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  • Finance 0

    Mortgage Default During The Great Recession Came From Real Estate Investors, Not Subprime Credit Holders

    from Voxeu.org — this post authored by Stefania Albanesi, Giacomo De Giorgi and Jaromir Nosal The Global Crisis narrative has suggested that an expansion of subprime credit was the reason for rising mortgage defaults, leading to the large-scale recession in 2007-09. Taking a closer look at the characteristics of subprime credit holders over the period, this column argues that the growth in mortgage defaults did not occur predominantly amongst subprime credit holders. Instead, it was real estate investors that played a critical role in the rise in mortgage debt, specifically among the middle and the top of the credit score distribution. ...
    On November 17, 2017 / By
  • Finance 0

    EUR/USD And GBP/USD Forecast – Friday, Nov. 17

    EUR/USD The EUR/USD pair fell during the trading session on Thursday, as we continue to see quite a bit of volatility. A breakdown below the shooting star from the Wednesday session was the first signal that we are probably going to continue to drift towards the 1.17 level. While not looking for some type of melt down, I believe that we are going down to that level to go looking for support. If we can break down below there, the market then could drift as low as the 1.16 handle, and this would show just how messy and erratic the market can be. After all, we had initially had a nice head and shoulders breakdown, but now we have completely nega...
    On November 17, 2017 / By
  • Finance 0

    Unique Evidence Of Recessionary Conditions In China From 2014 To 2016

    Back in June 2014, we were among the first to observe in near real-time that China’s economy had cooling to the point where it could be considered to be in recession, which we based on a unique combination of trade and environmental data. The recessionary conditions that we observed persisted from 2014 through mid-2016, when they finally began to reverse. We noted at the time that both trade data and the measurements of carbon dioxide emitted into the atmosphere indicated that the Earth’s economy was cooling during that period. In January 2017, the outgoing Obama administration claimed that the global economy was growin...
    On November 17, 2017 / By
  • Finance 0

    U.S. Dollar Gains After House Republicans Pass Tax Reform Bill

    The House Republicans on Thursday finally get enough votes to pass the largest tax reform bill in history to ease tax burden and stimulate broad-based economic productivity. A total of 227 representatives voted in favor of the bill while the remaining 205 voted against it. However, the Senate still have to vote in December to decide the final fate of the bill but still, investors considered the house republicans overwhelming support a success and believe it is the first step towards achieving a broad-based fiscal stimulus. President Donald Trump later on Thursday called the vote “a big step toward fulfilling our promise to deliver histori...
    On November 17, 2017 / By
  • Finance 0

    You’ll Never Guess What Happened To BuzzFeed’s IPO Chances After It Missed Revenue By 20%

    Buzzfeed’s plans for a rumored 2018 IPO, first reported back in March by Axios, just suffered a serious setback. In what amounts to a serious blow to the digital media pioneer’s credibility with investors, not to mention the potential impact on its lofty venture-capital-fueled valuation, the Wall Street Journal is reporting that Buzzfeed is on track to miss its 2017 revenue projections by between 15% and 20%. Buzzfeed had expected revenue of $350 million, but will probably miss that target by between $50 million and $70 million, per Wall Street Journal . If accurate, that would be at least the second major revenue miss for the site in the...
    On November 17, 2017 / By
  • Finance 0

    Huge Crude Stakes

    There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February. Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has intervened on the other side. Back then it was the oil producers who rising inventory forced into a larger and larger offsetting net short (hedge). This time, ho...
    On November 17, 2017 / By
  • Finance 0

    Is President Trump Setting Up A Huge Gold Trade?

    Gold prices have trended upward since President Trump took office January 20th of this year. Based on what the Trump administration has set out to do, gold prices may still have a long way to go. The dollar has been weakening since Trump has taken office. The President has labeled China and a couple other exporting countries as ‘Currency Manipulators’ and mentioned he would take action to stop this. Countries with a significant portion of GDP coming from exports are incentivized to weaken their currencies to make their products less expensive, and thus more competitive in foreign sales. The Dollar’s weakness shouldn’t...
    On November 17, 2017 / By
  • Finance 0

    ETFs In Focus Post Auto Earnings

    Global automobile sector behemoths, General Motors (GM – Free Report), Ford Motors (F – Free Report), Honda Motor Corporation (HMC – Free Report) and Toyota Motors (TM – Free Report) released their quarterly earnings. General Motors Shares of General Motors Company were up 2.9% at market close on Oct 25, 2017, as it surpassed the Zacks Consensus Estimate on both earnings and revenue. Earnings Discussion General Motors reported non-GAAP earnings per share (EPS) of $1.32 for the third quarter of 2017, beating the Zacks Consensus Estimate of $1.07 but decreasing 2.3% year over year. Moreover, revenues of $33.623...
    On November 17, 2017 / By
  • Finance 0

    The Big Four Economic Indicators: Industrial Production Up 0.9% In October

    Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are: Nonfarm Employment Industrial Production Real Retail Sales Real Personal Income (excluding Transfer Receipts) The Latest Indicator Data Today’s report on Industrial Production for October shows a 0.9% increase month...
    On November 16, 2017 / By
  • Finance 0

    Investors ‘Fearful’ From A 1.15% Pullback

    Actually Returns Are Good When Fund Managers Are Taking Risk In a previous article, I showed the chart below without the 3 year forward S&P 500 returns. Some bears were claiming the fact that fund managers are taking more risk than ever meant impending doom. As I mentioned, there have been times when the fund managers were very bullish and stocks did well afterwards. The red line supports this point. As you can see, the returns were high 3 years after fund managers were very bullish in 2003, 2009, 2010, and 2013. The takeaway is that this optimism from fund managers doesn’t necessarily mean stocks will crash soon. It’s important to a...
    On November 16, 2017 / By