From Calculatedriskblog a great post and several charts on how the home foreclosure and delinquency rates keep rising. Go over and read the entire post.
I agree with Calculatedrisk, until the deliquency rates start dropping we won't see any meaningful recovery in home prices.
Inflation numbers came out today. Interestingly all the components shown took a little bounce upwards. I wonder if this is due to statistical issues (12 months ago was an interesting time) or the start of a trend. Bears watching in the future.
Ran across this on my daily blog troll. I posted a while ago video by Hugh Hendry showing an empty skyscraper in China. This video completely trumps such small matters as a single building, here's an entire city.... empty!
I spent some time on Google maps and found satellite photos of empty Ordos. Wow. Scroll around and you will see just how big the place really is. Notice the new construction with no cars on the road or parked at the homes. From the shadows it appears around noon time so you'd think there would be some activity, right?
I think there is a little bit of malinvestment going on in China. When the populous does not have valid and efficient uses for their capital they end up buying apartments in empty cities. Makes the chinese pig farmer hoarding copper look entirely rational, eh? Like America property prices only go up in China, right?
Here's an article by the westerner interviewed in the video.
If this isn't a blatant example of a bubble, I do not know what is. When this bubble finally bursts the world wide ramifications will be tremendous.
While gold continues powering upwards the US Treasury market is not confirming similiar concerns about inflation. (If gold is climbing due to uncertainty regarding the entire paper fractional banking monetary system is another matter) Looking at the comparative yields of nominal versus inflation protected bonds (called TIPS) issued by the US treasury is illuminating.
As you can see inflation expectations in this market are actually lower now than before this crisis erupted in 2008. If the bond market was truely concerned with inflation you would see the implied breakeven inflation rate go up, not down.
Excess inventories in America are being worked off rather quickly as you can see. It will be interesting to watch this ratio over time and see what industrial production looks like after the ratio stabilizes. Also note how the ratio has dropped over time. America has become more efficient in lowering the inventory of 'stuff' needed per unit of sales.
In my previous post I discussed all consumer loans outstanding. The data is produced quarterly so there is a bit of a lag. (Another possible post, the desire for high frequency data and how it can sometimes trip you up.) Consumer credit (all debt but mortgage debt) is reported monthly so we can get a feel of whats coming down the pike. As the chart shows it continues to fall.
The chart is only of recent history but the US has not experienced this since WW II. Unfortunately the rate of decline continues to accelerate.
I would personally feel more confident in this recovery if consumer debt at least stopped cliff diving. Whether credit is falling due to less demand or bank restrictions doesn't matter at this point. Until the consumer starts borrowing any recovery will be very tepid and most likely artificial.
After some rummaging around I finally found the data series showing total consumer debt outstanding. This series includes both home and non home debt. I have blogged before (2009 October 7) about the year over year decline in non-home-debt outstanding but thought it would be prudent to chase down the TOTAL consumer debt outstanding to see if it is falling as well.
Yup, it is. The data shows the same trend as the subset previously mentioned. Like all the other credit/loan/debt outstanding I have recently presented the year over year numbers are negative, show no signs of stabilizing, and are unprecedented in their decline.
I usually dislike the term 'It's different this time' but this time, it really is!
From Calculatedriskblog a great post and several charts on how the home foreclosure and delinquency rates keep rising. Go over and read the entire post.
