Registered Investment Adviser Caleb Lawrence
The major averages shrugged off their early losses to enter the final hour about even on little news though it appears that auto sales are going to miss significantly again after preliminary data shows the big three domestic companies struggling in the face of high incentives, and bloated inventories.
CoreLogic reports that home prices advanced 7.1% in March from a year ago after a 1.6% gain for the month. With the index now just 2.8% below its 2006 peak at the current rate of increase a new record high is expected in the 2nd half.
With debt based Ponzi finance and economic growth in full swing it seems that Canada may be about to have its Lehman Brothers moment after mortgage lender Home Capital hits the skids hard following disclosures of fraudulent mortgages, regulatory investigations, and a run on high yield deposits that saw 75% or 1.5 billion Canadian fly out the door. The stock price has of course plunged as well, losing about 95% of its value since 2014 when these issues began to emerge.
A new statement on the ridiculous levels of Chinese debt or leverage and its alarming growth rate hits the tape following another Chinese Central Bank official warning. While I certainly would not argue the subject, if I had a Dollar for every one of these I would be a rich man.
On a similar vein UBS, BNP Paribus and the Royal Bank of Scotland got subpoenaed by the Justice Department over potential manipulation of the US Treasury market. At this juncture, I can think of precious few markets the various big banks haven’t manipulated and again if I had a Dollar for every story like this I’d have more money than God himself. Also of note the FDIC bailed out First NBC Bank founded in 2006, out of New Orleans to the tune of a billion Dollars, the first 10 figure bank bailout since 2010.