The major averages enter the final hour with modest gains on little real news. Bitcoin continues to drift lower absent hype to push it higher along with crypto currencies in general.
On the subject of hype, the trend is your friend until it isn’t. When something is based primarily on hype and propped up with debt, the end has a very nasty habit of appearing out of nowhere, very suddenly and without warning. Tesla being a case in point as after 15-years of business the company has never made money save one year it sold tax credits and turned a small profit but has incurred a mountain of debt. Recent events have left a number of Tesla’s suppliers thinking, and rightfully so, that they will not get paid following recent requests to restructure payment terms and provide refunds to an increasingly cash strapped Tesla that is clearly struggling to produce the model 3 efficiently, as the clock ticks and time grows short.
Foreclosures rose for the 1st time in 36 months during July with a 1% gain per ATTOM Data Solutions. The report noted that foreclosures rose on a year ago basis in 96 of 218 metropolitan areas. 33 metro areas saw a 3rd consecutive monthly increase in foreclosure activity on a year ago basis. States registering meaningful increases include Florida, +35%, ground zero back in 2008, Texas and Illinois both up 7% and California up 3%. During the Great Financial Crisis real estate problems rapidly spread from south Florida to Las Vegas and then California on the way to becoming a national crisis. Inventory for sale has also risen of late another troubling sign. That said the numbers are coming off very low levels, so the absolute figures are still quite modest. Real estate being a “sticky” asset. Price trends tend to be durable and resist change easily. The next few months will tell the tale and should be watched closely.
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