But as we’ve said before, the rally in the U.S. dollar and in U.S. sovereign debt is driven more by a preference for short-term liquidity than anything else. You can tell this is true because for longer-dated bonds, demand is weak. No one wants to lend to the Nation State for 30 years anymore.
February 24th, 2010 | Dan Denning | 2 comments | ContinuedAll Posts Tagged With: "U.S. housing market"
Another Very Bad Year for American Housing
The other global downer on the newswires comes from the U.S. housing market. New housing starts fell by 4% in December and index of homebuilder confidence fell too. But by far the more alarming news was that the Federal Housing Administration is increasing mortgage insurance premiums, demanding higher credit scores, and requiring larger down payments from new borrowers.
January 21st, 2010 | Dan Denning | 35 comments | Continued
A Date for an Aussie House Price Collapse
But we’ve done plenty of homework on the Aussie housing market. We’re either right or we’re wrong. Our forecast is not an option. There is no time decay. True, there may be people out there who are weighing up whether now is a good time to buy a house based on predictions about the direction of prices.
December 2nd, 2009 | Dan Denning | 251 comments | Continued
Rally in Stocks and Rise in Aussie Dollar is a Result of the Carry Trade
That’s just what happened last year. Only then, it was both a dollar and yen carry trade that led to a rise in Aussie assets. Once the credit crisis set in, the yen carry got dropped and investors fled risk assets and piled right back into the greenback and U.S. Treasuries.
October 29th, 2009 | Dan Denning | 9 comments | Continued
Inflationists Reappointed at the Fed
Why is the biggest story of the day? Because Ben Bernanke is a well-intentioned arsonist. Bernanke inherited an American and global economy built on an upside down pyramid of debt, with a very small asset base. When the entire edifice began to collapse in 2007, the Fed Chairman was slow to react.
August 26th, 2009 | Dan Denning | 1 comment | Continued
The Cash Flows Are Coming
National governments are demanding a larger portion of global savings. Government welfare transfer schemes and bailouts have to be funded from borrowing (unless from money printing), which also makes capital harder for private companies to get. Corporate cash flows will revert to the mean in the absence of huge infusions of credit to finance the growth of the balance sheet.
August 10th, 2009 | Dan Denning | 13 comments | Continued
Equity Premium Will Be Replaced With a Tangible Asset Premium
Geez. Last Friday we made the case that the equity premium in stocks is going to revert to its historic mean. Remember that the equity premium is your willingness to pay more for future corporate earnings today because you believe stocks do better than bonds and cash over time.
July 27th, 2009 | Dan Denning | 2 comments | Continued