US housing market raises red flag
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“Friday’s report on US economic growth spurred a presidential victory lap after it showed that gross domestic product rose at a 4.1% annual rate, the fastest in nearly four years.

“But it had an ugly detail about the housing market that added to evidence of a slump: Residential investment, which includes construction and brokers’ fees, shrank in the second quarter for a third quarter out of four.

“Add this to the worst housing affordability in nearly a decade and rising mortgage rates, and you have a recipe for a slowdown.

“For Lindsey Piegza, the chief economist at Stifel, the housing market “raises a large red flag” about economic growth in the second half of the year. She added that home sales help drive other parts of the economy, including consumer confidence and the pace of construction.”

http://uk.businessinsider.com/us-housing-slowdown-economy-2018-7


“Many [US] retirement funds could face insolvency.”

https://www.wsj.com/articles/the-pension-hole-for-u-s-cities-and-states-is-the-size-of-japans-economy-1532972501


“”I don’t want to scare the public, but we’ve never had QE,” [Jamie] Dimon said. “We’ve never had the reversal. Regulations are different. Monetary transmission is different. Governments have borrowed too much debt, and people can panic when things change.””

https://www.cnbc.com/2018/07/30/the-market-has-never-seen-this-before-and-that-has-jamie-dimon-worried.html


“Canada is finding it harder to attract the foreign investment in its bonds and stocks that it needs to finance a current account deficit, as yields rise at a faster pace in the United States and structural headwinds stifle prospects for domestic economy.”

https://business.financialpost.com/news/economy/reality-bites-for-canada-as-foreign-hunger-fades-for-its-securities


“[UK] Households are piling billions of pounds of debt on to credit cards, overdrafts and personal loans at record levels in a trend that economists are warning is unsustainable just as interest rates are set to rise. Years of weak wage growth and a recent rise in inflation has led consumers to borrow huge amounts of unsecured credit in order to sustain their normal spending over the past year.”

https://www.thetimes.co.uk/article/households-risk-debt-crisis-after-splurge-on-credit-cards-9qwgr7hgc


“Spanish economic growth slowed to its weakest pace in four years in the second quarter of the year, providing the latest evidence that the eurozone boom of late 2017 has moderated since the start of the new year.”

https://www.ft.com/content/2a9dc74c-9491-11e8-b747-fb1e803ee64e


“The Turkish Treasury’s domestic debt has increased by 25.8 billion lira since the beginning of the year, reaching 561.2 billion lira, whilst the Treasury’s external debts have increased by 67.6 billion lira in 6 months, reaching 408.6 billion lira. Household debt, meanwhile topped 500 billion lira as of May this year.”

https://ahvalnews.com/turkish-economy/turkeys-debt-rings-alarm-bells


“As Libya slips deeper into an economic crisis, cracking down on smuggling has risen higher on the agendas of local authorities and militias. Gasoline, in particular, has become contentious – and last year, amid increasing public outrage in western Libya, the informal agreements that regulate border smuggling started to limit quantities of gasoline. As a result, the price of the gasoline consumed by many in southern Tunisia has more than doubled. “

https://www.middleeasteye.net/columns/economic-malaise-heart-libya-tunisia-border-standoff-883226567


“China’s official factory gauge cooled this month as the impact of trade turbulence with the U.S. on confidence and the currency began to bite.”

https://www.bloomberg.com/news/articles/2018-07-31/china-factory-gauge-falls-on-tighter-credit-trade-war-risks


“China-based manufacturers were already in the process of moving to lower-cost Southeast Asia. Now that trade tariffs have been enacted on at least $50 billion worth of goods, and another $200 billion likely by summer’s end, they are shifting their supply chain. It’s happening.”

https://www.forbes.com/sites/kenrapoza/2018/07/30/trade-war-casualties-factories-shifting-out-of-china/#40bc815d103e


“A Bloomberg gauge tracking the performance of China-listed brokerages has fallen to its lowest reading relative to the Shanghai Composite Index in over a decade.”

https://chinaeconomicreview.com/china-brokerage-stocks-weakest-in-a-decade-bloomberg/


“The weekly chart shows that after the June 7 high, the price of copper has declined for seven consecutive weeks… China is the world’s leading copper consumer and a trade dispute between the Chinese and United States is at the heart of the protectionist rhetoric and actions over recent weeks.”

https://seekingalpha.com/article/4191387-copper-tanks-next


“The summer slump in freight markets continued last week…”

https://www.freightwaves.com/news/todays-pickup-summer-slump-continues


“Indonesian President Joko Widodo has asked his ministers to make “serious” efforts to strengthen the country’s foreign exchange reserves amid pressures caused by a global trade war. “The country needs dollars now,” Widodo said in a cabinet meeting on Tuesday.”

https://www.cnbc.com/2018/07/31/indonesia-president-citing-trade-war-says-country-needs-dollars-now.html


“The Bank of Japan owns 80% of the country’s ETFs and is a top ten shareholder in nearly 40% of listed companies… Japan’s financial markets (the same situation exists in the Japanese bond market where the Bank of Japan owns a huge percentage of the market and is running out of bonds to buy in the world’s second largest bond market, which is also the world’s most illiquid bond market) are a study in Ponzi finance…

“At some point, presumably, the Bank of Japan and GPIF will have to stop or significantly slow down their buying, which will pull the rug out from under this entire phony market. And when that happens… it will cause serious problems in global financial markets.”

https://www.forbes.com/sites/michaellewitt/2018/07/30/japanese-whales-and-the-next-financial-crisis/#6e0f514237f1


“Business confidence continues to slide [in New Zealand] according to the latest ANZ Business Outlook Survey. Business confidence, and firms’ views of their own activity, continued to fall in July, reaching the lowest levels since May 2008 and May 2009 respectively, ANZ chief economist Sharon Zollner said.”

http://www.newstalkzb.co.nz/news/business/new-survey-business-confidence-falls-to-lowest-since-2008/


Read yesterday’s ‘Economy’ thread here.