How many times have you heard the refrain on CNBC? The one that goes something like this: “Sure, the world has problems. But the U.S. economy is doing just fine. Buy stocks.”
Market Roundup
My response is simple: What are these guys smoking? The latest news has been anything BUT fine – and it tells me it’s time to worry about the U.S. economy. Really worry.
Just this morning, we learned that durable goods orders rose only 0.8% in March. Not only did that fail to reverse even a third of the massive 3.1% plunge in February, but it also missed economist forecasts for a 1.9% gain by a mile.
Strip out volatile transportation orders and you get a 0.2% drop. Economists expected a rise of 0.5%. Non-defense capital goods orders, ex-aircraft … a proxy for “core” business spending? They went nowhere, versus expectations for a 0.6% increase.
The Conference Board’s consumer confidence index? It dropped to 94.2 in April from 96.1 in March. That was another miss, considering forecasts called for a rise to 96.7. And it’s not like today’s figures are coming out of left field, either.
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| Retail sales dropped 0.3% in March, badly missing forecasts |
Retail sales dropped 0.3% in March, badly missing forecasts for a 0.1% gain and continuing a string of lousy numbers. The annualized rate of vehicle sales last month missed targets by more than 700,000, despite exploding incentives and a surge in deeply subsidized leasing.
In real estate, housing starts plunged almost 9% last month. That was more than quadruple the drop economists were looking for. New home sales dropped for the third month in a row, and underlying trends in commercial real estate appear to be worsening by the week.
The missing ingredient to the slowdown thesis … so far … has been jobs. Monthly job gains have been decent, if not spectacular, and jobless claims remain low.
[Read More – The Consequences of Reckless Lending – Mike Larson]
But anyone who knows anything about economic and credit cycles knows that labor is a “lagging” indicator, one of the last things to turn. I think it’s just a matter of time before the numbers cool there. So again, I’m more worried than sanguine.
| “This kind of disconnect between reality and fantasy can’t last forever.” |
That’s especially true now that the markets have rallied sharply on the expectation of more monetary hocus-pocus from the Bank of Japan or European Central Bank. This kind of disconnect between reality and fantasy can’t last forever – and I wouldn’t be surprised if the “reconnection” were to happen very soon.
So what do you think about the latest economic data? Is the U.S. economy at a significant turning point? Is this just a temporary blip in the expansion? Can central bank funny money paper over it all anyway, making actual analysis pointless? Let me know in the comment section.
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In yesterday’s column, I put out a call for reports on local real estate market conditions. Boy, did I ever get a lot of feedback. Many of you confirmed my observations – but some of you said things still looked good in your neck of the woods.
Reader Capt T. shared this view from Southwest Florida: “Fort Myers area here. Not seeing the explosion of open space, but there is some and it does seem to be growing. They have been on a building tear for several years, and I do expect to see the crash repeated.”
Reader Bob offered his take from not far away: “I haven’t seen this much vacant land clearing in North Naples, Florida in the last seven years. Infrastructure for thousands of residential lots, with lots of money in the ground, and a fair amount of spec housing being constructed.
“Retail and office space ‘For rent’ signs increasing almost daily. Can’t figure out why vacant commercial lots are being built on everywhere. I must be missing something.”
Meanwhile, Reader Len weighed in from central New Jersey with these observations: “I have noticed the same phenomenon – commercial property available everywhere you turn, and it seems to be on the increase with very little new construction. I thought it was a sign of the outward migration of business from our very highly taxed state.”
In Maryland, Reader Chuck B. said: “Here in Baltimore, a 40-odd-story apartment building and a 17-story office/apartment/retail building recently broke ground. Several others are in the wings, including another 40-plus story building. Quite a few older downtown office buildings have been or are being converted to apartments, so developers must think the market is strong.
“The city is said to be a good job market for young college grads. On the other hand, a luxury hotel added 11 floors of luxury condos, and is having a bit of trouble selling them. Had to lower prices.”
Down in Texas, Reader Myron said: “I live in a suburb of Houston, and I have been seeing a sharp increase in “For lease” or “For sale signs at commercial real estate properties.”
As for conditions in Colorado, Reader Chuck said: “Denver rents and real estate prices are going up. There is not enough commercial space for prospective tenants and vacancies are low and dropping. Developers cannot keep up, in part because during the ‘Great Recession,’ construction workers left the business and are not coming back.”
Shifting farther out West, Reader Robert S. said: “I have also noted that there are many “For lease” signs in the commercial space in our section of Los Angeles. The local economy leaves a lot to be desired and Amazon.com seems to be killing the retail sector. The lack of demand for goods and services is stifling.”
Elsewhere in the L.A. area, Reader Robert said: “In Los Angeles, especially on the Westside, it’s almost impossible to find a suitable apartment to rent under $2,000/month. Apartment owners are squeezing every last dollar out of their units because of a boom in ecommerce businesses opening campuses here. Buildings are selling for super-high multiples.”
Further up the California coast, Reader Carla shared this view from the San Francisco Bay Area: “Here in suburban Walnut Creek, there has been an insane amount of over-development and unsustainable growth. The downtown area is being overbuilt at breakneck speed, with high-density, high-end apartments (with a two-bedroom running $3,500 per month).
“This used to be a charming village-like community. Now it’s bumper-to-bumper endless traffic on poorly delineated streets. The stress and chaos is building.”
And shifting farther south, Reader Shell said: “My husband and I are real estate brokers and investors here in San Diego. Prices have jumped since December across the board! Anything, even slightly near the coast, under $1 million gets multiple offers within a few days. We have very limited inventory so it’s still a sellers’ market.
“Rents have skyrocketed, but many people don’t qualify for these high prices. New home developers are few and they’re selling quickly. We’ve seen a LOT of available commercial but have commercial clients who can’t find what they need (due to permits). Crazy times!”
I appreciate the on-the-ground intelligence, and I’m sure your fellow investors do as well. I really do believe we’re at a turning point in the real-estate cycle again, with this unfolding downturn likely to be led by commercial property rather than residential. The exception is the apartment market, where overbuilding of the sort a few of you noted in your comments particularly egregious.
You can find out much more on my real estate take, as well as my overall market outlook by …
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In other economic news, the Richmond Fed index dropped to 14 from 22 a month earlier. That makes the March spike to seven-year highs look even more anomalous.
A separate report on home prices from S&P/Case-Shiller showed year-over-year appreciation of 5.4% in February. That’s still healthy, but a definite cool down from the double-digit rates we saw in 2013 and 2014. As a matter of fact, it was the smallest gain since October 2015.
Will they or won’t they … exit the European Union, that is? That’s what investors continue to wonder about the U.K. The British pound gained some ground today against the dollar amid increased optimism the Brits will remain in the Union. But given that we still have two months until the referendum, sentiment could swing either way between now and then.
The earnings parade continued today, with a mixed bag of results from the likes of 3M (MMM), Du Pont (DD), Ingersoll-Rand (IR), Whirlpool (WHR), and Masco (MAS). My quick take? There is too much optimism about deep cyclicals and industrial stocks. They’ve rallied on the back of a temporary bout of debt-fueled Chinese stimulus … but that sugar high is going to run out fast. That makes these kinds of names among the most vulnerable out there to me.
Anything you want to add, on house prices, Brexit, or the outlook for industrial stocks? Then be sure to hit up the comment section below.
Until next time,
Mike Larson
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Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Just my view from England we are an Island and have an Island mentality I think it is a good possibility that we could exit the EU, as a way from getting rid of the huge costs from being in the EU, If the EU takes a big dive why would we want to stay in a club that is unmaginable and never published accounts, Lets head for the exit while we still can, close the borders befor the flood of immigrants turn the country into the Peoples republic of Europe, and North Africa.
As an ex Londoner now living in the USA I hope that the UK votes to regain its freedom and sovereignty. The EU is a failed state that can only damage the UK economy and lower living standards for British voters. Good luck mate!
Richard
I believe we have yet to hear the well timed NO case for exiting the EU. Sometimes an Island nation mentality is a good thing. There was another grand plan to take over Europe nearly sixty years ago that also failed. If nothing else this flooding of Europe by social and economic refugees will cripple movement and travel between states. I was on the Mediterranean one year ago and witnessed the building surge. Everyone has some level of compassion but the numerical logistics of this massive number of people was not foreseen and cannot be accommodated. Britain has this one chance to say no and then renegotiate a sensible trading policy they can believe in.
Richard, please don’t perpetuate the myth that our country is England. Our country is the UK. That region of it called England is not an island. What about the regions called Scotland to the north and Wales to the West? They are not England. But together thee three regions comprise Great Britain. When you add on Northern Ireland, we become the UK.
Anyone been to the Dallas, Plano, Arlington,Frisco.Fort Worth, Texas area lately? There is 2 BILLION dollars of residential and apartment building in progress. When a house gets listed for open house on the Multi List there are 15 to 25 buyers lined up to bid. Some bids have been as much as 15% over the asking price. Take a trip to Austin–same story.
Look at what Jerry Jones of the Cowboys is building near the Cowboys new practice facility.The development is in the hundreds of millions. No slow down in these areas.
In Asheville N.C. housing prices are going up 10% every 6 months. People are moving here to get away from the floods, fires, hail, tornadoes and crime.
Is Apple the canary in the coal mine? When the very symbol of the gold standard comes under pressure, I get worried. To me, this is something that can not be manipulated the way government statistics are fed to us like pabulum.
I’m getting sick of all this talk.
Can’t wait for the crash and the system cleaning itself up.
Tom,
A Crash has NEVER happened during a Liberal Progressive Administration…. Now, change that to the Conservatives in November and have them keep the Congressional Majority and it is “All Clear Ahead” for another Hoover and Cheney/bush Crash and Depression… Heck if we get Trump, maybe he can even throw in World War lll along with the Depression, aye?… :(
Dot Com crash started in August 2000 under Bill Clinton. Wake up 495.
Recession, not a Crash… Do some study so that you know the difference… :(
And it was the removal of the Glass-Steagall Act in 1999 by the MAJORITY REPUBLICAN CONGRESS which triggered that pullback…. That removal also caused the Crash of November 2007 under Cheney/bush… Know the facts!
We’ll have Tubman 20 bills soon, as if we haven’t suffered enough since the Civil War? Obama is telling border agents to not do their jobs, trying for multiples more potentially dangerous and costly immigrants, trying to get them registered to vote for Hillary, signing off for terrorist funding Iran to have more assets to use, while they thumb their noses at “agreements” with us, and I read” worry about WW111?” Iran is most likely to start this, with Obama’s liberal blessing. While Obamacare, immigrants, social spending, debt go through the roof, some think we need to keep this gravy train increasing? We need to return to sanity, not keep it going.
You are RIGHT– We just get unsustainable DEBT!!!
Eagle, if we do have a new Depression, we are quite likely to get WWIII as a way to “hopefully” end it. It could certainly end us all.
Not true.
Get your head out. The housing crash was from the libtud control of congress That said Everyone one should be able to get a house even when they could not pay for it.
Eagle is right in a way. The Progressives engage in massive deficit spending which artificially pumps up the economy temporarily. “Vote for me and I will give you money”. We have seen this in a big way the last seven years. $10 trillion in funny money will do an awful lot of stimulating. It looks good on the surface but as Mike points out above, all is not well. The big question of our time is when all this debt finally takes its toll. Progressivism works great until it runs out of money. If Eagle can convince me we can continue piling on trillions in debt in perpetuity ( as many Keyensian economists claim we can) without dreadful consequences I will buy into his narrative. Jim
LETS SEE hmmmm liberal democrats had conrol of the senate from 2004-2014 liberal democrats had control of the congress from 2004-2010 barack obama a liberal extremist progressive democrat from won the election to be president of the united states in 2008 and again in 2012 and please tell me again in your mind how this is the republicans fault for a no growth lackluster zero growth economy oh you failed to mention the longest depression started in 1937 under the watch of a liberal democrat F.D.R.
Wow you have definetly changed history to meet your agenda.
Since everything seems to be going down the toilet, how will the economy know which toilet to use. Is it male or female. Maybe we could ask a transvestite for a clue.
Don’t upset the master plan. We encourage men to marry men. We encourage women to marry women. We let anyone who wants an abortion have one. In two or three generations there won’t be any Liberals.
…because we’ll all be liberals? darwin’s natural selection in action?
ask the obamas
But jobdata to show 250000 new burgerflipper type jobs. FED sarisfied..
In Austin Texas, prices of houses have increased approximately 7% the past 2 years, yet, if your in the market to buy, you better not hesitate to offer the asking price since a full offer contract if signed by the buyer/seller is a binding contract. Otherwise, an offer of less than the asking price is subject to someone else coming along and outbidding the offer price.
Just visited Lexington,VA for the first time. It is home to Washington & Lee University and Virginia Military Institute. It seemed that every 3rd house was for sale Just a ton. Don’t understand why there is so much inventory.
This is no surprise and as I suggested a few months ago, the US is already in a recession and had been so for almost a year now!
But we cannot collaspe until after China implodes and Europe throws in the towel, which both are not very far away.
By July of this year all of the financial chaos will start to unravel – cascading similar to a domino effect. If we see foolish QE’s then the wave wil only grow and crash in 2917.
The Other Developments of the Day could be a bigger section. Don’t want to be too critical though.
Hi Mike
Just for a moment, consider the massive transfer of wealth to countries overseas from our shores over the last thirty years or so. While there’s no one palatable reason there are many causes. Many developed industrialised countries are now making considerable investments overseas from their own borders. The question is do we want to go on losing our productive capacity and mortgaging our kids future with what has been created. Massive uncontrollable debts, massive unemployment and massive redistribution of wealth. No one party is completely responsible. Just blaming one side or another is not going to fix this. All past political parties bare some responsibility and our weakening middle class want fair trade not free trade, someone who can hear them and repair the damage without just offering more free stuff. I wonder how many of us are listening.
Ah Howard,
I believe that has all happened since the Republican Revolution of 1981, which also ended with the Second Republican Stock Market Crash and Depression which began in November 2007 under Cheney/bush… the first was Hoover and that Republican Majority Congress in 1929…..
Ah Eagle,
So caught up in politics. Are you making any money my friend and do you know when to get in and out of the markets without worrying about a political compass?
Howard,
by ONLY investing during Liberal Progressive Presidents since 1929 $10,000 would have grown to about $360,000. by investing the same Amount in ONLY Conservatives Presidents the same amount would have ONLY grown the about $11,000……. Is that enough to convince you…… I’ve become wealthy by invessting just that way…. How about you? Incidentally coming to recent times, I went long the day Obamaa was seated….. Made some pretty good profits since then….. :)
we have 2 political partys one the democrats get elected promising free stuff and more free stuff the other the republicans realize you cant party till its 1999 forever we have a 20 trillion national debt a 102 trillion unfunded liabilities and the external debt to GDP ratio is above 99.7% still the democrats want to keep talking about wealth redistribution and more programs to dole out our money to anyone with a dollar less than us when will democrat liberal progressive extremists realize socialism only works as long as you have money to steal from one person to give to another
Hawk,
Do you work for a living? Have you noticed how your paycheck relative to inflation has gone no where since 1981? When the Democrats are leading, the 97% make better wages and spend that money and jobs are created in America and life is good, as it was from 1932-1981…. When the Republicans are in power, ONLY the 3% get richer and the 97% get screwed…..
do you have you ever the way you talk about social programs redistributing wealth and more handouts its easy to see what you have been doing the last 20 years everything you say is B/S AND EVERYONE HERE KNOWS IT
The markets hit the cieling in August of 2015… that was the crash. The technicals will reveil the fundamentals soon enough. The train wreak will be all over the news.
It is a shame. We were doing so well, then age set in. The old stopped looking forward, and the young look to a virtual reality. The future will be a repeat of yesturday with notions of tomorrow. Yet tomorrow will be yesturday in a new way… but the fundamentals always stay the same. Opportunity and timing…
No, so far that is simply a recession….Read up on what Crashes are…
OH YAY!! …Throw a Party!! It’s ONLY a Recession!! Let the Good Times Roll The Crash won’t happen, until Hilary lets it!! Oh Yes!! ..Let the Good Times Roll
hey i got to ask you this eagle where is all the 6%+ growth barack obama promised for every year he was president where is this high growth economy where were producing wind and solar equipment to the world , all this president did was spend spend spend on social programs wasting trillions doubling the national debt in 7 yrs to 20 trillion dollars and with billions unacounted for
Ya hawk,
That is easily explained… See the Republicans were just fine with money going to the banks to keep them from going broke, but later when the bills were brought forward to send aid to Main Street, they kept that from happening….. What, Rush didn’t tell you about that?
whoa whoa whoa eagle quit telling lies all you do is lie heres the truth the democrats had control of the senate from 2004-2014 and congress from 2004-2010 and the presidency from 2009-forward you are so full of it the democrats bailed out the banks see the truth quit listening to your masters
our external debt to GDP ratio is getting close to the default level we are now at 99.7% and all you liberals know to do is hand out the hand outs the younger kids coming to work now dont know how to work dont want to work and thats the fault of the liberal progressive democrats like you who spread misinformation and lies, and tell them everything is free for the taking dont work for it youre owed it
The hidden force behind a long term recession is the massive slowdown of consumption by baby boomers. Most are retiring and downsizing, not buying new homes, cars etc. The majority of average folks are broke, live week to week, and have little savings. With no major industries producing there are fewer jobs. Get ready for a depression!
We are already in a slow motion crash. Metals have tanked (some bounce now) over the past few years, oil has crashed (some bounce now), stocks are down, interest rates have crashed like crazy, even going negative in some countries, and hurting the heck out of retirees for years now.
Real estate in selected areas such as NYC, LA, Bay Area, etc. is benefiting from the flight of capital from Europe and Asia. Other small cities and areas less attractive to foreigners are in decline….. so you see a dichotomy.
Bottom line…….you are right Mike……this is a precarious situation. And it makes NO difference who is elected this fall (although they can exacerbate the situation by mismanagement, i.e., spending money like a drunken sailor and doubling the national debt in 7 years). THIS THING IS GOING DOWN.
Ya 151,
In your world, history doesn’t mean anything does it!?… :(
i checked history eagle and franklin roosevelt F.D.R. a liberal progressive democrat was elected in 1933 then during his second term in 1937 the united states faced its worse depression ever we stayed in depression through a good part of ww2 please stop the misinformation you think anyone here believes you anymore we know what you are quit treating us like were low I.Q. voters that the democrats rely on
I wrote of all the new construction in Baltimore, before. If I remember my history correctly, there was lots of new construction in many parts of the nation leading into the Crash of ’29. The city’s former tallest building (now converted to apartments) was completed during the early ’30s, and stuck up like a thumb in pictures from the ’30d, ’40s and 50s. Maybe all the Trump Towers around the country will face a similar fate.
We have been hearing about the bill in Congress to release proof of Saudi complicity in the 9/11 attacks, and allow suits against the Saudi government. Obama scooted over there to assure them he wouldn’t let it happen, because the Saudis would immediately sell some $750 Billion in Treasury bonds to keep them from being tied up in the courts. That would result in a crash in Treasuries. Look what they did to the Petrodollar. The Saudis will almost certainly begin selling them off more slowly now, to get as much out of them as possible, since they now realize their vulnerability. Don’t think the Chinese, with around a $Trillion of the things won’t be looking to do something similar.
Other nations also. Treasuries could glut the market, and lose most of their perceived value.
I believe the Russians have sold most of their Treasuries and bought GOLD.
Putin may turn out to be the shrewdest politician of all. He seems to have seen what is coming, and he took action.
It’s High Time to Worry About the U.S. Economy
Translation: I’m getting killed shorting the market and am hoping for a major correction to bail out my sinking positions.
Neal, I Shorted the UUP at $25.79 buy purchasing Jan17 2018 $23 PUTS @ $0.19 per contract (30 contracts). They last traded at $0.40 and have seen $0.48. I have owned them since 01/2016 ..up 210% in a few months. So is this a Positive Sign, with about 20 months left too continue that Slide?? Of course My Silver Mines, many up 300% + and GDXJ @ $13.46 , Now up over $34 …my Jan.17 2018 $25 calls on the GDXJ –once Way out of the money but W/time on my side, Purchased @ $3.25 ea (10 contracts) Last traded @ $13.90 ea. .My TCK 2018 $5 calls purchased @ $66 ea. (20 contracts) are now $6.70 appear to be Proof of that weakening Dollar. Would you call the Falling Dollar a sign of Economic Strength?? It is IF You think Quantitative Easing is only done in a Good Strong Economy….witch it Isn’t !! Any 20% pullbacks in these positions will be my opportunity to add! ..also the S&P seems to be forming the Right Shoulder of a “Head & Shoulder” Pattern ..also not good! …Lately purchasing calls on the SH since it hit 19.88 recently (10 contracts) , since it hit 19.88 recently, those options are Up 40% so far, W/ many months left and will add many more. These are what are known as DEFENSIVE POSITIONS or things that go UP, as the Markets get Shaky//Weak. Mike may have been Early, but he Saw It And Took Action. The Time IS NOW …better a bit Early, than be a frozen “Deer in the Headlights”—After it’s TOO LATE, Praying for a Bounce just to break even, or maybe recoup Some!! Open Your Eyes and stop “Hoping” it will last another 6 months!! July to September is always a “Great Time” in the markets!! I Went %65 in cash last June 23rd, my Birthday & Gift to myself and began Buying last December through January! —-GOOD LUCK With Whatever!!
Buy should be by …witch should be which …65% not %65 ….an “Edit” feature would be nice, it was Late and I’m ready for bed!!
Mike, you write about the declining figures in the economy, but it appears to be worse than that. I just read, that the “Accounting Analyst’s Observer” reports that , while companies are required to use GAAP figures in reports to the SEC, they are allowed to use non-GAAP figures in public reports. Some 90% of S&P500 companies do so, omitting such “other” expenses as restructuring and acquisition expenses, stock based compensation and write downs. Non-GAAP figures for these companies show plus 6.6% gains, while GAAP figures show 10% losses. Of course, we buy or sell stock based on these publicly stated figures, while the truth is buried in the fine print of the annual reports, which few of us bother to read, or know how to interpret. They give several examples. Home Depot doesn’t publicize expenses relating to their data breach; Frontier Communications keeps mum about preferred stock dividends; H&R Block leaves out severance pay in public figures. Unless a company states that its public figures are “according to GAAP”, be doubtful.
Two comments:
Orders up smAll percentage even though dropped in February? Yeh, but it’s up, my invested stock companies are profitable and I’m still getting my 7 – 9 % dividends.
And 2u – oil is up to it’s highest in more Tammany months and trending up and I’m still collecting my 7 – 9 % dividends.
David Pacey..read my reply, above …dividends, for Now! Oil?? My LACDF (Lithium) is up over 300+ % in 3 months—Oil is Up how many percent 50% ??
You’re preaching to the chorus here. I’ve studied real economics and history for 5 decades, and I have tried to get the people around me to wake up and smell the defecation, but they are so conditioned by all of the governmental BS that they think I am crazy. Here I am. I have been studying the long cycles of civilization (1500-1700 years), and I see the indicators that we are at the end of the third cycle, but who am I? Just another idiot like those who are talking about the second coming or whatever. The difference is that my conclusions were not derived from any supernatural or alien sources, but by a study of the works of established history specialists. I have arrived at these conclusions that they have missed, because, unlike them, I am going far beyond the limited areas of specialists, and putting all of the pieces of the puzzle together. At the end of each cycle all governments collapse, as around 1200 B.C. (Read 1277 B.C.: the Year that Civilization Collapsed by Eric Cline.) or the fifth century A.D. when Rome collapsed, and was followed by every large government in Europe and Asia, all the way to China, except for one. The Byzantine Empire did not collapse, because in 1092, Emperor Alexios I Komnenos restored 95% gold coinage, and this empire revived and lasted until 1453, when it was conquered by the Turks. In our own society the pseudo-economists like Larry Summers are too busy referring to gold as a “barbarous relic” and somewhere large powers are keeping the price of gold low enough that they can acquire all of the existing supply. So, everybody, keep on doing what you are doing. Don’t read Economics in one lesson by Henry Hazlitt or The Road to Serfdom by Franz Hayek, and wait to be surprised in a decade or two when you discover that everything you have worked for is gone. The indicators are appearing regularly. Literacy is declining very rapidly, the condition of the working class is becoming worse and worse, the government is gaining an increasing amount of power, so that it can step in at the end and control the civil unrest if it still exists then. But do not pay any attention to me, because all I have on my side is the kind of knowledge that most people do not want to be bothered with. After all, belief is much more important, because if you fervently believe that everything will be OK, then that is all you need. And remember that because Larry Summers is a Harvard professor, he is the most intelligent human on earth, and you should put all of your faith in him.
From what I have noticed, Commercial Real Estate, leads the Consumer//Retail property markets. I think we’re at//near the top again…In February, commercial property sales plummeted 47%. And they’ve now fallen three months straight. That hasn’t happened since the 2009 financial crisis. Everything was Booming!! ..Just like Mid 2007, in San Diego, Cranes all over the Skyline with 1 or 2 new ones per month!! At the same time, Commercial properties were vacating!! Then the Summer of that year, those giants began to slow and stand idle. By early 2008, more than half were gone, many incomplete//stalled projects were visible.
It looks like that Today, commercial properties and “For Lease” Signs popping up in mass! Cranes are Everywhere in the Downtown area Racing for completion, before it’s too late! Can’t Time it, but I’d take those things as the Warning Signs that the Real Estate Markets are Topping out, and The Housing markets will follow closely behind –By Months-Not a Year!! Looks very likely, We are at or nearing that Same Top!!
Switching to another subject along the lines of City Budgets and services being “Stretched” or going almost unfunded. This is not just happening with the 911 calls but is a sign that cities are financially in trouble when basic services are lacking. Emergency services should be a Priority, so when 911 calls go unanswered, I’d say there is something seriously wrong with the local budget! From a local news report: Unanswered 911 Calls in Baby’s Death Expose Dispatch Problem
Critics are calling out San Diego leaders saying they need to come clean about just how bad the issue is
Source: http://www.nbcsandiego.com/news/local/Unanswered-911-Calls-in-Babys-Death-Reveal-Dispatch-Center-Problem-377154961.html#ixzz46zxl3Vxz
Don’t worry about the stats..just CASH FLOW TO THE USA!!!
I read a lot of business reports from Harry Dent to John Mauldin but Mike Larson seems to make the most sense in todays crazy world. Just glancing up I see Michael R saying cash flow to the USA. Money flows can be a tricky fickle thing. Whats here today can be gone tomorrow but Michael spoken like a true Attorney. Cash flows cannot endlessly pump up a market. Once greed sets in look out.
Sam Zell “The Grave Dancer” is selling properties. He has always been ahead of the market.
Stock tip for the day buy P&G. They are going to repurchase 8 billion dollars worth of their shares this year. Good way to pump up yea ole balance sheet. Seems like Venezuela is causing problems for a lot of companies. Thats what you get when you chase cheap labor. Instability.
HERE Is your Ticking Time BOMB!! What caused the ’08-’09 Crisis?? Well the Banks are at it again—Even WORSE!! With Zero the Fed can do with a Bailout, this Round!! These are the Top 5 Banks with their Assets on the Left and their Derivatives (MBS) Exposure on the Right, in Millions>>assets …………exposure
J P MORGAN $1,954,125 …..$51,907,395
CITIBANK $1,337,881……$50,570,305
GLD SACHS $1,127,605……$43,621,441
B of A $1,616,426……$27,811,096
W. FARGO $1,579,174……$6,147,411 ….ANTONE SEE A PROBLEM HERE?
Ronnie 619
This is why Obama went to the UK, to save our banks derivative position exposures in the EU.
All your views , comments, analysis are true to the core, but markets are in a defiant mood. I have been a bear on S&P 500 far enough for a long long time but each time I read an article of yours, hopefully your predictions will come true. Since I have no leverage on my position, I have neither any fear or panic.
Regards.
Up here in Maine the existing home sales are vigorous and according to my broker neighbor it is a sellers market for sure. There is almost no new home construction, not that there really ever is all that much, but what I do see is assisted living complexes. On the commercial real estate front my wife and I noticed that the retail spaces in Freeport Maine have been growing almost weekly in vacancy. This is the town that is the home of LL Bean and is a small town full of outlet stores. LL Bean is the anchor retailer and over the 22 years we have lived up here this is the first year we have noticed Main Street (highest foot and car traffic area of the town) store vacancies the most that we can remember.
Do you think the artificially low interest rates may be boosting home buying beyond what would be expected with honest interest rates?
Absolutely, particularly here in Seattle. I think a lot of what are considered “residential real estate” purchases are actually “commercial real estate” purchases. Mom and Pop can’t get any interest on their savings account at the bank so they put their money into real estate. If they live in a growing city, they either buy another house and rent it out or they buy a second home they use occasionally until they need some cash and then they sell it at a profit. In both cases, they can make money, something they haven’t been able to do for years at the bank….
Not only do I believe the economy is getting worse, but it will not be helped any if either Hillary or Donald are elected. It will get worse and worse.
Mike: “The Great Crash” Larry: “Dow to 31K”
And the correct prognosticator is?
Both. Dow to 31K and gold to $5000 implies inflation beginning to run away. That will happen following the Great Crash, as the Fed floods us with meaningless bucks to try to reverse it.
Deflationary Depression, as in the ’30s, we can handle. Inflationary Depression probably means Revolution, and the end of America, as it splits into regional factions – possibly warring on one another.
Money is faith based now.
Faith from the masses is directed and controlled through truth and mis-information like all good lies, (think unemployment report numbers, GAAP reporting practices etc.), illuminated by the tv, newspapers, online blogs etc.
The media.
The U.S. has ample assets and raw materials but is not producing strongly for export mainly because China and others put the U.S. at a monetary (6 to 1) disadvantage on labor costs.
I feel that when the plum is ripe the people who control and print the cash and benefit most from those who lose all they have worked for will put the workable actions in motion to confiscate said plum because they are evil, greedy and care not, in a larger sense, for their fellow human being seeing them as only a messy tool to be eventually replaced by a thinking robotic machine, plus they have invested centuries and generations in the cookie cutter method of bold faced theft using the boiling frog technique which you can easily accomplish if you have enough wealth to face no real deadlines but only the one’s created to move the system in the intended directions over time. A long time, so as to be forgotten.
If they squeal too loud about a creating a fair sovereign currency, kill the squealer. If they persist, threaten to, or actually destroy the money base, confiscate everything beholden to interest accruing money then print new cash bills all over again. At that point they can pay the elected, or anyone else, to do what is wrong for everyone else in order to satisfy their personal and current individual needs.
Then the printers of cash and slave drivers re-sell the confiscated wealth once again…with interest of course..whilst explaining what a great deal you are getting and how the sky would fall if you sent them all to the moon without oxygen.
Not that I wish that on anyone but you may see the point.
In my opinion.
It’s all good.
They still have to keep you alive to use you again, until the robot, then maybe not so much.
Peace.
Everybit the truth and hardly noticed or regarded by too many underdeveloped minds. That ninety percent part of the brain matters.
I am convinced we have far too many short term thinkers and planners. There is an old proverb ( Chinese I think) that says the best time to plant a tree was 25 years ago. The next best time is today. We have almost guaranteed a ruinous future for our children and grandchildren. I , for one, am not very proud of the knowledge that my generation is responsible for that. We must change directions and establish sound fiscal , trade, and regulatory policies that work to assure our future generations a good and sustainable economy instead of our current methods of doing whatever necessary to keep markets artificially pumped up. All we are accomplishing is delaying the inevitable. When will we ever learn.
QE and negative interest rates have broken social contracts between citizen and goverment
Mike, we should be concerned about the US economy since December 1913 already!
Under the current system, the potential supply of money is unlimited. With unlimited money, the potential value is “zilch”. Only things or skills will have value.
RIP USA…..1776-2008…..Yes, America died in 2008, when we elected the first Black Socialist Muslim president….Barrack Hussein Obama…..His Socialist practices killed the USA and we now live in the Socialist States of America…formerly the USA.
Much was made of Obamas education and former job as a ” Constitutional Scholar’ as a college professor. In my education background I found out that most of the staff in the Economics dept were Socialists if not out right Communists. It shows that to defeat a system you must know it. Obama knows the Constitution and has gone around it, many times with his Executive Orders….Its true that ” familiarity breeds contempt”….Most politicians are lawyers who know the law….so they can make laws that favor themselves and their backers. For a list of some of the most egregious thieves in Washington, read the book ” Throw Them All Out”…..
I subscribe to many “Wealth” blogs and many of them say to just leave the USA or have your second home out of the states and have your second passport ready. The end will come very soon. If Bernie the Commie or Hillary Rotten(read Clinton Cash,…also any one with a security clearance knows that Clinton is guilty of failing to keep secure classified data……its disgusting that we must pay for the “investigations”…that Congress and FBI are doing against Clinton….we know the outcome….) are elected ITS ALL OVER……Russia and or China will sweep us away….as they know that Hilary Rotten is like Obama with no moral core or belief and they can be bought…….for the right price.
AMERICA IS finished…..Any Economics 100 student knows the economy is a Ponzi scheme ready to implode.
With No Regards,
Anthony BArbuto
peasant, living in the Socialist States of America, formerly the USA.
RIP……USA….1776-2008
Hey don’t forget the Repubs done a lot to run that National Tab up as well. Also read the fine print in Donald Trump’s tax system. He wants us to forfeit 1trillion in taxes on the gamble that companies will come back to USA ,and we live happy ever after. Comon gang their will be no trickdown, as we have waited for rhat since 1981 Reagan ,and here we are today. Giving up 1trillion in revenue will only excerbate the problems we face. However if she cuts the expenditures way down,and balance the budget meanwhilst declare backruptcy ,and give folks .10cents on the dollar maybe in5yrs or so things will heal. Every other country has declared bankruptcy that is only way out of this shitmess.
Yes, bankruptcy is an option but what will be the terms? It seems lower mankind accepts terms against their own best interest. It seems that decisions are always based on faulty social ideologue. Here we are once again on the same path as centuries before. Going at each other while those that caused this tangle stand around and watch the vulnerable and defenseless struggle to break free of the psycho, political, social and economic stranglehold instituted by lapdogs.
There’s a system in place guiding the misguided masses otherwise lower mankind would catch on and make different decisions based on solidarity regardless what color or nation. Perhaps that’s been the problem; that there is no human contract that dictates civil economics. Until that is instituted we’re all on track to reach the predetermined destination: slavery. The markets are in fact telling the truth.
Besides practically every country in the world owes us bigtime. All the countries in Western Europe ,Russia dating back to WW2 – present. We practically rebuilt China, etc, etc, etc.
Being retired fron the Title Insurance and banking industry, I would like to know on what the interest rate of our Foreign debt is figured. I’ve searched many sources but didn’t find this information. There were reports that the Fed was reluctant to raise interest rates for this very reason, so wish to know how they are figured. Thanks, Pam Halencak