Everything Bubble

Cracks Forming In Housing Bubble II (But This Time It’s Different)

by Wolf Richter •  • Comments Off on Cracks Forming In Housing Bubble II (But This Time It’s Different)

Number one is Palo Alto, epicenter of Silicon Valley craziness, where home prices are now 40% higher than they were at their prior bubble peak. What are we calling this phenomenon? Bubble? Nope. “Housing recovery.” But the middle class has hit a wall.

What Happens Next, Now That The 10-year Treasury Yield Hit The Psycho-Sound Barrier Of 3%

by Wolf Richter •  • Comments Off on What Happens Next, Now That The 10-year Treasury Yield Hit The Psycho-Sound Barrier Of 3%

Treasuries have been skidding, and the 10-year yield hit the psycho-sound barrier of 3%. What happened last time this phenomenon occurred? Well, yields bounced off and fell – because the mayhem they’d triggered gave the Fed conniptions and caused it to back off.

When Soaring Margin Debt, Sign of Investor Confidence, Turns Into A Nightmare On Steroids

by Wolf Richter •  • Comments Off on When Soaring Margin Debt, Sign of Investor Confidence, Turns Into A Nightmare On Steroids

There have been three mega-crashes in my investing lifetime, and three concurrent peaks in margin debt. In April, margin debt broke the record set in 2007 and has continued to rise. Over the last three months, it has soared 10.9%. Are we there yet?

Financial Engineering Wildest Since The 2007 Bubble

by Wolf Richter •  • Comments Off on Financial Engineering Wildest Since The 2007 Bubble

Financial engineering had a glorious year. Now finally, after five years, the crazy fun is back, and the good thing is: this time, it’s different. This time, the smart money is selling!

Junk-Debt Time Bomb: Ticking Till The Fed’s Money Dries Up

by Wolf Richter •  • Comments Off on Junk-Debt Time Bomb: Ticking Till The Fed’s Money Dries Up

Discount retailer Loehmann’s did what other retailers – and a large number of other junk-rated companies – will do once the Fed allows a sense of reality into the markets: it filed for bankruptcy. Investors had refused to fund further losses.

Fear and Trembling In Muni Land

by Wolf Richter •  • Comments Off on Fear and Trembling In Muni Land

Municipal bond investors, a conservative bunch eager to avoid rollercoasters and cliffhangers, are getting frazzled. Bankruptcies and the Fed’s taper cacophony are a toxic mix. So they’re bailing out of muni bond funds at record rate. Losses are mounting. And so are the fears.

How Crazy Is The Auto Financing Frenzy?

by Wolf Richter •  • Comments Off on How Crazy Is The Auto Financing Frenzy?

A “positive spiral effect?” Lenders are closing their eyes, sales are soaring, risks are piling up, auto loan balances jumped 15% in 12 months to an all-time high, and repossessions in the subprime segment more than doubled.

Growing Expectations Of TBTF Bank Creditor Bailouts Tighten Their Tentacles Around Taxpayers

by Wolf Richter •  • Comments Off on Growing Expectations Of TBTF Bank Creditor Bailouts Tighten Their Tentacles Around Taxpayers

One of the few rebellious Fed heads, Richmond Fed President Jeffrey Lacker, fired a salvo when testifying before the House Judiciary Committee. He hit Wall Street risks covered by implicit government guarantees in the size of America’s GDP.

The Stock Bubble In Context (Will The Last Bear Please Turn Out The Lights?)

by Wolf Richter •  • Comments Off on The Stock Bubble In Context (Will The Last Bear Please Turn Out The Lights?)

Stock market bubbles – they allow investors to make the mostest the fastest – don’t happen in a vacuum. They happen in a context. But this time, the context is different. Very different.