Thursday , August 22 2019
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The author Wolf Richter
Wolf Richter
Founder, Wolf Street Corp. In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China.

Wolf Street

Repo Market Problems & Ballooning Inventories of Treasuries at Primary Dealers Make it into the Fed’s Minutes. My Fancy-Schmancy “Fed Hawk-o-Meter” Jumps

Fed Warns about “Elevated” Asset Prices and High Business Leverage. My fancy-schmancy Fed Hawk-o-Meter, which analyzes the minutes of the Fed’s meetings for tell-tale signs of how the Fed sees the economy, jumped 5 points for the meeting on July 30-31, indicating that a further rate cut – even a cut of just a quarter percentage point – was not set in stone during the meeting: The Fed Hawk-o-Meter counts how often “strong,” “strongly,” and “stronger” appear in the minutes to describe...

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How Negative Interest Rates Screw Up the Economy

Now they’re clamoring for this NIRP absurdity in the US. How will this end? This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT: Now there is talk everywhere that the United States too will descend into negative interest rates. And there are people on Wall Street and in the media that are hyping this absurd condition where government bonds and perhaps even corporate bonds, and eventually even junk bonds have negative yields. All of that NIRP absurdity is already...

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Canada’s Most Splendid Housing Bubbles, July Update

Vancouver sags. Calgary, Edmonton down from many years ago. Toronto rises but below 2017 peak. Montreal, Ottawa at new highs. July is seasonally a strong month in the Canadian housing market, as tracked by the Teranet–National Bank National House Price Index. Over the past 21 years, the composite index for the metros has risen on average 1% from June to July due to seasonal pressures. This year it only rose 0.7%. On a seasonally adjusted basis, the composite index declined in July by...

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How the Ecommerce Boom Crushes “Mall Retailers” One by One

The segments at the core of the Brick-and-Mortar Meltdown. Ecommerce sales in the second quarter 2019 soared 13.3% from a year ago to a new record of $146 billion (seasonally adjusted), the Commerce Department reported today. In 2018, ecommerce sales reached $522 billion, according to revised data released today; at this rate of growth, ecommerce sales will get close to $600 billion this year. Ecommerce sales have doubled in five years. Ecommerce includes sales by the online operations...

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HSBC Runs into Buzzsaw in Hong Kong & China, its Home Market Generating 75% of its Profits

HSBC’s pleas of innocence have won little sympathy in Beijing. By Nick Corbishley, for WOLF STREET: Global banking behemoth HSBC has found itself on the back foot in recent months in its most important market, Hong Kong and China. The unexpected departure of three senior executives within a week, including its CEO and the head of key China business, sparked a broad sell-off of its shares, which are down 13% in just three weeks. The world’s eighth biggest bank by assets, HSBC is also...

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THE WOLF STREET REPORT: How Negative Interest Rates Screw Up the Economy

Now they’re clamoring for the NIRP absurdity in the US. How will this end? (11 minutes) Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate “beer money.” I appreciate it immensely. Click on the beer mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

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US National Debt Spiked $363 billion in Two Weeks, $1 Trillion in 12 months. But Who Bought This Pile of Treasury Securities?

Nope, the Fed dumped. But there was huge demand elsewhere. The US Gross National Debt has jumped by $363 billion in the two weeks since President Trump signed the law that suspended the debt ceiling. This surge pushed the total debt to $22.39 trillion. That’s up by $1.01 trillion from 12 months ago. And these are the good times. Watch this debt balloon during an economic downturn! Whoopee!  Note the technical term at the top right of the chart: The question, “Who the heck is buying...

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Freight Shipments Suffer Steepest Drops since Financial Crisis, Overcapacity Balloons

For Trucking and Railroads, it’s Hangover Time. Freight shipments within the US by all modes of transportation – truck, rail, air, and barge – fell 5.9% in July 2019, compared to July 2018, the eighth month in a row of year-over-year declines, according to the Cass Freight Index for Shipments, which tracks shipments of consumer and industrial goods but not of bulk commodities such as grains. This decline along with the 6.0% drop in May were the steepest year-over-year declines in...

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It Starts: First Truck Maker Cuts Production

Navistar confirms next phase in Transportation Recession. After orders by trucking companies for Class-8 trucks – the heavy trucks that haul trailers across the country – collapsed by 81% in July compared to July last year to the smallest number of orders since 2010, deepening a trend that has gotten worse all year, it would only be a matter of time before truck manufacturers announce production cuts and ultimately layoffs. These heavy-truck makers – Peterbilt and Kenworth, divisions...

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Housing Bubble 2 in San Francisco Bay Area & Silicon Valley Pops Despite Startup Millionaires & Low Mortgage Rates

House prices dropped again – and ironically the most in San Francisco and Silicon Valley. In the San Francisco Bay Area overall, house prices dropped again in July compared to July last year. They dropped in eight of the nine counties on a year-over-year basis: Silicon Valley (Santa Clara and San Mateo), San Francisco, Marin, the Wine Country of Napa and Sonoma, and the East Bay (Alameda and Contra Costa). The only county where house prices ticked up year-over-year was in the least...

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