Category Archives: real estate

2 years after market low retail investors are finally optimistic about stock market.


Is not it a wonderful sign that retail investors who bailed out of the stock market when it hit a multi-year low in March of 2009 and who kept selling all the way to Dow 12200 just reached in February, are now are now ready to buy stocks again hoping they will continue to go […]

On foreclosures fraud, QE and coming new spiral of deflationary forces.


There isn’t anyone at the (nominal) helm who didn’t understood from the very git-go that the only possible way out was a resumption of organic credit growth. All the fraud, lies, deceit, corruption and violation of centuries old jurisprudence were justified (at least in their minds) by national security concerns.

The power-elite have always know that there was a black whole comprised of many different elements, one of which being title insurance, related to challenges in re-securitizing the ponzi. More importantly, they knew that they had at most two years in which to blow another bubble, anywhere/any kind, to get the herd moving once again in a speculative fashion.

Australia’s housing bubble pop.


It looks like there are jitters beginning to be felt through Australia’s house bubble. How do we know? Because when “housing bubble fears grow” it already burst. It is too late now. Whoever sells first wins.

Is Canada’s housing market bubble beginning to deflate?


Now we are reading a welcome news from Canada. The supply of houses on the market is beginning to increase which if it were to continue on this path would signify that Canadian housing bubble is being pricked as we speak and should provide a spectacular deflation in the months and years to come.

This is how it started in USA back in 2005. First supply of houses rose while the prices continued to inch upward. But then the supply really began to accumulate as more and more fools started to put their properties on the market sensing that it was time to get out. We know what happened next.

And now in Canada we are beginning to see the same kind of trends. They, of course, still continue talking about how real estate prices never go down, and that the rising valuations are based on fundamentals and that Canadian economy is strong and getting stronger. But we now know that this is precisely the bubble talk you hear at the top of many speculative markets throughout history.

Conquer the crash: Bernanke defeats deflation.


At last, the news reports are now fully brimming with optimism and proclaiming victory after victory on the economic front. Despite the fact that the private (and total) credit in the US economy has been and is still contracting at unprecedented multitrillion dollar annual rate, which is deflation by definition in credit based monetary system, the Bloomberg news declares nevertheless that the honorable manager of the privately owned Federal Reserve, Ben Bernanke, has already defeated deflation. Oh say, can you see …

Sovereign Defaults Coming in Second Stage of the Financial Crisis.


The first stage of the deflationary debt unwind resulted in massive consumer and corporate defaults, particularly in the financial sector. This sector being one and the same as the governments that it controls, the state has thrown all the resources that it had and did not have (pulled them out of thin air) in order to save its Banking sponsors. While it has given the Banks the respite and saved many of them for now from going belly up, it did not solve a thing. The bad debts have simply been transfered to the Central Banks’ balance sheets that are expected to be later transferred to the taxpayers of each and every country. Whatever was not transfered was hidden by suspension of the mark-to-market accounting rules. Thus, the deflation that is not seen has not gone a way, but has been simply hidden.

Japan sees long deflation in US, bets on falling Treasury yields.


“The recovery is very weak and the U.S. is running the risk of deflation…” say the Japanese investors as they are piling into US Treasuries while expecting the yields to drop sharply. They may be the only ones in current economic environment that have extensive experience investing in deflationary times and so it may be worth wile heeding their advice:

“Demand for Treasuries is very good because of the idle money in the banking system…”

“The medium term risk toward inflation is being caused by potential policy missteps by policy makers in regards to monetary and fiscal policy and the weakening dollar…”

“Any economics textbook would tell you that the massive stimulus from the central government will eventually cause inflation, but the Japanese know it doesn’t have to turn out that way…”

“The U.S. economy has faced a double whammy: the recession and credit contraction. The U.S. will face a triple whammy with deflation. That’s good for the Treasury market.”

The Lowdown on Deflation.


Deflation is the contraction (reduction) of money and credit. It occurs when the economic system is carrying too much debt to be supported by the level of income generated by economic activity. It occurs because too much debt has been incurred to create unproductive assets that don’t generate income. Deflation is a corrective process, it’s simply the market (you and I) not being able to service debt, so we must forfeit.

FDIC wisdom from 2005 – U.S. Home Prices: Does Bust Always Follow Boom?


This analytical research piece from FDIC from February 10, 2005 makes quite interesting and amusing read now in September of 2009. The main premise of this article is that booms are not always followed by a bust. We now know it is nonsense. What goes up must come down, especially if it is not based on fundamentals. The laws of physics have already proven the quasi educated Federal clowns to be wrong, but that is not stopping them from trying to blow another bubble, or rather reflate the one that just burst in pretty much every asset class.

Does the world have the courage to deal with its debts?


Quite a sensible article from an MSM source, Telegraph of UK, that aptly discusses the real state of things on the Central Banks’ front of deflationary fighting and suggests several solutions out of this global economic crisis. I, however, do not agree with the proposed solution ouf of indebtedness problem that we the people should pay down the debts as the author puts it “very slowly, by sweat and toil”. This contradicts the very natural economic self-interest of the majority of hundreds of millions of people that were either duped into borrowing by financial wizards or had to do it as they saw no other way of being able to afford things as the wages stagnated for decades. No, I propose to default on all the debts, walk away and let the owners of this world financial system have it. I in essense call for a debt revolt, stick it to them and let them be crushed under their own debts.