Toronto House Price Bubble Hit with 15% Foreign Buyers Tax. ‘Property Scalpers’ & ‘Double Ending’ Brokers Targeted

‘People need to ask themselves very carefully, ‘Why am I buying this house?”: Stephen Poloz, Bank of Canada.
The government of the Province of Ontario announced a laundry list of measures to prick the crazy house price bubble in Toronto and surrounding areas. This includes a 15% transfer tax imposed on home sales to non-resident foreign investors, including corporations. It’s aimed at Chinese investors in China that buy homes in Canada to diversify their assets and get them out of harm’s way in their own country.
For them, homes in Toronto (or anywhere outside China) are an asset class denominated in a foreign currency. But these homes also confer other benefits in the event some untoward mishaps occur in China, as these investors appear to half-expect.
The Province of British Columbia imposed a similar measure last August to get a grip on the housing bubble in Vancouver that had long ago spiraled out of control. It had the effect of freezing the market, with home sales volume plunging.
Why now in Toronto? It appears that the attention of Chinese investors has pivoted from Vancouver to Toronto: In March, year-over year, the average price for all types of homes in Toronto soared 33%! It doesn’t take a genius to figure out that this is simply ludicrous.

This post was published at Wolf Street by Wolf Richter ‘ Apr 20, 2017.

Why The Relationship Between OPEC And Hedge Funds Is On The Verge Of Falling Apart

Following years of acrimony between OPEC and the hedge fund community, which the cartel dismissed simply as “speculators”, things suddenly changed in 2016 when the two groups got so close, there were outright reports of collusion between the two on various occasions. We documented this last month in “Why OPEC Is Colluding With Hedge Funds.” However, as Reuters’ energy analyst John Kemp pointed out on twitter this morning, that relationship may be ending as hedge funds start to lose confidence in OPEC.
Taking us to the beginning, Kemp notes that OPEC and some of the most important hedge funds active in commodities reached an understanding on oil market rebalancing during informal briefings held in the second half of 2016. OPEC committed to implement credible production cuts and reduce global crude stocks while hedge funds responded by establishing bullish long positions in both flat prices and calendar spreads.
OPEC effectively underwrote the fund managers’ bullish positions by providing the oil market with detail about output levels and public messaging about high levels of compliance. In return, the funds delivered an early payoff for OPEC through higher oil prices and a shift from contango to backwardation that should have helped drain excess crude stocks.

This post was published at Zero Hedge on Apr 20, 2017.

Stocks and Precious Metals Charts – Paper, Numbers, and Dreams

“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States-that is prosperity.”
President Herbert Hoover, May 1, 1930
“The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the driest little spot.
But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through some poor fellow’s hands.
They saved the big banks, but the little ones went up the flue.”
Will Rogers, 5 December 1932
‘The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.’
John Kenneth Galbraith, The Great Crash of 1929
It was a risk on day, as the algos shook off any concerns and went into ‘up mode.’
Big cap tech pushed to a new closing high.

This post was published at Jesses Crossroads Cafe on 20 APRIL 2017.

APRIL 20/SILVER WHACKED TODAY/COMEX IN SILVER HAS ANOTHER RECORD OI AT OVER 229,000 CONTRACTS/GOLD IS UP 50 CENTS BUT SILVER IS DOWN 15 CENTS/ONTARIO CRACKS DOWN ON HOT CHINESE MONEY FLOODING INT…

Gold: $1281.90 UP 50 CENTS
Silver: $17.99 DOWN 15 cents
Closing access prices:
Gold $1282.50
silver: $18.04!!!
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1287.95 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1279.25
PREMIUM FIRST FIX: $8.70
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1290.19
NY GOLD PRICE AT THE EXACT SAME TIME: 1278,86
Premium of Shanghai 2nd fix/NY:$11.33
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1279.90
NY PRICING AT THE EXACT SAME TIME: $1279.45
LONDON SECOND GOLD FIX 10 AM: $1282.10
NY PRICING AT THE EXACT SAME TIME. 1281.75
For comex gold:
APRIL/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 1 NOTICE(S) FOR 100 OZ.
TOTAL NOTICES SO FAR: 667 FOR 66700 OZ (2.0746 TONNES)
For silver:
For silver: APRIL
62 NOTICES FILED TODAY FOR 310,000 OZ/
Total number of notices filed so far this month: 892 for 4,460,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
END
The open interest in silver continues to advance with today’s reading just UNDER 230,000 contracts (229,227 contracts/a new record) or about 4000 contracts ABOVE the record set last year AND 1000 CONTRACTS ABOVE THE RECORD SET YESTERDAY. It seems that the boys want to attack our precious metals as they are quite nervous about silver and its gigantic high OI for the front month of May.
Let us have a look at the data for today

This post was published at Harvey Organ Blog on April 20, 2017.

Paul Tudor Jones Has A Message For Janet Yellen: “Be Terrified”

Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid.
Echoing a number of recent high profile managers’ warnings…
Guggenheim Partner’s Scott Minerd said he expected a “significant correction” this summer or early fall, citing as potential triggers President Donald Trump’s struggle to enact policies, including a tax overhaul, as well as geopolitical risks.

This post was published at Zero Hedge on Apr 20, 2017.

Asian Metals Market Update: Apr-20-2017

Lack of news resulted in gold and silver correcting yesterday which if it continues today will result in a mild sell off. Indian demand and Asian demand will be the key for gold and silver. Investment demand for gold and silver is expected to remain firm as long as they trade over $1258 and $1737.
US economic data releases point to steady growth. Japan and other nations in Asia are also showing signs of a sustained economic recovery. Gold and silver will fall if and when economics take over Europe election risk and geopolitics risk. However sharp corrections should be used to invest for the medium term to long term in gold and silver. Expansion in industrial uses of silver will ensure that silver moves into deficit by next year.
Copper and other industrial metals will dictated by Chinese demand pickup. Crude oil will consolidate in wider range.
COMEX GOLD JUNE 2017 – current price $1281.00
Bullish over $1292.10 with $1297.80-$1304.70 and $1314.10 as price target
Bearish below $1278.70 with $1272.10-$1259.50 as price target.

This post was published at GoldSeek on 20 April 2017.

China Update – Why Is the Consensus Now So Optimistic?

As long as China has debt capacity, it can achieve any GDP growth rate Beijing requires, simply by allowing credit to expand. But debt levels are already high, and credit must expand at an accelerating pace to maintain growth. China is probably still a few years away from reaching its debt limits, but the more debt grows, the lower the country’s growth rate average will be over the long term.
Anyone reading news reports about the Chinese economy a year ago might have thought the country was on the verge of financial collapse. There seemed at the time plenty of evidence supporting those who expected an economic breakdown: debt was surging at unprecedented rates, regulators were in disarray following a stock market collapse the previous summer, and liquidity panics periodically swept through the banking system. In addition, so much capital was fleeing the country that even a huge current account surplus couldn’t prevent central bank reserves from eventually declining by nearly a quarter from their June 2014 peak.
But, as I have been arguing for years, China was not on the verge of a financial collapse and was never likely to collapse as long as regulators were credible and able to restructure liabilities in the banking system with relative ease. Financial crises are caused not by insolvency or economic downturns, but rather by highly inverted asset-liability mismatches severe enough to cause a breakdown when evaporating liquidity prevents the rolling over of liabilities. On paper, the Chinese financial system seems plagued by such mismatches, but liabilities in a closed banking system with all-powerful regulators are much more stable than they seem because the regulators have many ways to restructure liabilities through the banking system.

This post was published at FinancialSense on 04/19/2017.

French Stocks Surge Off Technical Support After Overnight Poll

Nothing says existential fear for the EU like buying the f**king French dip on the heels of an overnight poll that simply confirmed expectations that the worst case scenario ‘Le Pen – Melenchon’ second round was still a significant outlier. French stocks soared 1.7% – the most in 6 weeks – bouncing off the 50-day moving average.
We suspect given the massive hedge positions being laid out that this kind of volatility will be the new normal for the next week or so…
Notice CAC bounced perfectly off the 50DMA

It was a broad-based rally, with banking stocks among top gainers: BNP Paribas 4.2%, Societe Generale 3.8%, Credit Agricole 3%.

This post was published at Zero Hedge on Apr 20, 2017.

Failure to Launch: Millennials Struggling with Adulthood

A new census report painted a rather grim picture of millennials as they make their transition into adulthood. You might call it a failure to launch. American 20-something-year-olds face low wages and high debt levels, and many are struggling to make it on their own.
According to the government report, in 2015 one-third of young adults (about 24 million) in the US lived with their parents. ‘While 81 percent of those who live at home are either working or going to school, one in four between 25 to 34 are ‘idle, meaning they are not in school and do not work,’’ the report said.
An NBC report focused on the wage problem millennials face. Simply put, they can’t find decent paying jobs. The census report corroborates the issue, revealing the extent of the wage problem, especially for young men:
‘In 1975, only 25% of men aged 25 to 34 had incomes of less than $30,000 per year. By 2016, that share rose to 41% of young men.’
The findings stand in stark contrast to the employment news the mainstream media constantly feeds the public. Based on the numbers, the jobs market is healthy. Young people entering the workforce should have no problem finding work. But Peter Schiff has been saying for months that most of the jobs being created are low-paying, service jobs, not jobs that you can build a life around:

This post was published at Schiffgold on APRIL 20, 2017.

World Stock Markets Mostly Firmer As Crude Oil, Geopolitics In Focus

(Kitco News) – European and Asian stock markets were mostly slightly higher Thursday. Crude oil’s solid losses on Wednesday did give equities traders pause, but oil prices have rebounded a bit Thursday morning. U. S. stock indexes are pointed toward higher openings when the New York day session begins.
Gold prices are weaker Thursday morning as the market is experiencing a normal downside technical correction after scoring a five-month high earlier this week.
The world marketplace is still very aware of geopolitical tensions between the U. S. and North Korea, and the U. S. and Russia. U. S. Secretary of State Rex Tillerson on Wednesday afternoon took a very hard line on Iran, too. Tillerson said the days of a passive U. S. stance against regimes like Iran and North Korea are over.

This post was published at Wall Street Examiner on April 20, 2017.

Gold and Silver Market Morning: April 20 2017 – Gold still building strength below $1,300!

Gold Today – New York closed at $1,279.20 yesterday after closing at$1,290.10 Tuesday. London opened at $1,279.15 today.
Overall the dollar was weaker against global currencies early today. Before London’s opening:
– The $: was weaker at $1.0766 after yesterday’s $1.0724: 1.
– The Dollar index was weaker at 99.46 after yesterday’s 99.66.
– The Yen was weaker at 109.03 after yesterday’s 108.99:$1.
– The Yuan was slightly stronger at 6.8837 after yesterday’s6.8854: $1.
– The Pound Sterling was weaker at $1.2833 after yesterday’s $1.2857: 1.
The Shanghai Gold Exchange was trading at 285.90 towards the close today. This translates into $1,286.82. While New York and London were pulled lower by Shanghai yesterday and today you will note that Shanghai has barely changed in the last two days.
New York closed $7.62 below Shanghai’s closing yesterday and today. London opened at a $7.67 discount to Shanghai in line with New York.

This post was published at GoldSeek on 20 April 2017.

Is the US Stock Market at a Major Inflection Point?

A powerful reality check on the limits of Presidential power has deflated some of the euphoric bullish expectations of investors in recent months. After hitting a new all-time high on March 1st – the day of Trump’s first speech to Congress – the S&P 500 has been steadily losing steam and many are wondering just how much upside is left for the 8-year bull market in US stocks.
Jonathan Krinsky, Chief Market Technician for MKM Partners, recently joined us on Financial Sense Newshour to discuss his market outlook and why, he believes, the backdrop is still positive.
Consolidation in Progress
Despite the weakness, Krinsky thinks what we’re seeing is a consolidation. We saw an amazing surge following the election, and markets still haven’t given up even half those gains.
‘We’d need to see a lot more weakness before we would consider thinking there’s any type of serious top,’ he said.
The Russell Mid-Cap and S&P 500 have also been trading sideways since December. Following the election, the small and mid-caps broke out of a multi-year base, pretty much in a straight line, Krinsky noted. Since early December, they haven’t done much.
‘We know markets correct one of two ways: either through time or through price,’ he said. ‘Even though they’ve been underperforming, we would say that the action since early December is really just a time consolidation.’

This post was published at FinancialSense on 04/19/2017.

Crispin Odey: “It Feels Lonely Being Bearish”

In Crispin Odey’s latest letter to investors, the billionaire hedge fund manager laments “how quickly everything has changed”, notes that “without the reflation fireworks, equity markets feel vulnerable”, and concludes that while a year ago it was easy to be bearish – China was slowing, world trade was creaking, Europe was not recovering and the oil price was hitting new lows – “a year later to be bearish feels lonely, despite the fact that the reflationary story of the past year looks difficult to sustain and auto loan lending has joined a long list of risks along with Trump and Brexit.”
And yet, unlike Horseman, he is not throwing in the towel just yet: “Money creation alone has taken markets to all-time highs but what strong arms take, strong arms must defend. Valuations demand that they do.”
And while Odey’s trenchant appeal that “when we look back at this madness, some people will feel ashamed” is accurate however, considering his YTD P&L of -4.9%, following a 1 year drop of 33.7% (and more than half over the past 3 years), Odey may not be among those looking back.
Full letter below:
Look how quickly everything has changed. Trump, defeated over the Obama Healthcare reform has, as it were, retreated into an aggressive foreign policy which is almost the opposite to the Monroe doctrine which he was adopting earlier. Bannon is on the back foot. In the absence of a corporate tax cut or any kind of VAT tax reform, the US economy is succumbing to an overvalued dollar and a growing crisis in subprime lending, centred on the second hand car market. The government bonds have already guessed Yellen’s mind. No more rate rises. We are now just waiting for the Fed to set up a lending business, loaning 5 year old cars to people who can neither drive nor borrow. That is what they need to do to stop the subprime losses ballooning.

This post was published at Zero Hedge on Apr 20, 2017.

AMERICAN DREAM IS DEAD: MEXICAN AND CHINESE MILLENNIALS HAVE HIGHER HOMEOWNERSHIP RATE THAN AMERICANS

From a cultural and economic perspective, American millennials will likely go down in history as a lost generation. We’re talking about an entire generation that was coddled, and bamboozled by an education system that tricked them into absorbing tens of thousands of dollars in debt for college degrees that are worthless.
They came of age at a time when America’s blue collar jobs were hollowed out and shipped overseas, and wages stagnated across the board. They’re in so much debt that they’ve had to postpone all of the hallmarks of adulthood such as marriage, raising kids, and homeownership. They simply can’t afford it.

This post was published at The Daily Sheeple on APRIL 19, 2017.

How to Identify Bubbles

The first bubble I ever saw was the dot-com bubble of 1999. I was born in the early seventies, and I made it to my mid-twenties before ever hearing about an asset price bubble. Commercial real estate went nuts in the eighties, but nobody ever called it a bubble. They didn’t even call it a crash when it crashed.
Bubbles aren’t new – they’ve been around since Dutch tulips – but it’s only recently that they’ve worked their way into the average investor’s lexicon. If you asked the man on the street, he would probably tell you there are five different bubbles going on right now. There is some truth to that, but also some untruth to that.
The true part is that a lot of things are currently overvalued. I would say stocks are overvalued. Most people would agree. I would also say bonds are overvalued. Some people would agree. I would say corporate credit is overvalued, real estate in certain parts of the country is overvalued, and maybe a few other things.
But these are not bubbles.
So, what is the difference between something being overvalued and something being in a bubble?
Since you asked…

This post was published at Mauldin Economics on APRIL 20, 2017.

Are Bonds Headed Back To Extraordinarily Low Rate Regime?

The U. S. 10-Year Treasury Yield has dropped back below the line containing the past decade’s ‘extraordinarily low-rate’ regime.
Among the many significant moves in financial markets last fall in the aftermath of the U. S. presidential election was a spike higher in U. S. bond yields. This spike included a jump in the 10-Year Treasury Yield (TNX) above its post-2007 Down trendline. Now, this was not your ordinary trendline break. Here is the background, as we noted in a post in January when the TNX subsequently tested the breakout point:
‘As many observers may know, bond yields topped in 1981 and have been in a secular decline since. And, in fact, they had been in a very well-defined falling channel for 26 years (in blue on the chart below). In 2007, at the onset of the financial crisis, yields entered a new regime.
Spawned by the Fed’s ‘extraordinarily low-rate’ campaign, the secular decline in yields began a steeper descent. This new channel (shown in red) would lead the TNX to its all-time lows in the 1.30%’s in 2012 and 2016.
The top of this new channel is that post-2007 Down trendline. Thus, recent price action has 10-Year Yields threatening to break out of this post-2007 technical regime. That’s why we consider the level to be so important.’

This post was published at Zero Hedge on Apr 20, 2017.

Venezuela Seizes General Motors Car Plant

While the US has a habit of invading or attacking sovereign nations any time the president’s approval rating dips below a certain threshold, Venezuela has a similar, if less dramatic mechanism to provide a brief boost to Maduro’s popularity: it nationalizes foreign plants on its soil.
It did so last July, when the country was once again suffocating under a wave of violent protests, when just hours after Kimberly-Clark said it will shutter its Venezuela operations after years of grappling with soaring inflation and a shortage of hard currency and raw materials, Venezuela retaliated by announcing it would seize the factory.
It did so again overnight, when General Motors said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia; as a result the carmaker said it would immediately halt operations in Venezuela.

This post was published at Zero Hedge on Apr 20, 2017.

Inflation Outlook Shifts As Rate Hike Odds Drop? | Golden Rule Radio #15

The following video was published by McAlvany Financial on Apr 20, 2017
Why did the Fed Rate Hike Odds drop suddenly this last week downgrading chances to only one more rate hike in 2017 instead of the previously assumed 3? Inflationary concerns shift this week as well as conflicting opinions in the market collide. Gold moves upward after tensions with North Korea continue to escalate. Learn how you can build a Dynamic Portfolio with opportunities benefits far beyond just the spot price. Thanks for listening.