Author Archives: Bone Fish

Did Russia Just Trigger A Global Reserve Currency Reset Process?

Russia De-Dollarizes Deeper: Shifts $100 Billion To Yuan, Yen, And Euro

(Listen to the report here)

Russia is continuing to ramp up its efforts to move away from the American dollar (Federal Reserve Notes). The country just shifted $100 billion of its reserves to the yuan, the yen, and the euro in their ongoing effort to ditch the US Dollar.

The Central Bank of Russia has moved further away from its reliance on the United States dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen, and Chinese yuan according to a report by RT. The share of the U.S. dollar in Russia’s international reserves portfolio has dramatically decreased in just three months between March and June 2018. The holding decreased from 43.7 percent to a new low of 21.9 percent, according to the Central Bank’s latest quarterly report, which is issued with a six-month lag.

The money pulled from the dollar reserves was redistributed to increase the share of the euro to 32 percent and the share of Chinese yuan to 14.7 percent. Another 14.7 percent of the portfolio was invested in other currencies, including the British pound (6.3 percent), Japanese yen (4.5 percent), as well as Canadian (2.3 percent) and Australian (1 percent) dollars.

The Central Bank’s total assets in foreign currencies and gold increased by $40.4 billion from July 2017 to June 2018, reaching $458.1 billion. –RT

Russian and others have been consistently moving away from the dollar and toward other currencies. Economic sanctions, which are losing their power as more countries move from the dollar, and trade wars seem to be fueling the dollar’s uncertainty.

Peter Schiff warns that as the supply of dollars is going to grow and grow, the demand for the American currency can fall, while the US Fed will be unable to stop the dollar’s demise. Schiff says that what is coming for Americans, is massive inflation.

“Eventually, what’s going to happen is it’s going to be the demand for those dollars is going to collapse, not the supply. And when the demand for dollars collapses, then the price of the dollar collapses. You get massive inflation. That is what is coming.”

Russia began its unprecedented dumping of U.S. Treasury bonds in April and May of last year. Russia appears to be moving on from the rise in tensions with the United States. The massive $81 billion spring sell-off coincided with the U.S.’s sanctioning of Russian businessmen, companies, and government officials. But Russia has long had plans to “beat” the U.S. when it comes to sanctions by stockpiling gold.

The Russian central bank’s First Deputy Governor Dmitry Tulin said that Moscow sees the acquisition of gold as a “100-percent guarantee from legal and political risks.”

As reported by RT, the Kremlin has openly stated that American sanctions and pressure are forcing Russia to find alternative settlement currencies to the U.S. dollar to ensure the security of the country’s economy. Other countries, such as China, India, and Iran, are also pursuing steps to challenge the greenback’s dominance in global trade.

Source: ZeroHedge

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India Begins Paying For Iranian Oil In Rupees Instead Of US Dollars

Three months ago, in Mid-October, Subhash Chandra Garg, economic affairs secretary at India’s finance ministry, said that India still hasn’t worked out yet a payment system for continued purchases of crude oil from Iran, just before receiving a waiver to continue importing oil from Iran in its capacity as Iran’s second largest oil client after China.

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That took place amid reports that India had discussed ditching the U.S. dollar in its trading of oil with Russia, Venezuela, and Iran, instead settling the trade either in Indian rupees or under a barter agreement. One thing was certain: India wanted to keep importing oil from Iran, because Tehran offers generous discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.

Fast forward to the new year when we learn that India has found a solution to the problem, and has begun paying Iran for oil in rupees, a senior bank official said on Tuesday, the first such payments since the United States imposed new sanctions against Tehran in November. An industry source told Reuters that India’s top refiner Indian Oil Corp and Mangalore Refinery & Petrochemicals have made payments for Iranian oil imports.

To be sure, India, the world’s third biggest oil importer, has wanted to continue buying oil from Iran as it offers free shipping and an extended credit period, while Iran will use the rupee funds to mostly pay for imports from India.

“Today we received a good amount from some oil companies,” Charan Singh, executive director at state-owned UCO Bank told Reuters. He did not disclose the names of refiners or how much had been deposited.

Hinting that it wants to extend oil trade with Tehran, New Delhi recently issued a notification exempting payments to the National Iranian Oil Company (NIOC) for crude oil imports from steep withholding taxes, enabling refiners to clear an estimated $1.5 billion in dues.

Meanwhile, in lieu of transacting in US Dollars, Iran is devising payment mechanisms including barter with trading partners like India, China and Russia following a delay in the setting up of a European Union-led special purpose vehicle to facilitate trade with Tehran, its foreign minister Javad Zarif said earlier on Tuesday.

As Reuters notes, in the previous round of U.S. sanctions, India settled 45% of oil payments in rupees and the remainder in euros but this time it has signed deal with Iran to make all payments in rupees as New Delhi wanted to fix its trade balance with Tehran.  Case in point: Indian imports from Iran totaled about $11 billion between April and November, with oil accounting for about 90 percent.

Singh said Indian refiners had previously made payments to 15 banks, but they will now be making deposits into the accounts of only 9 Iranian lenders as one had since closed and the U.S has imposed secondary sanctions on five others.

It’s all about control… Robert Fripp

Source: ZeroHedge

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What Gen Z Learned From Millennials: Skip College

Generation Z is already learning from the millennial generation’s mistakes…

(LibertyNation) For years, millennials have scoffed at the notion of fixing someone else’s toilet, installing elevators, or cleaning a patient’s teeth. Instead, they wanted to get educated in lesbian dance theory, gender studies, and how white people and western civilization destroyed the world. As a result, student loan debt has surpassed the $1 trillion mark, the youth unemployment rate hovers around 9%, and the most tech-savvy and educated generation is delaying adulthood.

But their generational successors are not making the same mistakes, choosing to put in a good day’s work rather than whining on Twitter about how “problematic” the TV series Seinfeld was. It appears that young folks are paying attention to the wisdom of Mike Rowe, the American television host who has highlighted the benefits and importance of trade schools and blue-collar work – he has also made headlines for poking fun at man-babies and so-called Starbucks shelters.

Will Generation Z become the laughing stock of the world, too? Unlikely.

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Z Is Abandoning University

A new report from VICE Magazine suggests that Generation Z – those born around the late-1990s and early-2000s – are turning to trade schools, not university and college, for careers. Ostensibly, a growing number of younger students are seeing stable paychecks in in-demand fields without having to collapse under the weight of crushing debt.

Because Gen Zers want to learn now and work now, they are abandoning the traditional four-year route, a somewhat precocious response to the ever-evolving global economy.

Cosmetologist, petroleum technician, and respiratory therapist are just some of the positions that this generation of selfies, Snapchat, and emoticons are taking. And this is an encouraging development, considering that participation in career and technical education (CTE) has steadily declined since 1990.

David Abreu, a teacher at Queens Technical High School, told a class of young whippersnappers at the start of the semester:

“When you go out there, there’s no reason why anyone should be sitting on mommy’s couch, eating cereal, and watching cartoons or a telenovela. There’s tons of construction, and there’s not enough people. So they’re hiring from outside of New York City. They’re getting people from the Midwest. I love the accents, but they don’t have enough of you.”

While students feel the pressure of attaining a four-year degree in a subject that offers fewer employment opportunities, the blue-collar jobs are out there to be filled. It iestimated that more than one-third of businesses in construction, manufacturing, and financial services are unable to fill open jobs, mainly because of a skills shortage and a paucity of qualifications.

This could change in the coming years.

The Future Of College

Over the last decade or so, the college experience has turned into a circus. At Evergreen College, the inmates ran the asylum. The University of Missouri staff requested “some muscle over here” to suppress journalists. Harvard University has turned into a politically correct institution. What do all these places of higher learning have in common? They’re losing money, whether it’s from fewer donations or tumbling enrollment.

Not only are these places of higher learning metastasizing into leftist indoctrination centers, their rates for graduates obtaining employment are putrid. And parents and students are realizing this.

With the trend of Gen Zers embracing the trades, the future of post-secondary education might be different. Since colleges need to remain competitive in the sector, they will have to offer alternative programs and eliminate eclectic courses, and the administration will be required to justify their utility.

A pupil seeking out a STEM education will not be subjected to the inane ramblings of an ecofeminism teacher or the asinine curriculum of a queer theory course.

Moreover, colleges could no longer afford to spend chunks of their budgets on opulent settings. A student interested in the trades is unlikely to be attracted to in-house day spas, luxury dorms, and exorbitant gyms. They want the skills, the tools, and the training to garner a high-paying career without sacrificing 15 years’ worth of earnings just so they could enjoy lobster for lunch twice a week.

Generation Smart?

Millennials are typically the butt of jokes, known for texting in the middle of job interviews, demanding complicated Starbucks beverages, and ignoring their friends at the restaurant. Perhaps Generation Z doesn’t want to experience the same humiliation and stereotypes. This could explain why they are dismissing the millennial trends and instead adopting common sense, conservatism, tradition, and anything else that is contrary to those who need to be coddled.

The next 20 years should be fascinating.

In 2039, Ryder, who prefers the pronoun “xe,” is employed as a barista, a position he claims is temporary to pay off his student debt. He lives on his friend’s sofa, still protests former President Donald Trump, and spends his disposable income on tattoos. In the same year, Frank operates an HVAC business, owns his home without a mortgage, and has a wife and three children who enjoy their summer weekends at the ballpark with the grandparents.

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One went to college for feminist philosophy, the other went to trade school. You decide who.

Source: ZeroHedge

Global Housing Markets From Hong Kong To Sydney Join Global Rout

It’s not just stocks: the global housing market is in for a rough patch, which has turned ugly for many homeowners and investors from Vancouver to London, with markets in Singapore, Hong Kong, and Australia already showing increased signs of softening.

Macro factors have triggered a global economic slowdown that is unraveling luxury marketplaces worldwide, according to Bloomberg. As a result, a turning point has been reached, with home prices globally now under pressure, and rising mortgage rates leading to depressed consumer optimism, while also triggering a housing affordability crisis, S&P Global Ratings said in a December report. To make matters worse, a simultaneous drop in house prices globally could lead to “financial and macroeconomic instability,” the IMF warned in a report last April.

While each metropolis globally has its distinct characteristics of what triggered its real estate slowdown, there are a few common denominators at play: rising borrowing costs, quantitative tightening, a crackdown on money laundering and increased government regulation, emerging market capital outflows and volatile financial markets. Bloomberg notes that there is also declining demand from Chinese buyers, who were the most powerful force in many housing markets globally over the course of this cycle.

“As China’s economy is affected by the trade war, capital outflows have become more difficult, thus weakening demand in markets including Sydney and Hong Kong,” said Patrick Wong, a real estate analyst at Bloomberg Intelligence.

One of the first dominoes to fall has been in Hong Kong, home values in the city have plummeted for 13 weeks straight since August, the longest losing streak since the 2008 financial crash, data from Centaline Property Agency show. Homeowners and investors have taken great caution due to a jump in borrowing costs, a looming vacancy tax, and the trade war that has derailed economic growth in mainland China.  

“The change in attitude can be explained by a slowing mainland economy,” said Henry Mok, JLL’s senior director of capital markets. “Throw in a simmering trade war between China and the U.S., the government has taken actions to restrict capital outflows, which in turn has increased difficulties for developers to invest overseas.”

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Home prices in Singapore, which rank among the world’s most expensive places to live, logged the first decline in six quarters in the three months ended December. Bloomberg said luxury experienced the worst declines, with values in prime areas dropping 1.5%.

Most of the slowdown was caused by government policies to cool the overinflated housing market. Cooling measures were implemented in July included higher stamp duties and tougher loan-to-value rules. The policies enacted by the government have halted the home-price recovery that only lasted for five quarters, the shortest since data became available.

“Landed home prices, being bigger ticket items, have taken a greater beating as demand softened,” said Ong Teck Hui, a senior director of research and consultancy at JLL.

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The downturn in Sydney’s housing market is expected to continue this year as tighter lending standards and the worst plunge in values since the late 1980s has spooked buyers. Average Sydney home values had dropped 11.1% since their 2017 top, according to a recent CoreLogic Inc. report — surpassing the 9.6% peak to trough decline when Australia was on the cusp of entering its last recession.

Nationwide, home values declined 4.8% last year, marking the weakest housing market conditions since the 2008 financial crash.

“Access to finance is likely to remain the most significant barrier to an improvement in housing market conditions in 2019,” CoreLogic’s head of research Tim Lawless said. Weak consumer sentiment toward the property market is “likely to continue to dampen housing demand.”

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Bloomberg notes that home prices in the country are still 60% higher than in 2012, if prices plunge another 10% in 2019, well, it could spark mass panic.

The Reserve Bank of Australia is terrified that an extended downturn will crimp consumption and with the main opposition Labor party pledging to curb tax perks for property investors if it wins an election expected in May, economic optimism would further deteriorate. Treasurer Josh Frydenberg on Thursday told the nation’s top banks not to tighten credit any more as the economic downturn is expected to get much worse.

But all eyes are on what is going on in arguably the most important housing markets in the world – those of Shanghai and Beijing. A government crackdown on leverage and overheating prices have damaged sales and triggered a 5% tumble in home values from their top. Rules on multiple home purchases, or how soon a property can be flipped once it is acquired, are starting to be relaxed, and the giveaways by home builders to lure buyers are starting to get absurd.

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One developer in September was giving away new BMWs to new homebuyers at its townhouses in Shanghai. Down-payments have been slashed, with China Evergrande Group asking for 5% rather than the normal 30% deposit required.

“It’s not a surprise to see Beijing and Shanghai residential prices fall given the curbing policies currently on these two markets,” said Henry Chin, head of research at CBRE Group Inc.

As a whole, Bloomberg’s compilation of global housing data showing the unraveling of many housing markets is a sobering reminder that a synchronized global slowdown has started.

Source: ZeroHedge

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Vancouver Condo Sales In December Drop To 10 Year Low

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Vancouver condo sales fell to a 10 year low in December with sales plunging 47.5% year-over-year, the sharpest annual decline since 2008…

Are You Prepared For A Credit Freeze?

2, 3 and 5-Year Treasury Yields All Drop Below The Fed Funds Rate

Things are getting increasingly more crazy in bond land, where moments ago the 2Y Treasury dipped below 2.40%, trading at 2.3947% to be exact, and joining its 3Y and 5Y peers, which were already trading with a sub-2.4% handle. Why is that notable? Because 2.40% is where the Effective Fed Funds rate is, by definition the safest of safe yields in the market, that backstopped by the Fed itself. In other words, for the first time since 2008, the 2Y (and 3Y and 5Y) are all trading below the effective Fed Funds rate.

That the curve is now inverted from the Fed Funds rate all the way to the 5Y Treasury position suggests that whatever is coming, will be very ugly as increasingly more traders bet that one or more central banks may have no choice but to backstop risk assets and they will do it – how else – by buying bonds, sending yields to levels last seen during QE… i.e., much, much lower.

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Explained…

Source: ZeroHedge

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Gold Soars Above $1,300; Nikkei, JGB Yields Tumble As Rout Goes Global

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Double Irish With A Dutch Sandwich

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What is the Double Irish With A Dutch Sandwich?

(Investopedia) The double Irish with a Dutch sandwich is a tax avoidance technique employed by certain large corporations, involving the use of a combination of Irish and Dutch subsidiary companies to shift profits to low or no tax jurisdictions. The scheme involves sending profits first through one Irish company, then to a Dutch company, and finally to a second Irish company headquartered in a tax haven. This technique has made it possible for certain corporations to reduce their overall corporate tax rates dramatically.

BREAKING DOWN Double Irish With A Dutch Sandwich

The double Irish with a Dutch sandwich is just one of a class of similar international tax avoidance schemes. Each involves arranging transactions between subsidiary companies to take advantage of the idiosyncrasies of varied national tax codes. These techniques are most prominently used by tech companies, because these firms can easily shift large portions of profits to other countries by assigning intellectual property rights to subsidiaries abroad.

The double Irish with a Dutch sandwich is generally considered to be a very aggressive tax planning strategy. It is, however, famously used by some of the world’s largest corporations, such as Google, Apple and Microsoft. In 2014, it came under heavy scrutiny, especially from the United States and the European Union, when it was discovered that this technique facilitated the transfer of several billion dollars annually tax-free to tax havens.

How it Works

The process involves two Irish companies, a Dutch company, and an offshore company located in a tax haven. The first Irish company is used to receive large royalties on goods, such as iPhones sold to U.S. consumers. The U.S. profits, and therefore taxes, are dramatically lowered, and the Irish taxes on the royalties are very low. Due to a loophole in Irish laws, the company can then transfer its profits tax-free to the offshore company, where they can remain un-taxed for years.

The second Irish company is used for sales to European customers. It is also taxed at a low rate and can send its profits to the first Irish company using a Dutch company as an intermediary. If done right, there is no tax paid anywhere. The first Irish company now has all the money and can again send it onward to the tax haven company.

The End of the Double Irish With a Dutch Sandwich

Due largely to international pressure and the publicity surrounding Google’s and Apple’s use of the double Irish with a Dutch sandwich, the Irish finance minister, in the 2015 budget, passed measures to close the loopholes and effectively end the use of the double Irish with a Dutch sandwich for new tax plans. Companies with established structures will continue to benefit from the old system until 2020.

Source: by Julia Kagen | Investopedia

Proposition 13 Is No Longer Off-Limits In California

https://s.hdnux.com/photos/75/11/15/16028529/7/gallery_xlarge.jpgGov. Jerry Brown, left, with Proposition 13 co-author Howard Jarvis at a news conference in July 1978, one month after California voters passed the measure. Photo: ROBBINS / AP

Proposition 13 Is Untouchable.

(San Francisco Chronicle) That’s been the thinking for 40 years in California. Politicians have feared for their careers if they dared suggest changes to the measure that capped property taxes, took a scythe to government spending and spawned anti-tax initiatives across the country.

However, that is beginning to change. With Republican influence in California on the wane and ascendant Democrats making tax fairness an issue, advocates are confident that the time is right to take a run at some legacies of the 1978 measure.

High on their list: making businesses pay more and ending a sweetheart deal for people who inherit homes and their low tax bills, then turn a profit by renting them out.

Legislative Democrats hold so many seats that they don’t have to worry about the GOP blocking such ideas from going before voters. Gov.-elect Gavin Newsom has said that “everything would be on the table,” including Prop. 13, as he formulates a plan to reform the state’s tax structure.

Perhaps most important, Prop. 13’s age is becoming an advantage to would-be reformers: California’s voting demography is changing. The generation of homeowners that grew up with Prop. 13 is well into retirement now, and some younger Californians blame flaws in the measure for everything from the under funding of public schools to growing wealth inequality.

“For Californians who grew up in the public education system that came after Prop. 13, their education was robbed from them. They didn’t get the same education their parents did,” said Catherine Bracy, executive director of TechEquity Collaborative, which is trying to rally the tech community to support changes to the state’s tax structure.

Bracy, 38, moved to the state six years ago from Chicago. “For newcomers (to California) like me, who were born after Prop. 13, we want to experience the California dream, too,” she said. “But we don’t have the opportunity to, because all the goodies have been locked up by the older generations.”

Prop. 13 was a remedy for a side-effect of one of California’s first housing bubbles — spiking property taxes. Moved by their own tax bills and horror stories of longtime homeowners being forced to sell because of skyrocketing assessments, voters overwhelmingly passed the measure. It rolled back assessments for homes and businesses to 1976 levels and capped annual tax increases at 2 percent.

Jon Coupal is president of Prop. 13’s fiercest defender — the Howard Jarvis Taxpayers Association, named after the initiative’s co-author. He agreed that “the number of homeowners who were around in 1978 is shrinking. And many younger people don’t remember the fear and anger about losing your home.”

But Coupal said that “notwithstanding the leftward movement of politics in California,” his organization’s internal polling shows support for Prop. 13 remains strong. And a survey in March by a nonpartisan group unaffiliated with Coupal’s organization, the Public Policy Institute of California, found that 65 percent of likely voters surveyed said Prop. 13 “turned out to be mostly a good thing for the state.”

Under Prop. 13, residential and commercial property alike is reassessed only when it is sold. But while homes often change hands every few years, many large businesses remain in the same ownership for a long time. Some businesses are paying property taxes based on assessments that haven’t changed in 40 years.

That’s one main target of people who want to tweak Prop. 13. The League of Women Voters of California says it has gathered enough signatures for a 2020 ballot measure that would create a so-called split roll system, under which businesses’ property would be reassessed every three years. Agricultural land and businesses with 50 or fewer employees would be exempt. Residential property would not be affected.

The change could raise $11 billion in tax revenue statewide, including $2.4 billion for Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, according to a January study by the USC Program for Environmental and Regional Equity. The study found that 56 percent of all Bay Area commercial properties had not been reassessed for 20 years, and 22 percent had assessments dating back to the 1970s.

Could a split-roll measure pass? It might be close. Forty-six percent of likely voters surveyed by the Public Policy Institute of California in January said they supported the idea, while 43 percent were against it. Support was far higher among likely voters under 35 (57 percent) than with those over 55 (41 percent).

However, the split-roll concept has actually been growing less popular over the years, the institute said: Six years ago, 60 percent of likely voters backed it.

Helen Hutchison, president of the League of Women Voters of California, acknowledged that changing the law will be difficult because “Prop. 13 still has some kind of magical pull. But we think the time is right to do this.”

https://s.hdnux.com/photos/77/52/12/16687798/5/940x940.jpgState Sen. Jerry Hill has introduced a ballot initiative that would limit a tax break for heirs of residential property. Photo: Max Whittaker / Getty Images 2009

So does state Sen. Jerry Hill, D-San Mateo. He has introduced a ballot initiative that would tweak a different part of Prop. 13’s legacy.

Hill’s proposal, Senate Constitutional Amendment 3, takes aim at Proposition 58, which voters approved in 1986. The measure allowed parents to give their residential property to their heirs without triggering a tax reassessment. The intent of the measure was to insulate children from absorbing a huge spike in property taxes and help them stay in the family home. California is the only state to offer this tax break.

Hill proposed the change after learning that many heirs are using their inherited properties as second homes or renting them out for many times more than what they’re paying in Prop. 13-controlled property taxes.

The proposed ballot measure would require people who inherit property in this way to move into the home within a year if they wanted the property tax break. The change would apply to future heirs, not those who have already inherited homes.

Getting this measure on the ballot in 2020 requires Hill to corral a two-thirds majority from both houses of the Legislature. If it makes it to the ballot, it could be passed by a simple majority of voters.

Hill is mindful of the politics around property taxes.

We’re not touching Prop. 13. We’re touching Prop. 58,” Hill said. “The goal is to get people to pay their fair share.”

Coupal, head of the Howard Jarvis Taxpayers Association, doesn’t think Hill’s measure is the biggest threat to Californians concerned about taxes.

Source: by Joe Garofoli | San Francisco Chronicle

Southern California Home Sales Plunge 12% In November As Prices Peak

Southern California region home sales plunged in November from a year earlier, while year over year prices increased at the slowest pace in three years amid a housing market slowdown, reported Los Angeles Times.

The 12% decline in November sales from a year earlier was the fourth consecutive monthly drop for the eight southern counties, including Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura.

The decline in sales for 2018 is still less pronounced than in 2014. Across the eight counties, year over year, lagging median price is still rising — 3.5% from November 2017, to $522,750, but the trend is starting to plateau.

Some housing markets experts are not convinced that a housing bust is materializing. “The housing market is slowing, but… a slowdown does not mean the sky is falling,” said Aaron Terrazas, an economist with Zillow.

LA Times noted if volatility in the stock market and Washington significantly affects consumer confidence and business investment decisions in 2019, the housing market could be due for significant correction into 2020. However, for now, Terrazas and other economists believe the factors that have led to past housing market crashes in Southern California are not visible.

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While some economists do not expect a crash, Bank of America rang the proverbial bell on the broader US real estate market in September, warning existing home sales have peaked, reflecting declining affordability, greater price reductions and deteriorating housing sentiment. 

“Call your realtor,” the BofA note proclaimed: “We are calling it: existing home sales have peaked.”

Richard K. Green, director of the USC Lusk Center for Real Estate, told the LA Times, he is very pessimistic about the housing situation in Southern California.

Green warns prices could plunge 5% to 10% into 2020, even with the current level of economic growth. He argues a similar tune that was said in BofA’s recent housing note: the affordability crisis is topping out the market.

Here are other factors pushing homes further out of reach of Americans:  “The tax law President Trump signed last year limited the amount of deductions for property tax and mortgage interest. Meanwhile, mortgage rates are elevated. The average rate for a 30-year fixed mortgage was 4.55% this week, according to Freddie Mac. That’s down from a recent high of 4.94%, but it’s far higher than the 3.99% level of a year ago,” LA Times said.

There are signs across Southern California that suggest buyers are holding back. 

In Los Angeles County, the median time on the market increased from 41 days in November 2017 to 45 days last month, according to online brokerage Redfin. Moreover, the number of listings with price reductions jumped from 15.9% to 22.2%.

Real estate agents have said buyers have been concern about buying a home as many see the housing market shifting in real time. 

“People are sidelining themselves,” said San Fernando Valley real estate agent Jaswant Singh.

On Thursday, more evidence showed a downward shift in the market. Real estate firm CoreLogic reported a 12% decline in November sales, with the annual rise in the median price coming in at the slowest pace since 2015. 

Southern California median price slipped 0.4% from October and is now $14,250 below the all-time high reached from summer. Inventory is now flooding the market as S&P CoreLogic Case-Shiller index shows a sharp deceleration in price appreciation. 

These are the markings of a turning point in the Southern California real estate market. What comes next you might ask? Well, the start of downward momentum in prices – likely to start in 2019 as the US economy is expected to rapidly slow.

Source: ZeroHedge