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This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/7338362573921398725
Not to be sentimental but CR definitely predicted there would be a shallow recession if any. This tempers my view of the reliability of CR's housing comments.
Almost first...
So if SFR's are basically on the floor still are these condos or...?
I doubt housing starts rebound until unemployment stabalizes. 2011-2012.
--bh
--
Unemployment is a big time lagging indicator and it doesn't predict any upturn in anything.
So where are all these condos going in?
energyecon says:Today, 08:56:51
So if SFR's are basically on the floor still are these condos or...?
Internment camps?
Well, they are planning to close down Guantanamo
We're just bouncing along the bottom.
So it's all over then? Whew. That wasn't that bad after all.
One month does not make a trend - and the graph shows this is just a slight increase in total starts (and single family starts are basically flat with the record low). However I do expect housing starts to bottom sometime in 2009.
Rebounding off a very low floor and probably not bouncing very high. IMHO.
Is this really a material change or just a moral victory?
Internment camps?
Tent cities.
CR- given the inventory overhang, why would increasing housing starts be a good thing anyway? Isn't it just more overinvestment in an unproductive asset?
Ummmm.........it's all about cash flow
from Deninnenger: The only actual good news was the concurrent housing start number, up 22% from January. This is somewhat stupid as a statistic since few people start building anything in January due to the weather, <br/><br/>Assuming these arent' seasonally adjusted then? I still theing the only reason to keep building is if you're skimming the C&D loans by getting...
So if a condo project goes bust after the foundation is poured, do they revise the month they counted the "start" downward? If the project is restarted down the line, do they count it again?
I doubt housing starts rebound until unemployment stabalizes. 2011-2012.
It's hard to imagine that there's really a need for more housing supply while the economy is shedding over 500k jobs a month.
This is proof that:
1.The government is incompetent at collecting data
\tor
2.There are a lot of stupid builders.
Take your choice.
Obama – Bush III in Black®
False choice fallacey of "either this" or "this"...
Government can be both incompetent and home builders equally stupid.
--bh
I will take all of the above.
ews like this is what can cause euphoria among the bulls and push bear rallies to dizzying heights. i'll wait to see if a trend develops that portends underlying stability/path to recovery. My gut tells me it's not a sign of strength right around the corner. Any econ/housing guru's that can infer what overall economic level (GDP) would be if we stabilized around the 500-600k new homes/year level?
Could a seasonal adjustment factor be involved here? Biggest jump seems to come from starts in NE. A big jump in condo construction in the Northeast in February?
Maybe someone decided to convert a bunch of CRE to condos or apartments
I was joking in the office that there was no number that housing starts could be that wouldn't be written up as positive, and that a viable strategy for igniting the markets would be to release a new housing start number every day.
Lower housing starts? Great news, we're working off the inventory finally!
Higher housing starts? Great news, the ever-intelligent homebuilders have seen the bottom, and it was yesterday!
Anon @ 9:02 had the same question that I had.
If we've got year plus of available inventory, then precisely why is this a good thing?
The flip side is that this batch of homeowners won't cause the festering wounds that other year batches have. U/W standards have by accounts improved and there's skin in the game. I hope. Of course, knowing these financial industry asshats, I retract my statement.
well that was SAAR but it's still nearly invisible on the graphs.
Could a seasonal adjustment factor be involved here? Biggest jump seems to come from starts in NE. A big jump in condo construction in the Northeast in February?
Having watch economic data closely for a couple of years now I've noticed that the biggest aberrations tend to come during the winter when (presumably) the seasonal adjustments are the largest and most volatile.
From CNBC:
The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.
February's pickup was led by a big increase in apartment construction.
Right next to a picture of a half-built house.
Do condo conversions count as starts?
What do you make of this chart?
Housing Affordability Index
I've been a housing bear, but this chart offers compelling evidence that a housing bottom may be imminent!
That, or the vast unemployed are making no money, and drawing average incomes down, thus making prices higher relative to a lower average yearly incomes
The methodology shows a flaw in this statistic: it depends upon the Census Bureau's median family income (the denominator in their index, so to speak). They are likely using the latest national figures ...from 2007. The height of the bubble, and wages. Anyone buying on the basis of this index is doing the classic "investing by the rear view mirror", and will truly be catching a falling knife as the wage data is updated over the next few years to reflect the sharp unemployment increases since these Census figures were taken.
Seems like the 'rebound' is mostly on the level of noise. I've got to wonder about how big the seasonal adjustments are.
PureGuesswork:
i want to know that also. i wonder what quirks, anomalies may be skewing the data (positive or negative) that may have caused this. I don't know the details of the series well enough to look for those issues. hopefully it's a clean, legitimate number.
Also heard this morning the new sfh starts are around 300sqft smaller. This has to be good news, right? The unemployed can buy smaller McMansions now.
I think you mean that taxpayers can buy smaller McMansions
--
McMansions were built for a reason--Baby Doomers would live in a communal setting! 2-5 couples per McMansion is a better way to watch America's doom while waiting to die.
Jas
has created a graph that says housing is affordable. Excellent.
touche... DONT_KNOW
The Dempublican elites hate the working man.
--
"I do expect housing starts to bottom sometime in 2009."
That is if we are not entering the depression. CR has been on optimistic side of the housing and would remain so.
SFH sales around 300K and completions around 500K means that more are being added to the unsold inventory.
3% annual increase in UR means that the housing demand is negative. Hence, Permits, Starts and Completions are all above the current demand.
IF CR were smart he would join the depression camp now and not a year from now, just as he reluctantly joined the Severe Recession camp a year too late.
Jas
--
Born-and-bred American dopes don't know the role that economists have played in this crisis, e.g., they lied about the housing demand during the bubble period and kept calling false bottoms after the bubble had burst.
Don't forget that evildoers Greenspan, Bernanke and Summers are all economists. These evildoers believe that they can manipulate the economy. Yes, they can, but only with bad results for the vast majority and to benefit a tiny minority. And they even preach free market principles. They are frikin liars.
CR was trained in a profession that is incompetent and corrupt and in no position to see a depression that has been fully baked in the cake with Bankers' Mischief. CR simply does not understand depressions. WE shall find out in due course.
Jas
A minor point, but it ended almost 70 years ago; My Mom and Dad both were 3 when it ended, so their only recollection is hearing the "old folks" talk about it. Mine too.
I recommend that you refer to him as j-ASS from mow on.....
Blackhat says:
False choice fallacey of "either this" or "this"...
Government can be both incompetent and home builders equally stupid.
--bh
You're absolutely right. I stand corrected.
Obama – Bush III in Black®
--
Homebuilders are stupid and incompetent, economists are incompetent and corrupt, and the govt, controlled by crooks, is corrupt and crooked.
There is absolutely no reason to be optimistic on America—doped population, crooked leaders and corrupt intermediaries.
Jas
Jas, you forgot to note that also all blog commenters are corrupt. Also nuns and kindergarten teachers.
GS down 6.5% pre. WSJ even scolded the AIG looting.
Must be more new Hooverville refrigerator box homes.
The Latest from Ritholz:
Final Book Chapters
Housing Starts Rebound
I almost spit out my coffee when I saw the title. I read it as a sentence and read "Rebound" as "ReBOUND." I thought CR was suddenly saying the housing market in general has hit bottom and is on its way up.
I'm off to get more coffee.
“It's a start when it starts. If it stops, it isn't retroactively reclassified as a not-a-start. If it starts up again, then it isn't a start. If the condos are converted to rental apartments, then they were a start when they started, but it doesn't count again when they are converted, normally.
If you had a draw-down in condo inventory due to conversions of condo inventory to rental inventory, but demand for condos was sufficient to require more condo inventory, then you might have an increase in starts on new condos due to conversion of existing condo inventory. So it may be that new condo starts would be caused by strong demand for rental conversions causing low condo inventories.
I've been a housing bear, but this chart offers compelling evidence that a housing bottom may be imminent!
LOL!
govt must be rushing to put cinderblock row houses again, like they did in WWII. Lived in one of those until I was 6, I remember Dad saying he payed 1/2 of a weeks salary per month for rent. Shirley Homes, Arlington, VA.
This is more noise, more junk data. With the market as unstable as it is why should we believe this is anything other than a rush of spec permits that will sit around all year, unused, when previous inventory does not sell.
Look back through the graph, every winter there is a rush of permits, but they don't necessarily all translate into completed homes. My bet is we will see even larger disconnects between starts and complete until jobs start to rebound.
I guess I am not sure why MORE completed homes (or even started homes) is a good thing when we have too much inventory as it is.
Seems like this should be bad news for R.E. prices and by extension the banks. But what do I know.
Some mention of politics in the last thread, so just a bit of text -
'"Practical equality of opportunity for all citizens, when we achieve it, will have two great results. First, every man will have a fair chance to make of himself all that in him lies; to reach the highest point to which his capacities, unassisted by special privilege of his own and unhampered by the special privilege of others, can carry him, and to get for himself and his family substantially what he has earned. Second, equality of opportunity means that the commonwealth will get from every citizen the highest service of which he is capable. No man who carries the burden of the special privileges of another can give to the commonwealth that service to which it is fairly entitled.
— I stand for the **** deal. But when I say that I am for the **** deal, I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service... When I say I want a **** deal for the poor man, I do not mean that I want a **** deal for the man who remains poor because he has not got the energy to work for himself. If a man who has had a chance will not make good, then he has got to quit... Now, this means that our government, National and State, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit....The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation. The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man's making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being."'
Guess what sort of deal was being talked about, and name the president. Should be fun - America has changed a lot, but not in the way often presented here. ( Theodore Roosevelt - Wikipedia, the free encyclopedia )
Revisions will take this number south...
Can it be that this new houses are at lower price that the asking price of other housing? At least here in SF asking seems to be a lot higher than any of the "reports" out there. It seems that home owners (at least in SF) think that their own home is worth more than what the market is willing to pay. On the other hand a friend of nine just sold his condo in Aventura for about $400K (he paid 385 2 years ago). So what gives????
Thank you, Jas, for today's daily affirmation.
Step 1; turn a shovel full of dirt.
Step 2; access entire C&D line of credit.
Step 3; run off loan.
Step 4; bank places shovel full of dirt in Level 3 at full value of loan.
I guess the builders couldn't hold on anymore and had to start doing something, even if that something is quite a terrible idea...
I don't see this as good news, housing is already overbuilt and adding even more inventory is just going to drive down prices further in the long run. It's like the companies were waiting for the situation to improve...but now they just said "aw damn it all to hell, let's just build some f'in stuff"....
I've been a housing bear, but this chart offers compelling evidence that a housing bottom may be imminent!
I suspect that affordability chart is based on nominal interest rates which in reality may be much higher (effectively) in part because of broad deflationary pressures and specifically due to a continued decline in house prices.
Also keep in mind that people are losing jobs left and right and credit is tight.
I would look for a significant and sustained decline in foreclosures as a sign of a housing bottom (assuming this isn't the result of government intervention).
interm and crude goods were off pretty significantly... wonder if this is going to get passed through or not
Rob Dawg says:
Today, 09:35:17
“Step 1; turn a shovel full of dirt.
Step 2; access entire C&D line of credit.
Step 3; run off loan.
Step 4; bank places shovel full of dirt in Level 3 at full value of loan."
Step 5; Sell level 3 asset to the Govt for face value.
Step 6: Pay massive bonuses, get fired, get golden parachute!
"However I do expect housing starts to bottom sometime in 2009."
Based on lending from who to who? I sure would like to see the statistics around these starts relative to norms. Is it that the cost of materials to build, including land, have fallen below the price of houses on the market?
I'm bullish on housing NOW.
Of course since this is a dem white house & congress, it's sector specific - Section8 housing.
I'm surprised CR framed it this way.. Housing starts are still down 47% from February 2008... Doesnt sound like a huge rebound.
I would think that this number for February 2009 is better (as would be expected) due to 1)Weather 2)sales are always better in feb than Jan 3)Slightly improved credit markets...
But again I would thought CT would see this as a negative or neutral and not a positive...
anon @ 8:38,
looking at the data over the last 18 months, it's hard to imagine anything but a seismic shift in the global economy....our lack of imagination in how to deal with it is quickly becoming a disaster...
call it a depression or whatever you want, at what point does reporting the obvious become...well, just that...
I've been coming to CR for a long time, because it's a solid place to get information...but some conclusions one will always have to make for one's self.
Housing starts are up? That just makes my tits tingle!!!! =-X
The Lorax understands.
And at that very moment, we heard a load whack!
From outside in the fields came a sickening smack
of an axe on a tree. Then we heard the tree fall.
The very last Truffula Tree of them all!
No more trees. No more Thneeds. No more work to be done.
So, in no time, my uncles and aunts, every one,
all waved me good-bye. they jumped into my cars
and drove away under the smoke-smuggered stars.
Now all that was left 'neath the bad-smelling sky
was my big empty factory
the Lorax...
and I.
"However I do expect housing starts to bottom sometime in 2009."
Why? Now that we've done away with originate-to-distribute, who will be loaning money to builders to build houses for people who won't have jobs? Unless you know something... Tata is going to be selling us $2,500 cars. Is there something along the lines of "volkshausen" in the works?
The only residential unit growth in this (and I suspect many other areas) is for boomer downsizing condos: the "kids are out of college, I don't want to do yard work" buyers
I'm not entirely surprised. In fact, I wouldn't be startled to see this again in a month or two. Developers and lenders make decisions based on advice from 'professionals' and there have been a few waves of general optimism lately. In fact, we're in one now.
Dodd proposing windfall bonus tax to recapture AIG bonuses: Senators announce plan to tax bonuses - CNN.com
Great quote by Grassley in there too, suggesting that the AIG executives should commit Seppuku.
I have a question on the starts data. The published figure is the seasonally adjusted monthly # multiplied by 12, so we are really looking at a seasonally adjusted difference of 8,800 starts between Jan & Feb, not that significant for a country our size if you ask me. I have never spent much time following housing starts, but it seems as the Annual part of SAAR gets ignored in the analysis by many in the “media” when this gets hyped up.
Also, this number is far below anything on record going back to 1959, so I would expect there is much room for this type of movement in the month to month, making this rather insignificant. Am I wrong?
DONT_KNOW
I suspect that affordability chart is based on nominal interest rates which in reality may be much higher (effectively) in part because of broad deflationary pressures and specifically due to a continued decline in house prices.
Also keep in mind that people are losing jobs left and right and credit is tight.
The last sentence is the key - in much of the country housing always was affordable and is more affordable now than ever IF you had anything close to resembling job security. Few did then, fewer do now.
That was even true during the bubble only then lenders gave loans to anyone then - with or without verification of a job - not so much anymore.
I do not see this blip as a return to bubble regardless of NAR.
Wow - with a title like "Housing Starts Rebound" this is post is gonna attract alot of boo birds. My patented "Calculated Risk Anger/Denial Index" says this post will attract 400 comments...
Housing starts seen at record lows in February
Yahoo! 404 - Page Not Found
txchick57 says:Today, 6:47:52 AM PDT
Housing starts are up? That just makes my tits tingle!!!!
IIRC didn't you have the same reaction to Dow 14,000?
Yes.
Texie senses, tingling, time to short.
Jas, you forgot to note that also all blog commenters are corrupt. Also nuns and kindergarten teachers.
Kittens too. They're like little furry Nazis.
Hitler cat! http://mako2.web.infoseek.co.jp/0/01/02/03/04/05/hitler_cat.jpg
Great quote by Grassley in there too, suggesting that the AIG executives should commit Seppuku.
Grassley is just pissed he and the other flyover senators haven't been as successful getting millions to their individual corporate farmer friends as the coastal senators have been in getting millions to their investment banker buddies.
Obviously Grassley still belongs in the 'minor leagues' - maybe someday he too can make it to the show.
Hitler cat!
The internet is such a wonderful place:
Cats That Look Like Hitler!
Obi speaks and markets tick down - he should stop whining about his "inheritance" and rehearse his lines for his appearance on Leno
PPI numbers: - Bloomberg.com
Rob Dawg says:Today, 09:00:49 AM
“txchick57 says:Today, 6:47:52 AM PDT
Housing starts are up? That just makes my tits tingle!!!!
IIRC didn't you have the same reaction to Dow 14,000?
What can you say about people who get excited five times a day about a new graph? (disclaimer: I'm one of them/us). It's like
science without the cancer cures...
Dodd proposing windfall bonus tax to recapture AIG bonuses:
would that apply to the $100,000,000,000 that Goldman and a few other recieved from AIG/taxpayers?
If you build them....you will have more of them.
Nouveau Poor, I have met alot of them lately.
I was speaking to a family acquaintance the other day. In her late 50's, artist, boomer. She lost over half of her assets last year and even sold her house and put the proceeds into her stocks! She is broke and will have to start aggressively marketing her art if she wants to survive ( she is actually a very talented painter ).
My mom is lawyering up with her siblings to try and get a chunk of my grandfathers estate in advance because they are no longer able to retire with their depressed stock holdings or other bad choices over the years.
These people should be retiring and doting on their grandchildren, not headed back into the dwindling workforce! Healthcare still needs to take a noise dove when they find out that boomer are not even able to pay for basic medical care, let alone the expensive stuff.
oh bullshit..there are no guarantees...and if breathing, that is gift enough.
CDS report: Markets go into reverse
Posted by Anousha Sakoui
FT Alphaville » Blog Archive » CDS report: Markets go into reverse
The Latest from Denninger:
AIG: More Samurai Swords Please
Those CDS reports are like reading H.P. Lovecraft to me, fascinating in that "I should not be looking into this universe on penalty of permanent sanity loss" way.
OK. I want to see this backed up by something real. If housing starts are rebounding then what is driving it? What sector of our economy has turned the corner and started expanding? Which companies are adding jobs, increasing incomes, and creating a net increase in wealth that is driving new homeowners to build new homes to live in?
If we can identify who is driving the growth, then we can invest in those companies and make money. If we can't, then this "rebound" isn't real - even if it is driven by expansion of the government and funded by Chinese purchase of US Treasuries.
Maybe the market believes gov't efforts to buoy real estate prices will work, putting us at a higher point on the supply curve. Now we just need to find families to go in these houses.
Auto Loan Delinquencies Up
All banksters all CDS players should be summarily shot. No exceptions.
U.S. Bailouts Add to Risk of Depression, Rogers Says (Update2)
By Chua Kong Ho and Bernard Lo
March 17 (Bloomberg) -- The U.S. risks sending the world into a depression as its bailouts of failed companies rob healthy businesses of capital, investor Jim Rogers said.
“The U.S. is taking assets from competent people and giving them to incompetent people,” said Rogers, chairman of Singapore-based Rogers Holdings and the author of books including “Investment Biker” and “Adventure Capitalist.” “That’s bad economics.”
U.S. Bailouts Add to Risk of Depression, Rogers Says (Update2) - Bloomberg.com
I take that back. First they should be repeatedly kicked where it hurts. Then they should be summarily shot.
Permit applications do expire in a given time frame depending on jurisdiction. Possibly these are last years apps set to expire.
I'm so glad our new prez is on TV everyday, spinning things up, spinning things down, recommending stocks, going on Leno, SNL,parties at the WH every Wed-- all while the country melts down. Hail the Boy King!(no racial reference intended)
reptillian says:
Today, 10:19:12
“Auto Loan Delinquencies Up"
Whohoo, more used cars for the market to bring prices back down again.
Live Feed of Senate Finance Committee Hearing on Ponzi Schemes
"Kittens too. They're like little furry Nazis."
Adult cats are Nazis. Kittens are Anarchists.
Let's hope it's not a trend. There should be a moratorium on housing starts until the surplus supply of housing we now have has been exhausted, if ever. Otherwise, we will continue to feed this vicious loop of plummeting home values and foreclosures.
Sign of things to come?
Nucor guides EPS well below consensus for Q1 (NUE) Co issues downside guidance for Q1 (Mar), sees EPS of ($0.55)-($0.65) vs. $0.43 First Call consensus.
"The economy has fallen off a cliff -- and there is no visibility as to the timing of the recovery."
AIG bonus list subpoenaed: NY AG issues subpoena to AIG - Atlanta Business Chronicle:
Caterpillar granting six month unpaid vacation to 439 in Indiana: IndyStar.com | Page not found | The Indianapolis Star
Shudda up. We only wanna unite all kittens under one flag. Entirely peaceful enterprise.
There should be a moratorium on housing starts until the surplus supply of housing we now have has been exhausted, if ever.
Morocco, that's been said one way or another many times here. But I can't agree.
Some will always need houses that don't exist, or aren't available where they need it. Or something unsuitable exists where they do need it. Other than the unnervingly widespread desire to tell people what they may or may not do, what is the point of an absolute moratorium?
Can those on 'vacation' at CAT claim unemployment payments?
Love the NAR Chart! If you decide to read the methodology behind that chart,do not have liquids in your mouth.
"Love the NAR Chart! If you decide to read the methodology behind that chart,do not have liquids in your mouth."
Remember, Nar is German for fool.
Wow, Zoi. Really, really good coffee?
The commercial double door refrigerator boxes are the new "double wide" stasis symbol in Hooverville!
Noise in the data. Such starts are at historic lows, and measurement errors are going to be magnified, and even with the upturn, we are still at historic lows.
Can those on 'vacation' at CAT claim unemployment payments?
Yes - Cat doesn't call it 'unpaid vacation'. But it isn't termed a permanent RIF either [might be - won't know until later].
CRbot presents, (with apologies in advance to FFDIC), a new feature called:
F'D FDIC: Breaking sounds from the bankerfront...
March 17, 2009 - PR-41-2009 FDIC Extends the Debt Guarantee Component of Its Temporary Liquidity Guarantee Program
You're WELCOME, crispy&cole. I very much hope you're satisfied now.
... now hammering FDIC's site more than 12 times faster. I hope YOU'RE very much satisfied now, Wisdom Speaker. Good luck keeping up, mere mortals.
Looks like the CR commentariat is having an impact on the general population:
Poll: More Americans fear a return of the Great Depression
Yahoo! 404 - Page Not Found
CAT employee's can file for UI. I recall being able to do this when Nat. Semi. had one of it's Fab. closures in the early 90's. They made everyone take two weeks off even if you were not in production, you could either use vacation time (stupid move IMO..many did) or file for UI.
Ciao
MS
OK you were patient. Truman's Fair Deal. What do I win?
REBear, yes, if you are on a layoff with a recall date, you can claim unemployment. Usually the work search requirements are waived if you have a recall date.
Wow, they printed this headline in the best-possible light. Housing starts are down over 40% year-over-year. I'm surprised this wasn't caught by CR.
The improvement in starts was led by the multifamily component which made an 82.3 percent monthly surge while the single-family component edged up only 1.1 percent.
By region, the rebound in starts was led by a monthly 88.6 percent jump in the Northeast, followed by gains of 58.5 percent in the Midwest and 30.2 percent in the South. Starts were down 24.6 percent in the West.
While gains in starts are certainly more encouraging than declines, today's numbers should be taken with a grain of salt. Seasonal factors are large during winter months and it does not take much to jack up the adjusted numbers. And this likely was the case-especially with the volatile multifamily component taking the lead. January was not as weak as many believed and February is not as strong as suggested by the headline.
Who, in the name of everything holy, is doing construction loans for builders of apartment buildings?? And, and... who is buying these loans? Dig deeper!
Jobs ? What jobs ?
Baker Hughes cuts another 1,500 jobs - Houston Business Journal:
The Latest from Jesse:
Senator Grassley: Throw Them to the Wolves (and Ignore Us)
New Thread: Credit Crisis Indicators
http://www.calculatedriskblog.com/2009/03/credit-crisis-indicators.html ( 1 comments )
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Wonder if this is a factor:
Brownstoner: Brooklyn Building Boom Healthier in 2008 than 2007
Also deadlines coming up to apply for affordable housing bonds in the city...If these projects were started up in feb., woe is the boro. These building will convert to rentals, and rent prices will fall even more.
There is absolutely no reason to be optimistic on America—doped population, crooked leaders and corrupt intermediaries.
Jas
Here is where you fail as a communicator, a logician, a moral person.
Americans are human beings; therefore, there is hope. So, where is your formula for proceeding from here? This is not as easy as condemning people as worthless, is it? Solving problems is the gift of "my people". To do this, one must first believe that one is possible. Your proclamation that there isn't one leaves you the hopeless one.
I'll take the stumbling and bumbling, bracketed by occasional greatness, since we can see that the alternative is perpetual darkness.
Alright, burnside, I'll settle for no new subdivisions. One-off custom homebuilding in an area that is not subdivided will be allowed.
Grassley should get back to his core Republican values of pro Big Business, deregulation and tax cuts.
Grassley, you are my hero for taking it to Big Governement. Thanks for voting for the Gramm-Leach-Bliley Act aka the Glass-Steagall Act killer.
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
http://en.wikipedia.org/wiki/Glass-Steagall_Act
And the voter roll. (Pres. Clinton (D) voted for this bill. He got swept up in the Deregulation Movement too. God Bless him! Biden and Ted Kennedy nays.)
U.S. Senate: Legislation & Records Home > Votes > Roll Call Vote
Grassely you don't have to grandstand for the popular vote I love you for your true character. DONT_KNOW
And the voter roll. (Pres. Clinton (D) voted for this bill. He got swept up in the Deregulation Movement too. God Bless him! Biden and Ted Kennedy nays.)
Clinton voted in Congress? Wow. I missed that part of the 90s. Why is Grassley all excited about what Japanese CEOs do? I thought we were trying to avoid recreating the Japanese model. Ah, except where they kill themselves. I guess that part is just fine. Geez.
Residential Investment is a leading indicator, as you posted two days ago.
Are today's housing numbers statistically significant, i.e. a possible bottom?
These numbers have got to be B.S. I can't imagine anyone building new homes in the current fiscal enviroment. My local fishwrap has dozens of Foreclosures every week and the RE section of the paper has all but dissapeared.
"My local fishwrap has dozens of Foreclosures every week and the RE section of the paper has all but dissapeared."
I wonder how much the demise of the "Home" section of the newspapers is a contributor to the crash in the dailys?
As long as we are tyring to figure out why starts were up in February, it might do to tie the fact that the rise was overwhelmingly in multi-family starts to the fact that multi-family permits had run far ahead of starts for a couple of months and that a sharp drop in multi starts in January was matched up with a rise in permits. Permits lead starts. I understand that the median estimate was for a fall in starts, and that matters for market-type expectational stuff. In this case, though, I think is also means that a good many economists were too busy doing other stuff to bother cranking out a legitimate starts forecast. If they had, they'd have forecast a rise for February starts, based on permits.
Also note that starts and permits have been pretty good about sticking to the three-year trend, wobbling between 1 standard deviation either side in most months. Starts and permits are just back to trend now after three months below. Let's wait to see if they can clear that 1 deviation barrier to the top side before declaring anything in particular has changed.
"Let's wait to see if they can clear that 1 deviation barrier to the top side before declaring anything in particular has changed."
Nice post. Good explanation and clear thinking.
Anon
Re: Fair Deal
I was indeed feeling a little Bull Moose this past year.
You realize that TR's message of World's Policeman was manipulated....Let's try walk softly but carry a big stick. Rugged Individualism ...
This:
(TK)
"..we who believe in this movement of asserting and exercising a genuine control, in the public interest, over these great corporations have to contend .."
We are seeing the results of that now , no?
(I think his brothers would kick his ass by the way)
Rob Dawg says:
Step 1; turn a shovel full of dirt.
Step 2; access entire C&D line of credit.
Step 3; run off loan.
Step 4; bank places shovel full of dirt in Level 3 at full value of loan.
The Lorax says:
Step 5; Sell level 3 asset to the Govt for face value.
Dead_Monkey_Bounce says:
Step 6; Pay massive bonuses, get fired, get golden parachute!
Step 7 - Start distressed asset fund with disgraced former bank management, funded with government non-recourse loans. Have government agree to limit your downside risks. Purchase loans worth nickels from bank for pennies on the dollar. Rinse and repeat.
Save America: Save
Rob Dawg says:
Step 1; turn a shovel full of dirt.
Step 2; access entire C&D line of credit.
Step 3; run off loan.
Step 4; bank places shovel full of dirt in Level 3 at full value of loan.
I was just thinking the same picture when i saw your post. Construction loans are based on progress draws and points of substantial completion, but putting in the foundations will activate a good tranche of cash, and there are probably a lot of companies treading water that are desperate for flow. Trades will be bidding below the floor right now, so its easy to rationalize a cost advantage, and that leaves a little more cash on the table for other costs, like VP salaries. Once the foundation is in, they can sit on for awhile and see what pops. Plus, the outlook for cheap rental product is a recently revived market, unless i'm mistaken.
Town of 12,000 (tourism, fishing, county seat, state university/NOAA marine research facility), in county with probably 11% or greater unemployment last month (SA), in a state with 10.8% unemployment. I saw more custom home construction along the bluffs of a one mile section of a beach I walk last summer than several years previously. There was a small house fire on my block last year--the place is still being repaired--looks as though they're adding another 500 square feet or so on the second floor as part of the repair. Two blocks away, there's remodel going on that looks like it's doubling the square footage. There are also several homes for sale that have been on the market for over a year. Another's been off the market for about 5 months after sitting for over a year without selling.
On the other side of the bridge, there's a "sustainable" housing development being built (so I've read in the paper, I haven't driven over to look). I don't live in a high end neighborhood, except for about one block that is all ocean view & larger homes. There is public housing a couple of blocks away (next to the 2 lane highway).
There's more empty commercial space than I've seen since the '80's (of course, there's much more space to be empty). Condos w/oceanview or within a block of the beach condos aren't selling--the builders/owners are pushing for conditional use permits to allow "daily use rentals" even though the local hotels aren't doing particularly well. The county's supposed to have one of the largest numbers of homeless children/adolescents in the state (and the state's fairly high up in the national ranking).
But there's still residential construction going on. Those who are well off still want to build that 2nd, 3rd, 4th home by the beach. Those who still have, seem to have plenty. Gotta do something with those huge bonuses, why not yet another "home", this one on the OR coast? How many does McCain have? 9? 10?
Can't wait for that promised sea level rises accompanied by on average higher energy storm surges/wave levels (latter is already happening to some extent). See some of these structures fall into the ocean.
Lies, damned lies and statistics: (i) After a strong jump in a time series (e.g. the downward break last year), season-adjustment factors are less reliable. (ii) The official release shows that the reported increases in building permits and housing completions are NOT statistically significant, even at 90% (my guess is that at 95% housing starts would also lose significance). In other words, you cannot reject that there was NO increase, or even a slight decrease, seasonally adjusted, in either series. This excellent blog should include this kind of information more in its postings. Keep up the good work!
Like Rob Dawg and others have mentioned already, I will now dramatize these numbers.
Developer Board Meeting mid January.
CEO "How bad is it?"
CFO "Our cash flow is Visa and Mastercard."
VPSales "I can't unload anything."
Attorney "We still own enough councilmen, supervisors and alderman to postpone 97% of our entitled projects without putting money upfront, that leaves 3% that we need to start or we loss the entitlements and fees, restarting will mean spending the same money twice, if we let the permits lapse the value of those parcels goes to below negative in my opinion.
CFO "If we don't move on the 3% that couldn't be delayed, some of our lines will be called. Our lenders are going to go apeshite. We have to waste money on that 3% to keep the rest of it from being called in.
CEO "how much will it cost us?"
Attorney "We can drag our asses on most of the 3% we need to start. Most of the permit agencies that balked at postponement needed to keep their people busy. You are better off hiring a burger flipper as foreman on site. Who cares if it takes 12 inspections for grading. If we can keep the building departments from filling up with inspectors I don't think any of the cities will mind if we don't get anything done."
If the lenders cry about lack of progress we can blame it on the excessive inspections.
CEO "how many delays can we expect on next months expiring permits?"
Attorney "How many more rubber chicken campaign fund raisers can you go to?"
CEO "Do they take VISA?"
Like Rob Dawg and others have mentioned already, I will now dramatize these numbers.
Developer Board Meeting mid January.
CEO "How bad is it?"
CFO "Our cash flow is Visa and Mastercard."
VPSales "I can't unload anything."
Attorney "We still own enough councilmen, supervisors and alderman to postpone 97% of our entitled projects without putting money upfront, that leaves 3% that we need to start or we loss the entitlements and fees, restarting will mean spending the same money twice, if we let the permits lapse the value of those parcels goes to below negative in my opinion.
CFO "If we don't move on the 3% that couldn't be delayed, some of our lines will be called. Our lenders are going to go apeshite. We have to waste money on that 3% to keep the rest of it from being called in.
CEO "how much will it cost us?"
Attorney "We can drag our asses on most of the 3% we need to start. Most of the permit agencies that balked at postponement needed to keep their people busy. You are better off hiring a burger flipper as foreman on site. Who cares if it takes 12 inspections for grading. If we can keep the building departments from filling up with inspectors I don't think any of the cities will mind if we don't get anything done."
If the lenders cry about lack of progress we can blame it on the excessive inspections.
CEO "how many delays can we expect on next months expiring permits?"
Attorney "How many more rubber chicken campaign fund raisers can you go to?"
CEO "Do they take VISA?"
Starts do not equal sales...new home sales are still declining, and will until the foreclosure glut is flushed thru.
The Real AIG Scandal
It's not the bonuses. It's that AIG's counterparties are getting paid back in full. By Eliot Spitzer
Posted Tuesday, March 17, 2009, at 10:41 AM
Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars? ...
The real scandal at AIG is the not the bonuses. It's the payments to counterparties. - By Eliot Spitzer - Slate Magazine