Mish's Global Economic Trend Analysis |
- Roubini Sees "Mother of All Asset Bubbles", But Claims Bubble Will Not Burst Until 2016
- Putin Threatens Currency Speculators; Six Ways to Know a Currency is in Deep Trouble
- 4 Million Homeowners Still Underwater, Total Negative Equity $157 Billion
| Roubini Sees "Mother of All Asset Bubbles", But Claims Bubble Will Not Burst Until 2016 Posted: 04 Dec 2014 01:51 PM PST How big can the current asset bubble get? Stocks, bonds (especially junk bonds), and equities are all in huge bubbles. I know full well that calling the end is problematic. Economist Nouriel Roubini thinks he knows. Roubini says we are in the "mother of all asset bubbles" but it's going to get even bigger, not popping until 2016. Link if above video does not play: Roubini: We're in an asset bubble and it won't pop until 2016 We're currently in the mid-late stretch of this boom, "so next year we'll see economic growth and easy money. This frothiness that we've seen in financial markets is likely to continue from equities to credit to housing," says Roubini. He predicts an eventual crash, but not for at least a few years. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Putin Threatens Currency Speculators; Six Ways to Know a Currency is in Deep Trouble Posted: 04 Dec 2014 10:51 AM PST Here's a lesson about various ways to spot a currency that is in deep-deep trouble.
Ruble Analysis Let's check those six measures starting with today's report Putin Threatens Crackdown on Currency Speculators. 1. Putin Blames Currency Speculators Vladimir Putin threatened to crack down on speculators against the rouble as he called on Russia to put its economic house in order to fight what he called an attempt by outside enemies to bring the country to its knees. "We have asked the central bank to take measures to make sure that speculators can no longer take advantage," Russia's president said in a speech on Thursday. "We know who those people are, and we have the means to rein them in. It's time to use these instruments." 2. Putin Blames Foreigners and Plays Hitler Card "Hitler with his misanthropic ideas tried to destroy Russia and throw us back behind the Urals. Just remember how that ended," Mr Putin said. "If [Russia's annexation of Crimea] had not happened, they would have found another excuse for holding Russia back and Russia down. This has been happening for centuries — every time the west thinks Russia is getting too strong, they use these policies." 3. Measures to Stop Capital Flight "We need to reverse the history of capital flight from our country, we need to end this era," Mr Putin said. 4. Amnesty for All Putin promised an amnesty for offshore capital returning home, saying Russians bringing back money from abroad would not have to prove where they got it from. 5. Currency Action  Since July 2008 the Ruble had gone from 24Rub-per-US$ to 54Rub-per-US$. That is a decline of 55.55%. In the last six months alone, the Ruble has gone from 34Rub-per-US$ to 54Rub-per-US$. That is a 6-month decline of 37%. 6. Currency controls Anton Siluanov, finance minister, reiterated the government's commitment to abstain from currency controls after Mr Putin's speech, but said that the government and the central bank would "co-ordinate" the actions of exporters on the foreign exchange market to reduce their collective influence on the rouble exchange rate. Does that sound like the start of currency controls to you? It does to me. If the US and Iran come to agreement ending sanctions on Iran, more Iranian oil will flow on the markets, likely pressuring prices further (assuming all other factors remain the same). A slowing global economy also pressures oil prices. In turn, falling oil prices pressures the Ruble. As bad as things look for Russia on the Ruble front, there is potential for things to get much worse. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| 4 Million Homeowners Still Underwater, Total Negative Equity $157 Billion Posted: 03 Dec 2014 11:41 PM PST In spite of a sustained rally in home prices, the October Black Knight Financial Services Mortgage Monitor shows Four million borrowers currently underwater. Highlights
Sustained Improvement in Negative Equity  Over the past two and a half years, there has been a sustained and continual improvement in negative equity, from 33.5 percent of borrowers being underwater in January 2012 to less than eight percent today Only 1.2 percent of active mortgages have current CLTVs of 150 percent or higher, down from 9.5 percent in January of 2012 (the bottom of the market in terms of national home prices). Delinquencies by Bucket  While the overall share of underwater mortgages continues to decline, delinquency rates are increasing among the remaining negative equity mortgages. For the severely underwater – 150 percent or higher current CLTVs – over three out of every four borrowers (77 percent) are delinquent. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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