News: 2013-12-10

By Edward Harrison On Dec 10, 2013

Markets

Treasury Yield Forecast for 2014 Climb to Survey High of 3.41% – Bloomberg

Big Idea 2014: Investing Will Completely Change | LinkedIn

“Baby Boomers are marching into retirement, thereby beginning to liquidate their investments; thus the profile of the “typical investor” is changing. For example, although women are still referred to as a “niche market” by the wealth management industry (yes, seriously), it is estimated that by 2030, they will control some two-thirds of US wealth. And at the same time, Millennials are entering their prime earning (and thus investing) years.

The changes driven by these demographic shifts will be far-reaching.”

A Short History of Long-Term Trends

Thoughts by Marc Faber on why crises happen

2-10 Spread Hits Two-Year High Crossing Wall Street

World’s biggest investor BlackRock says US rally nearing exhaustion – Telegraph

Housing

Pay down mortgage debt or invest in shares? – Telegraph

Home buying will be out of reach for an ‘entire generation’ – Telegraph

Big Banks About to Start Booking Second Mortgage Losses They Can No Longer Extend and Pretend Away | naked capitalism

Jump in mortgage borrowing a good for US consumption – FT.com

“After reducing debt for 21 consecutive quarters, US households increased their net mortgage liabilities at an annualised rate of 0.9 per cent in the third quarter of 2013, according to new data from the US Federal Reserve.”

Swedish Housing Surges to Unsafe Value as Debt Soars – Bloomberg

Skyrocketing rents hit ‘crisis’ levels – NBC News.com

Home Buyers Are Scarce, So Renters Take Their Place – NYTimes.com

America’s rental crisis | Felix Salmon

UK house price growth expectations hit 14-year high in Nov – RICS | Reuters

“Illusion i Sverige omlångsiktigt stigande priser” | SvD

Goda skäl till oro överShillers varning | Sverige | SvD

More analysis here of how Shiller’s bubble warning is worrying the Swedes.

De tror på en svensk bostadsbubbla | Bostad | SvD

Good to see a major Swedish daily covering this news. Svenska Dagbladet is talking here with Robert Shiller about his comments on Sweden having a housing bubble. The article here is seven pages long and also has thoughts from others like Nouriel Roubini. MUST READ. In Swedish

Economy

Pimco’s El-Erian Sees Faster Global Growth as U.S. Offsets China – Bloomberg

McKinsey, Morgan Stanley and BlackRock love infrastructure investing

Cheer Up: World Growth Is Accelerating – Bloomberg

Fed

A Fed Dissident on Policy and Transparency – NYTimes.com

Fed on track to taper in March; chances of December or January rise: Reuters poll | Reuters

Bullard Offers Up The Tiny Taper – Tim Duy’s Fed Watch

Low inflation is becoming a major headache | Gavyn Davies

Fed’s Fisher: The Time to Taper Fed Bond Buys Is Now – Real Time Economics – WSJ

Fed’s Lacker: Risks of further bond-buying outweigh benefits | Reuters

Central banks lose $400bn in gold rout – Telegraph

Fed could do ‘small’ QE3 taper to recognize job gains: Bullard | Reuters

“While he would prefer a Fed promise not to increase rates unless inflation rises above a certain level, say 1.5 percent, a so-called inflation floor has not won widespread support among his colleagues.”

Money printing, search for yield and the mirage of financial stability – Telegraph

North America

US sells remaining General Motors shares at a loss of $10.5bn | Business | theguardian.com

Let’s get this straight: AIG execs got bailout bonuses, but pensioners get cuts? | Dean Baker | Comment is free | theguardian.com

Robert Reich (JP Morgan Chase, the Foreign Corrupt Practice Act, and the Corruption of America)

It Takes A McDonald’s Worker 4 Months To Earn What The CEO Gets In An Hour

Rule That Curbs Bank Risk-Taking Nears Approval – NYTimes.com

Consumer confidence nears year high as Canadians put faith in rising house prices | Financial Post

Household net worth hits record high in third quarter | Reuters

Europe

Ireland ‘unlikely’ to get ESM help to recover cost of bailing out our banks – Independent.ie

Flat 3Q Italian GDP signals recession may be over – MarketWatch

Note the fine print:

“Measured in terms of expenditures, Italian GDP was lifted by inventories even as fixed business investments fell by 0.6% from the previous quarter and household spending declined by 0.2%, according to Istat’s data. “

Industriproduktionen faller | Näringsliv | SvD

Sweden is slowing. Industrial production in October fell 1.7% compared to September and 5.0% compared to the year ago level. This was worse than expected. The results were dominated by the electronics and chemical sectors. So the time series has some volatility. Nonetheless, the heady growth days are over.

ekathimerini.com | Greek industrial production dips 5.2 pct in October, year-on-year

El precio de las casas modera su caída, pero baja el 38,5% desde máximos | Economía | Cinco Días

The fall in home prices in Spain is slowing but the decline from the peak is now 38.5%.

Reallöhne: Verluste werden zur Norm – KURIER.at

This article points out that real wages have stagnated or declined in Europe since 2010. In Austria, they were up only 0.1% this year

China

Strong China retail data defy predictions of slowdown – FT.com

Jedes fünfte verkaufte Auto ist ein deutsches: Chinas Automarkt boomt – n-tv.de

The German carmakers are cleaning up in China. We are seeing record figures there, with the Germans taking one fifth of the market. The sales have increased seven-fold since 2005. That’s huge. It also explains why the Germans have shifted focus to China and away from the periphery.

Yuan auf Rekordhoch: Euro zeigt weiter Stärke – n-tv.de

China’s currency is going from strength to strength. It is now at a new high to the USD of 6.1114. Part of this is the return differential; Chinese 1-year paper returns 4.06% while for example the comparable South Korean paper returns only 2.6%. As a result, Chinese banks have bought 2.1 trillion yuan since the beginning of the year. The currency is up 2.7% since the beginning of the year.

China November industrial output growth slows to 10pc as retail sales rise | South China Morning Post