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Oh no. According to that graph we're now in a recession.
--
The numbers 7.2-7.8 look to large to be in mil. What is the scale?
Jas
ac, that graph is from Menzie and I think he uses the gray to show the future - not recession.
Jas, see the link. It's a log scale.
Best to all.
Statisticians should only talk to other statisticians.
This reminds me of Hamilton's piece the other day.
'All of this number cranking proves it may drop but, then again, it may not.'
Sorry, I couldn't resist. It's good work. Having said that, I agree with Sippn. Statisticians should only talk to other statisticians.
Of course, with a standard error of regression (SER) of 0.055, a zero change lies within the 67% prediction interval."
So there's a 67% chance of between -5.1% and 0% change in log housing starts.
Whew!
In my experience, toad bones and ground-up dog balls rival the accuracy of sophisticated mathematical models at least some of the time.
off topic
what do you guys think about this?
The Next Home Equity Surge -- Seeking Alpha
The price of the median U.S. home is now around $219,000.
Is the median mortgage payment tracked anywhere? I believe it's $1500+ right now.
I would be interested in knowing how the median price of a home has tracked with the median mortgage payment over the past 5 yrs., and at what point the correlation of the 2 leads to increased foreclosures.
Some people just see recession bars everywhere.
Toatlly off topic:
Why CDO's are still selling.
I Knew It Was Bad, But…-Minyanville
Here is an interesting commercial real estate property:
Manhattan office building: 1619 Broadway was purchased for $44,000,000 in May 0f 2003. The mortgage went public and the appraisal put the building at $46,000,000. No renovations/improvements/significant leases have changed in the building since.
Novermber 2006: the building sells for a whopping $89 million to Murray Hill Properties and Westbook partners! It is like a condo flip.
Now the kicker, it was just released today that it is being sold again (6 months later) to Invesco Real Estate for 150 million dollars. Makes the condo flippers look pathetic.
The new york office market is going to crash, folks. Cap rates will not stay below treasuries indefinitely.
"He's got a 50/50 chance of living but there's only a 20% chance of that." - Lt Frank Drebin, Police Squad
Great work but it only confirms what my gut is telling me: you can't have a massive bubble without experiencing and overshoot on the way down.
ed, that minyanville piece is interesting. The conflict of interest with ratings agencies is something that sure sounds eerily similar to the dotcom analyst/investment-house conflict that drove SEC governance to put some phoney barriers up.
Who regulates the MBS market?
The page cannot be found
he also had to say this abouit private equity:
Bernanke Says Subprime Curbs to Hurt Housing Market (Update6) - Bloomberg.com
Max may be right, but you don't see a lot of log houses anymore.
The most interesting thing on this chart is that permits exceeded predictions all the way up, but the reverse was true almost all the way down. The 'prediction' obviously carries a backward bias.
Max may be right, but you don't see a lot of log houses anymore.
And considering the small sample size, I doubt that 67% number is correct anyway.
Minyanville said: "...it raises a huge conflict of interest: the credit agency's customers are the very issuers of the tranches they rate."
Uhh, the agency's customers are ALWAYS the issuers of the debt. This isn't the only case. This is the norm.
Now you can argue that it's a conflict of interest, that the rating agancies are always late to the fray, that their models are incorrect, etc. In fact, that's why most money managers and mutual funds have in-house credit analysts and don't rely on the rating agencies. But for this guy to claim "conflict of interest" is, at best, ingenous, and worst, just plain stupid.
////Top Officers Leave after hiding defaults
OceanFirst Shuts Subprime Home Loan Unit, Top Officers Leave - Bloomberg.com
HBB on the new trend:
"In the middle class neighborhood I live in, there are already two multi-family households. One of them sports no less than 5 vehicles at all times. I would guess there are at least 15 people living there (including kids). They must be on top of each other since the house is 1700 square feet. "
"off topic
what do you guys think about this?"
I think that the vultures are trying to take every scrap of meat that they can off the battered carcass of the American consumer.
How does one join the Bill Gross army of scouts?
Yal,
the junk bond market gas a very rude awakening coming with wide repurcussions, the PE & LBO frenzy is over.
Oh great, the Bill Gross article is gone and now my post doesn't make sense. Just pretend it was amusing.
Japan's Demand for Services Slips From a Record
Japan's Demand for Services Slides 2.2% From a Record (Update4) - Bloomberg.com
The tertiary index, a gauge of money spent on shopping, banking and phone calls, declined 2.2 percent in March from a month earlier
Japan's Stocks Drop, Consumer Lenders Fall on Earnings, Loans
- Bloomberg.com
consumer lenders are strengthening loan screenings, resulting in a drop in contracts by 17 percentage points in March
"I think that the vultures are trying to take every scrap of meat that they can off the battered carcass of the American consumer."
Bob, at least vultures wait for something to die before they start to pick at it. I'm rather partial to the word "parasite," which I think more accurately describes guys like Ken Lay, Ivan Boesky, Michael Millken, and some recently deceased evangelists. Unlike a predator, which takes down its prey, kills it, then eats it, parasites suck the life out of the living, then move on to another victim.
I'm sure Dotcommunist has some thoughts on this subject.
Funny Circus Bear, if you're goin' fishin' and Monica's holdin' your pole, whose pole are you holdin'? Or, did I miss somethin'?
Funny Circus Bear, are you a'holdin' Monica's pole, or is she? holdin' her own?
Gloomy Gus, at times like these I'd suggest you check with Funny Circus Bear, he'd know, but he's gone fishin'.
ATTENTION PERMABEAR HEADJOBS:
STOCKS ARE A BUBBLE
BONDS ARE A BUBBLE
HOMES ARE A BUBBLE
COMMODITIES ARE A BUBBLE
I hate to say it, but I think "DOOMSTER" might be the most insightful poster on this site.
Seriously, how many of you were short on that SUPREMELY BODACIOUS stock known by PERMA-BEARS as CFC?
It's not that I necessarily condone DOOMSTER's method(s) of communication, but I want to make it clear that I support the results..
"Successful" ideas are a "dime a dozen" in this world. Successful execution, on the other hand, is something altogether different.
You'll see, some day I'm going to be rich!!!
ragged dick | 05.17.07 - 10:07 pm | #
How about you get your f****** act together and follow the lead of those who already are.
There are a lot of people out there who got "rich" the hard way and would be more than happy to help out anyone willing to follow the same path.
Work hard and offer to use your brain (openly) and maybe you'll get somewhere.
That's the best opportunity you'll ever get. Don't waste it by being a "modern day" laughing stock.
whoa
inmates from the next town have taken over our asylum.
ac, I'm going to take the fifth on the CFC matter. But, damn, it's a BODACIOUS stock!
dc1000, I have the feeling that it will get even better as the evening wears on. As for me, it's time for some good German beer. Make that two.
I was making fun of our little wheeler-dealer and his hot tips.
ragged dick | 05.17.07 - 10:21 pm | #
Ah... sorry about that.
Net short high fives then (NEW, DHI, etc.).
ac, dc1000, if you hear from Funny Circus Bear, please tell him I would have invited him for a beer, but he and Monica went fishin' holdin' each other's ... Forget it.
Well, many of us took statistics in graduate school, so this looks tough, but rhymes something...
We are in recession on log scale. If you invert the logarithm back - we are in exponential growth
))
Everything is a bubble... if priced in money. Maybe just money is a bubble and everything else is totally normal? When money bubble deflates it will be called deflation and will surprise all overextended borrowers out there. "I thought I don't need to pay my loan as money just used to magically evaporate"
In my experience, toad bones and ground-up dog balls rival the accuracy of sophisticated mathematical models at least some of the time.
Who is your supplier? The ones I've been using (I get them from a guy I met at a convention who has a reliable contact overseas) have no predictive accuracy at all.
Dan, I'm not saying, but will advise you to steer clear of cheap foreign imports.
In ny opinion, some parts of the world consider dog balls a delicacy even use them as a food seasoning when dried and ground into a fine powder. Further, I believe that unscrupulous Chinese exporters are keen to this and, as a consequence, dog balls imported into this country are, more often than not, merely powdered melamine which, as you may or may not be aware, is a substance banned by the FDA.
It's no wonder you're having problems with that imported crap.
My toad bones and dog balls are predicting that Cerberus, after slashing and burning Chrysler, will sell it to the Chinese, who will re-name it "Happy Sun Motor LLC." They will introduce a new truck line, "Happy Toad 150," "250" and "350." Also , they'll introduce a new sports car, the "Happy Cat on Wet Linoleum." Finally, a new muscle car, "Limping Duck." Please keep this to yourself.
mp,
Stop Stop Stop.
I've got to get to sleep. Early morning event.
Thanks for the laugh.
In the Minyanville article, seems to me Succo is just saying the same thing about rating agencies and the CDO market that people here and elsewhere have been saying about appraisers and the home RE market, i.e. that their price-setting track record, mainly how high or low, could affect their future business, and since the product in question might not trade again very soon after a sale, there's little market discipline exerted against their just keeping customers happy.
That is a conflict of interest for the raters, and if there's nothing new about it once you understand the structure of their environment, there's also nothing bogus or trivial about it. Or so it seems to me.
Fed chairman does not want more regulations.
The prblems are: (to name just a few)
Fraudulant cash-back-at-closing deals that inflated prices.
Appraisers that inflated values to make room in the loan for the fraudulant cash-back deals.
Realtors that knew there was mass fraud, but ignored it as inflated prices meant inflated comissions.
Leanders that knew there were fraudulent deals, inflating prices, but didnt care.
Speculators that rushed in.
Lenders that gave loans to speculators.
Home improvement tv shows that didnt check the facts of all the flip deals.
Lenders that continued to offer crazy credit, even after signs the market was topping.
Politicians that watched it all happen, and ignored it because higher prices means higher property taxes.
The American population that saw it happening (me included), but didnt shout out loudly enough to make it stop.
More?
I just saw an ad on tv from ditech.
They are offering 125 percent loans.