Juggling Dynamite

Independent measurements and insights (i.e., not coming from investment sales firms) are very rare and valuable. You have to know where to look and also want to see. ECRI’s Lakshman Achuthan updates on the business and market cycle in the segment below, starting at 3:50 on the play bar.

MacroVoices welcome ECRI @businesscycle co-founder Lakshman Achuthan to the show to discuss the business cycle and why the expected recession is taking longer than expected to arrive, and much more. Here is a direct audio link.

After past housing bubble peaks in Canada and elsewhere, home prices contracted 25%+ nationally and stayed relatively flat in the following decade or so. That allowed incomes to advance on shelter costs and restore affordability over time. A similar pattern is the base case this time, as well. Much needed.

Tony Stillo, director of economics for Canada at Oxford Economics, joins BNN Bloomberg to discuss housing affordability in Canada. After the country hit a record worst level of unaffordability in Q2 of 2023, he believes that house prices will fall another 10 percent by early next year but says home ownership will likely not return to an affordable range until 2027. Here is a direct video link.

Also, see more on the spreading strain in commercial real estate and related debt in Big US Banks trying to dump commercial real estate loans–but buyers scarce as pressures mount for property markets.

US household debt has surpassed a fresh record of $17.1 trillion. $12 trillion is in mortgages (more than twice the 2006 bubble top), $1.6 trillion in auto loans, and over $1 trillion in credit card debt, all with the highest interest rates in 22 years and rising unemployment. Courtesy of Bloomberg, the chart below shows the trend in auto (black line) and credit card balances (yellow) since 2003. The discussion below lays out the economic implications well.

Ted Oakley interviews Danielle DiMartino Booth discussing current Fed policy, employment implications, and debt implications. Here is a direct video link.

Not just in America, China’s debt crisis is also compounding, see China’s largest surviving developer, sinks into crisis. Meanwhile, the year-to-date freefall in China’s export prices is shown below as softening consumer demand and inflated inventories force prices lower for the world’s second largest economy #disinflation. See China slides into deflation as consumer, factory prices drop. Also, China slips into deflation in warning sign for world economy.