This may have been covered before, but is new/existing sales data available for earlier years? I'd be curious to see that chart extended back to the late 80's.
Is there an even simpler explanation here? General demand for housing as a whole is contracting, and the inferior good (existing housing) is falling at a slower rate than the costlier/higher-quality alternative (new housing)... why is this surprising in the present recessionary environment?
Its kinda like when the stock bulls tell you to pile in "defensive'' stocks when the market is in a decline. Even if existing and new move together that will still be a disaster...
The 2nd graph here shows new home sales back to 1963.
Unfortunately I only have annual data for existing home sales back to 1969. Note: there have been some minor changes in how the existing home sales data is collected.
But New Home Sales were UP 0.3 percent (±14.5%)* above the revised March rate of 351,000. With interest rates so low, even an unemployed person can make those payments. And they'll have all that inventory to choose from. Buyer's dream!!!!!!!!!!!!! Home sales are going to rocket higher from here.
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
Looking at the New And Existing Home Sales chart and doing some math...
First IF foreclosure, short sale & other distressed selling is about half the existing market... and looking at the chart gives existing sales ~4.6MM units (SAAR).... half that and you get ~2.3MM units SAAR) which falls right about on top of the New Homes curve... ~350K units (SAAR).
1930's Germans dutifully paid their 5 Marks a week towards the purchase of a VW automobile, and just a handful were delivered, before hostilities broke out....
2000's Baby Boomers dutifully paid their SS payments every week all their adult lives, and just a handful (1946-47) will receive payments, before the world was turned upside down financially.
I thought we were supposed to buy two houses each, one for summer vacations?!
========
funny, I remember a headline proclaiming that something like 40% of homes purchased were "second homes" (I think it was in 2005 or 2006). That's when I fully digested the red pill and realized we were headed for cliff diving at some point.
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
I agree. And considering that existing home sales appear to account for about 85% of home sales, a drop in the blue line is going to take us well below the level of sales activity we had in 1994.
OT: NYMEX-Crude rallies on large oil inventory decline
The Energy Information Administration said that for the week to May 22, crude inventories fell 5.4 million barrels to 363.1 million barrels, against the forecast in a Reuters poll for a 700,000-barrel drawdown NYMEX-Crude rallies on large oil inventory decline
| Reuters
...I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect -CR
Yes, I'm wondering that also. At some point the two lines will converge together. The rub is how that's going to happen. I suspect that new home sales have hit the bottom and will just stay there for the most part-essentially flat-lining. That means existing homes would have to fall. That does appear more likely than new home sales picking up to meet the existing home sales.
CalculatedRisk (profile) wrote on Thu, 5/28/2009 - 11:49 am
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
I would have to agree with you. It is pretty clear from looking at this chart that it is general demand for housing which is contracting. That fits my mental model which is that attempts by the government to artificially inflate housing demand will be of temporary effect at best and in the medium and long-term will be trumped by changes in buyer psychology to the extent that housing will eventually be viewed as an albatross for a few decades, regardless of how much money we give away to would-be homebuyers, qualified or not..
"Is there an even simpler explanation here? ... why is this surprising in the present recessionary environment?"
- ResistanceIsFeudal
Comparing the graphs for older data (which CR so graciously pointed out) it seems like there are, in fact, similar gaps in prior recessions, which lends credence to your theory.
I thought we were supposed to buy two houses each, one for summer vacations?!
Many did but unknowingly threw them away - they thought they were just boxes their brand new stainless refrigerator's came in paid for by the Home ATM... little did they know those were really 'lifeboats'.
No one knows how many NOD and actual foreclosures are simply sitting on the banks' books, doing nothing other than being valued at 100% as T3 mark-to-model assets. With all levels of gov't conspiring with the accounting industry to mask the banks' true financial positions, the only, and I mean the ONLY true measure will be cash flow.
With these suckers cash flowing a big fat -0-, it will be easy to compare the banks' positions against outgoing expenditures, and will provide a good indication of the overall supply of REO. When this backed up supply hits the market, it will be a veritable tsunami as prices plunge another 50%.
The only winners will be the transaction folks - you don't want to actually be tied to any particular $ values, just # units. Say, like TI.
" Lobbyist Ben Dover (profile) wrote on Thu, 5/28/2009 - 9:35 am
PMI insurance started the lending problems. A hard line 20% and no creative lending would have made a much more stable market."
BINGO!! 100% correct IMHO. the MI industry was the great enabler, at least to Fannie/Freddie, they couldn't have dug themselves into as big a hole without their MI enablers.
all that Alt A/Option ARM pools they bought? all backstopped by the MI industry.
All the wall street liars (eCONomist salesman) keep talking about pent up demand. Where's the honest discussion of "pent up" supply - millions of sf of self storage space packed full of "stuff." And don't get me started on the 20 million vacant housing units either.
We truly have two distinct economies. One is real and one is a sham. They are only casually associated.
It's all about growing credit. Paying the rent seekers. They'll have us pound sand if that is what it takes to keep credit expanding at an exponential rate. I refuse.
"FYI - quite a few pretty nice used RVs showing up on Ebay & other sites. Makes one think somebody is having problems making a payment or two."
Saw some news report of people scuttling their boats for the insurance claims. Apparently so common, that some waterways are getting clogged. That should push coverage rates up and cause even more of a problem. Underwater on your boat? Put your boat underwater...
Saw some news report of people scuttling their boats for the insurance claims. Apparently so common, that some waterways are getting clogged. That should push coverage rates up and cause even more of a problem. Underwater on your boat? Put your boat underwater...
dryfly-
on RVs, I know an RV dealer, and at least here in San Diego apparently just two of about eight larger dealers have NOT gone bankrupt. My understanding is that virtually every RV manufacturer has gone BK.
I also know a few lawyers who do "lemon law" lawsuits, and RVs have been a favorite target for years, since they are prone to problems and have a price tag high enough to make it worth fighting about. With all the manufactures and dealers going BK, this gravy train has been stopped cold. Their firm laid off everyone- just the partners and a sec. left, hoping that some good case come in the door.
//No one knows how many NOD and actual foreclosures are simply sitting on the banks' books, doing nothing other than being valued at 100% as T3 mark-to-model assets.//
Anecdotal from a very upscale suburban Chicago neighborhood: I contacted my city council person to express concern about all the vacant buildings that have fallen into disrepair (burst pipes, etc.) to see if any ordinances could be enacted to prevent more of the same. He forwarded my email to the code enforcement guy. The code enforcement guy sent me a surprisingly unguarded email in which he said there were currently 229 homes in the "vacant/foreclosed" database. Currently, the MLS shows only 35 as bank-owned. Not sure precisely what this difference means, but it smells funny.
In Soviet Russia, if the state shoe manufacturer was told to make a million shoes, but only had enough leather for 600,000...
1 million size-1 women's shoe were produced
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
In all consuming America, if the manufacturer was told to make 2 million shoes, but only had customers for 1 million, they cajoled people to buy more vis a Visa.
Wow I'm not a Treasuries trader but, isn't 78% trucking at 6bp over market rates pretty sloppy? That looks kinda like it ran into a hedge / backstop at a round figure, to me. Fixed Incomes in da house, is that so?
Margaret Thatcher said back in 1979 “The problem with socialism is that you very quickly run out of other people's money”. Unfortunately, the same can be said about capitalism too
Suppose bond buyers are fleeing bonds and buying equities? Would that drive the market up? What is the bond market telling us? What is a person trying to preserve savings to do if bonds aren't safe?
mine as well, Elkhart Indiana has been devastated by this
I drove by there recently - ghost town. Irony is RVs sold just fine at >$3 gasoline as long as the Home ATM was well supplied... Even with gas below $2 the biz goes T/U once the ATM runs out of cash.
Treasury: Geither will discuss deficits with China
Treasury: Geithner will discuss US deficits and balanced growth goals in talks with Chinese
WASHINGTON (AP) -- Treasury Secretary Timothy Geithner will discuss the Obama administration's efforts to deal with record U.S. budget deficits in talks next week with top Chinese officials, a senior Treasury official said Thursday.
The official said that Geithner would stress to the Chinese that the administration was committed to bringing down the deficits once the country has emerged from the current recession and financial crisis. Officials in China, the largest foreign holder of U.S. Treasury securities, have expressed worries about the exploding U.S. deficits.
saw a news story a while back about a town around elkhart that had to start enforcing an ordinance (that had been on the books but never needed enforcing) limiting the # of days per month that one could have a garage sale.
Seems that some citizens had essentially turned their lives into one long front-yard liquidation sale. Sad actually.
yep, per the RV dealer I know the issue is all about financing. No HELOCs available. No banks doing RV loans. Cash buyers only. And the cash buyers know they have the dealer over a barrel.
when I was a kid one of our neighbors down the street had a monstrous RV that spent 50 weeks per year parked next to their house and 1-2 weeks a year on the road during their summer vacation. my dad used to rant to us kids about how much of a waste that was.
in hindsight, I learned a lot from rants like that.
Seems that some citizens had essentially turned their lives into one long front-yard liquidation sale. Sad actually.
I've seen it with my own eyes... to get around the ordinances you find 'proxies' & hold the sales elsewhere - they turn into flea markets in effect - one giant endless rolling garage sale.
Isn't existing GSE MBS a large chunk of tier 1 capital? You would need to wonder if the long end really spikes that might force another round of recapitalization at the financials.
To be honest - I'd LOVE to find a decent & smallish used RV - I'd turn it into a rolling office for my biz. They still aren't cheap enough for my taste yet - but I keep watching.
Wife and I just have one car (paid for). Had to dig out of some dept a couple years ago and just got used to having one. About once a month when the logistics won't work we rent a car for a day or two from Enterprise and they "Pick us up!!"
Couple weeks ago we mentioned this to some neighbors (both employed and doing well) over dinner and to our surprise they said "We've been doing that for years!!".
"......saw a news story......about a town.......to start enforcing an ordinance .....limiting the # of days ..... [ppl] could have a garage sale."
......makes about as much sense as a Nye County ruling recently disallowing living in an RV on private property. During a time of extreme homelessness, a cardboard box makes much more sense then a self-contained RV.
When will the banksters start using these tactics to get their HELOC money back?
Malaysia police free 3 men chained by loan sharks to wall, beaten and starved for 2 months
KUALA LUMPUR, Malaysia (AP) -- Malaysian police rescued three men shackled to the wall of a filthy room for two months by illegal moneylenders after failing to repay their debts, an official said Thursday.
Newspapers published photographs of the men wearing soiled clothes and tethered by their necks in heavy iron chains to the wall. Firefighters later used a chain saw to free them.
The victims had not been allowed to change clothes, were repeatedly beaten with sticks and fed only bread and water every few days during their captivity, The Star and New Straits Times newspapers reported.
They each owed between 1,500 ringgit ($400) and 4,000 ringgit ($1,100). The moneylenders had been trying to force their families to settle the debts before the men would be freed, The Star and New Straits Times newspapers reported.
U.S. natural gas storage rose 106 billion cubic feet last week, the EIA said, against the forecast in a Reuters poll for a 108 bcf build. [ID:PRWP154].
The plot of natural gas supply vs 5 year range for storage volumes - shows us early in the injection season above the five year range: Weekly Natural Gas Storage Report
Geitner to Chinese:
"Hey, you currency-manipulating shoddy goods-producing M***** F*****s! We'll take care of this tab when we're done drinking, got it?"
Durable Goods orders and Initial claims surprised me big time today. Don't know what's behind it all yet. Crude inventories were down too, but still elevated
I pass by it almost every day (depends on the traffic if I drive by or not), but all of sudden (no big sign outside that I noticed) the RV's were nearly empty and then last week, it was all empty. I would have expected something like "closing the office sale" or something (since they only seem to have one in Orange County) on the wall near the highway but went quietly away....
I think the stock market is set up for a big drop. But the question is...where are stocks most vulnerable for shorting opportunity?
I think it's international. Japan's recent stock market rally is ridiculous, given their drop in exports, tools, autos and GDP. They also are very vulnerable to rising commodity/oil prices.
Europe is about to go through big financial turmoil in the Baltics, which will have impact on Western Euro banks as great as the mortgage crisis in the U.S. And they've got their own mortgage crisis in parts of Western Europe, too. They don't have the Ben and Timmy show to give the markets fuel.
My best idea right now is EFZ, short MSCI EAFE International Index. I'm loading up, and I'll wait it out. It's money in the bank.
rich,
Back in December 2008 I noticed this report from MarketWatch:
NEW YORK (MarketWatch) -- "Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported.
Under the bill, the Banks' Shareholding Acquisition Corporation, originally created in January 2002, would resume buying shares from banks and other entities, the Japanese news agency reported.
The bill would be introduced early next month "with an eye to implementing the measure by the end of March," the report quoted lawmakers as saying. The Liberal Democratic Party had intially considered just 10 trillion in stock purchases, but the size was roughly doubled to 20 trillion yen at the request of its ruling coalition partner, the New Komeito party, the report said."
Questions to ask:
-what price will the government buy at?
-what criteria will the government use to determine purchase prices?
-what proportion of the total float of Japanese stocks is owned by the government?
-what does the phrase "stock market" mean when government entities are participating?
-will this be an opportunity for foreign investors to dump their holdings of Japanese equities?
I don't know the answers to all of these questions, but I think it's pretty clear that Japan's stock market is openly manipulated by the Japanese government. I wouldn't touch the Nikkei with a ten foot pole.
On Topic :
Local community banks are now agreeing up front to short sale pricing on homebuilder inventory. It keeps the REO off of the banks' balance sheet, and will possibly allow homebuilders to stay in business.
"Questions to ask:
-what price will the government buy at?"
Obviously, the whole scheme is a bit ridiculous. However, the Japanese taxpayers were getting much better deal because they were buying equity after substantial decline through exchange @ market equilibrium!!! (which for us would be 40c or less on $1 ).
DOW 6000 (profile) wrote on Thu, 5/28/2009 - 10:43 am
reply ignore user
Quote of the day is a toss up between "Gurgle Mail " and "Avenge Me Bonds, Avenge me"
Change your handle to "DOW 5860" and you get my vote hands down.
Welcome to the new world of "hangar queens" for everyone. Anybody familiar with aviation knows what a hangar queen is. Now we have RVs in driveways and dinette sets in storage and Seasonal lawn decorations in the attic and motorcycles behind the garage and... you get it. One house, one car, less "stuff."
Up 1.9% with defense orders up 23.2%. Without defense, durable goods were only up 0.6%. And that rise is off of a big downwardly revised prior month (-2.1% vs originally reported 0.8%).
""Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported."
The old investment "advice" is starting to sound pretty good: Spend your money on women and booze. The rest you can just waste away.
dryfly (profile) wrote (in reply to...) on Thu, 5/28/2009 - 10:35 am
... to get around the ordinances you find 'proxies' & hold the sales elsewhere - they turn into flea markets in effect - one giant endless rolling garage sale.
Coming soon to Middle America's Industrial Capacity.
Comrade,
I agree this entity is buying at low price points, but I think that there is a good chance that many of the companies being propped should be liquidated. Keeping the zombie companies alive hurts in the long term, as people and resources could be shifted to new sectors.
"saw a news story a while back about a town around elkhart that had to start enforcing an ordinance (that had been on the books but never needed enforcing) limiting the # of days per month that one could have a garage sale."
I know of about four "permanent garage sales" within a mile of my house. They're out there most Saturdays and Sundays. But they're all on principal streets that already have moderately heavy traffic), so nobody gives a damn.
If you want to really experience the low-end trader class, head out to some storage auctions. Whole crowds of people living in trailers or garages bidding $50 for a whole locker full of mystery boxes, trying to flog it at flea markets, through craigslist, on friends' lawns. Guarding ever bit of treasured information about secret sources of "good stuff." Partying like it's 999.
Here is a blogger who thinks that there is a Devaluation Imminent in the Baltics...I tend to agree and think that would trigger another short term boost in the USD/T-bills.
timmyone (profile) wrote on Thu, 5/28/2009 - 11:08 am
The old investment "advice" is starting to sound pretty good: Spend your money on women and booze. The rest you can just waste
Scantily clad Frauliens toiling over the copper kettles as the smell of hops infuses the air. Always willing to help you with your lederhosen and pour you a Jägermeister. Life would be good.
My guess is next year RV's will be scrap metal prices. Storage lots will have many abandon ones. I am looking for the "Cousin Eddie" model older, cheap. Tag 5th or Class A. If I like it then maybe next year trade up.
I have noticed at the races lots of the guys with the $1/2 MM tow rigs are missing this year. Bargains coming!
There have been stories of people setting up outdoor 'stores' in the driveways of empty homes, in high traffic locations... selling just about everything...
RV companies - Winnebago and Thor Industries look to be well positioned to weather the storm - Monaco and Fleetwood went bk, Navistar is buying Monaco, somebody is buying most of Fleetwood - no word on resuming production though - those plants could be used to make other things - for example Navistar is going to be making some of the MRAP vehicles... Just like homes, there is a large inventory of brand new, never sold rv's that are in storage... Whether they can be sold without the support of the company is a good question... I would probably have been looking to upgrade next year, but since Monaco is gone for now I would wonder about the warranty - or even the availability of quality service since the factory service centers are closed... You can get a 3rd party warranty insurance policy which the dealer might provide but unless there is some place you can get the service that would not be worth much... RV dealers are notorious for not having any good mechanics...
Buying an RV on credit - just another sign of financial ignorance - they depreciate so fast that even buying one with cash is a bad idea unless you plan to use it a lot and really like the lifestyle - That is my motivation - we are normally in our rv almost full time, although for the last several months we have been caring for an elderly member of the family and had to put the rv into storage for a while...
If you really want an rv and can buy with cash, there has never been a better time to get a deal... there are a lot of good used rigs available, and if you really want a new one the dealers will be most happy to see you...
Obviously, the whole scheme is a bit ridiculous. However, the Japanese taxpayers were getting much better deal because they were buying equity after substantial decline through exchange @ market equilibrium!!! (which for us would be 40c or less on $1 ).
I've resigned myself to the fact that governments are going to keep trying the same sort of policy over and over until a major monetary system collapses.
There's a certain peace and harmony that comes with embracing total cynicism:
Once you give up on people you don't get mad anymore.
re: Japan...finally gave up on the YEN (YCL) yesterday....it will never go anywhere as long as the Japanese are intent on being the world's second largest printing press.
BTW oil shorts getting head handed to them....they will never learn.
I'm pretty sure garage sales tax is already the law in CA, but not enforced... I know if you take a load to an organized flea market they give you a sales tax form when you sign up for a space... I doubt if anyone bothers with it... It's the same thing if you buy something over the net from out of state, you are supposed to declare that on your state income tax... Ya right, I bet they collect a lot that way...
May 28 (Bloomberg) -- Japan’s ruling Liberal Democratic Party may abandon a bill that would set aside 50 trillion yen ($520 billion) to buy shares from the market because stocks have rebounded from a 26-year low, lawmakers said.
"Wait till the local governments require a Garage sale permit with sales tax collection! Black market. "
I'm sure you could find a few who do if there are more than x garage sales per year on the premises. But local gov't doesn't operate in a vaccuum, and I can't see the absolute law you're talking about passing in any community that's not running on absolute autopilot.
When I used to sell at flea markets years ago, you didn't need a permit; the market operator took care of that. Took care of the sales tax, too. They'd ask you, "How much did you sell" on the way out, you'd tell them maybe half of what you did sell, and ante up the appropriate percentage. Everybody was happy.
That said, there was an interesting article on the sfgate.com website about rogue food pushcart operators in SF -- rogue because it can cost $20K to get a permit, and the procedure varies by whether you're on a public street or not. So a lot of guys just go rogue and either cook stuff at home and sell it in bars, or have actual pushcarts and twitter their loyal customers as to where and when they're operating today. Some of these guys are pretty high end -- the Creme Brulee cart, for example. But it does prove your point, when the laws become too onerous people go underground. And they should. And if enough do, the laws change.
don't read too much into the auction results for this rally. It's not much better then yesterday, which was touted as "well received" by the regular pumpers. It's alot easier to press the "up" button when there is less competition for the big firms. Add in weaker than hell short positions and look what you get.
"I'm sure Conjure could tell us some tall stories."
Conjure says he wasn't acquainted with Gregory.
However, he was acquainted with Monseignor Montini during the '20s. This is many years before he became Paul VI. Montini was working in the Papal Secretariat at the time.
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
I like to torture numbers as much as anyone, and no doubt these are bad but to over read into the drop in new home sales is a mistake. There are many more exiting homes, and in the run up way more homes were built and sold than "normal" that is, for several years before 2007 the percentage of new homes sold as a percent of the market kept on increasing, now it's a bit below normal, as it needs to be till the existing inventory gets absorbed...
Rob Dawg (homepage, profile) wrote on Thu, 5/28/2009 - 1:32 pm
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
welcome to the desert of the Real.
if bad money drives out good... do bad economies drive good ones underground?...
also on the subject of revisions
Here are the upward revisions on the advance initial claims data for the past 2 months: 5,6,4,4,5,3,11,3 Index of /press/2009
The expected revision would put this week's report above the 4 week moving average
Comrade de Chaos -
"Spend your money on women and booze."
hm, investing in a home brewery . yes!
Need to rack my Heffe, keg my porter and plan on brewing an all grain IPA tomorrow. Got a 4 tap keggerator in my apartment, all I'm missing is the women. Man I have got to get my priorities straight.
Citizen Scotto,
could you write that exact sentence in a letter to Bernanke? He is stuck trying to figure out why his model of
(1) Increase Credit -> (2) Income -> (3) Jobs
isn't functioning.
And who would have thought we would ever miss NINJA loans, just as a small view from here, this time last year there were around 10 SFH foreclosures listed all over 500K, today there is 60+ and and over half of them less than 500K. Hawaii still has a long way to go down, I'm expecting to see full round trips from 200K to 800K back down to 250K (adjusted for 4.2 or so inflation).
the bulge in baby boomers starts around 1949 ish and gets extended from 1951 on. The more significant time frame is that the boomers are hitting 55+ in very large numbers which will slow the entire consumer demand curve downward.
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
Having survey the used DVD market, I'll tell you that wholesale used value of those DVDs is probably about what you paid. MSRP means nothing anymore in media; you can buy a "new" $70 book for $15 in a new/used bookstore -- if it's a remainder. Or last year's hot mass-market DVD "new" for $9.99. You think used dealers are eager to buy those for resale? They'd give 'em 50 cents, if anything.Meanwhile, if you know what you want, you still go to a real store and pay real sales tax.
You're too eager to see doom, Rob. It's an occupational hazard around here. Yes, there always is an underground economy; but it's kept to a minimum when local gov't (usually it's local gov't) wises up and reaches a meaningful compromise. There are many advantages to being above-ground, all other things being near-equal.
Rob Dawg (homepage, profile) wrote on Thu, 5/28/2009 - 1:39 pm
Exactly. Bravo. The Informal Economy is the good economy. California just got here first with their policies.
CA is leading the way again ... midwesterners like me just can't win. Now, just wait 'till the Informal Economy sets up its own currency. We know that direct barter will be too cumbersome eventually, even just within a large state, and official currencies become increasingly unpredictable in value. Speculation created a lot of bullshit-money that doesn't really exist, and governments will need more and more of it as exponential debt growth gets intractable... people will only allow bullshit-money to dictate the value of real items for so long.
The move up buyer has also been limited /distorted by the large cash-out refi activity the past 10 years. Many have already sold their house via the cash out refi and currently upside down or have small equity positions that would be wiped out by normal selling expenses. Move up buyers may be a rare item in future housing picture.
RV's also make a great guest house. Those boomerang children with their kids can live in the drive way. I just looked a t a 21.5 ft 5th for $3K older but nice.
do realize that there are two levels at play here. The instinctive, animal level, where we
want to punish those who have done us wrong, while those who have done us wrong have done it
following their animal desires. There is also the rational level, of which to I am
referring to above. Realistically, I know the beast in us will take over and this will end
like it did in France in the 1790's. I will, however, not be the one holding the sword.
I came across this interesting site..check it out Econ & Finance
Distressed properties ... accounted for 45 percent of all sales in April
====
agreed, means fewer new home sales and fewer move-up buyers.
This thing is a long way from over
(edited to claim first)
General "Buck" Turgidson: Mr. President, we must not allow a mindshaft gap!
This may have been covered before, but is new/existing sales data available for earlier years? I'd be curious to see that chart extended back to the late 80's.
Is there an even simpler explanation here? General demand for housing as a whole is contracting, and the inferior good (existing housing) is falling at a slower rate than the costlier/higher-quality alternative (new housing)... why is this surprising in the present recessionary environment?
Its kinda like when the stock bulls tell you to pile in "defensive'' stocks when the market is in a decline. Even if existing and new move together that will still be a disaster...
NateTG,
The 2nd graph here shows new home sales back to 1963.
Unfortunately I only have annual data for existing home sales
back to 1969. Note: there have been some minor changes in how the existing home sales data is collected.
best wishes
Painting the white elephant black is the New Black...
On the market Transports and Utilities are crappy.
1947, the baby boom. Turning 62 this year. Sales no longer matter. Supply swamps any possible demand.
But New Home Sales were UP 0.3 percent (±14.5%)* above the revised March rate of 351,000. With interest rates so low, even an unemployed person can make those payments. And they'll have all that inventory to choose from. Buyer's dream!!!!!!!!!!!!! Home sales are going to rocket higher from here.
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
best wishes
RD Congratulations! cash your checks early
I just found out I'm going to put in another $30b into GM. Canada another $9b. Current stock all but wiped out. Still trading $1.20. Bizarro World™.
"supply swamps any possible demand"
I thought we were supposed to buy two houses each, one for summer vacations?!
Looking at the New And Existing Home Sales chart and doing some math...
First IF foreclosure, short sale & other distressed selling is about half the existing market... and looking at the chart gives existing sales ~4.6MM units (SAAR).... half that and you get ~2.3MM units SAAR) which falls right about on top of the New Homes curve... ~350K units (SAAR).
Here is your new home assignment since most of you will be unemployed anyway
All Physics Books Categorized (download torrent) - TPB
In Godwin we trust...
1930's Germans dutifully paid their 5 Marks a week towards the purchase of a VW automobile, and just a handful were delivered, before hostilities broke out....
2000's Baby Boomers dutifully paid their SS payments every week all their adult lives, and just a handful (1946-47) will receive payments, before the world was turned upside down financially.
Tim waiting for 2012 (homepage, profile) wrote on Thu, 5/28/2009 - 9:50 am
RD Congratulations! cash your checks early
No, THEY are turning 62. I'm a 'tweener, tail end boomer. I ain't gettin' bupkiss.
I thought we were supposed to buy two houses each, one for summer vacations?!
========
funny, I remember a headline proclaiming that something like 40% of homes purchased were "second homes" (I think it was in 2005 or 2006). That's when I fully digested the red pill and realized we were headed for cliff diving at some point.
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
I agree. And considering that existing home sales appear to account for about 85% of home sales, a drop in the blue line is going to take us well below the level of sales activity we had in 1994.
Interest rat pop may drive home sales for both categories, regardless of the long-term trend
A false dawn
I am going RV shopping is that a qualifying house to get $8K tax credit?
Treasuries silently selling off... waiting for 10 am
OT: NYMEX-Crude rallies on large oil inventory decline
The Energy Information Administration said that for the week to May 22, crude inventories fell 5.4 million barrels to 363.1 million barrels, against the forecast in a Reuters poll for a 700,000-barrel drawdown
NYMEX-Crude rallies on large oil inventory decline
| Reuters
"Rat pop" is a good name for the recent activity.
In market news, is Elmo getting a head start on the 7-year auction results? 9:30 and 11:00 pump jobs both died at SPX 900ish. Look out below?
Interest rat pop may drive home sales for both categories, regardless of the long-term trend
A false dawn
===
agreed, interest rate pop will bring forward some demand but not change the overall trend
...I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect -CR
Yes, I'm wondering that also. At some point the two lines will converge together. The rub is how that's going to happen. I suspect that new home sales have hit the bottom and will just stay there for the most part-essentially flat-lining. That means existing homes would have to fall. That does appear more likely than new home sales picking up to meet the existing home sales.
10 Year ticking up again....3.74%
Ruh Roh. This game of Whack-A-Mole is getting wild. We're gonna need a bigger mallet.
Rd cash your checks anyways
Crash. Isn't it inevitable???
CalculatedRisk (profile) wrote on Thu, 5/28/2009 - 11:49 am
ResistanceIsFeudal, it's not surprising - but I think it leads to the opposite conclusion than almost any analyst - that existing home sales will fall further. I think almost all the forecasts are for existing home sale to increase, and I think that is incorrect
which is that attempts by the government to artificially inflate housing demand will be of temporary effect at best and in the medium and long-term will be trumped by changes in buyer psychology to the extent that housing will eventually be viewed as an albatross for a few decades, regardless of how much money we give away to would-be homebuyers, qualified or not..
I would have to agree with you. It is pretty clear from looking at this chart that it is general demand for housing which is contracting. That fits my mental model
"Is there an even simpler explanation here? ... why is this surprising in the present recessionary environment?"
- ResistanceIsFeudal
Comparing the graphs for older data (which CR so graciously pointed out) it seems like there are, in fact, similar gaps in prior recessions, which lends credence to your theory.
Avenge me bonds, avenge me!
A Red Dawn has fallen upon the FED
Auction says what?
I thought we were supposed to buy two houses each, one for summer vacations?!
Many did but unknowingly threw them away - they thought they were just boxes their brand new stainless refrigerator's came in paid for by the Home ATM... little did they know those were really 'lifeboats'.
Auction results, anyone? Should be over a couple of minutes ago.
ETA: Never mind, it looks like the markets like it.
I am going RV shopping is that a qualifying house to get $8K tax credit?
I prefer a houseboat myself...
FYI - quite a few pretty nice used RVs showing up on Ebay & other sites. Makes one think somebody is having problems making a payment or two.
Auction results:
Today's Auction Results
Interest Rate 3-1/4%
I think I wanna go hide under the bed.
After skimming through today's posts.
Press Release on 7-yr auction
http://www.treasurydirect.gov/instit/annceresult/press/preanre/2009/R_20090528_1.pdf
No one knows how many NOD and actual foreclosures are simply sitting on the banks' books, doing nothing other than being valued at 100% as T3 mark-to-model assets. With all levels of gov't conspiring with the accounting industry to mask the banks' true financial positions, the only, and I mean the ONLY true measure will be cash flow.
With these suckers cash flowing a big fat -0-, it will be easy to compare the banks' positions against outgoing expenditures, and will provide a good indication of the overall supply of REO. When this backed up supply hits the market, it will be a veritable tsunami as prices plunge another 50%.
The only winners will be the transaction folks - you don't want to actually be tied to any particular $ values, just # units. Say, like TI.
Through early morning fog I see
visions of the things to be
the pains that are withheld for me
I realize and I can see...
that collusion is painless
It brings on no changes
and I can take or leave it if I please.
wow treasuries are REALLY moving.. alarming to say the least
Indirect bidders took 33% of the 7 year notes at 3.33%
Oops, 3.30%
" Lobbyist Ben Dover (profile) wrote on Thu, 5/28/2009 - 9:35 am
PMI insurance started the lending problems. A hard line 20% and no creative lending would have made a much more stable market."
BINGO!! 100% correct IMHO. the MI industry was the great enabler, at least to Fannie/Freddie, they couldn't have dug themselves into as big a hole without their MI enablers.
all that Alt A/Option ARM pools they bought? all backstopped by the MI industry.
All the wall street liars (eCONomist salesman) keep talking about pent up demand. Where's the honest discussion of "pent up" supply - millions of sf of self storage space packed full of "stuff." And don't get me started on the 20 million vacant housing units either.
We truly have two distinct economies. One is real and one is a sham. They are only casually associated.
It's all about growing credit. Paying the rent seekers. They'll have us pound sand if that is what it takes to keep credit expanding at an exponential rate. I refuse.
we're gonna need a T-VIX soon
"FYI - quite a few pretty nice used RVs showing up on Ebay & other sites. Makes one think somebody is having problems making a payment or two."
Saw some news report of people scuttling their boats for the insurance claims. Apparently so common, that some waterways are getting clogged. That should push coverage rates up and cause even more of a problem. Underwater on your boat? Put your boat underwater...
Where's the honest discussion of "pent up" supply
======
great question, it's like someone here always says - "all the free market knows how to do is make more stuff"
Lobbyist Ben Dover-
I am going RV shopping is that a qualifying house to get $8K tax credit?
Maybe if you get a double wide.
Not true the free market is equally good at destroying things ie capital, value...
I remember hearing about "pent up demand" for cars in the 80s.
Someone on NPR was saying that 15m get trashed per year and only 9m were being sold, so pent
up demand should be happening.
Well, someday, I guess. But I think that clunkers will be kept running and 3 cars families will go to 2 cars, etc.
Saw some news report of people scuttling their boats for the insurance claims. Apparently so common, that some waterways are getting clogged. That should push coverage rates up and cause even more of a problem. Underwater on your boat? Put your boat underwater...
I think those are referred to as 'swim aways'.
I think those are referred to as 'swim aways'.
====
gurgle mail?
dryfly-
on RVs, I know an RV dealer, and at least here in San Diego apparently just two of about eight larger dealers have NOT gone bankrupt. My understanding is that virtually every RV manufacturer has gone BK.
I also know a few lawyers who do "lemon law" lawsuits, and RVs have been a favorite target for years, since they are prone to problems and have a price tag high enough to make it worth fighting about. With all the manufactures and dealers going BK, this gravy train has been stopped cold. Their firm laid off everyone- just the partners and a sec. left, hoping that some good case come in the door.
Too funny, dry, Scotto.
//No one knows how many NOD and actual foreclosures are simply sitting on the banks' books, doing nothing other than being valued at 100% as T3 mark-to-model assets.//
Anecdotal from a very upscale suburban Chicago neighborhood: I contacted my city council person to express concern about all the vacant buildings that have fallen into disrepair (burst pipes, etc.) to see if any ordinances could be enacted to prevent more of the same. He forwarded my email to the code enforcement guy. The code enforcement guy sent me a surprisingly unguarded email in which he said there were currently 229 homes in the "vacant/foreclosed" database. Currently, the MLS shows only 35 as bank-owned. Not sure precisely what this difference means, but it smells funny.
OT: Bloomberg has a headline: "Catastrophe Bond Market Rebounds". Meanwhile, yields are back to near yesterday's close.
In Soviet Russia, if the state shoe manufacturer was told to make a million shoes, but only had enough leather for 600,000...
1 million size-1 women's shoe were produced
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
In all consuming America, if the manufacturer was told to make 2 million shoes, but only had customers for 1 million, they cajoled people to buy more vis a Visa.
Wow I'm not a Treasuries trader but, isn't 78% trucking at 6bp over market rates pretty sloppy? That looks kinda like it ran into a hedge / backstop at a round figure, to me. Fixed Incomes in da house, is that so?
gurgle mail?
LOL! A new lexicon is born!
I just read the following AP headline on Yahoo! Finance:
Stocks Turn Positive as Oil Soars
Reminds me of "Mission Accomplished".
Margaret Thatcher said back in 1979 “The problem with socialism is that you very quickly run out of other people's money”. Unfortunately, the same can be said about capitalism too
RockyR (profile) wrote on Thu, 5/28/2009 - 1:18 pm
OT: Bloomberg has a headline: "Catastrophe Bond Market Rebounds". Meanwhile, yields are back to near yesterday's close.
The average Bloomberg article for the last 4 months:
BLARING LEDE OBVIOUSLY WRITTEN BY EDITOR WITH AGENDA
Actual Title Not Directly Related To Screaming Headline
[STORY TO FOLLOW]
My understanding is that virtually every RV manufacturer has gone BK.
====
mine as well, Elkhart Indiana has been devastated by this
Fifth-Columnists have infiltrated the 4th estate, writing whatever gibberish passes muster.
Suppose bond buyers are fleeing bonds and buying equities? Would that drive the market up? What is the bond market telling us? What is a person trying to preserve savings to do if bonds aren't safe?
I am all commodities from here on in.
mine as well, Elkhart Indiana has been devastated by this
I drove by there recently - ghost town. Irony is RVs sold just fine at >$3 gasoline as long as the Home ATM was well supplied... Even with gas below $2 the biz goes T/U once the ATM runs out of cash.
dry - yes, seems that credit is the real "black gold", eh?
CR: as always, thank you for your posts with great graphs! And your willingness to wake up so early for some of the news releases, like today.
dry - yes, seems that credit is the real "black gold", eh?
Yup.
Timmay is going to beg for more money?
Treasury: Geither will discuss deficits with China
Treasury: Geithner will discuss US deficits and balanced growth goals in talks with Chinese
WASHINGTON (AP) -- Treasury Secretary Timothy Geithner will discuss the Obama administration's efforts to deal with record U.S. budget deficits in talks next week with top Chinese officials, a senior Treasury official said Thursday.
The official said that Geithner would stress to the Chinese that the administration was committed to bringing down the deficits once the country has emerged from the current recession and financial crisis. Officials in China, the largest foreign holder of U.S. Treasury securities, have expressed worries about the exploding U.S. deficits.
Yahoo! 404 - Page Not Found
saw a news story a while back about a town around elkhart that had to start enforcing an ordinance (that had been on the books but never needed enforcing) limiting the # of days per month that one could have a garage sale.
Seems that some citizens had essentially turned their lives into one long front-yard liquidation sale. Sad actually.
Treasury: Geither to ask Rich Uncle for an advance on his allowance
yep, per the RV dealer I know the issue is all about financing. No HELOCs available. No banks doing RV loans. Cash buyers only. And the cash buyers know they have the dealer over a barrel.
My understanding is that virtually every RV manufacturer has gone BK.
I guess the BBAD's will have to downscale back to van conversions.
when I was a kid one of our neighbors down the street had a monstrous RV that spent 50 weeks per year parked next to their house and 1-2 weeks a year on the road during their summer vacation. my dad used to rant to us kids about how much of a waste that was.
in hindsight, I learned a lot from rants like that.
Seems that some citizens had essentially turned their lives into one long front-yard liquidation sale. Sad actually.
I've seen it with my own eyes... to get around the ordinances you find 'proxies' & hold the sales elsewhere - they turn into flea markets in effect - one giant endless rolling garage sale.
Isn't existing GSE MBS a large chunk of tier 1 capital? You would need to wonder if the long end really spikes that might force another round of recapitalization at the financials.
Cheers Citizen Scotto
To be honest - I'd LOVE to find a decent & smallish used RV - I'd turn it into a rolling office for my biz. They still aren't cheap enough for my taste yet - but I keep watching.
LawyerLiz,
Wife and I just have one car (paid for). Had to dig out of some dept a couple years ago and just got used to having one. About once a month when the logistics won't work we rent a car for a day or two from Enterprise and they "Pick us up!!"
Couple weeks ago we mentioned this to some neighbors (both employed and doing well) over dinner and to our surprise they said "We've been doing that for years!!".
Helps we're metro accessible, but still . . .
Couldn't Timmay just order Chinese take-out here instead?
"I'll have a #7, D.C. Duck"
"......saw a news story......about a town.......to start enforcing an ordinance .....limiting the # of days ..... [ppl] could have a garage sale."
......makes about as much sense as a Nye County ruling recently disallowing living in an RV on private property. During a time of extreme homelessness, a cardboard box makes much more sense then a self-contained RV.
When will the banksters start using these tactics to get their HELOC money back?
Malaysia police free 3 men chained by loan sharks to wall, beaten and starved for 2 months
KUALA LUMPUR, Malaysia (AP) -- Malaysian police rescued three men shackled to the wall of a filthy room for two months by illegal moneylenders after failing to repay their debts, an official said Thursday.
Newspapers published photographs of the men wearing soiled clothes and tethered by their necks in heavy iron chains to the wall. Firefighters later used a chain saw to free them.
The victims had not been allowed to change clothes, were repeatedly beaten with sticks and fed only bread and water every few days during their captivity, The Star and New Straits Times newspapers reported.
They each owed between 1,500 ringgit ($400) and 4,000 ringgit ($1,100). The moneylenders had been trying to force their families to settle the debts before the men would be freed, The Star and New Straits Times newspapers reported.
Yahoo! 404 - Page Not Found
From your link:
The plot of natural gas supply vs 5 year range for storage volumes - shows us early in the injection season above the five year range:
Weekly Natural Gas Storage Report
Geitner to Chinese:
"Hey, you currency-manipulating shoddy goods-producing M***** F*****s! We'll take care of this tab when we're done drinking, got it?"
Chinese investors:
"??!"
Quote of the day is a toss up between "Gurgle Mail " and "Avenge Me Bonds, Avenge me"
lol
Durable Goods orders and Initial claims surprised me big time today. Don't know what's behind it all yet. Crude inventories were down too, but still elevated
$izzzling Rice soup is the main course...
re: RV's. A local dealer branch closed down quietly this past week (in Westminster, CA):
The page cannot be found
I pass by it almost every day (depends on the traffic if I drive by or not), but all of sudden (no big sign outside that I noticed) the RV's were nearly empty and then last week, it was all empty. I would have expected something like "closing the office sale" or something (since they only seem to have one in Orange County) on the wall near the highway but went quietly away....
I think the stock market is set up for a big drop. But the question is...where are stocks most vulnerable for shorting opportunity?
I think it's international. Japan's recent stock market rally is ridiculous, given their drop in exports, tools, autos and GDP. They also are very vulnerable to rising commodity/oil prices.
Europe is about to go through big financial turmoil in the Baltics, which will have impact on Western Euro banks as great as the mortgage crisis in the U.S. And they've got their own mortgage crisis in parts of Western Europe, too. They don't have the Ben and Timmy show to give the markets fuel.
My best idea right now is EFZ, short MSCI EAFE International Index. I'm loading up, and I'll wait it out. It's money in the bank.
energyecon -
Thanks for posting that, does not look for oil or Nat gas, but for some reason people are buying.
notafriend_of_uncleben -
Neither a borrower or lender be. But that does show one of the downsides to debt, annoying phones calls are bad enough.
rich,
Back in December 2008 I noticed this report from MarketWatch:
NEW YORK (MarketWatch) -- "Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported.
Under the bill, the Banks' Shareholding Acquisition Corporation, originally created in January 2002, would resume buying shares from banks and other entities, the Japanese news agency reported.
The bill would be introduced early next month "with an eye to implementing the measure by the end of March," the report quoted lawmakers as saying. The Liberal Democratic Party had intially considered just 10 trillion in stock purchases, but the size was roughly doubled to 20 trillion yen at the request of its ruling coalition partner, the New Komeito party, the report said."
Questions to ask:
-what price will the government buy at?
-what criteria will the government use to determine purchase prices?
-what proportion of the total float of Japanese stocks is owned by the government?
-what does the phrase "stock market" mean when government entities are participating?
-will this be an opportunity for foreign investors to dump their holdings of Japanese equities?
I don't know the answers to all of these questions, but I think it's pretty clear that Japan's stock market is openly manipulated by the Japanese government. I wouldn't touch the Nikkei with a ten foot pole.
(10y bond 3.73% +0.07 (1.91%) )
Back from lunch.... 2 minutes to go
Do the units go to RV heaven? Who is stockpiling and armor-plating these for the coming Mad Max, terrain wars? People in bunkers demand answers.
I assume you guys noticed that oil quantitatively eased its way over $65/bbl.
Is this point where the waiter walks in and gives us the bill for our free lunch?
Mutually Assured Debtstruction is what the world is pinning it's hopes on, right now.
On Topic :
Local community banks are now agreeing up front to short sale pricing on homebuilder inventory. It keeps the REO off of the banks' balance sheet, and will possibly allow homebuilders to stay in business.
"Questions to ask:
-what price will the government buy at?"
Obviously, the whole scheme is a bit ridiculous. However, the Japanese taxpayers were getting much better deal because they were buying equity after substantial decline through exchange @ market equilibrium!!! (which for us would be 40c or less on $1 ).
Also it seems that Japanese gov. did little of buying while making a strong statement to calm down market emotions, etc. Japan May Scrap 50 Trillion-Yen Plan to Prop Up Stock Market - Bloomberg.com
DOW 6000 (profile) wrote on Thu, 5/28/2009 - 10:43 am
reply ignore user
Quote of the day is a toss up between "Gurgle Mail " and "Avenge Me Bonds, Avenge me"
Change your handle to "DOW 5860" and you get my vote hands down.
Welcome to the new world of "hangar queens" for everyone. Anybody familiar with aviation knows what a hangar queen is. Now we have RVs in driveways and dinette sets in storage and Seasonal lawn decorations in the attic and motorcycles behind the garage and... you get it. One house, one car, less "stuff."
EHP,
Regarding durable goods:
Up 1.9% with defense orders up 23.2%. Without defense, durable goods were only up 0.6%. And that rise is off of a big downwardly revised prior month (-2.1% vs originally reported 0.8%).
The yoy numbers are still coyote ugly:
Briefing.com: Durable Orders
Only a salesman in dire need of a commission could see green shoots in that data. I don't buy into the "could have been worse" bs.
""Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported."
The old investment "advice" is starting to sound pretty good: Spend your money on women and booze. The rest you can just waste away.
dryfly (profile) wrote (in reply to...) on Thu, 5/28/2009 - 10:35 am
... to get around the ordinances you find 'proxies' & hold the sales elsewhere - they turn into flea markets in effect - one giant endless rolling garage sale.
Coming soon to Middle America's Industrial Capacity.
Consequently (?), the 3rd flight to safety has been canceled/delayed.
"Spend your money on women and booze."
hm, investing in a home brewery . yes!
Comrade,
I agree this entity is buying at low price points, but I think that there is a good chance that many of the companies being propped should be liquidated. Keeping the zombie companies alive hurts in the long term, as people and resources could be shifted to new sectors.
"saw a news story a while back about a town around elkhart that had to start enforcing an ordinance (that had been on the books but never needed enforcing) limiting the # of days per month that one could have a garage sale."
I know of about four "permanent garage sales" within a mile of my house. They're out there most Saturdays and Sundays. But they're all on principal streets that already have moderately heavy traffic), so nobody gives a damn.
If you want to really experience the low-end trader class, head out to some storage auctions. Whole crowds of people living in trailers or garages bidding $50 for a whole locker full of mystery boxes, trying to flog it at flea markets, through craigslist, on friends' lawns. Guarding ever bit of treasured information about secret sources of "good stuff." Partying like it's 999.
Here is a blogger who thinks that there is a Devaluation Imminent in the Baltics...I tend to agree and think that would trigger another short term boost in the USD/T-bills.
timmyone (profile) wrote on Thu, 5/28/2009 - 11:08 am
The old investment "advice" is starting to sound pretty good: Spend your money on women and booze. The rest you can just waste
Scantily clad Frauliens toiling over the copper kettles as the smell of hops infuses the air. Always willing to help you with your lederhosen and pour you a Jägermeister. Life would be good.
"there is a good chance that many of the companies being propped should be liquidated."
True!!!, (that's why I mentioned the scheme is ridiculous.) I would add MUST be allowed to fail.
Dryfly,
My guess is next year RV's will be scrap metal prices. Storage lots will have many abandon ones. I am looking for the "Cousin Eddie" model older, cheap. Tag 5th or Class A. If I like it then maybe next year trade up.
I have noticed at the races lots of the guys with the $1/2 MM tow rigs are missing this year. Bargains coming!
There have been stories of people setting up outdoor 'stores' in the driveways of empty homes, in high traffic locations... selling just about everything...
RV companies - Winnebago and Thor Industries look to be well positioned to weather the storm - Monaco and Fleetwood went bk, Navistar is buying Monaco, somebody is buying most of Fleetwood - no word on resuming production though - those plants could be used to make other things - for example Navistar is going to be making some of the MRAP vehicles... Just like homes, there is a large inventory of brand new, never sold rv's that are in storage... Whether they can be sold without the support of the company is a good question... I would probably have been looking to upgrade next year, but since Monaco is gone for now I would wonder about the warranty - or even the availability of quality service since the factory service centers are closed... You can get a 3rd party warranty insurance policy which the dealer might provide but unless there is some place you can get the service that would not be worth much... RV dealers are notorious for not having any good mechanics...
Buying an RV on credit - just another sign of financial ignorance - they depreciate so fast that even buying one with cash is a bad idea unless you plan to use it a lot and really like the lifestyle - That is my motivation - we are normally in our rv almost full time, although for the last several months we have been caring for an elderly member of the family and had to put the rv into storage for a while...
If you really want an rv and can buy with cash, there has never been a better time to get a deal... there are a lot of good used rigs available, and if you really want a new one the dealers will be most happy to see you...
TNX under 3.7%
Obviously, the whole scheme is a bit ridiculous. However, the Japanese taxpayers were getting much better deal because they were buying equity after substantial decline through exchange @ market equilibrium!!! (which for us would be 40c or less on $1 ).
I've resigned myself to the fact that governments are going to keep trying the same sort of policy over and over until a major monetary system collapses.
There's a certain peace and harmony that comes with embracing total cynicism:
Once you give up on people you don't get mad anymore.
Wait till the local governments require a Garage sale permit with sales tax collection! Black market.
Which Hegemoney is the new reserve currency, or are we finished with that idea, along with the rest of Bretton Woods?
Skyin' 'em now, boss
Bob Dobbs (homepage, profile) wrote on Thu, 5/28/2009 - 11:16 am
Partying like it's 999.
Ahhh yes, Pope Gregory V. The first German Pope. I'm sure Conjure could tell us some tall stories.
Today's market action is patently absurd. I'm calling this the death rattle...
re: Japan...finally gave up on the YEN (YCL) yesterday....it will never go anywhere as long as the Japanese are intent on being the world's second largest printing press.
BTW oil shorts getting head handed to them....they will never learn.
Ciao
MS
Angry Saver,
thanks for that info
I'm pretty sure garage sales tax is already the law in CA, but not enforced... I know if you take a load to an organized flea market they give you a sales tax form when you sign up for a space... I doubt if anyone bothers with it... It's the same thing if you buy something over the net from out of state, you are supposed to declare that on your state income tax... Ya right, I bet they collect a lot that way...
Regarding Japan equity market intervention:
May 28 (Bloomberg) -- Japan’s ruling Liberal Democratic Party may abandon a bill that would set aside 50 trillion yen ($520 billion) to buy shares from the market because stocks have rebounded from a 26-year low, lawmakers said.
Japan May Scrap 50 Trillion-Yen Plan to Prop Up Stock Market - Bloomberg.com
AC, I haven't given up on people. I just lowered my expectations by a large degree. (Well said though. )
"Wait till the local governments require a Garage sale permit with sales tax collection! Black market. "
I'm sure you could find a few who do if there are more than x garage sales per year on the premises. But local gov't doesn't operate in a vaccuum, and I can't see the absolute law you're talking about passing in any community that's not running on absolute autopilot.
When I used to sell at flea markets years ago, you didn't need a permit; the market operator took care of that. Took care of the sales tax, too. They'd ask you, "How much did you sell" on the way out, you'd tell them maybe half of what you did sell, and ante up the appropriate percentage. Everybody was happy.
That said, there was an interesting article on the sfgate.com website about rogue food pushcart operators in SF -- rogue because it can cost $20K to get a permit, and the procedure varies by whether you're on a public street or not. So a lot of guys just go rogue and either cook stuff at home and sell it in bars, or have actual pushcarts and twitter their loyal customers as to where and when they're operating today. Some of these guys are pretty high end -- the Creme Brulee cart, for example. But it does prove your point, when the laws become too onerous people go underground. And they should. And if enough do, the laws change.
Juvenal Delinquent (profile) wrote on Thu, 5/28/2009 - 1:23 pm
Which Hegemoney is the new reserve currency, or are we finished with that idea, along with the rest of Bretton Woods?
I think you just coined it, pun intended, with a little help from neologism : I vote "hedgemoney" as the currency of the realm.
GH-
don't read too much into the auction results for this rally. It's not much better then yesterday, which was touted as "well received" by the regular pumpers. It's alot easier to press the "up" button when there is less competition for the big firms. Add in weaker than hell short positions and look what you get.
Ciao
MS
"I'm sure Conjure could tell us some tall stories."
Conjure says he wasn't acquainted with Gregory.
However, he was acquainted with Monseignor Montini during the '20s. This is many years before he became Paul VI. Montini was working in the Papal Secretariat at the time.
Montini, Conjure says, was a real "party boy."
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
equity manipulation ...
China is doing it and the scope is huge and unknown. I won't be surprised that our government is on the boat as well.
I like to torture numbers as much as anyone, and no doubt these are bad but to over read into the drop in new home sales is a mistake. There are many more exiting homes, and in the run up way more homes were built and sold than "normal" that is, for several years before 2007 the percentage of new homes sold as a percent of the market kept on increasing, now it's a bit below normal, as it needs to be till the existing inventory gets absorbed...
I keep hearing claims of this market being "Pump and Dump"...
But where's the Dump? There was supposed to be an earth-shattering Dump!
mp (profile) wrote on Thu, 5/28/2009 - 11:30 am
"I'm sure Conjure could tell us some tall stories."
Conjure says he wasn't acquainted with Gregory.
Well yeah. Conjure would say that. It has only been a thousand years ±. He's probably still under a vow of Papal secrecy.
Rob Dawg (homepage, profile) wrote on Thu, 5/28/2009 - 1:32 pm
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
welcome to the desert of the Real.
if bad money drives out good... do bad economies drive good ones underground?...
also on the subject of revisions
Here are the upward revisions on the advance initial claims data for the past 2 months: 5,6,4,4,5,3,11,3
Index of /press/2009
The expected revision would put this week's report above the 4 week moving average
Comrade de Chaos -
"Spend your money on women and booze."
hm, investing in a home brewery . yes!
Need to rack my Heffe, keg my porter and plan on brewing an all grain IPA tomorrow. Got a 4 tap keggerator in my apartment, all I'm missing is the women. Man I have got to get my priorities straight.
ResistanceIsFeudal (profile) wrote (in reply to...) on Thu, 5/28/2009 - 11:36 am
if bad money drives out good... do bad economies drive good ones underground?...
Exactly. Bravo. The Informal Economy is the good economy. California just got here first with their policies.
till the existing inventory gets absorbed
========
with the way employment is going it may be a long time, no job = no inventory absorption
AC, I haven't given up on people. I just lowered my expectations by a large degree. (Well said though. )
Well I haven't given up on people - this whole civilization thing is quite an achievement I must say.
But the structure of our political system today in combination with the people in charge of it - that's where my cynicism is directed.
Citizen Scotto,
could you write that exact sentence in a letter to Bernanke? He is stuck trying to figure out why his model of
(1) Increase Credit -> (2) Income -> (3) Jobs
isn't functioning.
I keep hearing claims of this market being "Pump and Dump"...
But where's the Dump? There was supposed to be an earth-shattering Dump!
Well remember we had a pump that lasted from 2002 to 2007.
Ohhhh, my puts!
GM to announce 14 factory closures on Monday
Yahoo! 404 - Page Not Found
============
This is a sign of recovery right?
no job = no inventory absorption.
And who would have thought we would ever miss NINJA loans, just as a small view from here, this time last year there were around 10 SFH foreclosures listed all over 500K, today there is 60+ and and over half of them less than 500K. Hawaii still has a long way to go down, I'm expecting to see full round trips from 200K to 800K back down to 250K (adjusted for 4.2 or so inflation).
p.s.
mortgage rate jumped 40bp in two days; gov just might learn, that price floors do not work.
the bulge in baby boomers starts around 1949 ish and gets extended from 1951 on. The more significant time frame is that the boomers are hitting 55+ in very large numbers which will slow the entire consumer demand curve downward.
California with sales taxes from 8.25% to 10.75% has precipitated a burgeoning underground economy. I bought 14 DVDs this weekend at yard sales for ~$24. I'm fairly sure no sales taxes were involved. These 14 have a combined MSRP of far more than $250. Poor California. Weep for their cut.
Having survey the used DVD market, I'll tell you that wholesale used value of those DVDs is probably about what you paid. MSRP means nothing anymore in media; you can buy a "new" $70 book for $15 in a new/used bookstore -- if it's a remainder. Or last year's hot mass-market DVD "new" for $9.99. You think used dealers are eager to buy those for resale? They'd give 'em 50 cents, if anything.Meanwhile, if you know what you want, you still go to a real store and pay real sales tax.
You're too eager to see doom, Rob. It's an occupational hazard around here. Yes, there always is an underground economy; but it's kept to a minimum when local gov't (usually it's local gov't) wises up and reaches a meaningful compromise. There are many advantages to being above-ground, all other things being near-equal.
Rob Dawg (homepage, profile) wrote on Thu, 5/28/2009 - 1:39 pm
Exactly. Bravo. The Informal Economy is the good economy. California just got here first with their policies.
... midwesterners like me just can't win. Now, just wait 'till the Informal Economy sets up its own currency. We know that direct barter will be too cumbersome eventually, even just within a large state, and official currencies become increasingly unpredictable in value. Speculation created a lot of bullshit-money that doesn't really exist, and governments will need more and more of it as exponential debt growth gets intractable... people will only allow bullshit-money to dictate the value of real items for so long.
CA is leading the way again
Guarding ever bit of treasured information about secret sources of "good stuff." Partying like it's 999.
And man they used to party before those button down Normans came and threw water over everything fun...
"To be honest - I'd LOVE to find a decent & smallish used RV - I'd turn it into a rolling office for my biz."
Been watching "Breaking Bad?"
The move up buyer has also been limited /distorted by the large cash-out refi activity the past 10 years. Many have already sold their house via the cash out refi and currently upside down or have small equity positions that would be wiped out by normal selling expenses. Move up buyers may be a rare item in future housing picture.
Been watching "Breaking Bad?"
No - brief me.
RV's also make a great guest house. Those boomerang children with their kids can live in the drive way. I just looked a t a 21.5 ft 5th for $3K older but nice.
do realize that there are two levels at play here. The instinctive, animal level, where we
want to punish those who have done us wrong, while those who have done us wrong have done it
following their animal desires. There is also the rational level, of which to I am
referring to above. Realistically, I know the beast in us will take over and this will end
like it did in France in the 1790's. I will, however, not be the one holding the sword.
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