What about here in Australia, though? The amount of money being lent for housing fell by 3.9% in June according to the Australian Bureau of Statistics. It was the lowest amount for housing finance since February of 2001, which was over nine years ago. What does that tell you? It tells you that the largest factor on “underlying demand” for Australian housing is the price of money. When the price of money is cheap, the demand for housing goes up.
August 11th, 2010 | Dan Denning | 42 comments | ContinuedAll Posts Tagged With: "economy"
The “Road to Serfdom”
The US government is pursuing the same misguided strategy that has failed for twenty years to revive Japan’s economy. This strategy consists of squandering taxpayer dollars on failed financial institutions, and prop up unaffordable federal and state spending programs. One key difference: Japan’s competitive export-oriented manufacturing base was…
August 11th, 2010 | Dan Amoss | 3 comments | Continued
The Economic Recovery Flop
After 18 months and $2.5 trillion in counter-cyclical budget deficits, people have begun to realize that the ‘recovery’ is a flop. What they haven’t realized – yet – is why. But, it’s summer…no one is doing too much thinking now. Obama went for a vacation in Maine. Hillary married her daughter. Economists are fishing.
August 10th, 2010 | Bill Bonner | 1 comment | Continued
Fake Plastic Economy
Our guess is that it is both. What is most remarkable about this whole episode is that the people who are most responsible for it – in the sense that they caused it…and that they now pretend to fix it – still show no evidence of understanding what it going on. Geithner did mention that households were paying down their debts.
August 9th, 2010 | Bill Bonner | 5 comments | Continued
Road to Nowhere
Where is it going to get you in the next five years? Who knows? But with government influence and debt on the rise, there are probably some severe misallocations in the economy. On a global and local scale. At some point they are going to have to reallocate.
August 7th, 2010 | Nickolai Hubble | 0 comments | Continued
Dysfunctional Price Signals are Distorting the Housing Market
The price of anything, whether it is a cake of soap or a jumbo jet, is meant to convey a whole bunch of information to an investor, producer or consumer. Prices send signals up and down the supply chain and these signals determine the ultimate supply and demand of any product or service.
August 6th, 2010 | Greg Canavan | 95 comments | Continued
US Treasury Secretary a True Believer in Economic Recovery
Consumer spending, pending home sales and factory orders were all weaker than projected in June, showing the US recovery lost momentum heading into the second half of the year as employment stagnates. Elsewhere in the news it is reported that more consumers than ever before are going bankrupt…
August 6th, 2010 | Bill Bonner | 0 comments | Continued
House as Bank
It’s a given that increases in household wealth support higher consumer spending. For one, when people see their share portfolios or housing investments go up, they are, in fact, richer on paper. This may give them more disposable income to actually spend. Or maybe they just feel richer and spend more freely (the wealth effect).But one thing we recall seeing at the peak of the U.S. housing bubble is a massive increase in borrowing against home equity.
August 5th, 2010 | Dan Denning | 10 comments | Continued
When Good Falling Prices Go Bad
What’s happening with prices is hard to tell. The official tally puts consumer price inflation at less than one-third the level it was at when Ben Bernanke told us he had it under control. Targeting 2%…the CPI now measures 0.5%…which means either Mr. Bernanke missed the target by 300% or he can’t really control inflation after all.
August 4th, 2010 | Bill Bonner | 0 comments | Continued
The Gold Bull Market is Alive and Well
Betting that the gold bull market is over is akin to betting on the wisdom of governments. I’ve happily taken the other side of that bet and following the recent sell-off, have just advised my subscribers to buy up a number of attractively priced gold companies. Investors with a little patience should do very well.
August 3rd, 2010 | Greg Canavan | 1 comment | Continued
Inflate Your Debts Away
You can recover from a fall. You can recover from a broken heart. You can recover from a head cold. You cannot recover from death. You can only become a zombie. The US economy merely became more zombified, after the crisis of ’07-’09. Houses are underwater. People are living on food stamps and unemployment compensation…
August 3rd, 2010 | Bill Bonner | 3 comments | Continued
Mrs. Watanabe Gets a Margin Call
This week begins with very different levels of manufacturing activity in China and Australia. One is bullish. The other not so much. One confirms the basic idea that the world is slowing down, growing less fast, writing down bad credits, and saving for a rainy day. The other doesn’t exactly contradict that idea.But we’d like to begin this week of reckoning with a simple observation: the rigging of short-term interest rates can prompt ordinary people to take extraordinary risks.
August 2nd, 2010 | Dan Denning | 21 comments | Continued
Three Out of Four Economists are Wrong
The thing economists said was nearly impossible actually happened last week. Yields on 2-year US debt hit a record low just as the Treasury prepares for another record-setting deficit. The supply of Treasury debt and the demand for it hit new highs – together. Stranger things have happened.
August 2nd, 2010 | Bill Bonner | 0 comments | Continued
Hooray for the Economic Recovery!…of 2016
Each new government initiative – the latest being financial reform – that doesn’t decisively address the debt, but rather tightens the government’s around private enterprise, only serves to delay or prevent economic revival. And so each new day will bring more distress and bankruptcy to homeowners, businesses, and banks.
July 29th, 2010 | David Galland | 8 comments | Continued
Reducing Spending Not in the Feds’ Plans
Why the government hates it when people do the right thing? Yesterday, the rally on Wall Street slowed down a bit. The Dow rose 12 points. Gold had a bad day – down $25. We had guessed that gold would be going down. But it is still too early to detect a real trend. For the moment, the financial markets and the economy are going in different directions.
July 29th, 2010 | Bill Bonner | 1 comment | Continued
