What Silicon Valley Home Prices Have Done since the Prior Peak

But household incomes got left behind.
Ten years have passed since the peak of Housing Bubble 1 in Silicon Valley. In 2007, home prices were crazy. After they began diving, accompanied by a deafening layoff boom, everyone called what had happened before a ‘bubble.’ But in early 2010, the layoff boom flipped around and turned into a dizzying hiring boom, and home prices bottomed out in late 2011, as global liquidity was once again washing ashore.
Now, ten years later, the hiring boom that has created hundreds of thousands of jobs in the Bay Area is stalling. And home prices?
Let’s start with the most expensive Bay Area town first: Atherton, with a population of less than 8,000. Only a few homes are sold every month. Currently, 25 homes are listed for sale on Zillow, ranging in asking price from $2.8 million to $22.8 million. Some of them have been on the market for well over a year (including 945 days). With few sales every month, the median price can be a very jumpy.
For example, Forbes, when it called Atherton the most expensive zip code in 2015, figured that the median home price was $10.6 million.
In its new report on the 10-year changes in property prices and household incomes in Silicon Valley, PropertyShark placed the peak of Atherton’s Housing Bubble 1 in 2008. Prices ‘took a tumble in 2009 and 2010, only to rebound and grow even faster over the following years,’ it said. After perhaps a few low-brow homes sold, the median price was at $5.1 million (as of August 31), up 45% from the prior peak.

This post was published at Wolf Street on Nov 8, 2017.

This Has Never Happened Before To The Nasdaq

No 52-week high in the Nasdaq 100 has ever been accompanied by as few advancing stocks as today’s. As most readers know, we are big proponents of strong breadth, or participation, in signifying healthy markets. When rallies are accompanied by a large swathe of advancing stocks, it is more likely to go further and last longer than those coming on the back of just a relatively few stocks. As such, it was encouraging to see the significant level of participation during the August-October stock market rally. Recent efforts, however, have not been so robust. Today’s action on the Nasdaq exchange is Exhibit A. On the one hand, the Nasdaq 100 (NDX) managed to rally – again – closing at a new all-time high – again. Despite the new high, however, the breadth on the Nasdaq read as follows (according to our vendor):

This post was published at Zero Hedge on Nov 8, 2017.

“Fully Self-Driving Cars Are Here” – Waymo To Begin Testing Driver-Free Autonomous Taxis In Phoenix

From here on out, if you see a car without a driver meandering around suburban Phoenix, don’t be alarmed: It’s just Google’s Waymo division testing its new driverless taxis – the first of their kind to be tested on US roads without the supervision of a ‘safety driver.”
Wayno has revealed that – effective immediately – it will begin testing the driverless taxis – referred to in technologist parlance as a ‘level 5’ driverless vehicle – in Chandler, Arizona. Thew news represents an important milestone that establishes Waymo as the leader in automated driving technology. Waymo CEO John Krafcik made the announcement Tuesday during in a speech at a web summit in Lisbon, Portugal.
‘We want the experience of traveling with Waymo to be routine, so you want to use our driver for your everyday needs,’ John Krafcik, Waymo’s chief executive officer, said at the Web Summit conference in Portugal. ‘Fully self-driving cars are here.”
According to Ars Technica, for the last year, Waymo has offered free taxi rides to ordinary people who live near the Phoenix suburb of Chandler. Until recently, the company’s modified Chrysler Pacifica minivans had a Waymo employee in the driver’s seat ready to take control if the car malfunctioned.

This post was published at Zero Hedge on Nov 8, 2017.

Stocks and Precious Metals Charts – The Court of the Dragon

“The whore and gambler, by the state
Licensed, build that nation’s fate.
The harlot’s cry from street to street
Shall weave old England’s winding-sheet.
The winner’s shout, the loser’s curse,
Dance before dead England’s hearse.
Every night and every morn
Some to misery are born,
Every morn and every night
Some are born to sweet delight.
Some are born to sweet delight,
Some are born to endless night.
We are led to believe a lie
When we see not through the eye,
Which was born in a night to perish in a night,
When the soul slept in beams of light.
God appears, and God is light,
To those poor souls who dwell in night;
But does a human form display
To those who dwell in realms of day.”
William Blake, Auguries of Innocence
What is driving US equity prices now is classic bubble action. Stocks are being bought, not with regard to any fundamentals for the most part, but for the sheer momentum of ever rising prices by speculators.
Having created this asset bubble, again, in conjunction with the financiers and Wall Street, the Fed is deathly afraid of anything that will break the mirage and put the banking system at risk.

This post was published at Jesses Crossroads Cafe on 08 NOVEMBER 2017.

Another Delay: Senate Won’t Release Tax Bill On Thursday As Mnuchin Admits Corp Tax Cut Delay Likely

Yesterday, the dollar slumped and yields dropped after a WaPo report claimed that the corporate tax cut could – the core piece of GOP tax reform – would be delayed by up to a year, a clear indication that there may be irreconcilable differences in the Senate regarding tax reform. Then, moments ago, Axios confirmed as much, reporting that the Senate “won’t release its version of the GOP tax bill tomorrow”, citing a senior GOP aide. On Tuesday Mitch McConnell said that the bill would come out on Thursday. That said, the aide reportedly said “this wasn’t a delay, because the release of the Senate bill was always going to start after the House Ways and Means Committee finished marking up its bill.”
As Axios explains, the delaying introduction of the bill is problematic “because it not only gives off the impression that things aren’t going well (whether it’s true or not), but also removes one more day that could have been spent getting the caucus on board with the bill.”
Meanwhile, speaking on Bloomberg, Treasury Secretary Mnuchin said that the White House’s preference would be to start the corporate tax rate cut next year, which again implies a material probability of delay.
‘Our strong preference is that the corporate tax rate starts next year. The longer we wait, the worse it is for the economy,’ Mnuchin said in interview on Bloomberg TV.

This post was published at Zero Hedge on Nov 8, 2017.


GOLD: $1283.75 UP $8.35
Silver: $17.11 UP 16 cents
Closing access prices:
Gold $1281.50
silver: $17.03
PREMIUM FIRST FIX: $8.30(premiums getting smaller)
Premium of Shanghai 2nd fix/NY:$6.00 PREMIUMS GETTING smaller)
LONDON FIRST GOLD FIX: 5:30 am est $1282.25
For comex gold:
For silver:
5,000 OZ/
Total number of notices filed so far this month: 864 for 4,320,000 oz
Bitcoin: BID $7481 OFFER /$7505 UP $365.00 (MORNING)
BITCOIN CLOSING; BID $7319 OFFER: 7344 // UP $204.00

This post was published at Harvey Organ Blog on November 8, 2017.

Michael Lewis Reveals His New “Big Short”

When the award-winning author of ‘The Big Short,’ ‘The Blind Side’ and ‘Moneyball,’ stopped by Yahoo Finance yesterday to discuss his latest book, ‘The Undoing Project,’ he was predictably asked for his next “Big Short” idea. And, after downplaying the value of his opinion, and those of everyone else for that matter, Lewis offered up a rather surprising answer: “The NFL.”
On our afternoon live show The Final Round, we asked Lewis what part of the market might become the next ‘big short.’ He was hesitant to answer, saying, ‘You’re asking the wrong person. Everybody will be a little stupider, if I answer that question. Can I answer this way: When people roll in with some big prediction, and they actually seem really certain about it, be very suspicious of them… When people come at you and say, ‘Oh, this is the short,’ it’s an interesting exercise, but the more serious they are about their prediction, the less seriously you should take them.’ But after the live show, Lewis thought of the NFL: ‘The NFL has real business problems. The CTE issues… I’ll give you the next short: the NFL.’

This post was published at Zero Hedge on Nov 8, 2017.

Gold And Silver: Something Different Is Occurring

JP Morgan, at least according to the daily Comex warehouse report, added over half a million ozs of silver to its ‘historic’ stash of silver at the Comex: TF Metals Report. It would be even more interesting to see an actual independent accounting of that specific metal which would track the serial numbers on the bars to the legal owner of title.
I’ve been hedged in my mining stock portfolio since early September. The signal for me to hedge is the reliable Comex bank ‘net short’ position as reported in the weekly Commitment of Traders report. Since late summer, the bank net short position, and the corresponding hedge fund ‘managed money’ net long position, has been at an extreme level.
Historically this is the signal that the Comex banks will implement what I call a ‘COT open interest liquidation’ take-down of the gold/silver price using Comex paper to trigger hedge fund stop-loss positions. This enables the Comex banks to cover their shorts and print huge profits. It’s also illegal trading activity but that’s for another day.
In early September, in ‘eyeballing’ the gold chart in conjunction with the historical COT data I have set up in a spreadsheet back to 2004 , I figured that the open interest – which was in the high 500,000’s at the time – needed to come down at least 100-150k contracts. I thought it would take a price take-down from $1320 to $1230/$1240.

This post was published at Investment Research Dynamics on November 8, 2017.

Short-Volatility Funds Are Being Flooded With Cash (VIX Evaporating)

The SPX volatility index VIX is near an all-time low as The Federal Reserve attempts to raise their target rate and unwind their $4.46 trillion balance sheet. The question remains as to how further rate increases and balance sheet unwinding will impact equity volatility.
(Bloomberg) Exchange-trade products betting that volatility will sink lower have never been more popular.
Even as the CBOE Volatility Index plunges to its lowest on record and U. S. stocks march to fresh highs, investors have continued to give the short-volatility trade their vote of confidence this year. With $2.4 billion in assets, short volatility exchange-traded funds are backed by the most cash on record, according to data compiled by Bloomberg.

This post was published at Wall Street Examiner on November 7, 2017.

One Year Later: These Are The Best And Worst Performing Assets Under President Trump

“A Happy Trumpiversary to all our readers this morning”
– Deutsche Bank
Today marks exactly 12 months since the US election on November 8th 2016, and as Deutsche Bank writes in “A Happy 12 Month Trumpiversary For Markets?” a lot has happened in the last year, although most surprising may be that for all calls of market collapse should Trump get elected, the S&P 500 has actually soared over 20% in the past 365 days according to Goldman which recently calculated that the Trump rally so far ranks as the fourth-best 12-month gain following a presidential election since 1936, trailing only Bill Clinton (1996, 32%), John F. Kennedy (1960, 29%), and George H. W. Bush (1988, 23%).
As Deutsche Bank then picks up, “needless to say that the victory was unprecedented and also a massive shock around the world. Following Trump’s victory, it was widely expected that we’d see a much higher chance of fiscal spending but also a reinforcement of the backlash against globalisation and associated forces of which migration policy and trade were probably first and foremost. In reality what we have seen in the last twelve months is plenty of evidence of backlash against globalisation, hostility and controversy, but very little in the way of fiscal policy.”
Here is the rest of Jim Reid’s observations on how the market has progressed so far under president Trump.

This post was published at Zero Hedge on Nov 8, 2017.

Global Labor and Capacity

Many forecasters, in and out of government, see severe limits to US economic growth in coming years and an inflation threat even sooner. A tight labor market, they claim, is the key reason.
Fed’s Forecast
The Fed is thoroughly convinced that the headline unemployment rate, now 4.2%, is so low that it will soon spawn significant wage inflation that, if left unchecked, will spread throughout the economy. The central bankers fervently believe in the theoretical Phillips Curve that holds that the lower the unemployment rate, the higher the inflation rate. They seem oblivious to the reality that both the unemployment rate and inflation have been falling in recent years.
Nevertheless, the Fed and others see the rising number of job openings while the hiring rate remains flat as clear evidence of a tight job market. In contrast, we continue to believe that employers remain cautious over new hires as they fret about not being able to pass on their additional costs in higher prices.

This post was published at FinancialSense on 11/08/2017.

Repealing Obamacare’s Individual Mandate Would Save $338 Billion

With Republicans scrambling to find every possible dollar to pay for Trump’s “massive” tax reform package, on Wednesday morning a new analysis by the CBO calculated that repealing ObamaCare’s individual mandate – an idea that had been floated previously by Trump – would save $338 billion over 10 years. CBO previously estimated repeal would save $416b over 10 years due to reduced use of Obamacare subsidies, demonstrating once again how “fluid” government forecasts are.

The report was released as the Senate prepares to unveil its own version of the Tax reform bill amid growing GOP dissent, and comes as some Republicans are pushing for repealing the mandate within tax reform, as a way to help pay for tax cuts. Still, as The Hill reports, that idea has met resistance from some Republican leaders who do not want to mix up health care and taxes. Previously the CBO had come under fire on Tuesday from Sen. Mike Lee (R-Utah), who slammed the agency after Sen. Bill Cassidy (R-La.) told The Hill that he had been informed that the CBO was changing its analysis of the mandate to find significantly less savings.
Just as notable was the CBO’s announcement that it was changing the way it analyzes the mandate, which Republicans suspect would show less government savings and fewer people becoming uninsured as a results.

This post was published at Zero Hedge on Nov 8, 2017.

Trump’s Revenge: DOJ Demands CNN Sale To Approve AT&T Deal; CEO Denies Offering Sale

NEW: The Justice Dept claims that AT&T privately offered to sell CNN. AT&T CEO Randall Stephenson DENIES that: "Throughout this process, I have never offered to sell CNN and have no intention of doing so."
— Brian Stelter (@brianstelter) November 8, 2017

Update 2: The plot thickens. According to CNN’s Brian Stelter, while the DOJ claims AT&T privately offered to sell CNN, AT&T CEO Randall Stephenson has denied that claim: “Throughout this process, I have never offered to sell CNN and have no intention of doing so.”
The denial comes after reports by Bloomberg and others that AT&T offered to sell CNN, a proposal the government rejected, while another person said the Justice Department brought up the idea of divesting either DirecTV, the satellite provider, or Turner Broadcasting, which includes CNN, TNT and TBS.
As Bloomberg notes, the conflicting views highlight just how far apart the two sides are in getting a deal done and the risk that talks could hit an impasse. Without an agreement, the Justice Department would sue to block the merger, as soon as next week, one Bloomberg source said. The agency is concerned that AT&T’s ownership of Time Warner content could raise the costs of its pay-TV rivals, according to one of the people.
Bloomberg aldo adds that it’s not clear if AT&T would be willing to part with anything it’s acquiring from Time Warner. The company has said it considers CNN, the news network that has been a lightning rod for President Donald Trump, a prize asset, and the company also considers properties such as the Warner Bros. studio, HBO, TNT and TBS essential, people familiar with the matter said.

This post was published at Zero Hedge on Nov 8, 2017.

How Snap Just Gave a Middle Finger to its Voteless Shareholders

They don’t need to know, Snap says. Tencent rues the day it bought a 12% stake.
Tuesday evening, Snap Inc., parent of Snapchat, reported a very ugly quarter, and its shares tanked in late trading. This morning, perhaps to stem the slide, it disclosed in a separate SEC filing that Chinese internet giant Tencent Holdings had acquired 145.78 million shares of SNAP, the crappy non-voting Class A common stock. This briefly boosted shares in early trading, until people started reading the fine print: The purchases were made in the past, and Snap didn’t notify its Class A shareholders because they were voteless and didn’t need to be notified.
Shares are currently down 16%. Tencent joins those who’re ruing the day they bought these misbegotten shares.
In its filings, Snap regularly lists Tencent as one of its competitors, along with Facebook, Apple, Google, Twitter, and others. Tencent is also a pre-IPO investor in Snap, dating to a 2013 fundraising round.
Today’s disclosure said: ‘In November 2017, Tencent Holdings Limited notified us that it, together with its affiliates, acquired 145,778,246 shares of our non-voting Class A common stock via open market purchases.’

This post was published at Wolf Street on Nov 8, 2017.

Gartman: “We’ll Not Hesitate Even For A Moment To Return To The Short Side”

Gartman does it again.
Yesterday we reproted that with futures spiking, and the S&P set to open just shy of 2,600, Gartman panicked, and closed out his shorts, instead predicting a “violent, parabolic” move higher.:
We have been wrong… badly… in taking even a modestly bearish view of the global equity market and effecting that bearish view via a position in out-of-the-money puts on the US equity market bought a week and one half ago.

This post was published at Zero Hedge on Nov 8, 2017.

The Economics Definition of Sanity: Keep Doing The Same Thing Over and Over Because It Has To Work One of These Times

We live in an age of statistics. They are everywhere, including a whole lot of junk numbers (endless studies) that don’t pass minimum scrutiny. Somehow, statistics have become the gold standard for at least the mainstream media in framing our view of everything from new discoveries to further exploration into how things work.
That’s fine for a discipline like quantum physics where the utterly complex probability models have been repeatedly tested and validated. It’s a far different proposition in the softer sciences where the rules of science aren’t as easily determined.
In 1972, Karl Popper in further defining the scientific process in this modernizing age said that,
Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.
It’s a warning that I try to take to heart, seeing as I do eurodollars lurking ominously behind every global problem. But Popper also said at the same time, ‘no rational argument will have a rational effect on a man who does not want to adopt a rational attitude.’ In other words, as long as I stick to a broad enough survey of evidence then proceeding as I do on the monetary explanation for at least economic deficiencies is a legitimate, rational inquiry.

This post was published at Wall Street Examiner on November 7, 2017.

US Consumer Debt Continues to Balloon

Last summer, US Global Investors CEO Frank Holmes called debt ‘the mother of all bubbles.’ That bubble continues to blow up.
US consumer debt increased even more than expected in September. According to data released by the Federal Reserve, total credit rose by $20.8 billion, an annualized rate of 6.6%. Analysts had expected an increase in the neighborhood of $18 billion. It was the largest increase in overall consumer indebtedness since last year’s holiday season.
Credit card spending helped drive overall consumer debt higher. Revolving credit rose by $6.3 billion in September, on the heels of a $5.6 billion increase in August. Total credit card debt in the US has now surged past the $1 trillion mark.
Non-revolving debt, the category that includes auto and student loans, also pushed higher. According to a Bloomberg report, a jump in motor vehicle purchases as consumers replaced vehicles damaged by Hurricanes Irma and Harvey drove up debt in the category. Loans for motor vehicles rose by $19.3 billion in the third quarter of this year.

This post was published at Schiffgold on NOVEMBER 8, 2017.

Lending Club Crashes Near Record Lows After Slashing Guidance

Despite record high stocks, record high consumer confidence, and ‘full’ employment, LendingClub is struggling to originate high-enough quality loans – crashing almost 20% after slashing its Q4 outlook.
CEO Scott Sanborn on LendingClub’s conference call pointed to a new credit model that represents “a tightening with an overall shift to higher-quality grades and higher quality approvals within grades,” and said Equifax’s significant data breach “has put consumers on edge.”
The stock is now back near record lows…

Analysts are watching what the company will say at its Dec. 7 investor day; some cut their price targets…
MORGAN STANLEY (James Faucette)
3Q shows “credit box setback,” with origination growth hurt as LC tightens credit, re-calibrates marketing with launch of 5th gen credit model Targets expected at investor meeting will “weigh heavily”

This post was published at Zero Hedge on Nov 8, 2017.