Trade war with US could be the tipping point for China’s $14 trillion debt-ridden economy

Trade war with US could be the tipping point for China’s $14 trillion debt-ridden economy

Nearly 20 percent of China's exports go to the U.S.

  • If a trade war ensues with the U.S., China's GDP growth would drop 0.5 percent and could continue to fall as things heat up, the IMF warns.

  • China's debt-to-GDP has ballooned to more than 300 percent from 160 percent a decade ago.

  • Chinese officials now warn of a financial-sector debt bubble that's waiting to burst.

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The Crash Of 1929: "Can It Happen Again?"

The Crash Of 1929: "Can It Happen Again?"

In the 4th of February, we published a blog entry detailing the similarities of the current stock market environment with that before the stock market crash in 1987. On February 5th, the Dow Jones Industrial Average (DJIA) experienced the worst daily point decline of its history. Since then, the stock market has recovered, but are we out of the woods?

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A Decade After The Bubble Burst, House Flipping Is On The Rise

A Decade After The Bubble Burst, House Flipping Is On The Rise

A decade after the U.S. housing bubble burst, house flipping is on the rise again. Defined as reselling a house within a year of purchase, flipping is at an 11-year high in the United States and it’s the subject of dozens of TV shows and weekend workshops promising to teach real estate novices how to make a fortune.

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Big banks have found a new way to stay in the subprime lending business

Big banks have found a new way to stay in the subprime lending business
  • Despite tough new regulations aimed at lowering risk for banks, Wall Street continues to find a way to finance subprime loans.
  • Instead of direct lending, big institutions like Wells Fargo and Citigroup loan money to nonbank institutions — shadow banks — who then deal with higher-risk clients.
  • Banks say this way helps lower their exposure.
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Housing starts fall more than expected in February

Housing starts fall more than expected in February
  • Housing starts declined 7.0 percent to a seasonally adjusted annual rate of 1.236 million units in February.
  • While the volatile multi-family housing segment accounted for the decline in home building last month, the broader housing market appears to be slowing.
  • There is growing optimism that tightening job market conditions will translate into faster wage growth in the second half of this year.
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What The Climbing Debt Defaults Really Mean For The Economy

What The Climbing Debt Defaults Really Mean For The Economy

By many measures, the economy looks strong.

The stock market — despite a fairly steepWh correction a week ago — is still well ahead of where it was a year ago and is trending up. Unemployment is at historic lows, wages are rising given the tight labor market and consumer spending has been keeping pace.

Dig in a bit deeper, however, and the numbers become a bit less confidence-inspiring, since the bulk of that consumer spending is being done on credit, as household debt is skyrocketing.

That by itself isn’t worrisome news: Credit can be useful leverage if used correctly. But the data indicates that for an increasing number of users, debt is not being managed correctly. Late payments and out-and-out defaults and charge-offs are on the rise across a few lending segments.

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Alan Greenspan: 'We have a stock market bubble'

Alan Greenspan: 'We have a stock market bubble'

Alan Greenspan is sounding the alarm about the booming stock market.
"There are two bubbles: We have a stock market bubble, and we have a bond market bubble," the former Federal Reserve chairman told Bloomberg TV on Wednesday.

The trouble in the bond market "will eventually be the critical issue," Greenspan said, adding that "for the short term it's not too bad."

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Pending home sales eke out 0.5 percent gain in December as supply shrinks to record low

Pending home sales eke out 0.5 percent gain in December as supply shrinks to record low
  • The supply crisis is hitting housing hard, as strong demand quickly eats up what few listings there are.
  • Home shoppers signed 0.5 percent more contracts to buy existing homes in December compared with November, according to the National Association of Realtors.
  • The supply of homes for sale at the end of December fell to the lowest level since the Realtors began tracking it in 1999.
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Fed holds interest rates at Yellen's last meeting as chair, sees inflation picking up

Fed holds interest rates at Yellen's last meeting as chair, sees inflation picking up
  • The Federal Reserve left its benchmark interest rate unchanged, as expected, at Janet Yellen's final meeting as chair. 
  • Inflation should stabilize around its 2% target this year, the Fed said, in an update to its previous language on one of its mandates. 
  • Traders expect the next rate hike in March, during the first meeting with Jerome Powell as Fed Chairman.
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Economists Are Saying We Will Have A Happy — Really Happy — New Year

Economists Are Saying We Will Have A Happy — Really Happy — New Year

It's New Year's Day, so it's time for football, hangovers, resolutions — and forecasts.

With the first three, you're on your own. But for forecasts, we have economists to help. They get paid to peer into the future, and in general, they are seeing good times ahead, thanks to an upbeat business cycle.

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Why are small banks disappearing?

Why are small banks disappearing?

In 1994, nearly 500 banks were headquartered in California. Today, there are fewer than 180. By the end of the year, if current trends hold, Californians will have only one-third the number of banks to choose from for their mortgage, small business and personal savings needs than they did just a couple of decades ago.

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