Few macro observations today

Quick roundup of tidbits I collected:

First, notice the striking correlation between the %YoY change in Canada and Australian home price indexes:
AUD vs. CAD home price indexes

Graph sources:
AUS Price Index (fig 1)
CAD Price Index (comminuques->april)

Second, look at the similarities between today and summer 2008:
– Both Aus & Canada %YoY home price trends are following the trend set in ’08.
– USD index came within a hair of its summer ’08 lows and has started to rally
– Commodities have started to tank and have registered their largest 1 week plunge since ’08

Third, QE2 comes to a close end of June. No more $4 billion of liquidity pumped into the markets daily to goose commodities and other risk assets. This also gives further fuel to the USD rally.

A crash this time around would be uglier as interest rate ammo worldwide is thin. So buckle up and let’s get the remaining world housing bubbles popping at warp speed scotty!

Submitted by crashcow

Sort by:   newest | oldest | most voted
Romeo Jordan
Guest
Romeo Jordan

Warp Speed – we'll be at Factor 10 Warp in a few months.

I told McLosin to hold off, I hope he took my advice.

The shit is going to hit hard and fast by late summer, but the warm up to the main act is already in MOTION NOW.

Fasten your seatbelts, and someone give McLoser a hug.

xoxox

Romeo Jordan

Anonymous
Guest
Anonymous

In my opinion commodities are still bullish last week was just a blip of a bear in the longer bull trend

just checked bloomberg.com and gold,silver and oil all up sharply

india and china still strong and when japan rebuilds will cause more upward pressure in commodities

that said i think vancouver real estate is not really linked to commodities the other factor of lack of affordability is much larger

jesse
Member
James Hamilton: Lower oil prices Like a roller coaster ride, 2011 saw oil prices climb gradually, only to fall dramatically this last week. Here I offer my thoughts on some of the key contributing factors… I believe that events in Libya had been a key driver of the price of oil over the last few months. The country produced about 2% of total world supplies last fall. If one assumes a short-run price elasticity of demand of 0.1, that would warrant a 20% price increase if those supplies were knocked out and no one else had the excess capacity to replace them. Not all of Libyan production has been lost, but on the other hand, I have heard some analysts claim that Libya accounted for 15% of current light sweet production, where the real crunch has been recently. The political… Read more »
Extremely rich Van h
Guest

@Anonymous:

China is only the main factor for the recent commodity spike so as the perpetual RE run.India is just a midget compare to China.

vreaa
Member

We're in agreement with crashcow's analysis.

Just about every silver analyst/commentator imaginable has come out and said that the pullback is a great buying opportunity.

Sample: 'Silver will hit new highs in just weeks'(James Turk).

There is a possibility they're right BUT we think there is a far higher probability that they're not. Silver will likely go to the teens before it (later) goes to new highs.

This is the beginning of the deflationary wave we've been anticipating. Risk assets are selling off. Stocks, commodities, loonie will all take a hit; USD will rally. Vancouver RE may, finally, actually go along for the downside ride.

vreaa
Member

Most oil analysts also seem to be seeing the pullback in crude as temporary and a buying opportunity…. (= lower prices!)

Extremely rich Van h
Guest

@Anonymous:

"lack of affordability"??

Wealthy Chinese in Beijing,Shanghai…….and all over Great China will rebuke and laugh at your stupid opinion;it only applies to whites who would rather spend their meager salary on beer and fishing trip.The world has already changed and it is not the world model that the white perceived since 18th century.Nowaday is China century.

real_professional
Member

No integrity – See the article below. CREA essentially noted prices in Vancouver went up and revised their forecasts upwards. Of course, they have to stay high despite any lack of connection to valuation levels. No integrity.

The Canadian Real Estate Association has gone back to the drawing board again, saying the number of multimillion-dollar Vancouver deals have “surged unexpectedly” as it raised its forecast for the year.

The national trade association said the average national resale price will gain four per cent by the end of the year because of high prices in Vancouver. In its last forecast – made in early February – CREA said the price would advance 1.3 per cent.

http://www.theglobeandmail.com/report-on-business

jesse
Member

@vreaa: Oil analysts bullish on spot oil prices are praying demand picks up soon because supply is coming online fast.

jesse
Member

@real_professional: Does Vancouver's dominance of the national house price index remind you of when Nortel made 40% of the TSE index in 2000?

real_professional
Member

@Jesse

indeed! Vancouver is Canada's next Nortel

vreaa
Member

@real_professional: CREA has always, always simply extrapolated recent past and presented as 'prediction'. Laughable.

vreaa
Member

Landlord Mentality – "I expect my tenants to subsidize my speculative bet on Vancouver RE prices"

http://wp.me/pcq1o-2fj

DaMann
Member
DaMann

@vreaa:

Wow, those comments are hilarious. Here's a tip for you bitching landlords. Don't buy if you can't make the numbers work! Or double the rent if it's not covering your expenses, oh wait, you can't because the free market won't rent the place at that price. So maybe it's your stupidity for buying an over inflated asset. Morons.

Ravishing Rick
Member
Ravishing Rick

@vreaa

All you self entitled, over leveraged landlords, sit down so your ladies can see what a real man is supposed to look like.

Here is a word of advice to landlords who don't like the tenants that are paying you to live in your bank's property… don't rent it out! Be a real man and make your mortgage payments without the need of a "mortgage helper".

You landlord sweat hogs have to understand that when you rent your space for money it is a business, and businesses have costs that the business owner must incur to keep the business going. If you whine about nail holes in the wall or a clogged drain, you should be slapped because that is the cost of doing business.

Hit the music!

Not much of a name..
Guest
Not much of a name..
It's interesting in looking at those graphs. I've been putting together a simple spreadsheet to track the maximum mortgage allowed over the last ten years. The data used has been the average incomes for Vancouver (I know, I know…but it's for reference), the average 5 yr mortgage rate based on the BoC historical data, and maximum amortizations allowed by CMHC with the minimum down payment. Based on what I have so far is that in early 2000 the max mortgage was about $200k. That has climbed to about $460k by the end of 2010. The most interesting thing I have seen in this is that I have graphed the year of year change in maximum mortgage. It actually looks very similar to the year over year changes in the HPI but that it tracks about 6 months ahead of the… Read more »
Anonymous
Guest
Anonymous

Here's my observation for the day.

There hasn't been any bad RE news in the MSM lately. Is it a coincidence that Dave has not been posting either? Things that make you go hmmm.

Flip Flop
Guest
Flip Flop

Is it just me or did Dave disappear when the last Troll got their IP banned? I can't remember the handle that was being used, but it happened 6 or 8 weeks ago I think. Maybe I'm wrong.

Jesse: I have what is obviously a form letter from the less than Honorable Jim Flaherty, re CMHC policies and stuff. Is there an easy way to upload the pdf, or is there an email I can fwd it along to? I'm under the assumption that you assist in posting here, so that's why I direct the Q at u.

RaggedyRenter
Guest
RaggedyRenter

Re: Not much of a name..

+100 for your hard work!

Looking forward to your spreadsheet.

Troll
Guest
Troll

Wow, when bears aren't railing against HAM, this blog is slow.

Ravishing Rick
Member
Ravishing Rick

Cut the music!

Next time my landlord comes around complaining, I'm just going to suplex his sorry butt through the floor of his bank's shoddy wood frame constructed condo.

Hit the Music!

Growl
Guest
Growl

@Troll:

"Wow, when bears aren’t railing against HAM, this blog is slow."

HAM is a cancer to this city.

jesse
Member

@Flip Flop: I would email to the address located here, or register for an account on the site and send a private message in the forum.

wpDiscuz