The Global Real Estate Bubble Is OFFICIALLY Bursting | Seeking Alpha

Bubbly cities like Singapore and Vancouver have started punishing foreign housing investors that have pushed up property prices to unaffordable – and unsustainable – rates. Foreign investors are now being taxed in many of these areas, and as a result, their real estate markets have begun to tank.During this housing burst, the most high-end, desirable locations will be hit the hardest.

Source: The Global Real Estate Bubble Is OFFICIALY Bursting | Seeking Alpha (sic)

Big Wall Street Firms Make Lame Excuse for Volcker Rule Non-Compliance, Ask for Additional Five Year Extension | naked capitalism

Anyone who knows bupkis about finance knows if you can’t sell a financial asset in three years (or more accurately, seven), particularly with public and private market valuations at record levels, the problem is not liquidity. It’s valuation. These banks are carrying these holdings on their books at inflated marks and don’t want to recognize losses……..

“It’s laughable that the biggest, most sophisticated financial firms in the world claim they can’t sell the stakes year after year,” said Dennis Kelleher, CEO of non-profit Better Markets. “Everyone else in America has to comply with the law and Wall Street should also.”

Source: Big Wall Street Firms Make Lame Excuse for Volcker Rule Non-Compliance, Ask for Additional Five Year Extension | naked capitalism

The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

The point here is that while the housing market has recovered – the media should be asking ‘Is that all the recovery there is?’

With 30-year mortgage rates below 4%, we should be in the middle of the next housing bubble with prices and home ownership rising. The question the media should be asking is “why?” Furthermore, what happens if the “bond market bears” get their wish and rates rise?

The housing recovery is ultimately a story of the “real” unemployment situation that still shows that roughly a quarter of the home buying cohort are unemployed and living at home with their parents. The remaining members of the home buying, household formation, contingent are employed but at lower ends of the pay scale and are choosing to rent due to budgetary considerations. This explains why household formation is near its lowest levels on record despite the “housing recovery” fairytale whispered softly in the media.

Housing-NetHouseholdFormation-072516

While the “official” unemployment rate suggests that the U.S. is near full employment, the roughly 94 million individuals sitting outside the labor force would likely disagree. Furthermore, considering that those individuals make up 45% of the 16-54 aged members of the workforce, it is no wonder that they are being pushed to rent due to budgetary considerations and an inability to qualify for a mortgage.

The risk to the housing recovery story remains in the Fed’s ability to continue to keep interest rates suppressed. It is important to remember that individuals “buy payments” rather than houses, so each tick higher in mortgage rates reduces someone’s ability to meet the monthly mortgage payment. With wages remaining suppressed, and a large number of individuals not working or on Federal subsidies, the pool of potential buyers remains contained.

The real crisis is NOT a lack of homes for people to buy, just a lack of enough homes for people to rent. Which says more about the “real economy” than just about anything else.

While there are many hopes pinned on the housing recovery as a “driver” of economic growth in 2013, 2014, 2015, 2016 – the lack of recovery in the home ownership data suggests otherwise.

Source: The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

Deutsche Bank Chief Economist Joins SocGen Chairman in Trying to Foment Banking Crisis to Get Germany, Brussels to Blink | naked capitalism

Another race to the crash: who goes first Deutsche Bank or Italian Banks? Can bankers get politicians to pull the emergency cord? Who gets screwed? Stay tune for Crash 2.0.

Why bank executives are stoking a banking crisis, with Deutsche Bank in their crosshairs.

Source: Deutsche Bank Chief Economist Joins SocGen Chairman in Trying to Foment Banking Crisis to Get Germany, Brussels to Blink | naked capitalism

Panama papers: “an old tradition of English piracy” | openDemocracy

Looking at the documents leaked from Mossack Fonseca and one thing is clear: Britain’s network is once again at the core. More than half of the companies listed in the documents are registered in the UK or its Overseas Territories, and Hong Kong plays a huge role.

Of course, this shouldn’t be surprising. Britain has for for a while now been thought to be the global capital for money laundering. And it’s no shock that nothing has been done about it. In 2010, two years after they crashed the global economy, the City paid for more than half of the Conservative party’s election campaign, helping (along with the aforementioned Lord Ashcroft) them limp them over the line, with a Lib Dem shaped crotch. Though, of course, Labour did little to regulate in the previous 13 years.

If we want to understand modern Britain, first we need to realise that our primary economic function in the world is probably our network of tax havens. After all, around $21tn is estimated to sit in offshore accounts, of which Britain’s territories are said to make up by far the biggest part. Our own GDP is only around $3tn.

Second, we need to get to grips with the serious claims about our role as the global money laundering capital: a function which pushes up the price of the pound, making other exports unaffordable (bye bye steel), and drives up the cost of houses in London and the South East, fuelling a vast speculative bubble which sucks investment out of the rest of the economy.

And third, we need to think about how this gradually dawning economic reality interacts with our politics: not through the obvious corruption of direct bribery, but through revolving doors between government and civil service, through old boy’s networks and friendship groups, through perfectly legal election donations and media domination.

Source: Panama papers: “an old tradition of English piracy” | openDemocracy

Elizabeth Warren’s Trade Deal Fears Confirmed: Canada Uses NAFTA to Challenge Volcker Rule | naked capitalism

Elizabeth Warren’s concerns about trade deals undermining financial regulations get an unexpected confirmation from Canada.

Source: Elizabeth Warren’s Trade Deal Fears Confirmed: Canada Uses NAFTA to Challenge Volcker Rule | naked capitalism