Most Americans can’t qualify for a mortgage today with prices and interest rates at generation-highs. Yet housing starts average a post-2007 record of 1.5m/month. Logic therefore suggests the US housing market could be heading for a repeat of the 2008 crisis
Chemicals and the Economy
Debt, deflation, demographics and Brexit set to challenge London house prices
London property websites haven’t used the word “reduced” for many years. But it’s starting to appear again on homes for sale and rent, even in core city postcodes. And in another sign of the downturn, homes can now be on offer for months without moving. The problem is that prices were already ready to tumble […]
Stock markets risk Wile E. Coyote fall despite Powell’s rush to support the S&P 500
How can companies and investors avoid losing money as the global economy goes into a China-led recession? That’s the key question as we enter 2019. We have reached a fork in the road: Since 2008, Western central bankers have focused on supporting stock markets But the bursting of China’s shadow banking bubble means this cannot continue for […]
“Everyone wants to be rich”: Divorces soar with land prices as China’s housing bubble enters its final stages
One thing that “everyone knows” in China’s Tier 1 cities is that property prices can never go down. As one resident told the South China Morning Post: “The only thing I know is that buying property will not turn out to be a loss. From several thousand yuan a square metre to more than 100,000 […]
25% of US sub-prime loans “seriously delinquent”
Speaking today, Federal Reserve Governor Elizabeth Duke produced some doleful figures about the current state of the US housing market. She noted that 25% of sub-prime loans, and 13% of near-prime loans, are now “seriously delinquent” – either 90 days overdue, or in foreclosure. The serious delinquency rate for prime mortgages is now over 3%, […]
The blog’s first birthday
Its now a year since the blog started. Since then, 213 postings have appeared. It is now read in 72 countries and 620 cities (shown above). Most encouragingly, readership continues to steadily increase. Since January, it has risen a further 301%. The blog’s aim is to identify ‘the influences that may shape the chemical industry […]
US housing slows again
Financial markets have been buoyant in recent weeks, as I noted recently. But this is at odds with actual newsflow. The chart above, from Kevin Swift’s excellent weekly report for the American Chemistry Council, highlights once again the dire state of US housing. March should be a buoyant month for house sales. Yet existing home […]
UK ‘at risk of US-style housing slump’
UK readers, and others invested in the outlook for the UK housing market, may be particularly interested in the FT this weekend. It devotes 2 prime pages to a detailed analysis by Fitch, the ratings agency, of sub-prime and buy-to-let lending. As we know from the US, these are the most risky types of lending, […]
US banks tighten as the Fed eases
The US Fed has dramatically cut interest rates by 1.25% recently. But as it eases, so US banks seem to be tightening their lending criteria for mortgages. Present standards are the tightest recorded Since 1990, the Fed has asked banks about their lending standards. The chart above (by Merrill Lynch) shows the results. From 1992-2006, […]
The end of the prologue
The report in today’s ‘Financial Times’ that Barclays Bank has lost ‘several hundred million dollars’, means that the UK has now joined every other global financial centre in suffering from the US subprime mortgage crisis. The news followed Friday’s 5% drop in the value of Bank of China’s shares, after it revealed it held $9.7bn […]