What Could Possibly Go Wrong

Japan nuclear agency upgrades Fukushima alert level

"Japan's nuclear agency has upgraded the severity level of a radioactive water leak at the Fukushima plant from one to three on an international scale. Japanese reports say it is a provisional move that had to be confirmed with the IAEA, the UN's nuclear agency. This week is the first time that Japan has declared an event on the Ines scale since the 2011 earthquake and tsunami. The move was announced in a document on the agency's website and was subsequently approved at a weekly meeting of the regulatory body. Shares of plant operator Tokyo Electric Power Company (Tepco) fell as much as 13% to 537 yen." Continue reading →

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What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

"If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode. And that is just for starters. So yes, we all need to be carefully watching the yield on 10 year U.S. Treasuries." Continue reading →

Continue ReadingWhat Is Going To Happen If Interest Rates Continue To Rise Rapidly?

What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

"If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode. And that is just for starters. So yes, we all need to be carefully watching the yield on 10 year U.S. Treasuries." Continue reading →

Continue ReadingWhat Is Going To Happen If Interest Rates Continue To Rise Rapidly?

The FED’s $500 Billion/Year Mortgage Subsidy Has Backfired

"Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 16, 2013. The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week. The Refinance Index has dropped 62.1 percent from the recent peak reached during the week of May 3, 2013." Continue reading →

Continue ReadingThe FED’s $500 Billion/Year Mortgage Subsidy Has Backfired

The FED’s $500 Billion/Year Mortgage Subsidy Has Backfired

"Mortgage applications decreased 4.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 16, 2013. The Market Composite Index, a measure of mortgage loan application volume, decreased 4.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week. The Refinance Index has dropped 62.1 percent from the recent peak reached during the week of May 3, 2013." Continue reading →

Continue ReadingThe FED’s $500 Billion/Year Mortgage Subsidy Has Backfired

Credit crisis begins to cripple Chinese cities

"Worried lenders in the informal sector raised interest rates for small and medium-size businesses, setting off a much broader wave of defaults in recent weeks, as owners found themselves unable to repay billions of dollars in bad debts, many of them handwritten and hard to enforce in court. State-owned banks have long been allowed to lend only at low, regulated rates barely above the inflation rate, with the total value of loans controlled by quarterly quotas. These loans go overwhelmingly to large state-owned businesses, government officials and politically connected individuals, who then relend the money at much higher interest rates." Continue reading →

Continue ReadingCredit crisis begins to cripple Chinese cities

The Beginnings of a Chinese Banking Crisis?

"The Industrial and Commercial Bank of China (ICBC) displaced Bank of America to become the world's biggest bank in 2012, marking the first time in history a Chinese bank has reached this pedestal. China now has four of the world's ten biggest banks. Together, these Chinese banks have a combined market capitalization of close to $1 trillion Canadian dollars, or three times the market cap of the Canadian banking sector. ICBC alone has 393 million individual customers, which according to the Telegraph is the equivalent of a single bank managing the bank accounts of every man, woman, and child in Western Europe." Continue reading →

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Top Chinese official warn of ‘empty cities’ emerging in China

"In a grim warning against rapid urbanisation in China, a top development official has said that reckless expansion of cities has turned many of them into ghost towns with no occupants in sight. Qiao Runling, deputy director of the China Centre for Urban Development, said local governments had relied on quick urbanisation to stimulate economic growth and generate fiscal revenue. State-run broad cater CCTV recently carried a report showing two such 'ghost cities' with massive apartment and commercial complexes with no occupants, leaving local governments in deep debts." Continue reading →

Continue ReadingTop Chinese official warn of ‘empty cities’ emerging in China

Indian rupee falls further amid Fed stimulus concerns

"The Indian rupee has fallen to a new all-time low against the US dollar, amid concerns the Federal Reserve will soon scale back its stimulus measures. Foreign investors have been pulling money out of India, as the economy has slowed and the cost of borrowing in dollars has risen. The Reserve Bank of India (RBI) is rumoured to have intervened to stem the slide in the currency. The Indian rupee has declined by nearly 16% against the US dollar since May and is Asia's worst performing currency so far this year. Its further decline on Tuesday was mirrored by falls in markets across other developing markets, particularly in Asia." Continue reading →

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