Tuesday, September 04, 2007

Construction Capitulation / Paper Economy

Paper Economy formerly known as Paper Money has put up one of his (as usual) fantastic post about the current situation of the housing market. Click here to view the entire post including multiple charts.

Paper Economy formerly known as Paper Money hat mal wieder wie üblich ein Granatenpost zum aktuellen Stand des US Immobilienmarktes rausgehauen. Klickt bitte hier um das komplette Post inklsuive mehrerer Charts zu betrachten.

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Anonymous Anonymous said...


Commercial Real Estate in U.S. Poised for 15 Percent Price Drop


11:57 PM  
Blogger jmf said...


the Blackstoen/EOP top...

New York-based Blackstone Group LP, manager of the world's largest buyout fund, purchased Sam Zell's Equity Office Properties Trust for $23 billion in February to gain about 540 office buildings in the U.S. That worked out to a capitalization rate of about 5.3 percent, a record low for an acquisition of a real estate investment trust, according to Green Street Advisors Inc. Including debt, the price was $39 billion.

just a few days or weeks after this deal the index made the top :-)

U.K. house prices rose 0.4% in August

U.K. house prices rose by 0.4% in August, down from a rise of 0.7% in July

The annual rate of house price inflation edged up slightly to 11.4% from 11.2%.

August was the fifth consecutive month in which house prices have grown by less than 1%.

Shocking :-)

12:39 AM  
Anonymous Anonymous said...

August was the fifth consecutive month in which house prices have grown by less than 1%.

Housing has gone up overall in the UK, but nowhere more than London. I read something recently about Las Vegas that made some sense: while LV is also a bubble town, any deflation there may be softer because of all the outside money that flows into LV real estate. Rich people, including many from overseas, seem to buy condos, houses, etc in LV. The same is no doubt true of London, but even more so.

While the pace of house price increases may slow in London, money from outside the UK -- from Russian millionaires to oil Sheiks -- will soften any deflation there. At least for a while...


12:47 AM  
Blogger jmf said...

Moin Eh,

i think that even the foreign money can´t prop up Lonodn forever.

are more infos and this might explain why the pound is weakening :-)

•The three monthly increase in house prices – a good indicator of the underlying trend – has fallen from 4.5% in March to 1.6% in August.

•Mortgage approvals to fund house purchase in the three months to July were 9% lower than during the recent three month peak during September to November 2006. The level of new buyer interest in purchasing a house fell for the eighth successive month in July, marking increasing caution amongst potential buyers.

Negative real earnings growth so far this year - average earnings increased by 3.3% over the year to June 2007 against a 4.4% rise in the Retail Price Index - and rising food prices will also reduce the income households have available for housing.

12:56 AM  
Blogger jmf said...

ABN Amro's Moute Cuts Stock Holdings on `Tip of Iceberg' Fears

Since early 2006 he has slashed his net holdings of shares from 85 percent of assets to 60 percent, the lowest he's allowed.

Almost one-quarter of his $343 million U.S. Opportunities fund now bets against indexes. The only equities he is buying are those of U.S. commodity companies selling in emerging markets, such as oil-service provider Schlumberger Ltd.

Moute's strategy may backfire if markets rise again.

He was foiled by the S&P 500's rally in the second half of 2006, when the index rose 12 percent, ahead of the 5.3 percent gain for the fund. U.S. Opportunities ranked 629 out of 723 funds then, according to Morningstar.

At least we were not alone during the squeeze :-)

3:54 AM  
Blogger jmf said...

ADP shows weakest hiring in four years in private sector

Employment in the U.S. private sector grew by 38,000 in August, the weakest in four years, according to the ADP employment report released Wednesday. The ADP report suggests nonfarm payrolls may have grown much slower than the 123,000 anticipated by economists ahead of the report.

Adding in some 27,000 government jobs typically added but not covered by the ADP report, it suggests nonfarm payrolls grew by about 65,000.

5:28 AM  
Anonymous Anonymous said...


Emerging-market economies are resilient enough to overcome a slowdown in the U.S., he said.

What does he mean by "overcome"? Anyway, I have my doubts about that. Without a strong US import market, the return on any investment/assets in emerging markets will take a big hit. For example, 40% of China's exports go to the US.

Earlier this year, Jim Rogers said mehr oder weniger das Gegenteil.

Also, noch eine Meinung...


8:49 AM  
Blogger jmf said...

Moin Eh,

i´m also not sure if there is a safe haven (besides gold).

I would rather hold cash than invest in EM.

But the chorus that is pointing to EM as a safe haven is getting louder day by day. Especially the bond guys from Pimco are extremely bullish on EM debt.

9:06 AM  
Blogger Lou Minatti said...

While the pace of house price increases may slow in London, money from outside the UK -- from Russian millionaires to oil Sheiks -- will soften any deflation there. At least for a while...

At least until oil crashes. Things will be lean for the sheiks and crooked Russian oil barons once oil breaks $20 on its way to $15.

Don't think it can happen? It wasn't so long ago that oil was less than $10. In 9 years, has the global economy expanded 7x? Is there 7x more demand for oil?

8:56 PM  
Blogger jmf said...

Moin Lou,

i´m not so sure if oil will crash.

I think that compared to paper assets or housing in London it will still outperform by a wide margin...

3:46 AM  
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6:31 PM  

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