency that never seems to lose its value. In the past week, for example, at least three national newspapers have run prominent articles telling the populace that their savings -- denied the magic of compound interest by the European Central Bank’s low-rate policies -- are in for a renewed onslaught from accelerating consumer prices. The Bundesbank forecasts average inflation of 1.5 percent next year, whereas rates will likely be around zero. Business daily Handelsblatt, which in March ran a mocked-up front-page picture of ECB President Mario Draghi burning up a 100-euro note with a cigar wedged in his mouth, published a cover headline on Friday proclaiming that Germany is about to get caught in an “inflation trap.”

Is Chicago’s Housing Market Next?  - (www.wolfstreet.com) Is Chicago’s Housing Market Next? The smart money tries to cash out at the peak, no? Does it always start at the top? Because there’s just no letup in dismal tidbits piling up about big-city high-end condo market: Manhattan, San Francisco, Miami – and now Chicago too? Just last year, things were still so good on the Magnificent Mile, those tony 13 blocks of Michigan Avenue from the Chicago River north to Oak Street, of landmark towers, shops and restaurants – rents rank among the most expensive in the country – museums, hotels, and high-end condos. April last year, the 65th-floor penthouse at the Park Tower on 800 N. Michigan Ave sold for $18.75 million, “to a firm with ties to ‘Star Wars’ creator George Lucas and wife Mellody Hobson, president of a Chicago investment firm,” the Chicago Tribune speculated. It was an all-time record. The real estate business was ecstatic. But it might have marked the peak. Now another penthouse at the Park Tower – a 4,000 sq. ft. two-bedroom – is for sale, asking $12 million, according to the Financial Times. A $7.5 million four-bedroom three-bathroom condo is for sale at the Art Deco Palmolive Building at the north end of the Mag Mile. Other lesser condos are for sale galore in the area.

WikiLeaks: Hillary Wants ObamaCare to 'Unravel' - Fox Nation - (www.foxnews.com) An email leaked by WikiLeaks Tuesday appears to suggest that Hillary Clinton wants the Affordable Care Act to fail — presumably as a pretense for implementing single-payer, government-controlled health care. In a chain between Clinton and her senior policy adviser Ann O’Leary titled “Memo on Cadillac Tax for HRC,” Clinton said she’s open to changing her position on the Cadillac Tax — but that the Republican plan to repeal it must pass.

OTHER STORIES:

Stocks Decline With Oil as Euro Whipsawed After Draghi's Remarks - (www.bloomberg.com)
ECB Leaves Stimulus Unchanged as Decision Deadline for QE Looms - (www.bloomberg.com)
Draghi Signals ECB Unlikely to Stop QE Buying Without Tapering - (www.bloomberg.com)
Sales of Existing Homes in U.S. Increase More Than Forecast - (www.bloomberg.com)

The Tech Bubble Didn’t Burst This Year. Just Wait - (www.bloomberg.com)
China’s Housing Bubble Wobble - (www.bloomberg.com)
China war on underground banks uncovers $148 billion in illegal trades - Financial News - (www.reuters.com)