Global house price to income multiples escalate: America slipping into second world status

U.S. house price to income multiples begin mirroring those of many socialist and second world nations

It all has to do with QE and the excess generation of US Treasuries

Although I suspect that Numbeo’s preliminary 2024 data may be subject to change as the changes have been substantial, the direction in which these multiples continue to climb are sobering for those who are trying to buy a home or rent. Moreover, high house prices versus household incomes substantially add to overall ownership cost burdens. For those who believe the USD is collapsing, this data is proof of it. If the dollar continues to collapse in value in tandem with the other fiat currencies, US home prices vis-a-vis household incomes will keep moving higher.

Link to data source:

Global house price to income multiples under global QE continue to escalate

For about ten years, I have been warning my readers that under the various forms of QE programmes around the world, global house prices when compared to household incomes would continue to rise, regardless of economic circumstances and affordability constraints. The following table lays out in detail where house prices stand when compared to the average household in 225 large cities around the world.

Of course, the global outlook is absolutely grim, since governments continue to pile on debt, which adds to the amount of leverageable securities (e.g. US Treasuries, UK Gilts)  that can be used as collateral to buy up more assets.

Link to data source:

A note to the reader: Please remember, Tuesdays are Soylent Green days.

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21 thoughts on “Global house price to income multiples escalate: America slipping into second world status

  1. A blizzard of numbers this morning and overall they look pretty darn good. GDP came in higher than estimates on the street and from the Atlanta Fed. PCE price day to look pretty good as well. Unemployment claims higher than estimates and the street and bond markets still believe there’s a soft landing taking place. The markets are liking these numbers and so do I.

    Continuing Jobless Claims
    Act: 1,833K Cons: 1,828K Prev: 1,806K

    Core Durable Goods Orders (MoM) (Dec)
    Act: 0.6% Cons: 0.2% Prev: 0.5%

    Core PCE Prices (Q4)
    Act: 2.00% Cons: 2.00% Prev: 2.00%

    Durable Goods Orders (MoM) (Dec)
    Act: 0.0% Cons: 1.1% Prev: 5.5%

    Durables Excluding Defense (MoM) (Dec)
    Act: 0.5% Cons: Prev: 6.9%

    GDP (QoQ) (Q4)
    Act: 3.3% Cons: 2.0% Prev: 4.9%

    GDP Price Index (QoQ) (Q4)
    Act: 1.5% Cons: 2.3% Prev: 3.3%

    GDP Sales (Q4)
    Act: 3.2% Cons: Prev: 3.6%

    Goods Orders Non Defense Ex Air (MoM) (Dec)
    Act: 0.3% Cons: 0.1% Prev: 1.0%

    Goods Trade Balance (Dec)
    Act: -88.46B Cons: -88.70B Prev: -90.27B

    Initial Jobless Claims
    Act: 214K Cons: 200K Prev: 189K

    Jobless Claims 4-Week Avg.
    Act: 202.25K Cons: Prev: 203.75K

    PCE Prices (Q4)
    Act: 1.7% Cons: Prev: 2.6%

    Real Consumer Spending (Q4)
    Act: 2.8% Cons: Prev: 3.1%

  2. Liberation theology at its best. #112 is at it again; disingenuously referring to Scripture to support the one world government.

    Davos 24: Pope Francis Calls for Peace and ‘Authentic Development’

    •Pope Francis says peace calls for more than setting aside instruments of war; “it demands addressing the injustices that are the root causes of conflict.”
    •Globalization has a fundamentally moral dimension that must make itself felt in economic, cultural, political and religious discussions, he says.
    •Authentic development must be global and in every part of the world, or it will regress even in areas marked hitherto by constant progress.

  3. BTW I sold off almost all my ALT position this week. I sold off my options before new year. The short term chart is not looking good, which is why I have been sitting around since the 10s. At these levels there is much more risk in holding than at 3 or 4. Perhaps those in the know have uncovered something? I don’t know. It still is a great sector, but all the small biotechs in that niche have been struggling. Even though I think LLY and NVO are overbought, their prices keep levitating. I thought NVDA would pull back, too, but that hasn’t happened either.

    I bring this up, since I did propose this stock in early December. It’s 1.5 months ago. That’s a long time for me to hold onto a trade. Perhaps the large buyers are waiting for more conclusive data as ALT disappointed early last year with their initial phase 2 data release. I don’t know, but the hourly and 4 hour charts are looking dicey.

  4. The United States is drowning OPEC in oil

    Pump, pump, pump pump it up! is what American oil producers have been saying for five years straight, since a prodigious increase in crude oil production in shale country helped make the US the largest crude pumper in the world.

    Traditional oil power OPEC, a cartel led by Saudi Arabia, has been cutting supply to prop up prices that began falling in mid-2022, with Saudi Arabia alone extracting nearly a million fewer barrels per day by the time 2023 was over. Does the US care? Nope!

    “US oil supply growth continues to defy expectations,” the International Energy Agency said in its latest Oil Market Report, released Thursday (Jan. 18). The US is producing more oil than any country in history, some 13 million barrels of it per day, and all those barrels are coming at OPEC’s expense. Combined with record production in Brazil and Guyana (whose oil resources are the key to an escalating diplomatic row with Venezuela), as well as the defection of OPEC member Algeria, the global oil supply marketshare of OPEC+ (OPEC and a select group of allies) sits at about 48%, the lowest since the “plus” was added in 2016.

    Those non-OPEC countries don’t seem keen to slow down in 2024, but if OPEC wants to fight to regain that marketshare? That could only make the prices fall further.

    “While OPEC+ supply management policies may tip the oil market into a small deficit at the start of the year, strong growth from non-OPEC+ producers could lead to a substantial surplus if the OPEC+ group’s extra voluntary cuts are unwound,” the IEA report said.

    1. Interesting. A recent “analyst” on Bloomberg said oil stocks are a “mess” and should be sold into any uptick. Further, contrary to all the charts, arrays and AI (and reports that Buffet was selling) that I studied in mid December of last year, the markets are grinding upward. The charts etc. were pointing to a significant correction in all equity markets. Hmmmm……am I right in thinking these markets are manipulated?

  5. Just in case….

    US Prepares Rule Forcing Banks to Tap Fed Discount Window

    Michael Hsu, acting director of the Office of the Comptroller of the Currency

    (Bloomberg) — US regulators are preparing to introduce a plan to require that banks tap the Federal Reserve’s discount window at least once a year to reduce the stigma and ensure lenders are ready for troubled times.

    The proposal, which is being drafted behind closed doors by the Office of the Comptroller of the Currency, Fed and Federal Deposit Insurance Corp., is the latest response to last year’s regional-bank crisis. The turmoil spotlighted that several lenders weren’t even set up operationally to quickly borrow from the window in a pinch.

    In an interview, Michael Hsu, the acting comptroller of the currency, said the changes regulators will propose aim to ensure banks are more prepared to respond to sudden flights of deposits.

    “We want to make sure that banks have enough resources to meet any kind of outflows within five days—especially those related to uninsured deposits,” Hsu said. He added that the plan will also seek to remove any stigma associated with borrowing from the Fed’s discount window.

    Bolstering banks’ liquidity backstops became a priority for US regulators after multiple midsize lenders, including Silicon Valley Bank, collapsed last March. Since then, the government has called for Federal Home Loan Banks, another source of funding, to direct lenders to the Fed in times of extreme stress.

    On Thursday, Hsu laid out several changes that regulators are likely to propose in the coming months. He said that lenders would also have to craft plans to borrow in a pinch, including what collateral they’d pledge. Banks would face fresh a requirement to borrow from the discount window once a year to test their ability to do so, he added.

    “It’s almost like doing a fire drill. If it’s required, when a real liquidity fire comes, then the banks can do it in real life,” he said during the interview. “Operationally, banks would have to go borrow $1, $100 million, whatever it might be, just to ensure that the procedures, the systems, the people, everything is there and in place to access the discount window.”

    Hsu is the latest top US regulator to flag the need for banks to be more comfortable using the discount window. “Banks need to be ready and willing to use the discount window in good times and bad,” Michael Barr, the Fed’s vice chair for supervision, said in December.

    Borrowing from the discount window, which dates back to the Fed’s creation in 1913, has often carried a stigma. The Fed itself discouraged borrowing from the facility for long periods throughout its history, and banks were reluctant to use the facility, ostensibly for institutions on the brink of insolvency, for fear that investors would see it as a sign of operational weakness.

    The Fed has worked to change that perception over the past two decades and now encourages banks to sign up for it in case they need it in times of stress. But the stigma has been tough to shake. Discount window loan information becomes public after two years, and banks largely prefer to borrow from other places when they need liquidity.

    To make the discount window more attractive, the government is considering ways to make it cheaper for borrowers, according to a person familiar with the rule-writing effort. The proposal could also affect how assets such as high-quality bonds and mutual funds, which are frequently held as collateral to gain discount-window access, can be counted on a bank’s balance sheet, said the person, who asked not to be identified as the plans haven’t been released.

    The Federal Reserve and the FDIC declined to comment.

    The bid to change rules affecting discount window borrowing and bank liquidity requirements follows last July’s sweeping proposal to require many banks to hold more capital to help them withstand a crisis. Wall Street giants, which would be most affected, are waging a fierce lobbying campaign to scuttle the effort.

  6. Walmart Is Boosting the Average Store Manager’s Salary to $128,000

    (Bloomberg) — Walmart Inc. said the average store manager’s salary will rise to $128,000 from $117,000, as the world’s largest retailer competes for workers in a tight work environment.

    Additionally, the company said it’s “redesigning” its bonus program for managers. Store profits “will play a bigger role” in calculating annual bonuses, Walmart said on its website. “If you hit all targets, your bonus could now be up to 200% of your base salary,” according to the post.

  7. A solid 70% of all commercials on YouTube involve black people. It’s like a giant middle finger to the Caucasians who made the nation. I don’t even see many Hispanics nor Indians. It’s just straight up black people right in your face all the time.

    But here’s the thing, anyone who makes his or her buying decisions based on commercials deserves to be a broke ass bastard. It’s a new form of slavery, just like when the ancient Israelites regretted leaving Egypt during The Exodus. They were bellyaching, because they had an easier time back in Egypt. That’s why they wandered in the wilderness for 40 years; God wanted to make sure all of the Israelite Egyptian slaves died off before the Israelites entered the promised Land.

    Some things never change, the blacks are still slaves, except they are slaves owned by the synagogue of Satan and are just debt slaves used as a cudgel to beat down and humiliate the other peoples. The worst aspect of it is they don’t even know it. They continually vote for more social largesse, which just makes them worse off, then they blame whitey for their troubles. Some things never change. What a curse. When a race of people vote 88% Democrat, it’s fairly obvious.

    1. As an investor, my investments would be better off and would move higher in value if the Democrats retained control of the presidency.

      The social largesse and deficit spending would continue to escalate, and the wealth and power consolidation would continue virtually unabated. We need the blacks to continue to be used as pawns with their belly aching about social injustice and the cracker ass keeping them down, so the financial and fiscal spigots can continue to remain open. This will ensure that the wealth and power consolidation continues.

      1. I see the Democrats inevitably winning the White House and control of the congress and senate in 2024 regardless who becomes the Republican nominee.

        If Trump becomes the Republican nominee that will turn off the suburban upper middle class soccer parents who will vote democrat never mind the urban dwellers where most of the people vote.

        If by remote chance Nikki Haley becomes the Republican candidate then the Trump supporters will not vote and Trump may very well split away into a third party run which will divide the non democrat vote.
        I think Nikki Haley is nothing more than another deep state impostor.

    2. I notice most of today’s TV commercials feature blacks with a few Hispanics here and there. What is really bothersome is that today’s ads with blacks feature ebonic culture and language. The few ads with Hispanics features their culture.
      I see this as a middle finger to average Caucasian American middle class values that we grew up with in the 70s and 80s.

      This also contrasts to the few tv commercials in the seventies that featured blacks in middle class settings living middle class lives with middle class attitudes. The ads back in the 70s just had a few blacks and an occasional asian American but they did feature them living middle class lives with middle American values. Aaaah those were the days. The USA is over and out.

      1. Always remember that many of the top politicians in Washington actually desire a new global monetary system. Their views and objectives are not aligned with ours and the most effective way in ridding ourselves of the current system is by overburdening it with debt. This only creates dreadful cost of living increases for the common Man.

        To achieve these objectives, this oligopolistic elite needed to dumb down the population. It was going too slowly, so they overwhelmed the West with a multicultural cesspool. They use the tried and true Marxist technique of using minorities to beat down the majorities and subdue them.

        We are now seeing the end results and by the end of the decade a new satanic system will emerge From the ashes. Everyone will be arguing amongst themselves and blaming their fellow while the synagogue of Satan will run the show and rule over the multicolored livestock of self indulgent and egosyntonic slaves.

        I refer you to the movies Elysium and Soylent Green.

    1. In business circles, president Donald Trump is probably one of the most dishonest people you’d ever come across. He stays in business because of Rothschild. He’s a controlled kosher approved and synagogue-loving charlatan.

      Going back to the 1980s with his Trump Express and casino spreads, every shareholder that has ever gotten involved with Trump has always ended up on the losing end. Growing up on Long Island and in New York City, I was impressed with how liberal and Democrat Donald Trump was. He was best buddies with all the Democrats, even Michael Bloomberg.

      That evil and twisted carnival Barker will say anything to stay in the limelight. All of his legal bills are paid by Rothschild funneled donations.

      He’s there to immobilize and fracture the righteous opposition.

    2. DWAC would probably perform better if he lost. That would allow Trump to take the higher road and be a controlled and arm’s length critic of the Michael Obama regime. He would never call out Michael Obama on being a transvestite drag queen.

  8. Retail sales data come in hotter than expected and import prices stronger as well. Export prices lower than consensus. Overall, bonds and the markets are not a fan.

    Core Retail Sales (MoM) (Dec)
    Act: 0.4% Cons: 0.2% Prev: 0.2%

    Retail Control (MoM) (Dec)
    Act: 0.8% Cons: Prev: 0.5%

    Retail Sales (YoY) (Dec)
    Act: 5.59% Cons: Prev: 3.97%

    Retail Sales (MoM) (Dec)
    Act: 0.6% Cons: 0.4% Prev: 0.3%

    Retail Sales Ex Gas/Autos (MoM) (Dec)
    Act: 0.6% Cons: Prev: 0.6%

    Export Price Index (MoM) (Dec)
    Act: -0.9% Cons: -0.6% Prev: -0.9%

    Export Price Index (YoY)
    Act: -3.2% Cons: Prev: -5.2%

    Import Price Index (YoY)
    Act: -1.6% Cons: Prev: -1.4%

    Import Price Index (MoM) (Dec)
    Act: 0.0% Cons: -0.5% Prev: -0.5%

  9. Investment markets are pricing in more rate cuts than what the Fed is saying here. I see another 3q 2019 again, unless the Fed changes QT and ends the taper by Summer. It must start the taper by early Spring….

    Fed Economist Says Final Leg of Inflation Fight Will Be Easier Than Expected
    Steve Matthews

    (Bloomberg) — While some economists worry the US inflation fight may become more difficult as the Federal Reserve gets closer to its 2% target, a new central bank research paper argues that’s not the case.

    “It is difficult to conclude that the last mile of disinflation is more arduous than the rest,” Federal Reserve Bank of Atlanta economist David Rapach wrote in a paper released Tuesday. “In terms of policy, this implies that the Fed need not view the final phase of the disinflation process as fundamentally different from the other phases.”

    Fed officials’ quarterly economic projections show they expect three rate cuts in 2024 as inflation falls this year, according to their median forecast. Still, policymakers have pushed back against market expectations that they would begin cutting interest rates as soon as their March meeting.

    Earlier Tuesday, Fed Governor Christopher Waller said the central bank will be able to lower rates this year absent a rebound in inflation. When that time comes, he argued policymakers should be cautious and methodical.

    The Atlanta Fed economist concluded that too much concern over the “last mile” of the fight could result in a policy error.

    “From a risk management perspective, believing that the last mile is more strenuous could cause the Fed to tighten policy more than is necessary, which increases the likelihood of a recession and a sharp increase in unemployment,” he wrote.

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