2012 January 18 | timiacono.com

Canada Home Prices: What, Me Worry?

They still seem pretty sanguine about home prices north of the border, but, if the country I lived in appeared in the far right position of a chart like this one from a recent IMF survey on global home prices, I’d be a little concerned about not overdoing it on credit and maybe selling an investment property rather than buying another one.

Bloomberg filed this report on the subject yesterday that included the following:

“Investor-owned condos have got to be a cause for concern, just because of supply and demand,” Bank of Montreal Chief Executive Officer William Downe said Jan. 10 at a banking conference in Toronto. Royal Bank CEO Gordon Nixon said “there’s no question” that the condo markets in Vancouver and Toronto are the most vulnerable in the country.

Investor owned condos… You don’t hear too much about that in the U.S. these days, but they were a hot topic in places like Miami and Las Vegas in 2005…

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Time and again you hear pundits say that what the U.S. experienced in the last decade was a terrible boom/bust cycle for the housing and credit markets. But then, almost in the same breath, they oftentimes say the nation must do whatever it can to get those eight million jobs back that were “lost” when the housing bubble burst.

But, does that make any sense?

Were those jobs really “lost” or should a good many of them have never existed in the first place?

Anyone with a rudimentary understanding of economics would conclude that, since many of the jobs created early in the decade were related to housing – construction workers, mortgage brokers, etc. – that they won’t be coming back anytime soon, at least not as long as the housing bubble remains “popped” (which is a pretty good bet over the next few years).

Of course, since the early-2000s housing boom was, effectively, the cure for the stock market boom that went bust at the turn of the century, one could argue that what the government and central bank need to do is create a new and different asset bubble.

But, so far, Fed Chief Ben Bernanke and crew seem to be shooting blanks.

(more…)

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The Uneasy Calm in European Bond Markets

Here’s another one of those neat graphics from Spiegel Online, this one related to a story yesterday about what they consider to be only a “temporary respite” from the credit market troubles that have accelerated in recent weeks and months.

If not for the swath of S&P credit downgrades in recent days, there would probably be even more sore arms in Europe from everyone patting each other on the back, that is, after a $500+ billion program of back-door money printing seems to have produced the desired effects on the red and yellow lines above.

Wednesday Morning Links

MUST READS
Internet regulation: Black ops – Economist
World Bank slashes global GDP forecasts – Reuters
IMF to Seek $1 Trillion Boost Amid Euro Crisis – Bloomberg
Half of U.S. Households Took Government Benefits in 2010 – Atlantic
Easing inflation fuels policy adjustment predictions – China Daily
China Said to Warn Banks as Local Officials Seek New Loans – Bloomberg
World from Berlin: ‘Ratings Agencies Are Not Responsible for Crisis’ – Spiegel
Ron Paul urges end to the Fed, gold standard. But is that possible? – Washington Post
Fannie-Freddie Fees Fail to Offset Lowest Loan Rates on Record – Bloomberg
Goldman Sachs faces backlash over $12.6bn staff pay pot – Telegraph
I’ve found the problem in Washington… it’s some sort of time warp – Mandelman
Will House Prices Keep Falling? – IMF

MARKETS/INVESTING
Report on China sends oil prices up – AP
Gold firms as IMF talk benefits euro – Reuters
Markets rise on talk of $1-trillion IMF boost – Globe & Mail
Portfolio Insights: The euro-crisis horror show – MarketWatch
IEA Cuts 2012 Oil Demand Forecast, Warns of Further Decline – Businessweek
Sprott Physical Silver Trust Announces Follow-on Offering – MarketWire
The phenomenal rise of the Chinese gold market – Mineweb
‘Gold and silver to regain shine in 2012’ – Commodity Online
Gold’s bull market may be nearing its end – GFMS – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
Recovery at risk as Americans raid savings – Reuters
Campaign Renews Scrutiny of Growing Food-Stamp Program – WSJ
Bank Data Supports Austrian Theory For Recovery – Daily Capitalist
U.K. Jobless Rate Rises to 16-Year High of 8.4% – Bloomberg
The Ultimate European Government Debt Chart – Credit Writedowns
Italy Warns of ‘Backlash’: Rome Demands German Refinancing Help – Spiegel
Germany Cuts 2012 Growth Forecast as Crisis Dims Export Outlook – Bloomberg
China’s property sector goes from bad to worse – FT Alphaville
Has President Obama’s housing policy failed? – CNN
Federal Reserve as a Hedge Fund: Higher Profits, Lower Pay – DealBook
Fed Open to Additional Easing as They Monitor Risks to Economy – Bloomberg
Ben Bernanke Is Finally Right For Being Wrong – Real Clear Markets

 
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