Mish's Global Economic Trend Analysis

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• Vancouver Real Estate Bubble in Pictures; Presenting the $1,050,000 "Livable" House
• Greek "Unity Government" Effectively Collapsed Already; Showdown Underway; New Democracy Party Wants Rollbacks on Austerity Measures
• Interview with Kyle Bass on Gold, Hugely Profitable Asymmetric Bets on US Subprime and Europe, and his next Asymmetric Bet on Japan

Vancouver Real Estate Bubble in Pictures; Presenting the $1,050,000 "Livable" House Posted: 19 Nov 2011 05:34 PM PST Housing bubble denial in Canada keeps getting louder and louder, as prices become more and more absurd. Terry from Canada writes Hi Mish, I am beginning to believe that Canada's housing bubble is making the US housing bubble look bush league in comparison. The worst part is Canadians are so delusional they still believe that "It is different here". 50,000 dollars can now buy you a pretty decent house in some parts of the US, do you want to see what $1,050,000 buys you in Vancouver? A house that is described as "livable". Wow, million dollar mortgages which are fully insured by the tax payers of Canada are being handed out to 20 year-olds like they are candy and meanwhile our government still declares, just as the US government did before it's house crash, that there is no housing bubble and that prices will remain stable and "affordable". And the rest of the world still looks on and considers Canada to be a fiscally responsible, financially prudent country. Just another of many myths that get started and than repeated ad nauseam by the press without understanding the whole story. $1,050,000 "Livable" House Inquiring minds my be interested to see what $1,050,000 will buy in Vancouver. Note the alleged 6 bedrooms (3 converted from the basement) but only 2 bathrooms. Who are they kidding? Is this the happy hooker flop house? Unfortunately, pictures like these are easy to find. The longer this continues the bigger the crash. Look for prices on such properties to crash 75% or more. When it does, it will be no bargain. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Greek "Unity Government" Effectively Collapsed Already; Showdown Underway; New Democracy Party Wants Rollbacks on Austerity Measures Posted: 19 Nov 2011 10:15 AM PST The very instant the Greek "Unity Government" formed it was divided. Antonis Samaras, the leader of Greece's New Democracy Party, one of the three coalition parties that formed the government says he will not sign a document demanded by the IMF before it will release the next tranche. That's not all, Samaras actually wants to rework the agreement. Neither will fly (at least with Greece receiving the next tranche of money), and tensions fester. Bloomberg reports Samaras Won't Sign Pledge Committing to EU's Greek Debt Accord Antonis Samaras, leader of Greece's New Democracy Party, won't sign a document pledging his commitment to the Oct. 26 European Union agreement for the nation, the Athens News Agency reported. Samaras, whose party is a member of the country's unity government, told officials from the so-called troika of the European Union, the International Monetary Fund and the European Central Bank that he has already taken five actions that show his party's full commitment to the agreement, the state-run news agency said. Is this posturing? If so, what is the gain? I think he will sign, or the New Democracy Party will take the blame for the collapse.  The situation is even messier than a signing agreement. Samaras Wants Rollbacks of  Austerity Measures He Disagrees With Athens News comments Troika back in town The interim government took a first step on Friday towards meeting terms of an international bailout needed to avoid bankruptcy, submitting a budget bill that foresees no new austerity measures next year as long as reforms are enacted. But more importantly, however, was the rift between parties in technocrat Prime Minister Lucas Papademos's unity coalition caused by jockeying for position by the New Democracy party ahead of an election slated for February 19. Papademos must win pledges from the rival parties that they will do what it takes to meet bailout terms or Greece's lenders will withhold an 8bl euro aid tranche Athens needs to dodge default next month, plus longer-term financing later. Samaras said on Thursday said he wanted to win an outright majority in the snap election to reverse the austerity measures he disagrees with. Although publicly committed to coalition, he has distanced himself while still being seen to be taking part for the sake of keeping Greece's creditors on side. On Friday his party repeated an oft-made call to scrap the austerity measures prescribed under the bailout, known as the "Memorandum" in Greece, in favour of pro-growth policies. "The Memorandum needs to be renegotiated. A recipe that doesn't work needs to be changed," it said in a statement. These coalition "unity" governments in both Greece and Italy are struggling already, and over things that would seem to be a given like signing a document that appears to be a formality to what has been agreed upon. Is signing a document such a big deal? It might be if the intent is to roll back the agreement. The Greek "Unity" government has effectively collapsed already. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Interview with Kyle Bass on Gold, Hugely Profitable Asymmetric Bets on US Subprime and Europe, and his next Asymmetric Bet on Japan Posted: 18 Nov 2011 11:55 PM PST The BBC has an excellent interview with Kyle Bass - Founder, Hayman Capital Hedge Fund on Europe, mortgages, monetary printing, "gold and guns" and Japan. At times the interviewer is openly hostile to Bass, blaming him for making money on the US mortgage mess, then again when Greece blew up. Bass defends himself quite nicely. His latest play is an asymmetric bet on Japan, based on demographics, interest rates, and ability to service debt. I happen to agree with Bass, that it is just a matter of time before the Yen blows up. I must also point out people have been predicting this for a decade. Bass finishes on a strong note "Buying gold is just buying a put on the idiocy of the political cycle. ... Capitalism without failure is like Christianity without Hell. You have to have atonement for ridiculous levels of spending both the US and Europe have gone through. The spending idiocy of the world is going to catch up to itself. And that's where we are today." It's an excellent but lengthy interview (about 23 minutes), well worth a play. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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