Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60513 Wed, 24 Aug 2016 00:58:22 GMT U.S. new-home sales climb to best level since late 2007 http://implode-explode.com/viewnews/2016-08-23_USnewhomesalesclimbtobestlevelsincelate2007.html New-home sales jumped 12.4 percent last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said Tuesday. The demand has eclipsed the pace of construction. Just 4.3 months' supply of new homes is available on the market, down from 5.2 months a year ago.

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The improved sales of both new and existing homes has supported the broader U.S. economy, which is still hampered by a global slowdown and weak worker productivity. Existing-home sales reached a seasonally adjusted annual rate of 5.57 million in June, the best performance since early 2007.

Happy times are hear again! Or, maybe, it's pretty much a peak...

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iehi-feed-60506 Tue, 23 Aug 2016 14:13:52 GMT Goldman Says It's Too Late to Chase the Booming Real Estate Sector http://implode-explode.com/viewnews/2016-08-23_GoldmanSaysItsTooLatetoChasetheBoomingRealEstateSector.html iehi-feed-60503 Tue, 23 Aug 2016 13:42:59 GMT Not The Best Time In History To Invest In Real Estate - Part 1 | The Wall Street Examiner http://implode-explode.com/viewnews/2016-08-23_NotTheBestTimeInHistoryToInvestInRealEstatePart1TheWallStreetExa.html iehi-feed-60492 Sun, 21 Aug 2016 13:38:32 GMT Canadian Debt Slaves Pile it on http://implode-explode.com/viewnews/2016-08-21_CanadianDebtSlavesPileiton.html iehi-feed-60475 Fri, 19 Aug 2016 14:07:06 GMT Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month http://implode-explode.com/viewnews/2016-08-19_VancouverHousingMarketImplodesAverageHomePricePlunges20In1Month.html Global News obtained MLS sales data from several key Metro Vancouver markets and found the number of homes sold during the first two weeks of August in Greater Vancouver dropped by 85% on average. Richmond experienced a 96% drop in the number of sales and Burnaby North fell by 95%. Vancouver's West Side, West Vancouver, and Coquitlam also took major hits.

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Zolo, a Canadian real estate brokerage, keeps track of MLS home sales in real-time and reports prices as an average rather than the "benchmark price" used by the REBGV. It currently shows a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago.

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iehi-feed-60462 Wed, 17 Aug 2016 14:55:24 GMT The "Housing Crisis" in San Francisco Strangles Demand http://implode-explode.com/viewnews/2016-08-17_TheHousingCrisisinSanFranciscoStranglesDemand.html For teachers, the math doesn't work out. Average teacher pay for the 2014-15 school year was $65,000. And less after taxes. But the median annual rent was $42,000 for something close to a one-bedroom apartment. After taxes and utilities, there's hardly any money left for anything else.

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These are a scary numbers for the housing market! If only 13% can buy that median home -- when in a healthier housing market, over 50% should be able to buy a median home -- who the heck is going to buy the rest of the homes?

This puts a stranglehold on demand. To sustain these crazy home prices, San Francisco needs to bring in an endless flow of highly paid people, including absentee foreign investors, to replace the teachers and other middle-class households, the artists and shop keepers and office workers, and to push out city employees, nurses, and the like. That's how the process has worked.

But that endless influx of highly paid people and investors is grinding to a halt.

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iehi-feed-60381 Fri, 05 Aug 2016 00:39:41 GMT "A Reverse Mortgage Ruined His Life"? - LOL | Mandelman Matters http://implode-explode.com/viewnews/2016-08-04_AReverseMortgageRuinedHisLifeLOLMandelmanMatters.html So, I'm to believe that this 67 year-old man, presumably of reasonably sound mind, waited until he received a foreclosure notice to find out how to pay his back property taxes, and when he couldn't find the amount listed in that foreclosure notice, that's what made it "tough for him to catch up" on his property taxes?

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The Post's article is a crap sandwich from the first bite to the last... the headline alone is so monumentally irresponsible that it should be a violation of the Truth in Advertising laws... if those even exist anymore.

However, in this case it's far worse than just getting a few facts wrong in an article... the Post's story is all but certain to scare some away from a HECM reverse mortgage for absolutely no good reason and in my mind that's just as bad as misleading someone into getting a reverse mortgage.

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iehi-feed-60376 Thu, 04 Aug 2016 22:28:21 GMT Rental Appreciation Already Peaked According to New CoreLogic Index http://implode-explode.com/viewnews/2016-08-04_RentalAppreciationAlreadyPeakedAccordingtoNewCoreLogicIndex.html iehi-feed-60365 Thu, 04 Aug 2016 00:06:40 GMT UK heading for new financial crisis 'on grander scale than 2008' with Bank of England 'asleep at the wheel': Report http://implode-explode.com/viewnews/2016-08-03_UKheadingfornewfinancialcrisisongranderscalethan2008withBankofEn.html Kevin Dowd, professor of finance and economics at Durham University, argues in a paper published today by the Adam Smith Institute that the Bank's tests, which model various adverse economic scenarios each year such as a major fall in UK house prices or a Chinese property crash, have a series of "fatal flaws" and that the central bank is "asleep at the wheel".

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In addition, he says the Bank's tests are less rigorous than those of the US central bank, and that if UK lenders were tested by the Federal Reserve all of them would fail.

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iehi-feed-60359 Tue, 02 Aug 2016 23:25:09 GMT The Foreclosure Crisis is Dead.  Long Live the Foreclosure Crisis! | Mandelman Matters http://implode-explode.com/viewnews/2016-08-02_TheForeclosureCrisisisDeadLongLivetheForeclosureCrisisMandelmanM.html iehi-feed-60344 Mon, 01 Aug 2016 14:13:04 GMT End of an Era as China's Love Affair With U.S. Real Estate Fades (AMIDST CAPITAL CRACKDOWN) http://implode-explode.com/viewnews/2016-08-01_EndofanEraasChinasLoveAffairWithUSRealEstateFadesAMIDSTCAPITALCR.html ``The residential-property market here, especially for those priced between $2.5 million to $3 million, has been affected by China's measures to control capital flight," said the New York City-based Keller Williams Realty Landmark broker. "You need to cut the price, or it may take a real long time."... In terms of U.S. dollar value, the total share of Chinese buying of international sales dropped from 27.5% to 26.7%.

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The Chinese authorities have been compelled to increasingly tighten the noose on cross-border capital flows to defend the yuan and to slow down the burnout of the nation's foreign-exchange reserves since then. This includes increasing scrutiny of transfers overseas, to closely check whether individuals send money abroad by breaking up foreign-currency purchases into smaller transactions.

New measures were also introduced in December to crack down on illegal China UnionPay Co. card machines, which were suspected of being used to channel funds offshore via fake transactions. Meanwhile, illegal foreign-exchange transactions from underground banking were brought to regulators' attention, as China busted the nation's biggest underground bank, which handled $62 billion, according to a November report by the official People's Daily.

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iehi-feed-60342 Mon, 01 Aug 2016 14:02:35 GMT What is Credit Damage and What Can You Do About It? | Mandelman Matters http://implode-explode.com/viewnews/2016-08-01_WhatisCreditDamageandWhatCanYouDoAboutItMandelmanMatters.html iehi-feed-60339 Sun, 31 Jul 2016 20:18:10 GMT Minsky's moment http://implode-explode.com/viewnews/2016-07-31_Minskysmoment.html Minsky's legacy has more to do with focusing on the right things than correctly structuring quantifiable models. It is enough to observe that debt and financial instability, his main preoccupations, have become some of the principal topics of inquiry for economists today. A new version of the "Handbook of Macroeconomics", an influential survey that was first published in 1999, is in the works. This time, it will make linkages between finance and economic activity a major component, with at least two articles citing Minsky. As Mr Krugman has quipped: "We are all Minskyites now."

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Will the moment last? Minsky's own theory suggests it will eventually peter out. Economic growth is still shaky and the scars of the global financial crisis visible. In the Minskyan trajectory, this is when firms and banks are at their most cautious, wary of repeating past mistakes and determined to fortify their balance-sheets. But in time, memories of the 2008 turmoil will dim. Firms will again race to expand, banks to fund them and regulators to loosen constraints. The warnings of Minsky will fade away. The further we move on from the last crisis, the less we want to hear from those who see another one coming.

This being The Economist, the article has to end by smugly ensuring us that things are fine now, and we have nothing to worry about until some indeterminate time YEARS in the future. This glibly ignores the fact that it's already been YEARS since the 2007/2008 crisis. But crediting the view that we won't necessarily see a re-peat of the Minsky Moment of 2007/2008 is that, this time, it's government debt that is the main problem. And it's not at all clear that governments -- especially not "all" of them racing towards putative default and currency collapse at the same time -- face the same dynamics. As we've said on numerous occasions, it will certainly be interesting to see how the denoument of the continuation of the credit excesses of 2007/2008 plays out. But we wouldn't exactly derive much comfort from the sequel playing out as a pure free-market Minsky Moment; perhaps it will be much uglier...

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iehi-feed-60326 Thu, 28 Jul 2016 21:06:44 GMT Millennials cause homeownership rate to drop to lowest level since 1965 http://implode-explode.com/viewnews/2016-07-28_Millennialscausehomeownershipratetodroptolowestlevelsince1965.html The drop in homeownership is largely due to a delay in homebuying by the millennials, who have the lowest ownership rate of their age group in history. Millennials are not only burdened by student loan debt, but they have also delayed life choices like marriage and parenthood, which are the primary drivers of homeownership.

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"Broadly speaking, the falling homeownership rate is a sign that renting isn't only for those just starting out or making a transition, but is becoming an increasingly viable longer-term option for many households," noted Svenja Gudell, chief economist at Zillow. "It also means incomes are not yet rising quickly enough to broadly support new homeownership, and that inventory remains too tight to allow for meaningful access to affordable housing."

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iehi-feed-60325 Thu, 28 Jul 2016 16:27:05 GMT Homeownership Rate in the U.S. Tumbles to the Lowest Since 1965 http://implode-explode.com/viewnews/2016-07-28_HomeownershipRateintheUSTumblestotheLowestSince1965.html The share of Americans who own their homes was 62.9 percent in the second quarter, the lowest since 1965, according to a Census Bureau report Thursday. It was the second straight quarterly decrease, down from 63.5 percent in the previous three months.

First-time buyers have been struggling to find affordable properties as low mortgage rates and an improving job market spur competition for a tight supply of listings. Home prices rose 5.2 percent in May from a year earlier, according to the S&P CoreLogic Case-Shiller index of values in 20 cities released this week.

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iehi-feed-60323 Thu, 28 Jul 2016 15:09:36 GMT Can the World Deal With a New Bank Crisis? - Satyajit Das http://implode-explode.com/viewnews/2016-07-28_CantheWorldDealWithaNewBankCrisisSatyajitDas.html As Europe braces for the release of its bank stress tests on Friday, the world could be on the verge of another banking crisis. The signs are obvious to all. The World Bank estimates the ratio of non-performing loans to total gross loans in 2015 reached 4.3 percent. Before the 2009 global financial crisis, they stood at 4.2 percent.

If anything, the problem is starker now than then: There are more than $3 trillion in stressed loan assets worldwide, compared to the roughly $1 trillion of U.S. subprime loans that triggered the 2009 crisis. European banks are saddled with $1.3 trillion in non-performing loans, nearly $400 billion of them in Italy. The IMF estimates that risky loans in China also total $1.3 trillion, although private forecasts are higher. India's stressed loans top $150 billion.

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To make matters worse, the world's limp recovery since 2009 is intensifying loan stresses. In advanced economies, low growth and disinflation or deflation is making it harder for companies to pay off what they owe. Many European firms are suffering from a lack of global competitiveness, exacerbated by the effects of the single currency.

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Current monetary policy is partly to blame. Zero or negative rates drive down bank lending rates more than deposit rates, which can't be cut because of the need to maintain deposits and comply with regulatory requirements for stable funding.

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iehi-feed-60319 Thu, 28 Jul 2016 14:42:47 GMT San Fran's Lending Standards Put The Last Housing Bubble To Shame http://implode-explode.com/viewnews/2016-07-28_SanFransLendingStandardsPutTheLastHousingBubbleToShame.html iehi-feed-60314 Wed, 27 Jul 2016 18:19:34 GMT Behind The New Home Sales Data: A Darker Backdrop http://implode-explode.com/viewnews/2016-07-27_BehindTheNewHomeSalesDataADarkerBackdrop.html Sales have nearly doubled from the June 2010 and June 2011 lows of 28,000 to this June's 54,000. But this is still down sharply from the June 2005 peak of 115,000 units. At the same time, it barely exceeds the low of 47,000 reached in June 1991 and 53,000 in June 1992 during that recession...

From the 2002 recession until this year, nominal median household income has risen by approximately 32%, using estimated 2% increases for 2015 and this year, which is consistent with the BLS data on nominal wage growth. However, the rate of sales per million people has declined by almost 22% over that period

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iehi-feed-60303 Tue, 26 Jul 2016 16:57:34 GMT Home Prices in 20 U.S. Cities Rose Less Than Forecast in May http://implode-explode.com/viewnews/2016-07-26_HomePricesin20USCitiesRoseLessThanForecastinMay.html iehi-feed-60279 Sat, 23 Jul 2016 00:32:15 GMT Denmark Faces ‘Out of Control' Housing Market http://implode-explode.com/viewnews/2016-07-22_DenmarkFacesOutofControlHousingMarket.html Denmark's biggest mortgage bank is warning there's a risk the housing market may get "out of control," especially around cities, as long-term negative interest rates make borrowers complacent.

"To be concrete, there is a danger that Danes go blind to the risk of rates ever rising again," Tore Stramer, chief analyst at Nykredit in Copenhagen, said in an e-mail. "That raises the risk of a major housing price decline, when rates at some point or other start to rise again."

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With no other country on the planet having experienced negative rates longer than Denmark, the distortions the policy is wreaking may provide a preview of what other economies face should they go down a similar path. Danes can get short-term mortgages at negative interest rates, and pay less to borrow for 30 years than the U.S. government.

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