Sector Funds vs S&P 500

Real Estate Rage is Back

The price was cut 22 percent and it triggered pissed off buyers who paid higher.

房价从1.8降价4千，泰州“华樾花园”交付维权pic.twitter.com/N88XQBLqdZ

— 财经数据库 (@caijingshujuku) August 31, 2023

I could not confirm via news, although a search for the city and project did turn up listings at the 18,000 yuan/sq ft price. This type of news would get covered years ago. I don't know for certain, but suspect this will run afoul of the new guidelines. In that case, take everything with a bit of salt until you see some confirmation because there are anti-CCP forces in the West that hype this type of news, show old videos claiming it is new and so on. I am fairly confident this is real because a busy season is coming in late September as both Mid-Autumn Festival and the Golden Week align. It would make sense for some developers to try discounts now to beat what all signs say will be a disappointing season.

Here is a post from 2019 speculating on this very timing: Will Real Estate Rage Return in 2019? Developers Slashing Home Prices Ahead of Mid-Autumn and National Day

Here's a protest from 2014. Link is dead now unfortunately, but I grabbed a picture: Real Estate Rage in Wuxi

Here's 2014, when it looked like the bubble might finally burst. Everything has been pushed back a decade and made far, far worse if this is indeed the bust: China Real Estate Rage Is Back; Ghost Cities Everywhere; Offshore Yuan Plunges; Talk of Falling Real Estate Prices Across China

This was my first real estate rage post from 2011. Home buyers in Shanghai angry at massive price drops, smash offices

More than a decade of this behavior thanks to the housing bubble requiring ever higher prices, insanely unaffodrable homes and developers need to move inventory to meet debt payments. Incredible to me that they did not deal with this in the interim. Instead here we are with the world economy holding its breath. Or at least, those in the world who are paying attention. Judging by the Nasdaq and social media, most of the U.S. doesn't care.

FX Charts Reaching Turmoil Zone

China vs USA Proxy

CADAUD. Breakouts in 2008 and 2020.

Housing Reversal Plays

If the market reverses, housing has been a leading momentum sector.

The Case for Deflation

The market is in a curious state with some sectors such as oil and oil serivces hinting at bullish breakouts and bonds hinting at bearish breakdowns. How about the contrary? The charts say the market isn't far from deflation either. If crude reverses, the outlook for inflation dims fairly quickly. I'm not going into monetary data in this post, only looking at some assets that should be doing well if inflation, specifically commodities prices, move higher.

Crude oil is about $10 away from a clear bullish breakout, but it is battling at a resistance area. It is $20+ away from a major bearish breakdown.

Rio Tinto has a potential measued move to $100 or its done and topping.

Freeport-McMoRan has what looks like a diamond pattern to me. Moves out of diamonds are often huge, powerful moves.

Emerging markets, of which China is the main component, are less than 10 percent from major support.

Copper is already well into a rollover and it leads oil.

Not enough to call it a serious break yet, but EURUSD went through support on Friday. The euro is keeping the U.S. Dollar Index in a bearish pattern.

East Asian currencies are rolling over. It won't take much of a push open a retest of the dollar's 2022 highs. An extension of the current dollar rally into Monday might be enough, as it would be enough to carry EURUSD below support...

Of Australia, Brazil and South Africa's stock markets and currencies, only Brazil's currency looks strong. You'd think it would be more than 1 out of 6 if a commodities bull run is coming.

Gold has a bullish look to it, but it often falls in the first part of deflationary waves. A pullback towards ther $1550 to $1600 area might be the buy of a generation if secular disinflation and the 40-year bond bull market have ended.

I've been focused on rising home prices and affordability, but I didn't pay close enough attention to the 2006 top. The Case-Schiller Index spent about 13 months topping (the low between the two tops broke in April 2007, after the initial March 2006 peak) with a double-top pattern. A precisely similar top in time would see home prices implode this month because Black Knight has said, and the trend in Case-Schiller, points to a new high in July. Case-Schiller will report August data in October. Analogs need not be precise though. As long as prices sink in the autumn, it'll be a very similar top. The prior top was followed by a 50 percent decline.

Here We Go Again: $32 billion in Trust Products Fail

China: $32 Billion Trust Default

Semiconductors: Bull or Bear?