Lawyerliz, Yes, recievership is probably a condition of the bid. What I'm wondering whether BankUnited will be like WAMU which went failed on a Thursday and straight to JPM by Friday morning. In WAMU's case I assumed it was so the FDIC didn't have to float backing deposits over the weekend. But I never really understood that. Or maybe BKUNA will be closer to the Wachovia model which technically wasn't a failure.
It's probably also worth pointing out that for smaller and smaller samples, the median becomes less and less meaningful, because individual samples can skew the calculated median.
"Yes, receivership is probably a condition of the bid. What I'm wondering whether BankUnited will be like WAMU which went failed on a Thursday and straight to JPM by Friday morning. In WAMU's case I assumed it was so the FDIC didn't have to float backing deposits over the weekend but I was never really sure. Or maybe BKUNA will be closer to the Wachovia model which technically wasn't a failure."
rumor is in WM's case, the FDIC was simply afraid of word leaking out, so had to pull the trigger early.
But, receivership by the FDIC is always done immediately. Those BFFs you read about? Those are all receiverships. Regulator puts bank into receivership, appoints FDIC as receiver, FDIC sells assets. That way, the buyer gets a clean slate, often absent some liabilities.
Don't underestimate the power of the pendulum swinging hard the other way, illiquidity driving down the comps just as quick as they went up previously, but pendulums cannot measure human emotion swings in the same fashion, thus the subterfugey murky world of comps @ present, compared to when it was in heat.
Everyday after watching Kudlow and his "green shoots are everywhere" drivel hype ... I shake my head, take two deep breaths and know that Calculating Risk is providing nuggets of rationality on a daily, and sometimes hourly, basis. I feel calm again.
Nemo, there is no perfect metric, although I prefer Case-Shiller. But I know we are going to read stories about the median price increasing - when all prices are still falling - just because the mix changed. How can the mix not change? The high end is essentially frozen right now as the Dataquick story indicated
On the contrary. A breakout is a good way of showing activity by price, while the median is useful, as we have seen and will see, to give an impression of increasing prices when there are none, to reflect plunging prices when that is a useful distortion and, soon enough, to trumpet a recovery on the imputation of increasing prices which do not yet exist.
It is far more useful to the Lereahs and Yuns of this world than it is to you and I.
You pretty much hit dead on the Washington DC Metropolitan area.
Outside the beltway, low price homes in Loudin, Fauqier, Prince Williams, Prince Georges counties have been decimated by the collapse. Foreclosures abound. Home prices 40% to 60% down.
Inside the beltway, however, Alexandria, Arlington, and DC proper, prices have held up BUT the volume of sales is 1/3 to 1/2 of pre-collapse. Prices have dropped 15-20%. But in the higher price areas, those who don't have to sell, don't; those who do have far fewer (if any) foreclosures to compete with.
George Mason University, incidentally, keeps the stats for Nortern Virginia on nvar.com Watching these for a couple years now the Median price is up, down, depending on the particular mix of sales and price level. Like you said, the median is all about the mix not the price change.
There is no reason for the U.S. government to borrow its own money from the Federal Reserve, AT INTEREST, when it can issue interest free money on its own.
The argument I've heard is that it puts control of the money supply outside of political concerns, which may have some merit, but I don't know that it outweighs the cost of skimming the cream off the economy to put into the pockets of bankers. It is a system doomed to mathematically fail.
Agreed, FHFA is very flawed (and I am suspicious it has been manipulated the past two months). Medians, as I posted above, are meaningless when gauging prices, but are decent in gauging what is moving in the market.
I too expect medians to increase substantially in the near future, as more expensive home owners capitulate (or are forced to capitulate).
All it will really mean is the pain is being spread. And may actually lead to even lower CS numbers, as a market that has held ground starts to give way.
We use median in appraisal but you have to break out the sub market data for each specific home type. You can't just look at homes from 300-400K because those homes used to be 400-500K or MORE 1-2 years ago. We look at number of beds, baths, basement, lot view, and search for a radius surrounding the subject property. You can gauge what is going on with similar homes based on this data. Most homes with 4-6 full baths in my area are $500,000+ priced homes. I can tell you that $500k to 2.2 Million are seeing about the same % decline....SEVERE. The magic number is $400K because that will STILL qualify for FHA. Looks like EVERYTHING will slowly drop to whatever price is supportable to EASY financing. Just an observation......
The one thing that separates this bubble from most every other bubble, is that a house is a need. Nobody needed Tulips or Beanie Babies or Silver or Baseball Cards or what have you, but this is different.
"The one thing that separates this bubble from most every other bubble, is that a house is a need. "
Yeah, but you don't need to own a house. You can rent.
The thing that really separates this bubble from most is the level of debt used to buy the overpriced asset. Most Tulips were bought with cash (and some margin, I am sure). Same thing with the stock market bubbles of the 1920s and 1990s.
Only with a house could you lever up to 100LTV, with relative ease.
McMansion bought two streets from me for 575K in 2003, 150K upgrades, listed for 18 months at 850K, just went under contract for 575K...that's a nice roundtrip
In Austin Texas the high end market has been frozen for over a year, first sales slowed above $550K, than $450K, for a while $350K was the sweet spot, but now there is only activity at $250K or below, we have a very active market at $150,000. I have seen homes start a million that are now $799,000 and still sitting a year later. There is a big cluster of sellers holding tight at $499,000 but very very few pendings at that level or anything above it.
Case-Shiller is not immune to the sales mix problem, is it?
Their base index will reflect price increases/decreases in the houses sold in a given period....so large volumes at the low end will skew the index lower.
And the price break points for the three "tiers" will also be influenced by the mix, won't it?
There is no reason for the U.S. government to borrow its own money from the Federal Reserve, AT INTEREST, when it can issue interest free money on its own.
The argument I've heard is that it puts control of the money supply outside of political concerns, which may have some merit, but I don't know that it outweighs the cost of skimming the cream off the economy to put into the pockets of bankers. It is a system doomed to mathematically fail.
~~~
We see that the banks get all the profit from currency and credit creation, yet . look at who is paying for their incompetence greed and fraud ... US!
By putting the creation of currency and credit in the UST the total amount of dollars in the system can be controlled. The privately owned and operated Federal Reserve
can not control the incompetence, greed and fraud of thousands of players producing money out of thin air ...
Are their risks ... sure ... but we can go right to the source, one agency to find fault and fix the problem ... the UST ...
Having our arms around all currency and credit creation will give us the tool to stop bubbles before they get out of hand ...
dcr100- Not just outside the beltway, rather the lower end in general is getting hammered. I just attended an auction for a house a couple of doors down from mine, in the Northern end of College Park, just inside the beltway.
on 10/25/2006 it sold for $365,000
on 5/19/2009 the gavel went dowo on $155,000 (+5% to auctioneer)
There were about 20 bidders present, so 19 people didn't want to pay any more than the selling price
Of course it sold for $168,000 in 2004 so it STILL may be overpriced.
On-Topic: CR is absolutely right. see kurtosis or the technical term of skew
Off-Topic:
I had a sporadic bit of time to kill today, instead of shooting the breeze I played with Matlab and data from the weekly PR for Fund flows on TrimTabs' website. I don't know how they come up with their numbers, they could be just working backwards from stock prices in large part. It's not so important, I was playing around. So that's what my earlier post was about. I've added the correlation and covariance data too. Nothing dramatic, but here are a few points:
- US ETFs were all the rage last fall, and then went cold. Commodities and hot money
- US Equity ETF flows had negative covariance with the All Equity Mutual Funds. Volatile, but counter to the market movement or mutual fund flows.
- Only correlation of note is the moderate correlation between S&P500 wk over wk % change with Mutual Funds (and not ETFs). This might become stronger with data that is not so coarse
In reference to the previous thread, I have one last thing to say regarding "buying time" and the issuance of debt.
Almost three centuries ago, one of my forefathers was approached by representatives of the Continental Congress. Desperately in need of financing, the new government asked him to buy their bonds and he did, pledging his entire fortune.
He made the mistake of using those bonds as collateral, and when the Congress defaulted on them, he ended up in a New Jersey debtors' prison for five years. His wife lived outside the gate and brought him food because the prison wouldn't feed the prisoners.
Upon his release, he petitioned to sue the newly formed US government and was denied.
Most of you are probably unaware of the fact that the United States Government has a history of default. The government is still here.
Your post made me wonder if the non-correlation between ETF and mutual fund flows was about the type of investment or the timing. If you're trading, it's too hard to get in and out of mutual funds, but it's easy to get in and out of ETFs. Can't see the images well enough to have an opinion, and you would have to know which ETFs.
The line in your table that says "Median Price", actually contains the mean price. (The two are the same for the first two columns, but not for the rest.)
More German Companies Seeking Handouts
Formerly confident execs—even from companies that disdain government aid—are lining up in growing numbers for a piece of Germany's $155 billion stimulus
The 1st "hard metal days" in the USA were in 1794 and 1795, when silver & gold coinage were introduced.
The U.S. so soured their financial system with the issuance of Continental Currency in the 1770's & 1780's-backed by bupkis, that the very first Federal Currency wasn't issued until 1860.
The "Continental" was debauched by British counterfeiting ...
~~~
read this :
At the outbreak of the War of Independence, the Continental Congress decided to issue a national currency to fund the war in 1775. Nearly $250,000 was printed.
“The notes were backed by the ‘anticipation’ of tax revenues. Without solid backing and easily counterfeited, the notes quickly became devalued, giving rise to the phrase ‘not worth a continental,’” according to the Federal Reserve Bank of San Francisco.
Paul Revere made the first plates for the federal currency. The notes were redeemable in Spanish milled dollars, according to the U.S. Secret Service.
British-Backed Counterfeiting
Though counterfeiting had been around since the first settlers, it became a war strategy in the Revolutionary War.
In 1776, a printing press was taken out to the HMS Phoenix that was moored in New York Harbor and started an operation that became the first British-sanctioned counterfeiting operation.
“The British counterfeits (colonial currency) of continentals were excellent—so good, in fact, that in April 1777 the king’s counterfeiters ran an ad in a New York newspaper offering to sell their false currency to loyal subjects of the Crown at a rock-bottom price—the cost of the paper it was printed on,” Thomas Craughwell wrote in Stealing Lincoln’s Body (Cambridge, Mass.: Belknap Press of Harvard University Press, 2007: pg. 33).
The counterfeiters were so confident in the quality of their fake bills that they wrote in the ad, that the fake continentals “are so neatly and exactly executed that there is no Risque…it being impossible to discover, that they are not genuine.” (Lynn Glaser, Counterfeiting in America: The History of an American Way to Wealth, Philadelphia: Clarkson N. Potter, 1960, pg. 37-39)
Officials tended to agree. In 1777, New Hampshire Governor Josiah Bartlett wrote, “We have lately discovered a most diabolical scheme to ruin the paper currency by counterfeiting it, vast quantities of the Massachusetts bill & ours [in Rhode Island], that are now passing are counterfeit, and so neatly done that it is extremely difficult to discover the difference… by what appears at present, it is a Tory plan and one of the most infernal that was ever hatched.” (Josiah Bartlett to William Whipple, 1777, Gilder Lehrman Document Number: GLC 193 at Digital History Website, University of Houston)
Circulating Fake Currency
The British had a distribution network of “shovers” or people who used the counterfeit currency in the tories, colonists who remained loyal to the British government.
Two of the British shovers, David Farnsworth and John Blair, were arrested in Danbury, Conn., with $10,000 in counterfeit currency on them. One of their excuses to try and avoid prison was that they were petty criminals compared to other shovers who were circulating $40,000 - $50,000. (Glaser, pg. 40-41)
Aftereffect of British Counterfeiting
Though Great Britain lost the war, America nearly collapsed because of the counterfeiting. American currency was so devalued by 1779 that Congress decided that they couldn’t print any more.
The country then moved to using gold and silver coins because they were harder to counterfeit.
I think this example is what is happening in New Orleans now. The lower end homes went up very high in price. The medians went way up and then it went down considerably. Now it is going up again but where I am sitting the prices are just starting to fall. It is taking a very long time for the new prices to be felt in the comps and appraisals.
My co-worker is buying a double right now and she is hoping it appraises so she can get the house because she wants it. Really she is trying to catch the falling knife. It is likely she is over paying by $75 grand because when it is all said and done a house with crappy kitchens and baths with no electricity on one side and in a so/so neighborhood should not really be $175,000. This is my instinct anyway. I would have offered $100. It probably needs 100 worth of renovation.
Houses that are put on the market either go into contract or expire. If fewer of the high-end units sell, the high-end listings will expire and the median price of expired listings will rise compared with the median price of listings that go into contract. You can see a real-world illustration of this at http://www.sfrealtors.com/pdf/realtor_advantage/Median_Price_SFR.pdf. During 2007 and into early 2008 (when the market in San Francisco was at its peak), the median price of listings that went into contract was always higher than the median of listings that expired. But starting first in July 2008, that relationship changed and now the median price of listings going into contract is lower than that of listings expiring.
ichael Pomerleano...."Quarter of credit to GDP exceeding the prior crisis credit to GDP"
Why would anyone want credit to GDP to expand beyond the levels that capsized their systems? What purpose is served by such unstable levels of credit? Better to maintain private debt to GDP within a range that promotes long term stability.
Let CPI prices gradually fall so that consumers can buy the extra goods made available by increased productivity. Don't force consumers to borrow unrepayable sums to buy the widgets.
"Now look at what happened in 2007. Since subprime imploded first, the number of units sold at the low end decreased to 40 from 50. Everything else stayed the same - and just the change in the mix (higher percentage of high end homes) pushed up the median price! Note that the median price (light blue) increased WITHOUT any actual prices increasing. This happened at the beginning of the housing bust in many areas."
This is what I'm talking about!
If "no one" ignored the median in 2007 as it was "artificially" pushed up, as the bubble began bursting - why should "we" ignore the median in 2009?
All the media did here in the Alt-A Bay Area in 2005-2007 was talk about 20% annual or more price gains... so now we should just ignore the median on the way down?
Obviously, the imperfections of the median in the past will continue (in either direction) in the future. But it's still important to know the median price.
So is there a better metric to use?
ConMedians
Nemo!!
The median price is a good way to gauge what is moving in the market, but not a good way to gauge what is happening with house prices.
Boxes will always be free.
Average price per square foot maybe?
I'm a little slow, so I'll just assume all this goobldygook means housing prices will stop going down and stocks will keep going up?
From last thread:
Lawyerliz, Yes, recievership is probably a condition of the bid. What I'm wondering whether BankUnited will be like WAMU which went failed on a Thursday and straight to JPM by Friday morning. In WAMU's case I assumed it was so the FDIC didn't have to float backing deposits over the weekend. But I never really understood that. Or maybe BKUNA will be closer to the Wachovia model which technically wasn't a failure.
It's probably also worth pointing out that for smaller and smaller samples, the median becomes less and less meaningful, because individual samples can skew the calculated median.
From the previous board:
"Yes, receivership is probably a condition of the bid. What I'm wondering whether BankUnited will be like WAMU which went failed on a Thursday and straight to JPM by Friday morning. In WAMU's case I assumed it was so the FDIC didn't have to float backing deposits over the weekend but I was never really sure. Or maybe BKUNA will be closer to the Wachovia model which technically wasn't a failure."
rumor is in WM's case, the FDIC was simply afraid of word leaking out, so had to pull the trigger early.
But, receivership by the FDIC is always done immediately. Those BFFs you read about? Those are all receiverships. Regulator puts bank into receivership, appoints FDIC as receiver, FDIC sells assets. That way, the buyer gets a clean slate, often absent some liabilities.
Don't underestimate the power of the pendulum swinging hard the other way, illiquidity driving down the comps just as quick as they went up previously, but pendulums cannot measure human emotion swings in the same fashion, thus the subterfugey murky world of comps @ present, compared to when it was in heat.
there's lies, damned lies and statistics
Everyday after watching Kudlow and his "green shoots are everywhere" drivel hype ... I shake my head, take two deep breaths and know that Calculating Risk is providing nuggets of rationality on a daily, and sometimes hourly, basis. I feel calm again.
"Up numbers good. Down numbers bad."
On breaking up the big banks, if that means no longer having ready access to my bank in a majority of states, forget about it.
Give me 15 largish banks over 2000 Mr. Potters & Milburn Drysdales any day of the week.
You can take 1987 banking and shove it.
Unabankers have issued a financial manifesto...
Nemo, there is no perfect metric, although I prefer Case-Shiller. But I know we are going to read stories about the median price increasing - when all prices are still falling - just because the mix changed. How can the mix not change? The high end is essentially frozen right now as the Dataquick story indicated
best to all
On the contrary. A breakout is a good way of showing activity by price, while the median is useful, as we have seen and will see, to give an impression of increasing prices when there are none, to reflect plunging prices when that is a useful distortion and, soon enough, to trumpet a recovery on the imputation of increasing prices which do not yet exist.
It is far more useful to the Lereahs and Yuns of this world than it is to you and I.
You pretty much hit dead on the Washington DC Metropolitan area.
Outside the beltway, low price homes in Loudin, Fauqier, Prince Williams, Prince Georges counties have been decimated by the collapse. Foreclosures abound. Home prices 40% to 60% down.
Inside the beltway, however, Alexandria, Arlington, and DC proper, prices have held up BUT the volume of sales is 1/3 to 1/2 of pre-collapse. Prices have dropped 15-20%. But in the higher price areas, those who don't have to sell, don't; those who do have far fewer (if any) foreclosures to compete with.
George Mason University, incidentally, keeps the stats for Nortern Virginia on nvar.com Watching these for a couple years now the Median price is up, down, depending on the particular mix of sales and price level. Like you said, the median is all about the mix not the price change.
BKUNA likely goes recievership thursday to give them a monster weekend to sift through the garbage.
@Nemo
yes
OT
American Thinker Blog: Letter from a Dodge dealer
How Chrysler is dealing with dealerships getting the ax
Larry Yun is the Mayor of Contemptkin Village
@mminckl,
Re: borrowing our own money. Yes!
There is no reason for the U.S. government to borrow its own money from the Federal Reserve, AT INTEREST, when it can issue interest free money on its own.
The argument I've heard is that it puts control of the money supply outside of political concerns, which may have some merit, but I don't know that it outweighs the cost of skimming the cream off the economy to put into the pockets of bankers. It is a system doomed to mathematically fail.
Agreed, CR. Low end unfrozen, a bit.
No sales over 300k.
And what is happening in California??
"although I prefer Case-Shiller"
Agreed, FHFA is very flawed (and I am suspicious it has been manipulated the past two months). Medians, as I posted above, are meaningless when gauging prices, but are decent in gauging what is moving in the market.
I too expect medians to increase substantially in the near future, as more expensive home owners capitulate (or are forced to capitulate).
All it will really mean is the pain is being spread. And may actually lead to even lower CS numbers, as a market that has held ground starts to give way.
We use median in appraisal but you have to break out the sub market data for each specific home type. You can't just look at homes from 300-400K because those homes used to be 400-500K or MORE 1-2 years ago. We look at number of beds, baths, basement, lot view, and search for a radius surrounding the subject property. You can gauge what is going on with similar homes based on this data. Most homes with 4-6 full baths in my area are $500,000+ priced homes. I can tell you that $500k to 2.2 Million are seeing about the same % decline....SEVERE. The magic number is $400K because that will STILL qualify for FHA. Looks like EVERYTHING will slowly drop to whatever price is supportable to EASY financing. Just an observation......
Banking is so much - better - in France...
Not without my chauffeur
| Reuters
The one thing that separates this bubble from most every other bubble, is that a house is a need. Nobody needed Tulips or Beanie Babies or Silver or Baseball Cards or what have you, but this is different.
California goes into receivership tomorrow.
Max in Broward County for fha is 351K.
And what is happening in California??
No sales over 300k.
When do the checks start bouncing?
"The one thing that separates this bubble from most every other bubble, is that a house is a need. "
Yeah, but you don't need to own a house. You can rent.
The thing that really separates this bubble from most is the level of debt used to buy the overpriced asset. Most Tulips were bought with cash (and some margin, I am sure). Same thing with the stock market bubbles of the 1920s and 1990s.
Only with a house could you lever up to 100LTV, with relative ease.
"Nobody needed . . . Beanie Babies "
I still need Beanie Babies.
I mean the great financial proposition failure.
Juvenal Delinquent (profile) wrote on Tue, 5/19/2009 - 3:41 pm
Nobody needed Tulips
Don't tell that to the Deer in my Ma's yard.
OT: note that the FDIC deposit insurance limit was raised to $250K through 2013 in the bill passed today.
More moral hazard coming your way.
No, no, ghost, the Dutch invented the foreward market for tulips.
No kidding.
Where'd everybody go?
Well, I'm off to pick up something to eat and then watch NCIS.
I'm (unfortunately) working on a database issue...back soon I hope.
Ode to the Clockwork Orange...
Oompa Loompa Doompadee Dah
If you're greedy you will go far
You will be subpoenaed too
Like the Oompa
Oompa Loompa doompadee do
Local CT nugget:
McMansion bought two streets from me for 575K in 2003, 150K upgrades, listed for 18 months at 850K, just went under contract for 575K...that's a nice roundtrip
"On breaking up the big banks, if that means no longer having ready access to my bank in a majority of states, forget about it."
What if they broke up branches and deposits by state? Wells Fargo of Texas, Bank of American California, Floridian Citibank?
This is exactly what is happening in here.
In Austin Texas the high end market has been frozen for over a year, first sales slowed above $550K, than $450K, for a while $350K was the sweet spot, but now there is only activity at $250K or below, we have a very active market at $150,000. I have seen homes start a million that are now $799,000 and still sitting a year later. There is a big cluster of sellers holding tight at $499,000 but very very few pendings at that level or anything above it.
"And what is happening in California??
No sales over 300k."
FHA prolly not gonna go for that. Cash only.
CR -
Case-Shiller is not immune to the sales mix problem, is it?
Their base index will reflect price increases/decreases in the houses sold in a given period....so large volumes at the low end will skew the index lower.
And the price break points for the three "tiers" will also be influenced by the mix, won't it?
"There is a big cluster of sellers holding tight at $499,000 but very very few pendings at that level or anything above it. "
Dell layoffs not helping. Stealth lay-off too.
What sort of sketchy neighborhood will $300k get you in SF or LA?
"What sort of sketchy neighborhood will $300k get you in SF or LA?"
Something quite nice, in a year or two, I suspect.
@Comrade Coinz
Re: borrowing our own money. Yes!
There is no reason for the U.S. government to borrow its own money from the Federal Reserve, AT INTEREST, when it can issue interest free money on its own.
The argument I've heard is that it puts control of the money supply outside of political concerns, which may have some merit, but I don't know that it outweighs the cost of skimming the cream off the economy to put into the pockets of bankers. It is a system doomed to mathematically fail.
~~~
We see that the banks get all the profit from currency and credit creation, yet . look at who is paying for their incompetence greed and fraud ... US!
By putting the creation of currency and credit in the UST the total amount of dollars in the system can be controlled. The privately owned and operated Federal Reserve
can not control the incompetence, greed and fraud of thousands of players producing money out of thin air ...
Are their risks ... sure ... but we can go right to the source, one agency to find fault and fix the problem ... the UST ...
Having our arms around all currency and credit creation will give us the tool to stop bubbles before they get out of hand ...
Requiem for a heavy wait...
It's like a Financial Donner Party, and everybody was invited.
Pass me an A.R.M, please...
Could be corrected by using historical average volume mix of 25, 50 & 75 percentiles to show median.
Median price in my area is $220k. Median income is $52k.
We need a 30 percent correction from here before we snap back to historical norms.
[a house is a need]
No. Shelter yes. A house, no.
@mmckinl,
Debt free money, sign me up. But I don't think Congress has the will to close down the Fed. At least, not until the country is a smoking crater.
dcr100- Not just outside the beltway, rather the lower end in general is getting hammered. I just attended an auction for a house a couple of doors down from mine, in the Northern end of College Park, just inside the beltway.
on 10/25/2006 it sold for $365,000
on 5/19/2009 the gavel went dowo on $155,000 (+5% to auctioneer)
There were about 20 bidders present, so 19 people didn't want to pay any more than the selling price
Of course it sold for $168,000 in 2004 so it STILL may be overpriced.
BAC printing 825mm Sh. Bernanke's model of diluting is becoming an epidemic.
Cargotec Says U.S. Market Hit Bottom, Order Cancellations Ease
Cargotec Says U.S. Market Bottoms, Cancellations Ease (Update2) - Bloomberg.com
On-Topic: CR is absolutely right. see kurtosis or the technical term of skew
Off-Topic:
I had a sporadic bit of time to kill today, instead of shooting the breeze I played with Matlab and data from the weekly PR for Fund flows on TrimTabs' website. I don't know how they come up with their numbers, they could be just working backwards from stock prices in large part. It's not so important, I was playing around. So that's what my earlier post was about. I've added the correlation and covariance data too. Nothing dramatic, but here are a few points:
- US ETFs were all the rage last fall, and then went cold. Commodities and hot money
- US Equity ETF flows had negative covariance with the All Equity Mutual Funds. Volatile, but counter to the market movement or mutual fund flows.
- Only correlation of note is the moderate correlation between S&P500 wk over wk % change with Mutual Funds (and not ETFs). This might become stronger with data that is not so coarse
http://img167.imageshack.us/img167/8811/covar.png (the series labels are offset by one btw)
http://img177.imageshack.us/img177/9606/picture3jyy.png correlation table
http://img527.imageshack.us/img527/9264/picture4yhv.png probability not correlated table
http://img242.imageshack.us/img242/9186/picture1odn.png
the following were just charts from within matlab, but it's not so clear as an image because you don't have the freedom to rotate
http://img219.imageshack.us/img219/603/trimtabs1.png
http://img219.imageshack.us/img219/4959/trimtabs2.png
Comrade Coinz @mmckinl,
Debt free money, sign me up. But I don't think Congress has the will to close down the Fed. At least, not until the country is a smoking crater.
~~~~
I'm afraid you are correct , but one never knows ...
The House has a Bill to audit the Fed, that's a start ...
If someone explains to Congress that everybody's taxes can go down and
they can still balance the budget it has a real chance ...
In reference to the previous thread, I have one last thing to say regarding "buying time" and the issuance of debt.
Almost three centuries ago, one of my forefathers was approached by representatives of the Continental Congress. Desperately in need of financing, the new government asked him to buy their bonds and he did, pledging his entire fortune.
He made the mistake of using those bonds as collateral, and when the Congress defaulted on them, he ended up in a New Jersey debtors' prison for five years. His wife lived outside the gate and brought him food because the prison wouldn't feed the prisoners.
Upon his release, he petitioned to sue the newly formed US government and was denied.
Most of you are probably unaware of the fact that the United States Government has a history of default. The government is still here.
They bought time.
Believe it or not.
EHP;
Your post made me wonder if the non-correlation between ETF and mutual fund flows was about the type of investment or the timing. If you're trading, it's too hard to get in and out of mutual funds, but it's easy to get in and out of ETFs. Can't see the images well enough to have an opinion, and you would have to know which ETFs.
mmckinl - I like your fighting spirit.
"Never give a inch!" - Ken Kesey
The line in your table that says "Median Price", actually contains the mean price. (The two are the same for the first two columns, but not for the rest.)
mp;
"Most of you are probably unaware of the fact that the United States Government has a history of default."
Don't tell that to *** ****.
But it doesn't sound like the congresscritters bought time from your forefather - more like they stole it.
mp
Sorry for your grandfather ...
Same can't be said for sountherners during the Civil War ....
that government is, as we know ...gone
Those early days were hard money days as the "Continental" was ruined by
British counterfeiting ...
mmckinl - I like your fighting spirit.
"Never give a inch!" - Ken Kesey
~~~~
The facts don't give an inch ...
I just repeat them ...
More German Companies Seeking Handouts
Formerly confident execs—even from companies that disdain government aid—are lining up in growing numbers for a piece of Germany's $155 billion stimulus
The 1st "hard metal days" in the USA were in 1794 and 1795, when silver & gold coinage were introduced.
The U.S. so soured their financial system with the issuance of Continental Currency in the 1770's & 1780's-backed by bupkis, that the very first Federal Currency wasn't issued until 1860.
Juvenal Delinquent
You missed the important point ...
The "Continental" was debauched by British counterfeiting ...
~~~
read this :
At the outbreak of the War of Independence, the Continental Congress decided to issue a national currency to fund the war in 1775. Nearly $250,000 was printed.
“The notes were backed by the ‘anticipation’ of tax revenues. Without solid backing and easily counterfeited, the notes quickly became devalued, giving rise to the phrase ‘not worth a continental,’” according to the Federal Reserve Bank of San Francisco.
Paul Revere made the first plates for the federal currency. The notes were redeemable in Spanish milled dollars, according to the U.S. Secret Service.
British-Backed Counterfeiting
Though counterfeiting had been around since the first settlers, it became a war strategy in the Revolutionary War.
In 1776, a printing press was taken out to the HMS Phoenix that was moored in New York Harbor and started an operation that became the first British-sanctioned counterfeiting operation.
“The British counterfeits (colonial currency) of continentals were excellent—so good, in fact, that in April 1777 the king’s counterfeiters ran an ad in a New York newspaper offering to sell their false currency to loyal subjects of the Crown at a rock-bottom price—the cost of the paper it was printed on,” Thomas Craughwell wrote in Stealing Lincoln’s Body (Cambridge, Mass.: Belknap Press of Harvard University Press, 2007: pg. 33).
The counterfeiters were so confident in the quality of their fake bills that they wrote in the ad, that the fake continentals “are so neatly and exactly executed that there is no Risque…it being impossible to discover, that they are not genuine.” (Lynn Glaser, Counterfeiting in America: The History of an American Way to Wealth, Philadelphia: Clarkson N. Potter, 1960, pg. 37-39)
Officials tended to agree. In 1777, New Hampshire Governor Josiah Bartlett wrote, “We have lately discovered a most diabolical scheme to ruin the paper currency by counterfeiting it, vast quantities of the Massachusetts bill & ours [in Rhode Island], that are now passing are counterfeit, and so neatly done that it is extremely difficult to discover the difference… by what appears at present, it is a Tory plan and one of the most infernal that was ever hatched.” (Josiah Bartlett to William Whipple, 1777, Gilder Lehrman Document Number: GLC 193 at Digital History Website, University of Houston)
Circulating Fake Currency
The British had a distribution network of “shovers” or people who used the counterfeit currency in the tories, colonists who remained loyal to the British government.
Two of the British shovers, David Farnsworth and John Blair, were arrested in Danbury, Conn., with $10,000 in counterfeit currency on them. One of their excuses to try and avoid prison was that they were petty criminals compared to other shovers who were circulating $40,000 - $50,000. (Glaser, pg. 40-41)
Aftereffect of British Counterfeiting
Though Great Britain lost the war, America nearly collapsed because of the counterfeiting. American currency was so devalued by 1779 that Congress decided that they couldn’t print any more.
The country then moved to using gold and silver coins because they were harder to counterfeit.
I think this example is what is happening in New Orleans now. The lower end homes went up very high in price. The medians went way up and then it went down considerably. Now it is going up again but where I am sitting the prices are just starting to fall. It is taking a very long time for the new prices to be felt in the comps and appraisals.
My co-worker is buying a double right now and she is hoping it appraises so she can get the house because she wants it. Really she is trying to catch the falling knife. It is likely she is over paying by $75 grand because when it is all said and done a house with crappy kitchens and baths with no electricity on one side and in a so/so neighborhood should not really be $175,000. This is my instinct anyway. I would have offered $100. It probably needs 100 worth of renovation.
Houses that are put on the market either go into contract or expire. If fewer of the high-end units sell, the high-end listings will expire and the median price of expired listings will rise compared with the median price of listings that go into contract. You can see a real-world illustration of this at http://www.sfrealtors.com/pdf/realtor_advantage/Median_Price_SFR.pdf. During 2007 and into early 2008 (when the market in San Francisco was at its peak), the median price of listings that went into contract was always higher than the median of listings that expired. But starting first in July 2008, that relationship changed and now the median price of listings going into contract is lower than that of listings expiring.
ichael Pomerleano...."Quarter of credit to GDP exceeding the prior crisis credit to GDP"
Why would anyone want credit to GDP to expand beyond the levels that capsized their systems? What purpose is served by such unstable levels of credit? Better to maintain private debt to GDP within a range that promotes long term stability.
Let CPI prices gradually fall so that consumers can buy the extra goods made available by increased productivity. Don't force consumers to borrow unrepayable sums to buy the widgets.
A new bull market? No more Financial Crisis? Does Buy & Hold Work?
very compelling
as written in more detail http://www.wallstreetjournal.com/story/market_implode_or_rally?
"Now look at what happened in 2007. Since subprime imploded first, the number of units sold at the low end decreased to 40 from 50. Everything else stayed the same - and just the change in the mix (higher percentage of high end homes) pushed up the median price! Note that the median price (light blue) increased WITHOUT any actual prices increasing. This happened at the beginning of the housing bust in many areas."
This is what I'm talking about!
If "no one" ignored the median in 2007 as it was "artificially" pushed up, as the bubble began bursting - why should "we" ignore the median in 2009?
All the media did here in the Alt-A Bay Area in 2005-2007 was talk about 20% annual or more price gains... so now we should just ignore the median on the way down?
Obviously, the imperfections of the median in the past will continue (in either direction) in the future. But it's still important to know the median price.