Jim Chanos on China, Hong Kong and Australia

Famous shortseller Jim Chanos was in Hong Kong and Australia and reported back on what he saw to Bloomberg Television. Copy provided below including a link to the video

BofA delays Countrywide bankruptcy

The word is that BofA did in fact consider declaring their Countrywide subsidiary bankrupt to ring fence the rest of the company from Countrywide. It got as far as a board vote this past summer.

This Wall Street Journal video discusses the issues of why it has postponed the bankruptcy filing

Australia: There goes the neighbourhood

The last two days have seen the latest monthly data on credit growth in Australia from the RBA, and the latest quarterly data on house prices from the ABS. Together they confirm trends that I’ve identified on numerous occasions between the acceleration of mortgage debt and the change in house prices

Deleveraging, Banks and Economic Recovery in Ireland

The challenge that the Irish economy faces can best be described in the context of flows and stocks of assets and liabilities. Under the Memorandum of Understanding (MoU) with the IMF/EU/ECB Troika, Ireland must implement a severe fiscal austerity programme and reduce the size of its banking system. These goals must be achieved in the context of a deleveraging process in the household sector brought about by the need to repair balance sheets following a collapse in the value of housing assets. The current policy mix, which aims to reduce these stocks simultaneously, is unlikely to be successful, a feature we term the domestic trilemma. An external trilemma arising from the constraints of EMU membership also limits the policy choices for high-debt economies attempting to engineer an export-led recovery. This paper argues that a sequencing of policies is required for Ireland to achieve its goals

Shanghai property values plunge, recent buyers protest

The Chinese property market has come off the boil according to this video from NTD Television. The issues are reminiscent of the US subprime crisis in which developers, under the gun from a falling market, were forced to slash prices to sell new apartments. Recent buyers are seeing their investments implode overnight

Secular decline in US housing equity

We stumbled upon this interesting chart from the Financial Stability Oversight Council’s 2011 Annual report which shows the share of owner equity in household real estate. It surprised us, not so much in that it is at record lows, but that owner equity showed only a blip upward during the housing bubble. The secular decline in owner equity is also an eye opener

Why is a bank that failed the stress tests in Spain getting bought at a 31% premium?

I don’t follow the Spanish banking sector well enough to know what hidden value Banco Pastor has but I find it curious that it is the subject of a takeover bid at a 31% premium by Spain’s fifth largest bank, Banco Popular

Private Lending: Disintermediation in China’s Banking System

The consequences of negative real interest rates and financial repression. We know how this story ends. Keep this one on your radar

Why Nobody Went to Jail During the Credit Crisis

The following is a transcript of an interview with Financial Sense Newshour, a free financial/market broadcast hosted by money manager Jim Puplava on the week’s market action, interviews with financial experts, and Jim’s personal perspective on the markets/economy

Monetary Policy and the Future of China

There is a road open for China involving controlled inflation that would lead to re-balancing, both domestically and internationally, which has some uncertainties. These must be compared to those of sustaining the export-led growth model, basically an even bigger currency mismatch in the PBoC balance sheet and ever more unproductive capital investments

No Bottom in Sight for Housing

From Global Economic Intersection Guest author: Keith Jurow is the author of the MVP Housing Market Report. This article was posted at Minyanville with the title “There Is No Housing Bottom in Sight” At the end of June 2011, macromarkets.com released the results of a poll in which 108 leading economists and housing market analysts

All twenty metro areas with monthly house price increases in Case-Shiller

On a month-to-month basis, all metro region in the Case-Shiller Home Price Index for June 2011 showed price increases. On the other hand, we saw year-on-year housing declines across 20 major US metro areas of 4.5%