News: 2014-01-31
Housing
Roubini Global Economics – Housing Bubbles Part 1: Where Are Indicators Flashing Red?
“Home prices look extremely elevated in Norway, France, Canada, the UK, Sweden and Australia; in emerging markets (EMs), only Hong Kong stands out, but Turkey’s and China’s markets are ripe for a downturn and Brazil shows cause for concern, for reasons we explain in detail. In developed markets (DMs), debt service at historical lows and rising incomes mean a catalyst for correction will await rate hikes or recession. Unlike 2005-07, “supply myopia” is unlikely right now, although Norway, Canada and Switzerland are still overbuilding.”
North America
Even trash collectors benefit from Canada’s junk bond market | Financial Post
“A few years ago, the market for high-yield debt products, sometimes called junk bonds, was a mere curiosity in Canada. But the number of investors participating in the market has soared — enough to suggest that it is clearly here to stay.”
How Much Snow It Takes to Cancel School Across the US
Mortgage Volumes Hit Five Year Low – Real Time Economics – WSJ
U.S. Banks Start to Ease Limits on Lending – WSJ.com
U.S. Banks Loosening Loan Standards, Government Says – WSJ.com
“The OCC noted one exception to the trend: underwriting standards for home-equity loans have tightened.”
U.S. Pending Home Sales Drop Sharply in December – WSJ.com
“The index was down 8.8% in December from a year earlier. The last time it was this low was October 2011, when the index stood at 92.2.”
So Long to Bernanke and His Tight-Money Fed – Bloomberg
Emerging Markets
Emerging markets: Fear of contagion – FT.com
Investors should avoid casting their net too wide in EM pool – FT.com
“EMs look cheap for three main reasons: Chinese – and to a lesser extent Brazilian – banks; Russia; and Samsung. The forward price/earnings ratio of the benchmark MSCI EM index has just dropped below 10, compared with the US’s 15. Price to book value is also far lower, and the dividend yield about a quarter higher. Yet, only two EM sectors have a forward PE below 10: financials, at 8 times, and energy at 4 times. “
Submerging markets are not the norm (so far) | FT Long Short
Talking Troubled Turkey – NYTimes.com
Russia pledges ‘unlimited’ intervention as emerging market sell-off continues – Telegraph
India’s Raghuram Rajan hits out at uncoordinated global policy – FT.com
Rajan is basically saying that developed market central banks are focused on domestic concerns only and letting EM make all the international adjustments
Turkey’s central bank prepared to tighten policy further – FT.com
Poland plays with fire over pension reform – FT.com
Europe
“Before I get to Turkey, a brief history of global financial crises. For a generation after World War II, the world financial system was, by modern standards, remarkably crisis-free — probably because most countries placed restrictions on cross-border capital flows, so that international borrowing and lending were limited. In the late 1970s, however, deregulation and rising banker aggressiveness led to a surge of funds into Latin America, followed by what’s known in the trade as a “sudden stop” in 1982 — and a crisis that led to a decade of economic stagnation.”
Why the Fed is under pressure to continue innovating – FT.com
“Uncle Sam successfully sold $15bn of two-year floating-rate notes to investors in the first innovation in federal debt for 16 years. The sale of these bonds that reset according to market rates – thus avoiding any losses if rates rise – attracted a startling $85bn of orders; not that you would have noticed from following the media, whether social or mainstream.”
Technology
Zynga Lays Off 314 Employees, Or 15% Of Its Workforce | TechCrunch
Wow, Amazon Web Services had another bang-up quarter — Tech News and Analysis
Amazon Prime Could See $20 To $40 Price Hike | TechCrunch
Amazon Falls Short Of Expectations With Q4 Revenue Of $25.59B, EPS Of $0.51 | TechCrunch
Markets
Faber: “Physical gold” in Switzerland and Singapore is 20% of “net worth” | Resource Investor
Japan
BBC News – Japan inflation rises at fastest pace in over five years
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