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Financial Prisoners Shackled To Their Own Home Loans

A report from the South China Morning Post. “Shares of Country Garden, mainland China’s largest developer by sales, slumped to a 14 month low on Monday, after video circulated on social media showing protesters mobbing at least one sales centre during the weeklong national holiday. Scores of protesters, some seen holding Chinese-language placards that read ‘return my hard-earned money,’ others throwing rocks, mobbed a sales office for Xinzhou Mansion, a Country Garden residential project in Shangrao, Jiangxi.”

“A decision by the developer to cut prices by up to 30 per cent sparked a wave of anger among buyers who’d paid full price. A similar incident took place in Shanghai, where Country Garden slashed prices at its residential project One Mansion by as much as 25 per cent.”

“Developers large and small are feeling downbeat amid signs the real estate market is starting to soften after a long period of growth. ‘Current discounts within 10 per cent are more like a market gimmick,’ said Raymond Cheng, head of Hong Kong and China research at CGS-CIMB Securities. ‘If the October data shows a sharp drop, we will see a real price drop, higher than 10 per cent.'”

The West Australian. “The banking regulator has been accused of delaying WA’s economic recovery amid claims its policies are making Perth homeowners financial prisoners in their homes. WA Liberal senator Dean Smith said the Australian Prudential Regulation Authority and the major banks were effectively putting the State in a ‘credit squeeze’ that could hold back its economy for years.”

“APRA has, with the support of the Federal Government, tightened lending standards over the past 12 months in a bid to cool investor activity in the Sydney, Melbourne and Brisbane property markets. The financial sector royal commission has signalled that banks needed to better assess the ability of their customers to repay loans.”

“It has also raised concerns about APRA and the way it has policed the sector. Senator Smith said the collective value of Perth homes had tumbled $20 billion over the past four years, while measures of bankruptcy and financial vulnerability had all increased across the State.”

“People who bought during the boom years were now living in homes worth less than what they paid.”

“‘APRA’s lending rules might have helped those on the east coast bring down their housing prices, but they are substantially delaying the economic recovery in our State,’ Senator Smith said. ‘WA families are effectively becoming prisoners, shackled to their own home loans. The actions of APRA are akin to putting Roundup on the green shoots of the WA economy.'”

This Post Has 24 Comments
  1. ‘Scores of protesters, some seen holding Chinese-language placards that read ‘return my hard-earned money,’ others throwing rocks, mobbed a sales office’

    Did they trying stamping their little feet?

    ‘WA families are effectively becoming prisoners, shackled to their own home loans’

    I wonder what he means by “own”? It’s hard to be shackled to another persons loan. Maybe he said it for dramatic effect.

    1. China’s central planners are losing control. Soon mobs of “defrauded” investors will be venting their rage against the Chinese Communist Party offices that fostered such speculation.

      And then the CCP will do what scoundrels always do when their ineptitude and venality is exposed: they’ll rally the lumpen against a foreign enemy: us.

      https://www.youtube.com/watch?v=l_qr-4AKM18

      1. ‘China’s central planners are losing control’

        This is probably the 50th time this has happened since I’ve been blogging. Remember the “save the A shares” and the bank runs?

    2. The generation of Chinese that were children during the cultural revolution grew up with a sense of entitlement that puts our baby boomers to shame. It was deliberate at time when children were being brainwashed and encouraged to turn in their parents for not towing the line, and as a result they really believed in their excess importance. II would not doubt that many of them believe that stamping their feet will amount to something.

      1. They will be doing more than just stamping there feet when they realize the money they “invested” in US and other countries RE goes down the drain…

        1. China’s regulators and enforcers are as captured and negligent as our own. Millions of defrauded Chinese (and ‘Muricans) “investors” and FBs will have justified rage at the failure of the supposed market watchdogs to do their jobs and protect retail investors from systemic fraud and criminality by the financial firms and corporations our asleep-at-the-switch “regulators” are supposed to be overseeing.

          https://www.scmp.com/business/companies/article/2167658/financial-watchdog-sfc-vows-stamp-out-fake-stockbroker-trading

    3. ‘return my hard-earned money,’ others throwing rocks, mobbed a sales office’

      How will Chinese investors who lose a bundle on falling knife prices on their US real estate investments get recourse for their losses? Will they stage a protest march on DC?

  2. ‘A decision by the developer to cut prices by up to 30 per cent sparked a wave of anger…Country Garden slashed prices at its residential project One Mansion by as much as 25 per cent’

    Heck, just this morning I posted a report of New York City developers slashing 18% and you don’t see those FB’s throwing rocks.

    1. “Heck, just this morning I posted a report of New York City developers slashing 18% and you don’t see those FB’s throwing rocks.”

      This gets to a point I made in a recent post, which is that an overly abrupt transition from communism to cronyism has left China woefully unprepared for the wrenching economic adjustments which naturally ensue.

      1. For China the real “overly abrupt transition” was moving from the globalist Obama to the economic nationalist Trump. The other transition had been going on for almost forty years. In fact, I would say it’s reversing and moving back to communism.

  3. Oh dear…not another financial market earthquake, perfectly timed for mid-October…

    What is it about October, anyway?

    1. Bye-bye, punch bowl…
      ————————————-
      Markets
      Business News
      CNBC TV
      US futures drop as investors fret over higher interest rates
      – On Tuesday, the U.S. 10-year Treasury yield and 30-year Treasury yield rose to fresh multi-year highs.
      – On the data front, the calendar is quite thin with only the September NFIB Survey out at 6 a.m. ET.
      Silvia Amaro
      Published 2 Hours Ago CNBC.com

      U.S. stock index futures were lower ahead of Tuesday’s open.

      Around 2:41 a.m. ET, Dow futures fell 62 points, indicating a lower open of -14.78 points. Futures on the S&P 500 were indicating a slightly downbeat open of -1.18 points, while Nasdaq futures signalled a slightly positive open of 2.68 points.

      Equity markets are poised for a lower open as investors grapple with higher interest rates in the U.S. Economic data released last week showed an improvement in the health of the U.S. economy, which has pushed up expectations that the Fed will raise rates at a more rapid pace.

      On Tuesday, the U.S. 10-year Treasury yield and 30-year Treasury yield rose to fresh multi-year highs. Higher yields and expectations of rising rates are a drag on stock markets, given that they cap companies’ profits, thus restricting possible dividends to investors and higher pay for the employees.

      https://www.cnbc.com/2018/10/09/us-futures-drop-as-investors-fret-over-higher-interest-rates.html

    2. Is a 5% rate on a 30-year mortgage about return?
      ————————————-
      Mortgage rates higher for Tuesday
      Adrian D. Garcia

      Multiple closely watched mortgage rates cruised higher today. The average rates on 30-year fixed and 15-year fixed mortgages both ticked up. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, also rose.

      30-year fixed mortgages

      The average rate for a 30-year fixed mortgage is 4.78 percent, up 15 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was lower, at 4.47 percent.

      At the current average rate, you’ll pay principal and interest of $523.46 for every $100,000 you borrow. That’s an increase of $9.02 over what you would have paid last week.

      https://www.bankrate.com/mortgages/rates/mortgage-rates-for-tuesday-october-9/

  4. Does it also correlate to autos, furniture, credit card spending, etc.

    From zerohedge:
    Ford posted an 11% drop, missing analyst estimates of 9.1%. The F-Series pickup line ended a 16-month streak of sales gains. Mustang sales were down 1.3%.
    Nissan posted a 12.2% drop in September. Nissan and Infiniti brand car sales fell by 36%, including a 28% drop for the Altima sedan as the company prepared to start selling an all-new version this week.
    Toyota sales were down 10.4%, far below estimates of 6.7% for the month. Combined sales for Toyota and Lexus brand cars fell 25.3%.
    Fiat posted the only true “beat”, as sales rose 15% versus analyst estimates of 8%. However, the Chrysler brand fell 7% to 14,683 vehicles and the Fiat brand fell 46% to 1,185 vehicles. The deficit was made up on Jeep sales, which were up 14%, as well as sales of Ram pickups and minivans.
    Volkswagen of America car sales were down 4.8%
    GM third quarter total sales were down 11%. The company stopped reporting monthly numbers earlier this year, with many suspecting that weakness in the production pipeline is responsible; they were right.

  5. This could prove a rough day for superstitious Market Watchers
    —————————————–
    Opinion: Why Oct. 9 lives in stock-market infamy
    By Mark Hulbert
    Published: Oct 9, 2018 6:54 a.m. ET

    This is the day the 2007-2009 bear market began — and the day another bear market ended

    CHAPEL HILL, N.C. — Oct. 9 is a fateful day in U.S. stock-market history.

    That’s because not just one, but two, major market turning points took place on this day: Oct. 9, 2007, the top of the bull market that preceded the financial crisis, and Oct. 9, 2002, the bottom of the bear market precipitated by the bursting of the Internet bubble.

    Numerologists, along with Nervous Nellies and paranoids, therefore are holding their breath.

    https://www.marketwatch.com/story/why-oct-9-lives-in-stock-market-infamy-2018-10-09

  6. Oct 9, 2018, 3:09 am
    IMF Issues Stark Warning Over Bitcoin And Crypto ‘Rapid’ Growth
    Billy Bambrough
    Contributor
    Crypto & Blockchain
    I write about how bitcoin, crypto, and fintech are changing the world.

    The International Monetary Fund (IMF) has warned the “rapid growth” of bitcoin and cryptocurrency assets could create “new vulnerabilities in the international financial system,” as the world’s banks adjust to the recent bitcoin and blockchain boom.

    Bitcoin and cryptocurrencies, including Ripple Lab’s XRP token, ethereum, litecoin, EOS, and stellar, are being examined by the traditional financial system to gauge how they might be integrated as both investment tools and ways to move money across borders more quickly and cheaply.

    https://www.forbes.com/sites/billybambrough/2018/10/09/imf-issues-stark-warning-over-bitcoin-and-crypto-rapid-growth/#746b047c3544

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