Category Archives: Cool Charts

Six charts indicating that the financial crisis will get much worse

Many of the major Western Government bond yields are making all time lows. Some of these bond yields go back over 300 years. Never before has the entire world been pumping trillions of extra currency all at the same time. This can only end in disaster.
bonds_crashing

For a longer perspective, this chart shows that bond yields are really getting out of whack, and combined with trillions in money printing, Government’s around the world cannot afford to have high interest rates… but the excessive money printing will eventually catch up…
long_term_bonds

In the United States, its bond market has not been this low for 223 years. This is amazing when you look at the countless wars, interventions, social programs and other spending the US Government has done over this long period.
us_bond_yields_since_1790

In France, never before in over 400 years has the French Government been able to borrow money so cheaply with the current ultra low bond yield.
france_bond_yields_since_1746

and in Australia, our housing market increasingly becoming way out of wake, having its contraction further delayed by RBA interest rate manipulation, bank lending practices and Government manipulations.
aust_US_house_prices

And there is distinctly a similar pattern with the current Dow Jones movement with what happened in 1928-29…
Dow vs 1929

Stocks and Precious Metals at opposite turning points?

I feel we are at a major turning point for the major world sharemarkets and full gold and silver. Below is my interpretation of the chart technicals.

S&P500

Australian All Ords

AUD/USD

AUD/EUR

Gold (US$)

Silver (US$)

Cheers
Scott

Cool Housing Charts – Aus, US, International

kohler_may2012_aust_property_bear_market_frontpage

The following housing/property charts caught my eyes over the last three months (presented by Alan Kohler on ABC News)

Australian Housing


Property bear markets tend to last a long time, typically 15 to 20 years. Real house prices indicate many bad years ahead in Australia (price wise).


Per capita real wealth been going down for 7 years.

US Housing

International House Prices


Housing bubble? Singapore and Hong Kong place a stark contrast to the bubbles in Australia and China.

Cool charts from the last three months

kohler_may2012_3_great_recessions_frontpage

The following charts caught my eyes over the last three months (presented by Alan Kohler on ABC News)

Steve Keen sees housing gloom

kohler_april_2012_what_housing_crashes_look_like

Professor Steve Keen lays down the facts of the current decline in Australia housing… His full analysis can be viewed >here<

Australian house prices have now fallen 6.1 per cent from their peak, and have been falling for 21 months, which is the longest downturn in nominal prices ever recorded by the ABS – the previous longest being the 12 months from the beginning of the GFC (which was terminated by my favourite government policy of all time, the First Home Vendors Boost).

I’m sure the usual spruikers will come out with why this is now the bottom, and it’s a good time to buy, and there wasn’t an Australian house price bubble, and the shortage will drive up prices, and…

So let’s put the current data in the context of the bursting of acknowledged overseas house price bubbles.

Firstly the inflation adjusted data: in real terms, house prices have now fallen 10 per cent from their June 2010 peak, and are back to a level they first reached in late 2007.

Now let’s compare the Australian experience to date with the Japanese and US experiences – where no one, not even Alan Greenspan, denies that there was a housing bubble.

The Japanese bubble peaked in June 1991; the US bubble peaked in May 2006; and Australian house prices peaked in June 2010. Figure 3 shows the three declines from the peak, and while the Australian experience so far is clearly better than the US’s, it’s only a whisker better than the Japanese experience to the same date after the peak.

The motive force behind Australia’s bubble was the same as in the US and Japan: accelerating debt drove rising house prices during the boom. Now in both those countries, decelerating debt is driving house prices down.

And even though the actual level of mortgage debt is still rising, it’s doing so at the slowest rate ever recorded by the RBA.

The odds are that the rate of decline will accelerate in the next year – since as Leith van Onselen pointed out yesterday, many baby boomers are relying on rising house prices to secure their retirements. Now that house prices are falling, and have been doing so for almost two years, many of these boomers – 74 per cent of whom earn less than $80,000 a year, with the average investor losing over $9000 a year on these “investments” – could decide to get out rather than continue to absorb losses. The unwinding of their leveraged positions could push mortgage growth below zero, and of course accelerate the house price fall.

Weakest recovery of All Ords in 100 years

feature_kohler_jan_2012_weakest_market_recovery_since_1900

Two more interesting charts published by Kohler last night… This is looking like a secular bear market which could last for another decade.

Kohler –

Australian All Ordinaries in the four big collapses and recoveries since 1900.

This [current bear market] was the equal deepest, worse than 1929 and the same as 1973 and this recovery is the weakest of them all.

Kohler –

Price to Earnings valuation of all the developed world sharemarkets (which is how most analysts value stocks)

It’s been a 12 year global bear market, cutting the average valuation of shares by half.

~ Scott

Chinese real estate market down 34% since June 2011

feature_kohler_jan_2012_chinese_real_estate_collapsing

A compelling chart by Alan Kohler – the Chinese real estate index down 34% since June 2011. Kohler – “If anything, the slide is accelerating. I seem to remember something like that happening in the United States in 2007″

Fourteen months ago I discussed the Chinese real estate bubble in some depth on my previous blog. This post can be viewed here and part 2 here.

One quote from my article:

James Chanos sums up the current situation rather nicely. James is best known for seeing the problems of Enron and shorting its stock up until its collapse. He recently warned that China’s hyper-stimulated economy is headed for a crash, led by its housing bubble.

Its become very apparent… that China has embraced capitalism to keep the socialist elites entrenched, while more lately in the West we have embraced socialism to keep the capitalist elites entrenched. It’s a little bit of the opposite side of the same coin.

and of course a slow down in China will ultimately affect Australia’s resource boom in a big one (one of the few parts of our economy that has been doing well).

~ Scott