So if there's a 10.2 month supply of new homes, and a 9.6 month supply of existing homes, and possibly equal that number in shadow inventory, and another spike in foreclosures coming, why is calling a bottom now even important?
New home supply is about double what the bottom will be, unless you subscribe to a greater correction for this cycle and current supply is triple the eventual bottom.
Interested in positive reports on the housing market? Check out positive sentiment surrounding the housing market at Sorry. Page not found.Newssift.com
asterisk (profile) wrote on Wed, 6/24/2009 - 2:18 pm
So if there's a 10.2 month supply of new homes, and a 9.6 month supply of existing homes, and possibly equal that number in shadow inventory, and another spike in foreclosures coming, why is calling a bottom now even important?
w10949 (profile) wrote on Wed, 6/24/2009 - 2:29 pm
If that New homes sales chart was a stock chart it would be a sell.....thats not a good sign as it is approaching 0
Wait until CR starts putting 0 in the middle of the Y axis.
CR,
I don't believe the months of supply anymore. Look at the facts. At the peak months supply Jan '09 12.4 months and 25,000 NSA sales. Now we have 10.2 mo and 32,000. This implies Jan had 310k inventory and May had 326k inventory. That just doesn't jibe with seasonal completions. I think builders are holding just short completing houses to manipulate supply and avoid either taxes or loan covenant triggers.
Misty pre-dawn of time recollections of Monsanto ride at Disneyland, involved going into some microscope thingamajig or some such...looooooooong time ago lol
As I have stated previously, new homes sale numbers are virtually meaningless in my area, Denver, because many (if not most) 'new homes' have been foreclosed and then relisted and sold by the Bank, and thus are not counted as 'new homes' when they are resold by the Bank.
I think it's pretty obvious from Ben's prior testimony he doesn't give a rat's ass about the USD - "As long as you're not traveling to Europe, there's no impact to a weaker dollar"
Market seems to agree.
If you don't have any USD denominated savings a weaker dollar won't kill you.
I think it's pretty obvious from Ben's prior testimony he doesn't give a rat's ass about the USD - "As long as you're not traveling to Europe, there's no impact to a weaker dollar"
85% of Americans have no passport, so they've never been anywhere. In theory Benjamins is correct, but on the other hand, 100% of Americans are reliant upon imported goods to some extent.
Wow... that monthly sales number is obviously going WAY under 200K later in the year... on the way to (effectively, or near) zero, I think.
I don't see prices of existing bottoming any time soon, with fewer and fewer available dollars to chase more & more available homes.... so at some point (soon, if not already), buying or building anything new will simply be an insane/conspicuous luxury.
Why would anyone but the most wealthy, liquid, arrogant buyers pay the actual construction cost to build a house (let alone pay a builder the margin) when you can buy existing homes for 25-50% or more off (of actual cost to build)?
Interesting are the comments with various posters predictions...
If I had the time I'd throw all the predictions in a spreadsheet to find out whether we were too bearish or not enough on housing - alas I actually have to get some work done at work today.
the last few time I went to D-land I peaked my head around a corner in one of the shops where the people-mover came through and saw the old cars just sitting there collecting dust. The tracks it used had some sort of ride on them for a short bit but I think it's all unused right now. We got tickets, years ago from a contact at Monsanto that also included a reservation at Club 33.....sat next to the Sultan of Brunei and his 15 or so wives.
The microscope thing was a hoot back then....I remember it well.
Farmers now can get GPS on their tractors which allow them to really target places for fertilizer and pesticides. This results in many benefits. Reduced spraying, which means less money spent on fertilizers by farmers, less runoff into streams and probably healthier food.
I can't find the Washington Post article on it at the moment, but just search GPS farming or precision farming.
Screw montsanto - they have a dubious history of targeting small farmers who don't buy their product.
All the fake support in DAPs, 90 day foreclosure ban and super low interest rates and they still can't maintain a flat line. This mess is so far from over.
Chicago-based Boeing Co.'s only order so far this week, worth US$153 million at list prices, paled beside the US$6.25 billion chalked up by Airbus. The Wizz Air commitment is not included in the tally because it is not legally binding.
@Sebastian - talk about spin, why don't you give us the green shoots on the YoY May '08 to '09 percentage decline (down 21% on ships, 23% on new orders), or the YTD YoY that's down 19.3% on shipments and 26% on new orders? I'd say the spin is in the MSM.
I thought another headline this AM at ZeroHedge was interesting:
Is Raiffeisen Bank Bankrupt?
Posted by Tyler Durden at 9:16 AM
Zero Hedge discussed a few months ago the fact that the ratings agencies consider distressed exchange offers essentially equivalent to an event of default. If that is the case, then Raiffeisen Bank is basically bankrupt: one of Austria's biggest banks with massive Eastern European exposure has recently launched an exchange offer for €500 million of notes (ISIN: XS0253262025) at 55 cents on a dollar, to be exchanged into new notes yielding 15%!
European planemaker Airbus wrapped up the Paris air show with $6.4 billion of orders for 58 aircraft, marking as expected a steep fall from last year as airlines hold back from renewing fleets to stave off recession.
The world's largest planemaker also reported preliminary commitments -- yet to be placed in the order book -- for 69 planes worth $6.5 billion at list prices at the biennial show.
At last year's Farnborough Air Show -- which alternates with Paris -- Airbus notched up firm orders for 247 aircraft and Airbus and rival Boeing between them booked 444 orders. Boeing and Airbus are headed for their worst annual order tally in at least 15 years as struggling airlines cancel or defer almost as many planes as they are buying.
so if they are canceling orders how does that play out in report..is their a subtraction factored in...
I wonder how long people like this are going to stay in their house vs walking away. This guy is down 107,000 from his purchase price and the price is still
dropping. I think this could be the next shoe to drop if prices don't stabilize, at least here in the north east.
OT, but Sen. Judd Greg (from NH) is trying to pass legislation to eliminate the "paid for by stimulus bill" types of signs posted on the highways where work is taking place. The signs cost $300 each for a total of about $6 million. He says that's a waste.
The really funny thing is reading all the public comments on the news site. Whenever I need entertainment, I just scroll thru the public comments.
The general public does not seem so duped after all.
shill: "This one is for Sebastian...could you spin it for us please."
I'm not spinning anything. "Up" is "up" and "down" is "down", and posters who are blatantly demonstrating their ignorance of the facts, as well as their lack of interest in finding out what they are, just make the other bears look stupid and less credible, too.
There's plenty of bad news out there without denying that any positive data exists.
"June 24 (Bloomberg) -- Here’s a way to help head off the next financial crisis: Make sure borrowers have some of their own money on the line. "
This came up last night regarding the financial reforms post. I have been saying this for some time, and Danny brought this up again last night. From the Opinion piece:
"The reason for requiring borrowers to put their own money down: they will be less likely to roll the dice on risky loans or jump into speculative plays. That should defuse the temptation for bankers to create mortgage bombs during booms. "
This is exactly what I have been saying. I would make the downpayment requirement 20%. Through cheating and govt meddling, some would get it down to 10%, but even that would be a decent deterrent.
But what are we doing instead? Despite all the damage done to the economy, the FHA still allows no-money-down mortgages.
"actually, it is probably a bit worse than that, according to the generally superior cyberhomes... "
good point for anyone reading the blog - Zillow estimates are considered inaccurate in the industry, where cyberhomes is actually used in some loss-mitigation shops as a quick first-pass (any indepth analysis would use a BPO or full-blown appraisal).
shill, again thanks for the data...
....
OT/ I spend 45 minutes editing a Piggie vid mash-up for YouTube on my mobile unit no less...
and all you guys/gals can manage is 19 HITS? WTf?... it's 6 second long, your time ex.: 15 seconds at most...
guess you're the crowd that goes after TARP's posted Jennifer Alba in bikini, pointess, IMO... now that's magical thinking....
....
fried, so they couldn't sell that John Burgee/Philip Johnson post-modernist building after try number 2... met Johnson
about 15 years ago (even in his 90s he was a bit of a chicken hawk... and as *** as fairy lights on a Christmas tree (slang Brit expression),
whatever happened to John Burgee, that's right? old Philip threw him under the #1 train...
the end of the durable goods article MS posted gives a good synopsis.
Orders for nondefense capital equipment goods excluding aircraft rose 4.8% in May, a reversal after a 2.9% decline in April. It was the largest increase since September 2004. Such core capital goods orders are considered the best gauge of capital spending by businesses. Core capital goods orders are down 24% from the first five months of 2008.
Shipments of core capital goods -- a figure that feeds directly into calculations of gross domestic product -- rose 0.3% in May.
Orders for transportation goods rose 3.6% in May. Orders for vehicles and parts fell 8.1%.
Orders for electronics, excluding semiconductors, rose 2.2% in May.
Orders for fabricated metals fell 2.5%. Orders for primary metals rose 0.2%.
Orders for electrical equipment fell 1.1%.
Orders for defense capital goods rose 7.4%. Excluding defense, orders rose 1.4%.
bearly: "Sebastian is the ULTIMATE contrary indicator.
Bullish all the way down
Became bearish in March
Now, apparently bullish again."
Another bear who doesn't check his facts before he posts.
Evidently you missed my recent posts, declaring that there is no end in sight to the recession and that I'm looking for a good place to short the market.
But, like I said, you guys don't do "shame", so being so obviously out-of-touch doesn't bother you at all.))
I don't know about cyber, but Zillow generally isn't even close in my observations. House across the street from us has current zestimate of 505K, and just sold for 725K. Whatever the reason ...you can't go by Zillow, to be sure.
They are trotting out the old tired "CAP EX. is going to save us" routine again......
The disconnect between the market and it's data points are ridiculous. They don't even try. The electronics data point is just too hilarious for words. -semiconductors.
I think I'll visit my out of touch Neighbor who has been out of work for almost 8 months and they are just about to take his home, if he feels he is in touch with his inner " shame ".
There is no good news Seb...so why spin it otherwise.
dear CR:
maybe I'm just cranky tonight, but that New Home Sale graph
reminds me of being lost in the forest... too many trees
it's like a bad movie (7 writers in the credits)
either go stacked bar or a combo of bar and line...
....
I was going to say something last week... who am I?
you see this Rolex... that's who the **** I am...
The overall economy, as measured by the gross domestic product, shrank at annual rates of 6.3 percent in the final three months of last year and 5.7 percent in the January-March quarter — the worst six-month stretch for the GDP in more than 50 years. The government is scheduled to revise the first-quarter GDP figure Thursday, but analysts expect the revision will leave the overall figure unchanged.
U.S. economists at Deutsche Bank cautioned that "if the rest of the economy turns out to be weak, new orders for durables could ultimately be canceled."
Many economists say that GDP in the current quarter will show a much smaller decline, around 2 percent, with growth returning in the second half of this year. "The U.S. economy is weak but no longer in free fall," Leahey said.
Couple of comments/requests:
1. It would be great to have a median/mean measurement as another column on your top graph (New Home Sales, Monthly, NSA) showing the monthly changes for 2004-2009
2. It would be interesting to see the inventory broke down on the basis of price (low, average and high-end homes) and/or region.
3. I'd like to make the same analysis for the Canadian market - is CMHC the best source?
"Many economists say that GDP in the current quarter will show a much smaller decline, around 2 percent"
we need a new bubble. I am starting to believe that bubble is going to be "government". As if the govt wasn't big enough already, the PTB are going to try to move the whole economy into a central command and control economy.
NJ and NE-PA seems to be in bizzaro state right now. Houses are easily half a million for a 3 bedroom; and yet no owner is willing (or can) lower their price.
However, the rebate and low interest rate is causing some buying activity. So the question is whether NJ will ever reset to a lower price? Or it'll just stay at half a mil forever slowly. It's not coming down.
Woe to the first time buyer. Locked out when the market bubbled up, locked out when the market is plateauing at a very high level.
To join the game, you have to sell you and your family's future.
thanks MS...
for the feedback on currencies... no way am I trading! just knew this bloke who gets paid in
dollars here and is heading back to GB in 3 weeks and I was trying to give him 'guidance',
he watched the Pound go from 1.27 to now, and was looking for a glimmer it might get back to 1.55
The next bubble could be agriculturally based. I don't have the mind or time for a comprehensive post, but:
1. Asia has been moving to a protein based diet and the trend continues (much more resources).
2. Genetically modified foods are opening up more land to agriculture.
3. Middle Eastern countries are starting the process of planting in North Africa in areas not currently under plow.
4. 200,000 increase in world population every day.
All the above might be bad for humanity, but good for big agra.
"So the question is whether NJ will ever reset to a lower price? Or it'll just stay at half a mil forever slowly. It's not coming down."
Generally what I have observed in other countries that have these mortgage tax breaks is, once the tax break is taken away, activity and prices decline somewhat.
Also, rising mortgage rates in the absence of economic growth will lower prices as well.
well the soviets didn't have a market in the 70's but our market is completely tied to
"up" and the PTB are going to make damn sure that we achieve that because they already own it at a much higher level so to speak.
I was thinking that someone needs to announce some sort of new LBO on utterly ridiculous terms...like we had almost every monday morning '06-'07 so that we can put this whole recession talk to bed...
"The signs cost $300 each for a total of about $6 million. He says that's a waste."
Was anyone employed making these signs or are they naturally occurring and probably growing on trees? And, if so, did they (the workers employed making the signs) save the money or spend it. I'll bet Sen Gregg might not think it a was a waste of money if his name was on the sign. sheesh.(Is Sen. Gregg a waste of money??)
"Generally what I have observed in other countries that have these mortgage tax breaks is, once the tax break is taken away, activity and prices decline somewhat.
Also, rising mortgage rates in the absence of economic growth will lower prices as well. "
Tax rebates doesn't seem to be abating, but seems like Govt is discussing even increasing more tax incentives.
And if you believe mortgage rate is going to raise anytime soon... I got a bridge to sell you.
The Fed has made their position crystal clear. BRIC has also showed their hand, that they'll support Bretton Woods 2 & UST no matter what.
No... I'm beginning to think housing bubble becoming like Japan RE burst. Throughout the whole 23 year of RE burst in Japan, at no point was property lowered to an affordable level.
So for everyone waiting for "affordable property" I think you guys may have to revise your theories.
Tell me why I'm wrong... The current events are collectively working to move things in that direction.
at least I wasn't pigged
Even though Jon and Kate have split, the long national nightmare continues.
Lawrence Yun spotted with N. Korea's Kim..check back for updates
So if there's a 10.2 month supply of new homes, and a 9.6 month supply of existing homes, and possibly equal that number in shadow inventory, and another spike in foreclosures coming, why is calling a bottom now even important?
You mean... Cramer was wrong?
CR,
I'd love to see that second graph on a per capita basis (sales per 100,000 or 1,000,000?)...how far is down anyways?
TAKE THE MARKET ON THAT!!!!!!!!!!!!!!!!!!!!
BOOYAH!!!!
New home supply is about double what the bottom will be, unless you subscribe to a greater correction for this cycle and current supply is triple the eventual bottom.
If that New homes sales chart was a stock chart it would be a sell.....thats not a good sign as it is approaching 0
(rosebud)
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Interested in positive reports on the housing market? Check out positive sentiment surrounding the housing market at Sorry. Page not found. Newssift.com
Red Roof Inn defaults on $300+ million in debt, 79% owned by Citi. Add in Citi's increasing (by 50% or so) labor costs, and that equals C stock up?
asterisk (profile) wrote on Wed, 6/24/2009 - 2:18 pm
So if there's a 10.2 month supply of new homes, and a 9.6 month supply of existing homes, and possibly equal that number in shadow inventory, and another spike in foreclosures coming, why is calling a bottom now even important?
So someone can announce a sign of pre-recovery.
and that equals C stock up?
Sure.... why not?
79% was better than estimates.
bottom sighting
http://thetrawbros.files.wordpress.com/2007/12/jessica-alba-bikini-07.jpg
w10949 (profile) wrote on Wed, 6/24/2009 - 2:29 pm
If that New homes sales chart was a stock chart it would be a sell.....thats not a good sign as it is approaching 0
Wait until CR starts putting 0 in the middle of the Y axis.
Cliff diving is very similar to peak-bagging, as in most accidents happen on the descent...
CR,
I don't believe the months of supply anymore. Look at the facts. At the peak months supply Jan '09 12.4 months and 25,000 NSA sales. Now we have 10.2 mo and 32,000. This implies Jan had 310k inventory and May had 326k inventory. That just doesn't jibe with seasonal completions. I think builders are holding just short completing houses to manipulate supply and avoid either taxes or loan covenant triggers.
Monsanto cuts 900 positions
Monsanto to Restructure Herbicide Unit, as Profit Drops 14% - WSJ.com
Didn't Monsanto sponsor the "People-Mover" ride @ Disneyland?
CR- How about superimposing a bar for builder confidence on that graph.
JD,
Misty pre-dawn of time recollections of Monsanto ride at Disneyland, involved going into some microscope thingamajig or some such...looooooooong time ago lol
you know times are bad when even U North is laying off...
When the headlines no longer refer to Steve Jobs liver, the long national nightmare will be over.
As I have stated previously, new homes sale numbers are virtually meaningless in my area, Denver, because many (if not most) 'new homes' have been foreclosed and then relisted and sold by the Bank, and thus are not counted as 'new homes' when they are resold by the Bank.
Exit strategy ?
LMFAO!
I think it's pretty obvious from Ben's prior testimony he doesn't give a rat's ass about the USD - "As long as you're not traveling to Europe, there's no impact to a weaker dollar"
Market seems to agree.
If you don't have any USD denominated savings a weaker dollar won't kill you.
CR-
''''
but great yeoman work nonetheless!
sold out dba, tbt, half of fxp...
will reload shorts if ben's blatherings get us a 3 est spurt
I think it's pretty obvious from Ben's prior testimony he doesn't give a rat's ass about the USD - "As long as you're not traveling to Europe, there's no impact to a weaker dollar"
85% of Americans have no passport, so they've never been anywhere. In theory Benjamins is correct, but on the other hand, 100% of Americans are reliant upon imported goods to some extent.
Well, I AM going to Europe in the autumn.
Wow... that monthly sales number is obviously going WAY under 200K later in the year... on the way to (effectively, or near) zero, I think.
I don't see prices of existing bottoming any time soon, with fewer and fewer available dollars to chase more & more available homes.... so at some point (soon, if not already), buying or building anything new will simply be an insane/conspicuous luxury.
Why would anyone but the most wealthy, liquid, arrogant buyers pay the actual construction cost to build a house (let alone pay a builder the margin) when you can buy existing homes for 25-50% or more off (of actual cost to build)?
"100% of Americans are reliant upon imported goods to some extent"
though the yuan and greenback are somewhat linked in practice if not theory (though less than ever)
RE: the WSJ article about MON laying off 900...........
at the risk of being spammy, there is a firefox extension named relspoof that will let you access WSJ and FT articles that are "subscriber only"
A blast from the past
Calculated Risk: Contest: Predict New Home Sales
Interesting are the comments with various posters predictions...
If I had the time I'd throw all the predictions in a spreadsheet to find out whether we were too bearish or not enough on housing - alas I actually have to get some work done at work today.
the last few time I went to D-land I peaked my head around a corner in one of the shops where the people-mover came through and saw the old cars just sitting there collecting dust. The tracks it used had some sort of ride on them for a short bit but I think it's all unused right now. We got tickets, years ago from a contact at Monsanto that also included a reservation at Club 33.....sat next to the Sultan of Brunei and his 15 or so wives.
The microscope thing was a hoot back then....I remember it well.
Ciao
MS
Farmers now can get GPS on their tractors which allow them to really target places for fertilizer and pesticides. This results in many benefits. Reduced spraying, which means less money spent on fertilizers by farmers, less runoff into streams and probably healthier food.
I can't find the Washington Post article on it at the moment, but just search GPS farming or precision farming.
Screw montsanto - they have a dubious history of targeting small farmers who don't buy their product.
All the fake support in DAPs, 90 day foreclosure ban and super low interest rates and they still can't maintain a flat line. This mess is so far from over.
lower NEW home activity = positive in my books.
look at the durable goods orders....totally supported by aircraft orders?
WTF?
The madness continues. Let's just call this the SPARC rally....
Ciao
MS
Moody's: Credit Card Charge Off Rate Highest In 20 Years
Zero Hedge: Moody's: Credit Card Charge Off Rate Highest In 20 Years
MS
what aircraft orders?
MS- I was thinking the same thing myself. Did Boeing get any orders out of the Paris air show?
love that 5% balance-transfer fee from jpm - shine on indeed
MS: "look at the durable goods orders....totally supported by aircraft orders?"
Don't you guys ever do "shame?":)
Look at the data. New orders were higher even ex-transportation.
US Census Bureau Manufacturers’ Shipments, Inventories, and Orders
Sebastian
This one is for Sebastian...could you spin it for us please.
City of Rochester, NY area schools -200
Monsanto -900
MTV -50
Verizon Wireless -42
Rockstar Games -16
GM has new deadline to slash white collar jobs -4,000
DC Jobless rate surpasses 10%
DRS Test & Energy -65
City of Cherry Hill, NJ -14
Sacramento, CA fire department -68
Fort Worth, TX area schools -95
American General Life -291
Methuen, MA police department -20
Kane County, IL Health Department projects 10% staffing cuts
City of Stockton, CA -68
U.S. Xpress -14
State Newspaper (SC) -6
Orange County, CA Sheriff's Department -50
Quicksilver -168
Potential Edison, NJ layoffs, furloughs -75
City of Wichita, NY potential layoffs -50
Mesaba Airlines -110
Hav-a-Tampa Cigars -500
Untitled Document
heres aircraft orders
Airbus leading Boeing in Paris Air Show orders - The China Post
Chicago-based Boeing Co.'s only order so far this week, worth US$153 million at list prices, paled beside the US$6.25 billion chalked up by Airbus. The Wizz Air commitment is not included in the tally because it is not legally binding.
From the contest:
Tue, 8/26/2008 - 8:24 pm
Dawg's picks:
2008: 496K
2009: 492K
5 people picked 2008: 485k spot on.
Boeing gets first Paris Air Show order - Aviation- msnbc.com
airshow orders per MS msg above....
seb,
good to see you around...
@Sebastian - talk about spin, why don't you give us the green shoots on the YoY May '08 to '09 percentage decline (down 21% on ships, 23% on new orders), or the YTD YoY that's down 19.3% on shipments and 26% on new orders? I'd say the spin is in the MSM.
I thought another headline this AM at ZeroHedge was interesting:
Is Raiffeisen Bank Bankrupt?
Posted by Tyler Durden at 9:16 AM
Zero Hedge discussed a few months ago the fact that the ratings agencies consider distressed exchange offers essentially equivalent to an event of default. If that is the case, then Raiffeisen Bank is basically bankrupt: one of Austria's biggest banks with massive Eastern European exposure has recently launched an exchange offer for €500 million of notes (ISIN: XS0253262025) at 55 cents on a dollar, to be exchanged into new notes yielding 15%!
Credit Anstalt, anyone?
gimme a minute....I'll need to find it again...has something to do with the military.
Ciao
MS
shill,
We're looking for 2 people, preferably with hands-on bankruptcy or liquidation experience.
+2
Take that!
European planemaker Airbus wrapped up the Paris air show with $6.4 billion of orders for 58 aircraft, marking as expected a steep fall from last year as airlines hold back from renewing fleets to stave off recession.
The world's largest planemaker also reported preliminary commitments -- yet to be placed in the order book -- for 69 planes worth $6.5 billion at list prices at the biennial show.
At last year's Farnborough Air Show -- which alternates with Paris -- Airbus notched up firm orders for 247 aircraft and Airbus and rival Boeing between them booked 444 orders.
Boeing and Airbus are headed for their worst annual order tally in at least 15 years as struggling airlines cancel or defer almost as many planes as they are buying.
so if they are canceling orders how does that play out in report..is their a subtraction factored in...
I wonder how long people like this are going to stay in their house vs walking away. This guy is down 107,000 from his purchase price and the price is still
dropping. I think this could be the next shoe to drop if prices don't stabilize, at least here in the north east.
263 Montana Dr, Brick, NJ 08723 - Zillow
OT, but Sen. Judd Greg (from NH) is trying to pass legislation to eliminate the "paid for by stimulus bill" types of signs posted on the highways where work is taking place. The signs cost $300 each for a total of about $6 million. He says that's a waste.
The really funny thing is reading all the public comments on the news site. Whenever I need entertainment, I just scroll thru the public comments.
The general public does not seem so duped after all.
Cyberhomes.com - Home Details for 263 Montana Dr, Brick, NJ 08723
actually, it is probably a bit worse than that, according to the generally superior cyberhomes...
shill: "This one is for Sebastian...could you spin it for us please."
I'm not spinning anything. "Up" is "up" and "down" is "down", and posters who are blatantly demonstrating their ignorance of the facts, as well as their lack of interest in finding out what they are, just make the other bears look stupid and less credible, too.
There's plenty of bad news out there without denying that any positive data exists.
Sebastian
Durable-goods orders rise 3rd time in four months - MarketWatch
last sentence of the story.
This is not what I originally read but its close.
Ciao
MS
In case you didn't see this:
Mortgage Bombs, Quiet for Now, Await Next Boom: David Reilly - Bloomberg.com
"June 24 (Bloomberg) -- Here’s a way to help head off the next financial crisis: Make sure borrowers have some of their own money on the line. "
This came up last night regarding the financial reforms post. I have been saying this for some time, and Danny brought this up again last night. From the Opinion piece:
"The reason for requiring borrowers to put their own money down: they will be less likely to roll the dice on risky loans or jump into speculative plays. That should defuse the temptation for bankers to create mortgage bombs during booms. "
This is exactly what I have been saying. I would make the downpayment requirement 20%. Through cheating and govt meddling, some would get it down to 10%, but even that would be a decent deterrent.
But what are we doing instead? Despite all the damage done to the economy, the FHA still allows no-money-down mortgages.
"actually, it is probably a bit worse than that, according to the generally superior cyberhomes... "
good point for anyone reading the blog - Zillow estimates are considered inaccurate in the industry, where cyberhomes is actually used in some loss-mitigation shops as a quick first-pass (any indepth analysis would use a BPO or full-blown appraisal).
Sebastian is the ULTIMATE contrary indicator.
Bullish all the way down
Became bearish in March
Now, apparently bullish again.
shill, again thanks for the data...
....
OT/ I spend 45 minutes editing a Piggie vid mash-up for YouTube on my mobile unit no less...
and all you guys/gals can manage is 19 HITS? WTf?... it's 6 second long, your time ex.: 15 seconds at most...
guess you're the crowd that goes after TARP's posted Jennifer Alba in bikini, pointess, IMO... now that's magical thinking....
....
fried, so they couldn't sell that John Burgee/Philip Johnson post-modernist building after try number 2... met Johnson
about 15 years ago (even in his 90s he was a bit of a chicken hawk... and as *** as fairy lights on a Christmas tree (slang Brit expression),
whatever happened to John Burgee, that's right? old Philip threw him under the #1 train...
Zillow=Rich Barton....all I need to know.
Ciao
MS
the end of the durable goods article MS posted gives a good synopsis.
Orders for nondefense capital equipment goods excluding aircraft rose 4.8% in May, a reversal after a 2.9% decline in April. It was the largest increase since September 2004. Such core capital goods orders are considered the best gauge of capital spending by businesses. Core capital goods orders are down 24% from the first five months of 2008.
Shipments of core capital goods -- a figure that feeds directly into calculations of gross domestic product -- rose 0.3% in May.
Orders for transportation goods rose 3.6% in May. Orders for vehicles and parts fell 8.1%.
Orders for electronics, excluding semiconductors, rose 2.2% in May.
Orders for fabricated metals fell 2.5%. Orders for primary metals rose 0.2%.
Orders for electrical equipment fell 1.1%.
Orders for defense capital goods rose 7.4%. Excluding defense, orders rose 1.4%.
bearly: "Sebastian is the ULTIMATE contrary indicator.
Bullish all the way down
Became bearish in March
Now, apparently bullish again."
Another bear who doesn't check his facts before he posts.
Evidently you missed my recent posts, declaring that there is no end in sight to the recession and that I'm looking for a good place to short the market.
But, like I said, you guys don't do "shame", so being so obviously out-of-touch doesn't bother you at all.
))
Sebastian
I don't know about cyber, but Zillow generally isn't even close in my observations. House across the street from us has current zestimate of 505K, and just sold for 725K. Whatever the reason ...you can't go by Zillow, to be sure.
Ghost-
They are trotting out the old tired "CAP EX. is going to save us" routine again......
The disconnect between the market and it's data points are ridiculous. They don't even try. The electronics data point is just too hilarious for words. -semiconductors.
Priceless.
Ciao
MS
I think I'll visit my out of touch Neighbor who has been out of work for almost 8 months and they are just about to take his home, if he feels he is in touch with his inner " shame ".
There is no good news Seb...so why spin it otherwise.
dear CR:
maybe I'm just cranky tonight, but that New Home Sale graph
reminds me of being lost in the forest... too many trees
it's like a bad movie (7 writers in the credits)
either go stacked bar or a combo of bar and line...
....
I was going to say something last week... who am I?
you see this Rolex... that's who the **** I am...
These three paragraphs say it all to me...
The overall economy, as measured by the gross domestic product, shrank at annual rates of 6.3 percent in the final three months of last year and 5.7 percent in the January-March quarter — the worst six-month stretch for the GDP in more than 50 years. The government is scheduled to revise the first-quarter GDP figure Thursday, but analysts expect the revision will leave the overall figure unchanged.
U.S. economists at Deutsche Bank cautioned that "if the rest of the economy turns out to be weak, new orders for durables could ultimately be canceled."
Many economists say that GDP in the current quarter will show a much smaller decline, around 2 percent, with growth returning in the second half of this year. "The U.S. economy is weak but no longer in free fall," Leahey said.
Yahoo! 404 - Page Not Found
The re-recovery angle is getting old..
Ciao
MS
none of this sounds positive to me, can our economy continue to function at such low levels:
" Despite the recent increases, however, the level of new orders for big-ticket items during May was down 5.1% from December.
Orders are down 26.8% in the first five months of the year compared with the same period a year ago.
Shipments of durable goods fell 2.1% in May and are down 19.3% in the first five months of the year compared with a year earlier. "
Interesting in the Zero Hedge link, bit about no IWM available for borrow...
While the current #1 "Selling on Strength" is...IWM
Money Flows: Selling on Strength - Markets Data Center - WSJ.com
"none of this sounds positive to me, can our economy continue to function at such low levels"
Actually, the question is can China's and India's economy function at such low levels...
The volume of goods we produce is already so decimated over the years...
CR,
Couple of comments/requests:
1. It would be great to have a median/mean measurement as another column on your top graph (New Home Sales, Monthly, NSA) showing the monthly changes for 2004-2009
2. It would be interesting to see the inventory broke down on the basis of price (low, average and high-end homes) and/or region.
3. I'd like to make the same analysis for the Canadian market - is CMHC the best source?
Ted
"Many economists say that GDP in the current quarter will show a much smaller decline, around 2 percent"
we need a new bubble. I am starting to believe that bubble is going to be "government". As if the govt wasn't big enough already, the PTB are going to try to move the whole economy into a central command and control economy.
worked so well during the 70s.
and in the Soviet Union.
NJ and NE-PA seems to be in bizzaro state right now. Houses are easily half a million for a 3 bedroom; and yet no owner is willing (or can) lower their price.
However, the rebate and low interest rate is causing some buying activity. So the question is whether NJ will ever reset to a lower price? Or it'll just stay at half a mil forever slowly. It's not coming down.
Woe to the first time buyer. Locked out when the market bubbled up, locked out when the market is plateauing at a very high level.
To join the game, you have to sell you and your family's future.
thanks MS...
for the feedback on currencies... no way am I trading! just knew this bloke who gets paid in
dollars here and is heading back to GB in 3 weeks and I was trying to give him 'guidance',
he watched the Pound go from 1.27 to now, and was looking for a glimmer it might get back to 1.55
the zillow/cyberhomes split gets truly silly in the OC hills...
Cyberhomes.com - Home Details for 11542 Plantero Dr, Santa Ana, CA 92705
Santa Ana, California Real Estate & Santa Ana Homes for Sale - Zillow
yup, that's right... under 700K to over a mil...
The next bubble could be agriculturally based. I don't have the mind or time for a comprehensive post, but:
1. Asia has been moving to a protein based diet and the trend continues (much more resources).
2. Genetically modified foods are opening up more land to agriculture.
3. Middle Eastern countries are starting the process of planting in North Africa in areas not currently under plow.
4. 200,000 increase in world population every day.
All the above might be bad for humanity, but good for big agra.
"So the question is whether NJ will ever reset to a lower price? Or it'll just stay at half a mil forever slowly. It's not coming down."
Generally what I have observed in other countries that have these mortgage tax breaks is, once the tax break is taken away, activity and prices decline somewhat.
Also, rising mortgage rates in the absence of economic growth will lower prices as well.
So how happy are you?
http://1.bp.blogspot.com/_8rpY5fQK-UQ/SkFnaju3L7I/AAAAAAAAHH0/dXMnxLPM9Lk/s1600-h/ABC.png
Thanks to Econopic for the graph
well the soviets didn't have a market in the 70's but our market is completely tied to
"up" and the PTB are going to make damn sure that we achieve that because they already own it at a much higher level so to speak.
I was thinking that someone needs to announce some sort of new LBO on utterly ridiculous terms...like we had almost every monday morning '06-'07 so that we can put this whole recession talk to bed...
Ciao
MS
"The next bubble..."
If the result of a bubble is the overinvestment of something, such that it leads to overproduction and glut of such item....
Of all the things that can bubble, I would MUCH prefer to have a bubble in healthcare. (Some would debate we already have one)
My position is to let it grow and explode, massively. Perhaps this is the only way to get reasonable healthcare costs for the average person.
@hc - you mean the way that houses became so much more affordable for everyone in the housing bubble?
"The signs cost $300 each for a total of about $6 million. He says that's a waste."
Was anyone employed making these signs or are they naturally occurring and probably growing on trees? And, if so, did they (the workers employed making the signs) save the money or spend it. I'll bet Sen Gregg might not think it a was a waste of money if his name was on the sign. sheesh.(Is Sen. Gregg a waste of money??)
"Generally what I have observed in other countries that have these mortgage tax breaks is, once the tax break is taken away, activity and prices decline somewhat.
Also, rising mortgage rates in the absence of economic growth will lower prices as well. "
Tax rebates doesn't seem to be abating, but seems like Govt is discussing even increasing more tax incentives.
And if you believe mortgage rate is going to raise anytime soon... I got a bridge to sell you.
The Fed has made their position crystal clear. BRIC has also showed their hand, that they'll support Bretton Woods 2 & UST no matter what.
No... I'm beginning to think housing bubble becoming like Japan RE burst. Throughout the whole 23 year of RE burst in Japan, at no point was property lowered to an affordable level.
So for everyone waiting for "affordable property" I think you guys may have to revise your theories.
Tell me why I'm wrong... The current events are collectively working to move things in that direction.
I WAS in Europe five weeks this Spring. While I was there the $ lost 10% to the Euro.
So the question is whether NJ will ever reset to a lower price? Or it'll just stay at half a mil forever slowly. It's not coming down.
=====
This could only be true in an area where there are no job losses and everyone has a manageable debt-to-income ratio.
Otherwise, there will be a reset eventually.
"Preventive war was an invention of Hitler. Frankly, I would not even listen to anyone
seriously that came and talked about such a thing."
When the people fear their government, there is tyranny; when the government fears the
people, there is liberty.
~Thomas Jefferson
hat tip to Financial Opinions Updated Daily iamned.com for the good articles