Links 5 August 2019

Global Macro / Markets / Investing:





Unconventional Economist
Latest posts by Unconventional Economist (see all)



    This is funny..

    The banks are fretting about losing some of the $8 billion in revenue they make from payments, and are more concerned about losing control of customer relationships, given payments services provides the fulcrum to offer other financial services.

    Won’t someone think of the banks!

    For several years, regulators have been preoccupied with bitcoin, which was never going to become mainstream given it was created to protect criminals and circumvent regulation.

    Yes yes because the likes of HSBC really do their best to prevent fraudsters from using their systems..

    But regulators want to ensure consumers that turn to these new entrants are protected, and that they don’t create excessive risks to the financial system.

    Because regulators are clearly doing an excellent job and protecting us from the risks in the Australian banking system and preventing tax payers from ending up on the hook.

    And if you trust Facebook and Libre you’re an idiot too.


    … What does leading American builder D R Horton know that State / Local governments and other builders have yet to learn ? …

    How D.R. Horton, late in the cycle, lifted home closings 13%: ‘It’s all about price’ | Commentary | Mitchell Schnurman | Dallas News

    … extracts …

    … But take some comfort in the latest results from D.R. Horton, the nation’s largest homebuilder. On Wednesday, the Arlington company reported that home closings soared 13% in the latest quarter, extending a streak of double-digit gains that started in 2012.

    Horton is on pace to close almost 57,000 homes this fiscal year, finally topping its previous peak in 2006, just before the housing crash.

    Its stock price has roared back, too. Horton’s market value tops $17 billion, up from $2.9 billion eight years ago. And last week, the company’s board authorized $1 billion in stock buybacks. …

    One key to its run: Horton has ramped up construction of lower-priced homes, appealing to first-time buyers and empty-nesters looking for more affordable options. …

    … “The demand is there, if you can position and drive a price that they can buy,” Auld said.

    Horton has a deep supply of land — 300,000 lots either owned or controlled. And it operates in 87 markets in 29 states. … read more via hyperlink above …


    … Earlier MacroBusiness Australia ‘United States’ post …

    • Horton’s edge on price … (read more above) …

      Average selling price for select builders’ homes in second quarter of 2019, in thousands:

      D.R. Horton
      KB Home
      NVR Inc.
      M.D.C. Holdings
      Toll Brothers

  3. The WSJ article could equally be titled “Families make bloody stupid decisions to go deep into debt”.

  4. For the befuddled ….

    Since the late 1970s, we’ve had a grand experiment to test the claim that free markets really do work best. This resurrection occurred despite the practical failure of laissez-faire in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of managed capitalism during the three-decade postwar boom.

    Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat. This revival proved extremely convenient for the conservatives who came to power in the 1980s. The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every aspect of managed capitalism—from progressive taxation, welfare transfers, and antitrust, to the empowerment of workers and the regulation of banks and other major industries.

    Neoliberalism’s premise is that free markets can regulate themselves; that government is inherently incompetent, captive to special interests, and an intrusion on the efficiency of the market; that in distributive terms, market outcomes are basically deserved; and that redistribution creates perverse incentives by punishing the economy’s winners and rewarding its losers. So government should get out of the market’s way.

    By the 1990s, even moderate liberals had been converted to the belief that social objectives can be achieved by harnessing the power of markets. Intermittent periods of governance by Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine. The corporate wing of the Democratic Party approved.

    Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut, and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth is slower and more chaotic than during the era of managed capitalism. Deregulation has produced not salutary competition, but market concentration. Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration. – snip

    • Great to see everyone banging on about RE prices or cricket something the other when a post like this splains’ deeper fundamentals, paired with Hudson’s latest, one might think its more than just a bad case of self inflicted ignorance ….

      Lol why would people chose ignorance, then think others, should consider their thoughts have any weight …

      The corruption dynamic is pretty easy to understand IMO, especially the multi disciplinary quality directed at various public and private institutions.

  5. How good is S’traya, people? “Cashed up” buyers are baaaaack!

    Sharon Xie, credit manager of estimates a couple with a combined income of $200,000 (no dependents and standard living expenses) can borrow an additional $115,790 under the new assessment rate, increasing their borrowing power from $1,368,425 to $1,484,215.
    It may be early days, but there are signs that the upper end of the market is already responding to this stimulus.

    Oh… but maybe they are not… ‘early days’…