Weakness On Housing Stocks

The biggest canary (just another one of those dead canaries that these miners are ignoring) is what's going on in the housing stocks. We got more bad news on housing this week you got no warning going forward from DR Horton I think the stock was down 10 percent.

Stock Market: The Gains From The Midterms Rally Will Be Surrendered

I thought that relief rally was just another dead cat bounce that the fundamentals and the technicals still looked horrible for the US stock market I expected that rally to reverse and of course that process has already begun Thursday and Friday I think it will continue next week and I think the rest of those gains will be surrendered.

Real Estate: The Entire Market Is Going To Blow Up

I think that mortgage applications are going to go a lot lower. I think the entire market is pretty much gonna blow up and a good example of what's coming was the earnings that came out today from Zillow.

Zillow stock was down almost 27% on the day it actually closed just below $30 a share. The high this year was $65.70 so obviously the price of Zillow has been more than cut in half since this summer and I remember specifically on this podcast criticizing a move that Zillow made that is partially responsible for the plunging stock price.

What Zillow decided to do was actually go into the business of flipping real estate. They were not just gonna provide a platform for people to list their homes and for realtors to prospect for clients and all that, they actually were gonna get into the housing market by buying houses themselves and then listing them for sale. So, basically kind of like market making in homes, trying to pick up bargains and then sell their own houses on Zillow rather than simply act as a middleman. And I said this was a very risky move for Zillow to be making at a very bad time when you had the housing market topping, when you had mortgage rates rising.

I said this was a huge mistake, an indicative of a top and that is exactly what's happening. In fact if you look at their earnings, Zillow has bought a lot more houses than they've been able to sell so they now have a huge inventory of houses that they own, that they're trying to unload and of course they're not going to be able to do it because the buyers are just not there.

This Is Going To Be A Protracted Bear Market

This is going to be a protracted bear market like the one we had from 1966 to 1982 with 16 years without a new stock market high.The cost of living back then went up dramatically, and it’s going to rise even more dramatically during this secular bear market.

A Bubble Economy, A Brutal Recession & Interest Rates

Peter Schiff was active this week commenting the recent action in the markets. Here's a snapshot of the most interesting articles:

Peter Schiff: The Truth Is We Don't Have A Booming Economy; We Have A Bubble

Peter Schiff: The Recession That's Coming Is Going To Be Brutal (Video) 

Stock market will collapse with Fed raising interest rates: Peter Schiff (in Fox Business)

$5000 Gold Prices Could Be In Our Very Near Future