UK Realtors ask Bank of England to Put a Brake on Bubbles

Below is an interesting report stating that in the United Kingdom, beneficiaries of the indirect asset transfer via zero bound rates have been appealing to authorities to put a dampener on an alleged housing bubble.

From the Financial Times (hat tip zero hedge) [bold mine]

Estate agents and surveyors have become so concerned about the dangers of another unsustainable housing boom that their trade body is urging the Bank of England to limit national house price growth to 5 per cent a year…

“The Bank of England now has the ability to take the froth out of future housing market booms, without having to resort to interest rate increases,” said Joshua Miller, senior economist at Rics.

“This cap would send a clear and simple statement to the public and the banking sector, managing expectations as to how much future house prices are going to rise. We believe firmly anchored house price expectations would limit excessive risk taking and, as a result, limit an unsustainable rise in debt.”

The Rics intervention comes as data this week have reinforced a sense of recovery in the UK housing market and sparked warnings that a new bubble could be forming.

Average house prices hit another record high last month, according to figures published on Friday by the LSL/Acadametrics House Price Index, rising 3.2 per cent to £233,776 over the year to August.

It is important to point out how rare it is for beneficiaries of current policies admit to the risks of an inflating bubble. And that their call to contain bubbles signify as Posttraumatic stress disorder (PTSD) or stigma from the previous unpleasant experience expressed through the fear of another bubble bust.

As previously pointed out, a parallel universe exists in UK where asset prices continue to surge even as the economy struggles.

Asset booms in UK has led to a quasi-stagflation where statistical inflation rates have been higher than statistical economic growth rates whether annualized or by quarter.

Yet like in China or elsewhere, once the inflation genie has been let out of the proverbial lamp, hardly any regulatory caps have been successful in taming of bubbles. 

Besides bubbles have been convenient tools to generate statistical growth that embellishes the image of political authorities.

And proof of this is that despite BoE governor Mark Carney’s promise to keep interest rates low via “forward guidance” to supposedly bolster growth, which has rightly been met by skepticism by some of the Members of the Parliament (MP), yields of UK government bonds suggests that the halcyon days in the real estate and the stock markets appear to have been numbered—with or without the BoE’s action.

If the current trends of the bond markets persist, then eventually the bond vigilantes will force the hands of (global) central banks to officially hike interest rates which places all malinvestments forged via a regime of zero bound rates under intense pressure. 

By then, UK realtors will have their demands met, but sad to say that they are likely to endure anxiety relapse from another terrifying episode of a bubble bust. 

Bad News is Good News: Best Week for US Stocks Since January

Bad news is good news. Heads I win, tails you lose. Markets rise on good news, markets rise on bad news. Stock markets rise regardless of reality. And stock markets have been preordained to have only one direction: up up and away!

Reason? Bad news have been perceived as opportunities for the provision of more steroids by US FED to the steroid addicted Wall Street 

From Bloomberg

U.S. stocks rose, with the Dow Jones Industrial Average capping its best week since January, as disappointing economic data fueled bets that any Federal Reserve stimulus cuts this month would be moderate….

Investors, who have been scrutinizing economic data to determine whether growth is robust enough for the Fed to slow stimulus following its Sept. 17-18 meeting, will see a reduction next week as no big deal, according to a Bloomberg Global Poll of investors.

Like in the Eurozone, markets rose on disappointing data…

A Commerce Department report today showed retail sales in the U.S. rose 0.2 percent, the smallest increase in four months and below the 0.5 percent advance seen in Bloomberg survey. Wholesale prices in the U.S. rose more than forecast in August, adding 0.3 percent on higher costs for food and some fuels.

A separate report showed inventories at companies increased more than forecast in July, trailing a gain in sales that signals a pickup in factory orders. The Thomson Reuters/University of Michigan preliminary September index of consumer sentiment fell to 76.8 from 82.1 last month, which was the lowest since April.

Whatever the data, there has been no stopping the bulls…

Dow Jones Industrial spiked by 3.04% this week.

S&P 500 zoomed 1.98%

By surging 1.7% Nasdaq reached milestone highs

The Russell 2000 approaches the recently etched record highs up 1.24% for the week.

Dow Transports has also soared by 2.4%

US stocks continues to rise even as oil remains at $108 bbl

…and even as bond vigilantes hound on the global bond markets.

Lately the mainstream have chimed to say that the economies of US, Europe, China and Japan will come to save the day for Emerging Markets and Asian economies.

But evidences increasingly suggest that these claims may be overestimated or exaggerated. They may even have been orchestrated to juice up markets in order to buy off time from any impending risks of a crisis.

What has been real has been that FED steroids will continue to enforce a transfer of wealth from the main street (one recent symptom: sluggish Small Business activities) to Wall Street; thus the growing parallel universe. 

And Wall Street (and their global counterparts) will surreptitiously desire for the sustained laboring or drudging by main street so that the steroids will keep flowing to former. So the politically privileged Schadenfreude Wall Street benefits from a parasitical relationship enabled and facilitated by the US government channeled through the stock markets.

Of course, US stocks may continue to zoom higher. They could even rendition a Venezuela where stocks have been going only in one direction. 

The Caracas Index has been up a stunning 223% year to date (Friday’s close) and 523% from 2012 in nominal local currency terms. 

The difference is that rising stocks in Venezuela has been symptomatic of a more chronic-terminal form of inflationism: hyperinflation via a massive devaluation or a crashing currency, the bolivar.

In a lot milder form of inflation rising US stocks in departure with reality (George Soros’ reflexivity theory: the widening divergence between reality and expectations and the flaw in perceptions) are symptoms of a deepening mania or the Wile E. Coyote Moment.   

And it seems that investing gurus like Warren Buffett, George Soros and John Paulson has been in a liquidation mode too in a race to store up on cash.

We understand how bubbles operate, as Newton's third law of motion remind us "every action has equal and opposite reaction": the higher the rise, the steeper the fall.

Will Time Magazine’s ‘How Will Street Won’ signify as the Magazine Cover Indicator?

This is Time Magazine’s cover for the September 23rd issue. (hat tip EPJ)

Part of the marketing scheme of magazine publications have been to design covers which reflects on the popular or fashionable theme. 

With reference to the marketplace, when a popular investment theme graces the cover, they could be symptoms of sentiment excesses or the “crowded trade” phenomenon that could be indicative of inflection points: And so the magazine cover indicator.

Such indicators may not be foolproof, but current Time magazine covers as 'magazine cover indicators' have, thus far, been "IN the money".

I pointed to the Time Magazine’s depiction of ‘end of the euro’ in November of 2011.

Three months after the Time's November issue, the Euro rallied. (chart from yahoo)

A more interesting account has been the Time's May 2013 issue extolling the supposed heroics of Japan’s PM Shinzo Abe adaption of bold inflationist policies (The title of my post: Here comes Super Abenomics) 

Just a few days after, the Nikkei went into a tailspin and crashed into bear market territory in about three weeks. Yet today the Nikkei continues to flag marked by lower highs and lower lows. (chart from yahoo)

Will the Time’s magazine cover for September 2013 be ominous for US stocks?

European Economic Recovery? July Industrial Output Sinks Far from Consensus Expectations

The resumption of the RISK ON environment has been mainly premised on a supposed recovery by the economies of the US, Europe, China and Japan. The belief is that these countries will do the weightlifting for emerging markets-Asia and relieve the latter from the pressures of the Fed’s “tapering”.

Europe has reportedly been lifted out of recession in the 2nd quarter from improved consumption and production.

chart from economic design

European PMI surveys (Purchasing Managers Index—an indicator of the health of the manufacturing sector through 5 variables; specifically new orders, inventory levels, production, supplier deliveries and the employment environment) supposedly posted significant gains in July and in August.

Well it turns out that expectations and actual performance have once again severely diverged as European industrial output miss by an ocean: the parallel universe.

From Bloomberg: (bold mine)

Euro-area industrial output contracted more than economists forecast in July as manufacturers struggled to shake off the legacy of a record-long recession.

Factory production in the 17-nation euro area fell 1.5 percent from June, when it gained 0.6 percent, the European Union’s statistics office in Luxembourg said today. That’s more than the 0.3 percent contraction forecast by economists, according to the median of 33 estimates in a Bloomberg News survey. (EUITEMUM) In the year, output fell 2.1 percent.

The euro-area economy’s return to growth in the second quarter from its longest-ever recession has been restrained by record unemployment and inflation has remained below the European Central Bank’s 2 percent ceiling for seven months. That may help to explain why economists in a Bloomberg News survey see growth slowing to 0.1 percent in the third quarter after a 0.3 percent expansion in the three months through June.

The industrial-output “data call into question the region’s recovery,” said Chris Williamson, chief economist at Markit Economics in London. “There is clearly a risk that GDP could contract again in the third quarter, as some of this second-quarter growth proves to have been only temporary.”…

Production in Germany, Europe’s largest economy, declined 2.3 percent in July after a 2.2 percent gain in June, today’s report showed. Output in France fell 0.6 percent, while Italian industrial production unexpectedly declined 1.1 percent, signaling that the euro area’s third-biggest economy may still be stuck in its longest recession since World War II.

Some recovery.

Not to worry, European stocks represented by the STOX50 have been rising since the last quarter of 2011 and have presently been drifting at 2 year highs… 

GDP annualized

GDP by quarter

…even as the Eurozone has been mired by a continuum of negative growths (based on annual and quarter growth) for the entire 2012 until the 1st quarter 2013.

Who says stock markets reflect on the state of the economy?

More Bubble Signs: Jay Z raps the Warhol, Korea’s Invisible Tower

When the art markets become mainstream and appear priced to perfection then they could be indications of escalating overconfidence and or a culmination of a mania phase of the bubble cycle

Could rapper Jay Z rapping about Warhol, Basquiat and Art Basel signal an art bubble? Market guru James Grant thinks so.

From the CNBC:

Market guru James Grant quotes Jay Z's "Picasso Baby" in his latest Grant's Interest Rate Observer, arguing that prices in the contemporary art market may not be justified by long-term value. While well-hyped artists like Jeff Koons, Damien Hirst and Jean-Michel Basquiat are fetching eight-digit prices, it's unclear whether their work will withstand the test of time, art critics and museums.

It's hard to tell, for instance, whether one of Koons' famous pieces, "New Hoover"—four vacuum cleaners in an acrylic case —will be valued as a work of genius or "just another vacuum cleaner," Grant said.

"Modern art is valued in terms of modern money," he wrote. The Fed's low-interest-rate policies have driven the wealthy increasingly to collectibles of all kinds, including art, cars and jewels. "Miniature interest rates have reduced the opportunity cost of investing in any kind of nonyielding asset."

And while Koons and Basquiat are hot now, they might end up like the English portraits of the early 19th century, whose frenzied boom was followed by a spectacular bust. Prices never recovered.

The zero bound rates or free money chasing of asset markets has apparently percolated into the art markets. 

But the property sector has been ground zero for asset bubbles (aside from the stock markets).

 

Mushrooming signature skyscrapers almost everywhere (see previous post here here and here) appear as intensifying signs of an inflating bubble. One symptom: the skyscraper curse or monuments of grandeurs

From the Business Insider

The world will soon have its first "invisible" skyscraper.

There's no construction date yet for the planned 1,476-foot tower, called Tower Infinity. But its architects have just been granted a construction permit to begin building outside of Seoul, South Korea near Incheon International Airport.

The visionaries behind the project, GDS Architects, will make the tower appear "invisible" using an LED facade system with optical cameras to display what's directly behind the building. When turned on, the "reflective skin" of the building will give the illusion that Tower Infinity is blending in with the skyline.

The building's projections may also be used for broadcasting special events, or for advertising purposes, according to GDS Architects.

The tower itself has an impressive profile, with a main spire flanked on either side by two separate building wings. Tower Infinity will be used primarily for entertainment and leisure purposes, and is set to include a 4D theater, restaurants, a water park, landscaped gardens, and the third-highest observation deck in the world.

The actions of the bond vigilantes will determine whether these markets are bubbles or not.  My guess is on the affirmative

New York Times Op Ed: Vladmir Putin Pleas for Caution on Syria

Russian president Vladmir Putin takes his PR campaign against a military strike against Syria to the American public via a column at the New York Times.

Some choice quotes.

A military strike increases the risk of escalation and unintended consequences

The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation, potentially spreading the conflict far beyond Syria’s borders. A strike would increase violence and unleash a new wave of terrorism. It could undermine multilateral efforts to resolve the Iranian nuclear problem and the Israeli-Palestinian conflict and further destabilize the Middle East and North Africa. It could throw the entire system of international law and order out of balance.

The inconsistent US foreign policy of providing implicit support to ‘terrorists’

Syria is not witnessing a battle for democracy, but an armed conflict between government and opposition in a multireligious country. There are few champions of democracy in Syria. But there are more than enough Qaeda fighters and extremists of all stripes battling the government. The United States State Department has designated Al Nusra Front and the Islamic State of Iraq and the Levant, fighting with the opposition, as terrorist organizations. This internal conflict, fueled by foreign weapons supplied to the opposition, is one of the bloodiest in the world.

Mercenaries from Arab countries fighting there, and hundreds of militants from Western countries and even Russia, are an issue of our deep concern. Might they not return to our countries with experience acquired in Syria? After all, after fighting in Libya, extremists moved on to Mali. This threatens us all.

The false flag

No one doubts that poison gas was used in Syria. But there is every reason to believe it was used not by the Syrian Army, but by opposition forces, to provoke intervention by their powerful foreign patrons, who would be siding with the fundamentalists. Reports that militants are preparing another attack — this time against Israel — cannot be ignored.

The foreign policy of “bullying”

It is alarming that military intervention in internal conflicts in foreign countries has become commonplace for the United States. Is it in America’s long-term interest? I doubt it. Millions around the world increasingly see America not as a model of democracy but as relying solely on brute force, cobbling coalitions together under the slogan “you’re either with us or against us.”

The appeal to natural rights

My working and personal relationship with President Obama is marked by growing trust. I appreciate this. I carefully studied his address to the nation on Tuesday. And I would rather disagree with a case he made on American exceptionalism, stating that the United States’ policy is “what makes America different. It’s what makes us exceptional.” It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation. There are big countries and small countries, rich and poor, those with long democratic traditions and those still finding their way to democracy. Their policies differ, too. We are all different, but when we ask for the Lord’s blessings, we must not forget that God created us equal.

Read the rest here

Quote of the Day: Syrian war is a fight by the U.S. to maintain its top-dog status

The U.S. as global superpower is made possible by the dollar being the world’s reserve currency. And supporting the dollar’s role as world’s reserve currency is the fact that global energy transactions take place through the dollar. Energy is what gives the U.S. dollar and America their power.

Russia and Iran have no real intention of maintaining the status quo. Longer term, neither does China. Saudi Arabia long ago decided to support the dollar by selling its oil for depreciating greenbacks, which is why the two are such strong allies.

So what you’re seeing in Syria is not another regional conflict. It’s a fight by the U.S. to maintain its top-dog status. But when dogs get in trouble, they’ll do anything to survive. They’ll even gnaw off their leg if they get it trapped.

From Greg Canavan at the Laissez Faire Books

Chart of the Day: Obamacare Regulations: 8 Times Longer Than Bible

From CNS News (hat tip Tea Party Economist)

Since March 2010, when President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) and its companion Health Care and Education Reconciliation Act (HCERA), the administration has published in the Federal Register 109 final regulations governing how Obamacare will be implemented.

These regulations add up to 10,516 pages in the Federal Register—or more than eight times as many pages as there are in the Gutenberg Bible, which has 642 two-sided leaves or 1,286 pages.

From the admonitions of Roman orator lawyer and senator popularly known as Publius Tacitus (or Gaius Cornelius Tacitus) [Annals 117]

laws were most numerous when the commonwealth was most corrupt (or the popular variant: The more corrupt the state, the more laws)

Parallel Universe: India Edition

More signs of parallel universes or divergences between the real economy and the financial markets

From the Voice of America September 10 report 

As a plunging currency and a slowdown in consumption hamper India’s once vibrant economy, many industries are facing the prospect of plummeting profits.

Usually at this time of the year, consumer companies look ahead to windfall profits. Starting in September, consumption increases because it is considered auspicious to buy new products such as cars and televisions for the main Hindu festival, Diwali, to be celebrated in November.   

But this year the mood in most corporate headquarters is pessimistic. The reason: the plunging rupee. India’s currency has lost nearly 20 percent of its value in recent months, pushing up costs for companies that rely on imports of raw materials. That is a large number ranging from electronics to automobiles.

Nope. Untrue. Not from the way India’s stock market has recently behaved where the BSE index is seem as just a breathe away from the this year’s highs. 

This world has been full of surprises. In just about two weeks India has undergone a dramatic transformation coming from a brink of a crisis to a state of euphoria-nirvana.

And these have been one major reason why people have seen markets as having only one direction: up up and away! Risks have all vanished!

The rallying Indian rupee or USDINR (yahoo)

Yields of India’s 10 year bonds seem as hardly receptive to the stock market and the rupee. 

[Bloomberg’s chart has not been updated to include yesterday’s close so I put on my “update” via the red line.]

Has the transformation been real? Has the newly installed Rajan led central bank delivered the miracle?

Well the jury is out whether all these are sustainable or if they are mirage.

While Wall Street Cheers, US Small Businesses Frowns

Today’s financial markets has been hardwired to see price movements of securities as having only one direction: up up and away! 

And part of that programming has been to view bad news as good news. The reason for this schadenfreude outlook has been that bad news in the real economy extrapolates to more injections of government steroids. So Wall Street tacitly cheers and wishes for bad news, which they sell on the surface as good for the economy.

Aside from the depraved sense of ethics from bad news is good news, Wall Street’s benefiting from the massive transfers via government steroids has real effects on the economy. 

One victim has been Small Businesses.

Small businesses, the largest employers or job providers in the US, has been lackluster, despite the statistical so-called economic recovery.

August’s Optimism survey report from National Federation of Independent Business (NFIB) chief economist Bill Dunkelberg (bold original)

Small business optimism remained flat in August, dropping 0.1 points from July for a final reading of 94.0. While the total reading showed essentially no change over the month prior, a look at the individual indicators reveals incongruent details. Job creation plans leapt to a level not seen since before the recession and sales expectations improved; but this optimism would appear to contravene the dramatic deterioration in quarter to quarter sales and profit trends. The favorable employment plans also contrasted sharply with the increasingly negative expectations for improved general business conditions. The month's performance proved poor, but expectations, pre-Syria, were looking up.

So buoyant financial markets have spurred a jump in job creation plans but real actions via sales and profit trends “contravene” this outlook. What people say and what people actually do are different (demonstrated preference). 

Aside from the invisible transfers, lethargic activities of small businesses have been imputed to mostly taxes and government regulations.

In short the real economy suffers from uncertainty brought about by the trifecta of government induced factors: inflationism, taxes and regulation.

The so-called rising inequality has really been due to instituting policies favoring Wall Street at the expense of main street where the latter has been a recipient of transfers via Bernanke Put, zirp and QE channeled through higher asset prices.

And such dynamic reinforces the ongoing sentimental rotation from the tepid growth in the real economy and the selloffs in bond markets into the property and stock markets; The Wile E Coyote Moment

Quote of the Day: Singapore’s Healthcare System

No, Singapore does not have a free market for health care. What it does have is an alternative to the European/American welfare state, in which private saving and private insurance do what employers and governments do in other countries. The Singapore philosophy is:

-Each generation should pay its own way.

-Each family should pay its own way.

-Each individual should pay his own way.

Only after passing through these three filters, should anyone turn to the government for help.

If the United States adopted a similar approach to public policy, there would be no deficit problem in this country.

How the system works. In Singapore, people are required to save for health care, retirement income, and other needs. They can use their forced saving to purchase a home, pay education expenses, and purchase life insurance and disability insurance. For individuals up to age 50, the required saving rate is 36% of income (nominally divided: 20% from the employee and 16% from the employer). Of this amount, 7 percentage points is for health care and is deposited in a separate Medisave account. Individuals are also automatically enrolled in catastrophic health insurance with a deductible of about US $1,172, although they can opt out. When a Medisave account balance reaches about US $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.

(bold original)

This is from healthcare expert John Goodman senior fellow at the Independent Institute Blog

Global Cooling: Artic Ice Cap Grows 60% in One Year

The Daily Mail twits at the errors of BBC’s environmental scare mongering

The highlights:  

-Almost a million more square miles of ocean covered with ice than in 2012

-BBC reported in 2007 global warming would leave Arctic ice-free in summer by 2013

-Publication of UN climate change report suggesting global warming caused by humans pushed back to later this month

From the Daily Mail

A chilly Arctic summer has left nearly a million more square miles of ocean covered with ice than at the same time last year – an increase of 60 per cent.

The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013.

Instead, days before the annual autumn re-freeze is due to begin, an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores.

Scare mongering based on flawed models

The pause – which has now been accepted as real by every major climate research centre – is important, because the models’ predictions of ever-increasing global temperatures have made many of the world’s economies divert billions of pounds into ‘green’ measures to counter  climate change.

Those predictions now appear gravely flawed.

The religion of environmental politics is being exposed for what they truly are.

Risk On is Back. Wile Coyote in Full Speed

It’s risk ON time again. So says global equity markets led by the US.

From Bloomberg:

U.S. stocks rose, giving the Dow Jones Industrial Average its biggest gain since July 11, as exports from China topped forecasts and corporate acquisitions fueled optimism in the world’s largest economy.

Chinese exports supposedly rose 7.2 from a year earlier exceeding the 5.5% median estimate. And because consumer prices rose only 2.6% media sees this as an opportunity for “extra stimulus if needed”

But what markets have ignored has been that while exports outperformed, imports underperformed. From an earlier Bloomberg article:

Imports (CNFRIMPY) rose a less-than-estimated 7 percent from a year earlier, leaving a trade surplus of more than $28 billion, customs data showed yesterday.

As one would note, markets appear to be selectively picking on data to justify yield chasing.

Another reason for the rally, as usual, addiction to stimulus. From the former Bloomberg article

The equities gauge has rallied 17 percent this year as the Fed continued to provide stimulus to the economy. A report Sept. 6 showed payrolls in the U.S. climbed less than projected in August and gains in the prior two months were revised downward, fueling speculation that any Fed move to taper its stimulus program will be limited.

See Bad new is good news. Wall Street cheers on negative main street activities.

Markets expect tapering to be minimal. The Federal Reserve Open Committee convenes next week September 17-18 and the markets seem as anticipating such action or may be seen as applying pressure on the Fed to do as they expect.

Another variable for the risk ON mode has been the alleged acceptance by the Syrian government to surrender chemical weapons to Russia. Secretary of State John Kerry gives an ultimatum of one week to Syria

This looks like Russia’s Putin has given US President Obama an opportunity for a graceful exit as only about 10% of house representatives are in favor of Obama’s proposal for a military strike 

WTIC Oil fell to $108 along with gold. Yields of UST dropped by 41 basis points to 2.897%. Importantly the risk On mode means a weak dollar as the US dollar index fell by .44%

Risk ON is back. We are made to believe that the June episode had merely been a shakeout.

Shanghai Index rising on stealth stimulus.

Nikkei appears to reversing to the upside.

Europe’s STOX50 while down last night has also been largely buoyant.

As for the ASEAN meltdown, forget about it. They never happened.

Singapore STI clings to the hopes of a recovery of the Chinese economy. Yet China’s property bubbles seem as intensifying. Residential land sales amidst property curbs are not only at  record highs but home prices are outpacing construction activities.

A full blown mania can be noted in the below article from the Wall Street Journal. (bold mine)

The pent-up demand driving China's housing prices ever higher was on full view at the launch of the manicured Shanyucheng apartment complex in Beijing's outermost suburbs. A shouting match flared up when 500 people came to sign up to buy 200 units on Saturday and the latecomers realized they had little chance.

Property bubbles have been a global phenomenon

From Bloomberg:

Global house prices rose by an average of 2.4 percent in the second quarter, the biggest increase in three years, as Dubai and Asian markets including Hong Kong and mainland China rallied, Knight Frank LLP said.

Dubai had the largest increase, with prices surging 21.7 percent from a year earlier, the London-based property broker said today in a report. Taiwan recorded the biggest jump compared with the previous quarter, with a 7.4 percent gain.

Turkey, Europe’s strongest performer, saw prices rise 12.2 percent from last year, while Greece was the continent’s weakest with an 11.5 percent drop in values.

“For the first time since 2010, European countries recorded positive annual price growth,” analyst Kate Everett-Allen wrote in the report. “However, the average 0.7 percent uplift over the past 12 months masks a sharp divergence in performance between individual countries.”…

Home prices in the U.S. increased 7.1 percent in the second quarter from the previous three months, the second consecutive quarterly rise. Prices in the U.K. advanced 2.6 percent in the period.

Hong Kong climbed 19.1 percent and China gained 14.8 percent in the last 12 months. Though the annual growth was among the world’s highest, China’s prices were unchanged in the second quarter from the first and Hong Kong rose 1.2 percent.

Rallying risk assets everywhere…

Big rallies in Thailand’s equities…

Malaysia….

and Indonesia.

The China-FED inspired rally will likely spillover to the Phisix.

Yet the big rally in ASEAN equities has had marginal impact on Indonesia’s currency (the one big sensitive spot)

Rallying global equity and property markets despite elevated bond yields and $100+ oil accentuates signs of a deepening mania or the Wile E Coyote Moment.