December 4th Update – Markets in focus; Realtor.com surveys; Who profits the most day trading stocks; What if student loans are forgiven?

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-Stock move back up. Who makes the most from stock and index day trading? It’s not the guy looking at the charts. My thoughts based on my experience at Nasdaq.
-I can easily see a scenario where some close to Trump know beforehand about what he will say and can trade on that.
-Gold looking better as the COT has unwound some of its open interest. The Commercial shorts are still above 300k net short.
Realtor.com 2020 Housing Survey came out this morning. What I think in light of Realtor.com’s 2019 Survey.
-The ones who really benefit from student loan debt forgiveness and how can we benefit, even if we don’t have student loans. Discussion of a Forbes article titled, If $1.6 Trillion Of Student Loan Debt Is Forgiven, This Is What Happens, and what it omits.
-If social spending increases and debt forgiveness becomes a reality, look for the U.S. numbers in this survey to move higher and approach those of the developed socialist nations.

As we predicted; Australia’s real estate markets shoot higher

Could it be? Australia’s real estate markets are now booming

Since January, we expected the unexpected and told our readers to prepare for a market rebound

  • The Australian Government and RBA would not tolerate a protracted housing downturn.
  • The world is awash in trillions of new U.S. dollars, sovereign debt securities and, Treasuries. Australia is an attractive dumping ground for these dollars. High-end global real estate is effectively priced in U.S. dollars.
  • The Australian dollar is near its cycle low against the USD.
  • The global central banking cartel is in complete control and is not ready to give up on its system. Low rates would prevail.
Local residents may think Sydney housing is expensive, but the people with the trillions of USD around the world do not think so

National property values jumped 1.7 per cent last month, the largest gain since 2003, according to data from CoreLogic Inc released Monday. Sydney and Melbourne continued to lead the rebound, with prices up 2.7 per cent and 2.2 per cent respectively.

Annualised gains over the past three months in both cities are tracking in the mid-20 per cent range, CoreLogic said. At that rate, home values will recoup all their losses from the recent downturn and be back at record highs early next year.

Adelaide suburbs top the booming markets

“The Australian housing market is now five months into an unexpected period of rapid recovery,” CoreLogic research director Tim Lawless said in a statement. “The question is, how long can such a high pace of capital gains be sustained?”

The housing rebound is a complete about-face from just six months ago when economists were debating how much further prices could fall.

In addition to record-low interest rates and a loosening of lending curbs, prices are being driven higher by a shortage of properties on the market. That’s led to a renewed fear among buyers that if they don’t jump in now, they could miss the chance to buy.

Australia home frenzy back as prices surge most in 16 years, Bloomberg, December 1st

Source: Adelaide suburbs dominate top 10 booming suburbs, news.com.au

Recall the propaganda articles from ZeroHedge like this one titled, Australia’s Imploding Housing Market Now Threatens To Unleash Nasty Recession. The alt-financial media were pumping out this garbage as recently as this Summer. This particular article was dated May 15th.

Recall this July 19th article from ZeroHedge, titled These Two Charts Reveal The Extraordinary Collapse In Australian Homeownership.

All year long, I had been advising Australians to take advantage of that slowdown and bid at the subdued auctions and to start deploying cash, because the malaise would not last. Even Australian TV was pumping out this gloom of contraction and misery. However, my conclusions differed from this simple “analysis” for four reasons:

  • The Australian Government and the Reserve Bank would not stand for a protracted housing downturn; they would begin to soften monetary policy to achieve this objective and had plenty of room to make it so.
  • The world is increasingly awash in trillions of new sovereign debt securities every year, mostly in U.S. dollars, and these dollars need to find a home. I suggested that Australia would prove to be an attractive dumping ground for these dollars. Global real estate, especially in the cities of influence, is effectively priced in dollars.
  • The Australian dollar is near its cycle low against the USD and those with the U.S. dollars view Australian house prices as attractive.
  • The global central banking cartel is in complete control and is not ready to give up on its system.

Why fight the trend? As an American, I view much of Australia’s housing stock as being relatively attractive when priced in U.S. dollars. How long will this comparative attractiveness last? It’s all up to the U.S. Fed’s dovishness and I am banking on more of the same.

 

Mainstream business covering for the central banks only ensures higher asset prices

Double-mindedness in the business press guarantees more of the same
As long as the central banks keep the growing debt pile in service, economic growth and inflation will sink, which will require more fiscal deficit spending, which will require more debt, which will require more QE
  • As long as the central banks buy up all the debt required to keep rates moving lower, the markets and asset prices will move higher
  • My personal observations; small and less knowledgeable investors are becoming increasingly comfortable with risky speculation
  • Since 2008, the world’s net savings has no longer been able to fund sovereign borrowing needs without the additional “demand” from the central banks
  • Despite stories to the contrary, global investors seems willing to allow the  central banks to continue their sovereign debt buying campaigns
  • Though most economists claim that negative yielding debt poses a systemic problem, I claim that this is actually the only viable solution given the direction the central banks chose. The amount of it will grow over time as the global economy sinks in a sea of deflationary and over-supplied red ink.

I received an email from a reader:

You’re kinda hinting at a gut feeling that a significant crash is incoming … well, that crash is well underway across the globe … so commodities will weaken.

The rich world is still hanging in there as the periphery is crushed and burnt, but probably not for much longer, 2020 will probably be a painful year.

C.H.

For those without the assets, their worlds have already crashed
Crisis, reaction, solution. Be patient as this can last for years

I understand this reader’s concern at what is transpiring, and while I do agree that a major crash is coming, I submit that the central banks have their agenda under control. With QE and falling rates, this banking cartel has placed the entire global economy on an indefinite IV-drip, and it now controls the world’s destiny. I submit that the globalists have a course of events planned in the future, when at that time, the central banks will prove powerless to overturn the laws of gravity. Of course, historically speaking, that has always been war, but for now these QE programs have proven effective.

There are many out there (former readers and subscribers) who do not agree with this assessment, but we are now entering 2020 and are still here discussing potential catastrophes. Most in the alt-financial media have stood by in disbelief all decade as the financial system levitates higher.

The mainstream press runs cover for the central banks
The current world economic situation could be the exception

I get it; regardless of what Solomon wrote in Ecclesiastes, we are indeed experiencing unprecedented circumstances, but that does not mean things will cave soon, and arguing from incredulity has never proven profitable.

Okay, let’s turn back to the point of this article; consider the mainstream business press, which runs cover for the central banks.  I came across a Bloomberg article published earlier today that illustrates my point about a complicit business media. After reading this article, I do not know where the author (or Bloomberg) stands on the matter of the central bank government debt-buying or the massive fiscal stimulus programs being contemplated. This tells me that more of the same is coming.

Now, as policy makers grapple with the slowest growth since that era, a suite of options on how to revive their economies share a common denominator: yet more debt. From Green New Deals to Modern Monetary Theory, proponents of deficit spending argue central banks are exhausted and that massive fiscal spending is needed to yank companies and households out of their funk.

Fiscal hawks argue such proposals will merely sow the seeds for more trouble. But the needle seems to be shifting on how much debt an economy can safely carry.

Central bankers and policy makers from European Central Bank President Christine Lagarde to the International Monetary Fund have been urging governments to do more, arguing it’s a good time to borrow for projects that will reap economic dividends.

“Previous conventional wisdom about advanced economy speed limits regarding debt to GDP ratios may be changing,” said Mark Sobel, a former U.S. Treasury and International Monetary Fund official. “Given lower interest bills and markets’ pent-up demand for safe assets, major advanced economies may well be able to sustain higher debt loads.”

The Way Out for a World Economy Hooked On Debt? Yet More Debt, Bloomberg, December 1st

All I know is that people continue to spend with reckless abandon. The streets around my community are clogged and get more crowded all the time. These sheep cannot stop pissing away their money and will spend themselves into oblivion. They are the great unwashed that keep the economy and asset markets moving higher. Thank them for their spendthrift ways and do the opposite. What is bad for us (personal spending and debt) is good for the economy. As long as we prepare for the inevitable, we will manage, regardless of society’s circumstances.

We should be less concerned about things we cannot control and more careful about our own affairs. Move forward in this reprobate world and trim our wicks. As long as the establishment outlets run cover for the status quo, we have more to come.