"“However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month to month improvements in September than in August in both seasonally adjusted and unadjusted figures."
Certainly sounds like a problem with seasonal adjustment, as CR has said.
S&P is slow to post the data online. They just have their news release - and that isn't sufficient.
It's important to remember that the Case-Shiller numbers are a rolling average of 3 months - so September includes price increases in July and August. My guess is the actual September only numbers (that we never see) showed a decline.
According to St. Louis Fed's National Economic Trends, "corporate profits" hit almost 14% of GDP in 2007, vs. historical norm near 8-9% (e.g. in 1980s). Corporate profits have been looking like Mortgage Pig, with a peak at 12% in 1997, then a rewind to the 8-9% level at the trough in the 2001 dot-com recession. Corporate profits since 2007 have fallen back to 9% about a year ago, but have rebounced to at least 10% since, and with the latest growth in the BEA report (1% of GDP in Q3 alone) I expect to see an 11% print. But is this a V-shaped profit recovery, or a dead-cat bounce? (Also there's the "shrinking denominator" effect of the drop in GDP playing into the profits-to-GDP ratio bouncing up.)
(This is a followup to my post in the previous thread about the apparent fact that ALL of the 3rd Quarter GDP growth apparently went to the reported increase in Corporate Profits.)
When the worst performing and the best performing cities in the country are Pavlovegas and the Morgue'er City as far as real estate goes, America: you got a problem.
Why am I so confident this trap is being set? Nancy Pelosi herself tipped her hand on the retroactive tax plan when she said last January she wanted Congress to repeal Bush’s tax cuts well before their scheduled expiration date. An early repeal of the Bush tax cuts was also one of President Obama’s campaign promises.
The administration and its allies have since gone quiet on its intentions. But that’s only because they want to avoid triggering a stock selloff before the end of 2009. That all changes once the ball drops in Times Square this coming New Year’s Eve. At that point, it will be too late to escape.
The good news is that avoiding this trap is as easy as selling your most profitable stock positions on or before December 31, 2009.
This way, you’ll only pay 15% on your long-term capital gains… instead of the 28% the government is planning to sting you with once its tax trap is sprung in 2010.”
Attributed to david galland casey research no link
If we take $780B over 6 quarters, that's about $130B/quarter. Since corporate profits were up nearly $110B in Q3, I'd say the return is nearly 100%!
Also, if you figure that for the corporations the only direct investment was in lobbying expenses, the ROI has to be about 1,000,000% (i.e. $100B out for $10M or so in...)....
The corporate profit numbers you are using don't tell the whole story. They DON"T include write-downs/capital losses. They are, in effect, operating earnings.
About half the price increase in Q3 can be attributed to the tax credit, and probably another 25% to the fed engineered lowering of mortgage rates. You can probably attribute the rest to essentially zero down payment FHA financing. Like the economy, the apparent stabilization is 100% government debt financed.
ou’ll only pay 15% on your long-term capital gains… instead of the 28% the government is planning to sting you with once its tax trap is sprung in 2010.”
I'd rather see spending cuts than tax increases. But given that at least one tax increase is probably inevitable (to be "fair and balanced"), a tax on asset sale capital gains is probably a lot better for the economy than a tax on "incomes". It always makes me angry when the Dems start talking about "tax the rich" and then tax productivity (income tax) instead of actual wealth... An increase in capital gains tax might also help to tamp down the speculative fever gripping the nation (except of course that so much market activity is now tax-exempt or tax-deferred...) However, there should be a special exception made for bonus income as opposed to base pay!
So everyone who bought prior to 2001 (set to 100) is in fine shape. Even Las Vegas (104) and Phoenix (109) homeowners are well ahead considering their 20% down and 9 years of having made on time payments.
Washington: 180.45 - Higher than NYC. Thought I'd never see the day. Tells you all you need to know about the power of the government to prop up home prices.
They DON"T include write-downs/capital losses. They are, in effect, operating earnings.
Maybe so. I thought about that, but didn't yet hunt around for the detailed explanation of what BEA and the Fed generally report. It would seem foolish for the government agencies to report "operating earnings" in these reports!! Especially without full disclosure. But it wouldn't surprise me, although how they get all the shares of GDP to sum to 100% in the National Economic Trends report without full GAAP earnings would be an interesting question -- where's the delta hidden??
I also think their "corporate earnings" include non-public corporations, small corps, etc. so not directly comparable with S&P500 profits.
When you look at the month to month changes, all of them were lower in Sep than Aug. I.e., gains were smaller, or losses larger in Sep.
That most likely means all markets are being affected by common factors, or common modeling/adjustment issues. Seasonality? Maybe. This is also something you typically see when investor sentiment is changing.
released the press release (that you linked to) and the excel file for NSA ... but the link for the SA data is broken.
May I gently suggest that the NSA data is at least as valuable, if not more valuable to many of us, than the massaged SA data? Perhaps this is a sign... Why not plot the NSA data too?
Funny how corporate profits are inversely proportional to compensation. You'd think the workers would share in the fortune of their employers.....or not-
Anyone who can't do their own seasonal adjustment has no business fiddling with either set of data. I have long contended that the first step to financial hell was taken when an engineer showed an accountant how to use VisiCalc.
Anyone who can't do their own seasonal adjustment has no business fiddling with either set of data. I have long contended that the first step to financial hell was taken when an engineer showed an accountant how to use VisiCalc.
There was computer golf game out back in the '80s that had a "Boss Screen" that popped up a phony spreadsheet whenever you hit the key. Perhaps this is where is all started?
Please enlighten us on your choice of spending cuts.
I ripped apart the California state budget during the summer budget panic, and would love to take a deep look at the current Federal Budget, but to give this the thoughtful response it requires will take some time. For those interested in the subject of Federal discretionary spending, this is an interesting chart:
It's based on the President's budget (i.e. not real spending) and mainly shows "discretionary" spending. The elephant in the room remains the entitlement programs (which we discussed a bit overnight). But there ought to be some room for reduction in the Overseas Warfare (aka "Defense") budget. And there are a tremendous number of time-wasting federal tax-code items that could be reimplemented so as not to tax the productivity of the population. (I'm thinking of the Dependent Care and Health Care Reimbursement account benefit arrangements specifically, where you get incentivized to spend a few hours siphoning "pretax" money out of your paycheck and are allowed to spend the money on a tax-exempt basis... I reckon that for the $2000 or so I save in taxes each year, between myself and the recordkeepers at least $300 in productive time is wasted. That's an expensive tax break and I'm sure there are thousands of these peppered around the tax code...)
However, I've got a family to mobilize this morning. More later...
Nov. 24 (Bloomberg) -- New York is legally permitted to condemn property to make way for developer Bruce Ratner’s Atlantic Yards project in Brooklyn, New York, which includes a basketball arena and apartments, the state’s high court ruled.
In a decision that may make it easier for cities in New York to take properties for redevelopment, the Court of Appeals in Albany today upheld a lower court ruling against a group of property owners who sued to stop the state from taking over their homes and businesses through eminent domain. Developer Forest City Ratner Cos. plans an arena for the current New Jersey Nets professional basketball team, as well as residential and commercial towers, in the $4 billion project.
The Empire State Development Corp., the New York agency behind the project, told the Court of Appeals last month that eminent domain, the right of the government to take possession of private property for public need, was legal because the site was “blighted.”
Lawyers for the property owners, who formed a group called Develop Don’t Destroy Brooklyn, said the distinction was an excuse to seize their homes for a developer.
Now you'll see why I am so angry. Bankers (and insiders, CEOs, etc.) stripped the real cash out of the vault and left a bunch of worthless derivatives and over-priced assets for the tax payer to deal with. It was obvious. No way can profits increase at that kind of rate while GDP was growing at sub-optimal levels for a decade.
The biggest swindle in history. This was not an accident. Bernanke (and the fed) should be held to account.
OT: Reuters.com The development of a good relational database design relies on the sort of cooperative effort that only exists in a handful of companies. That’s because extracting all the information from the involved parties is a daunting task. The rule of thumb is that it can represent upwards of 85% of the effort involved in re-engineering a corporation’s data assets, while the actual code to accomplish the job accounts for less than one-fifth of the work
I can second this. Comprehensive Databases of CDS/MBS components were non existent. In extension any pricing model (e.g. Copulas) are useless as they dont have the representative inputs. Garbage in Garbage out.
I see what CR means by household formation; when grown kids move back home or postponing marriage, its household contraction I suppose!
November 24, 2009
Economy Is Forcing Young Adults Back Home in Big Numbers, Survey Finds
By SAM ROBERTS
For more young adults, there is no place like home for the holidays, and for the rest of the year, too. Ten percent of adults younger than 35 told the Pew Research Center that they had moved back in with their parents because of the recession.
They also blamed the economy for other lifestyle decisions. Twelve percent had gotten a roommate to share expenses. Fifteen percent said they had postponed getting married, and 14 percent said they had delayed having a baby.
In the Pew study, 13 percent of parents with grown children said one of their adult sons or daughters had moved back home in the past year. According to Pew, of all grown children who lived with their parents, 2 in 10 were full-time students, one-quarter were unemployed and about one-third said they had lived on their own before returning home.
According to the census, 56 percent of men 18 to 24 years old and 48 percent of women were either still under the same roof as their parents or had moved back home.
A smaller share of 16-to-24-year-olds — 46 percent — is currently employed than at any time since the government began collecting that data in 1948.
Meanwhile, the portion of adults 18 to 29 who lived alone declined to 7.3 percent in 2009 from 7.9 percent in 2007, according to the Current Population Survey. A decline that big was recorded only twice before over three decades, in the early 1980s and the early 1990s during or after recessions.
Washington: 180.45 - Higher than NYC. Thought I'd never see the day. Tells you all you need to know about the power of the government to prop up home prices.
Nah. That tells me how much DC is in for some serious pain down the road. The homeowner mantra here is "prices have overcorrected because this region is special". When in fact, income levels aren't nearly close to supporting these price levels. Expect DC to see some serious pain ahead. Most of those b.s. stimulus jobs are either far from this area or are a bunch of $45k/yr positions, not nearly enough to make a dent in this ridiculously expensive market.
Does anybody have a link to this month's data in xls? That's how I'm used to seeing it, and can punch in my own equations. I'm only seeing it in pdf right now...
"“However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month to month improvements in September than in August in both seasonally adjusted and unadjusted figures."
Certainly sounds like a problem with seasonal adjustment, as CR has said.
But was the aggregate increase more or less than the $8,000 FTHB program cost?
good morning!
Conjuregram time t-minus later, dude.
Data just showed up, http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blo
S&P is slow to post the data online. They just have their news release - and that isn't sufficient.
It's important to remember that the Case-Shiller numbers are a rolling average of 3 months - so September includes price increases in July and August. My guess is the actual September only numbers (that we never see) showed a decline.
I'll go back to waiting for the data ...
best to all
Given the tremendous weakness in sales on the high-end, methinks we have a "tale of two markets" here...
Biggest loser, Vegas, down 0.9%. Biggest gainer, Detroit???? Up 1.8%. Did cash for clunkers somehow affect local home prices?
All I can say is that our eCONomy works much better when people are impoverishing themselves with debt.
They key takeaway is that we can never stop impoverishing ourselves- ever. Other than that, the pre-Lehman eCONomy was a marvel.
PDF alert: http://research.stlouisfed.org/publications/net/page21.pdf
According to St. Louis Fed's National Economic Trends, "corporate profits" hit almost 14% of GDP in 2007, vs. historical norm near 8-9% (e.g. in 1980s). Corporate profits have been looking like Mortgage Pig, with a peak at 12% in 1997, then a rewind to the 8-9% level at the trough in the 2001 dot-com recession. Corporate profits since 2007 have fallen back to 9% about a year ago, but have rebounced to at least 10% since, and with the latest growth in the BEA report (1% of GDP in Q3 alone) I expect to see an 11% print. But is this a V-shaped profit recovery, or a dead-cat bounce? (Also there's the "shrinking denominator" effect of the drop in GDP playing into the profits-to-GDP ratio bouncing up.)
(This is a followup to my post in the previous thread about the apparent fact that ALL of the 3rd Quarter GDP growth apparently went to the reported increase in Corporate Profits.)
Obligatory broken-record comment: Seasonal adjustment has a finite response time to rapidly changing data.
US 'revised' GDP -
What's the revised ROI of the stimulus plan?
When the worst performing and the best performing cities in the country are Pavlovegas and the Morgue'er City as far as real estate goes, America: you got a problem.
Interesting day, we get the FHFA Home Price Index in another half-hour as well. Normally FHFA and Case-Shiller come out on different days, don't they?
But was the aggregate increase more or less than the $8,000 FTHB program cost?
Dawg,
Those kind of insightful comments are antithetical to the extend and pretend eCONomy. It's the Xmas season for cryin out loud.
Attributed to david galland casey research no link
If we take $780B over 6 quarters, that's about $130B/quarter. Since corporate profits were up nearly $110B in Q3, I'd say the return is nearly 100%!
Also, if you figure that for the corporations the only direct investment was in lobbying expenses, the ROI has to be about 1,000,000% (i.e. $100B out for $10M or so in...)....
Rob Dawg wrote:
why do you hate 'MErica?
Every time I hear terms like "seasonally adjusted" I read it as "institutionalized lies"
I mailed my CC payment of $100 last month but asked them to apply it as $200 "seasonally adjusted". Which number will they use?
Wisdom Speaker,
The corporate profit numbers you are using don't tell the whole story. They DON"T include write-downs/capital losses. They are, in effect, operating earnings.
Be careful.
CIty index value, m/m change, prior m/m change, y/y change
Atlanta 111.26 0.0% 1.1% -9.3%
Boston 155.62 -0.2% 0.9% -3.3%
Charlotte 119.84 -0.7% -0.4% -8.1%
Chicago 132.13 1.2% 1.7% -10.6%
Cleveland 105.75 -1.6% -0.5% -3.7%
Dallas 120.57 -0.7% 0.2% -1.2%
Denver 129.45 -0.5% 1.0% -1.2%
Detroit 72.90 1.8% 1.9% -19.2%
Las Vegas 104.82 -0.9% -0.3% -28.6%
Los Angeles 167.93 0.8% 1.6% -9.0%
Miami 149.69 0.5% 1.1% -16.2%
Minneapolis 124.96 1.8% 3.1% -11.2%
New York 174.38 -0.3% 0.6% -9.0%
Phoenix 109.26 0.8% 1.6% -21.8%
Portland 149.72 -0.5% 0.3% -11.8%
San Diego 154.76 0.9% 1.6% -5.7%
San Francisco 134.16 1.3% 2.8% -7.8%
Seattle 148.94 -0.4% 0.1% -13.8%
Tampa 142.57 -0.6% 0.4% -16.7%
Washington 180.45 0.5% 1.8% -5.0%
Composite-10 158.61 0.4% 1.3% -8.5%
Composite-20 146.51 0.3% 1.2% -9.4%
About half the price increase in Q3 can be attributed to the tax credit, and probably another 25% to the fed engineered lowering of mortgage rates. You can probably attribute the rest to essentially zero down payment FHA financing. Like the economy, the apparent stabilization is 100% government debt financed.
tg wrote:
I'd rather see spending cuts than tax increases. But given that at least one tax increase is probably inevitable (to be "fair and balanced"), a tax on asset sale capital gains is probably a lot better for the economy than a tax on "incomes". It always makes me angry when the Dems start talking about "tax the rich" and then tax productivity (income tax) instead of actual wealth... An increase in capital gains tax might also help to tamp down the speculative fever gripping the nation (except of course that so much market activity is now tax-exempt or tax-deferred...) However, there should be a special exception made for bonus income as opposed to base pay!
If the value of their domiciles keep descending, what are HELOCalifornians gonna do, aside from waiting for go dough?
some investor guy wrote:
Thanks... good stuff. Well, not really, but you know what I mean.
some investor guy wrote:
So everyone who bought prior to 2001 (set to 100) is in fine shape. Even Las Vegas (104) and Phoenix (109) homeowners are well ahead considering their 20% down and 9 years of having made on time payments.
Spunkmeyer wrote:
Sentiments translated and appreciated
Rob Dawg wrote:
There. Fixed it for ya.
Washington: 180.45 - Higher than NYC. Thought I'd never see the day. Tells you all you need to know about the power of the government to prop up home prices.
Angry Saver wrote:
Maybe so. I thought about that, but didn't yet hunt around for the detailed explanation of what BEA and the Fed generally report. It would seem foolish for the government agencies to report "operating earnings" in these reports!! Especially without full disclosure. But it wouldn't surprise me, although how they get all the shares of GDP to sum to 100% in the National Economic Trends report without full GAAP earnings would be an interesting question -- where's the delta hidden??
I also think their "corporate earnings" include non-public corporations, small corps, etc. so not directly comparable with S&P500 profits.
Darn. They've released the press release (that you linked to) and the excel file for NSA ... but the link for the SA data is broken.
Geesh ... S&P seems to have a problem every month.
best wishes
some investor guy wrote:
No offense but I don't consider taking out every trace of my carefully constructed snark as "fixed."
There are still two stalkers out there. Dynamo and Fireball. Who do you think will make the next kill?
The road to HELOC was played with good intentions...
When you look at the month to month changes, all of them were lower in Sep than Aug. I.e., gains were smaller, or losses larger in Sep.
That most likely means all markets are being affected by common factors, or common modeling/adjustment issues. Seasonality? Maybe. This is also something you typically see when investor sentiment is changing.
CalculatedRisk wrote:
May I gently suggest that the NSA data is at least as valuable, if not more valuable to many of us, than the massaged SA data? Perhaps this is a sign... Why not plot the NSA data too?
Updated: Case-Shiller 100-Year Chart | The Big Picture
Wisdom Speaker wrote:
they wouldn't do that would they?
Please enlighten us on your choice of spending cuts.
Home Equity Mortgage Line Of Credit Kaboom
Wisdom Speaker wrote:
I am also a big fan of raw data.
Wisdom Speaker wrote:
Funny how corporate profits are inversely proportional to compensation. You'd think the workers would share in the fortune of their employers.....or not-
Anyone who can't do their own seasonal adjustment has no business fiddling with either set of data. I have long contended that the first step to financial hell was taken when an engineer showed an accountant how to use VisiCalc.
HomeGnome wrote:
sometimes my ignorance reassures me
Workers, what workers. Corporations don't need no stinkin' employees.
Juvenal Delinquent wrote:
Hemlock, Godot,.. sir you are on fire today
steelhead wrote:
correct, which is why they have classified them as assets
Rob Dawg wrote:
There was computer golf game out back in the '80s that had a "Boss Screen" that popped up a phony spreadsheet whenever you hit the key. Perhaps this is where is all started?
has mp posted the latest conjuregram, yet?
RockyR wrote:
Tomorrow evening, 8pm.
steelhead wrote:
I ripped apart the California state budget during the summer budget panic, and would love to take a deep look at the current Federal Budget, but to give this the thoughtful response it requires will take some time. For those interested in the subject of Federal discretionary spending, this is an interesting chart:
WallStats - Death and Taxes & Taxes
It's based on the President's budget (i.e. not real spending) and mainly shows "discretionary" spending. The elephant in the room remains the entitlement programs (which we discussed a bit overnight). But there ought to be some room for reduction in the Overseas Warfare (aka "Defense") budget. And there are a tremendous number of time-wasting federal tax-code items that could be reimplemented so as not to tax the productivity of the population. (I'm thinking of the Dependent Care and Health Care Reimbursement account benefit arrangements specifically, where you get incentivized to spend a few hours siphoning "pretax" money out of your paycheck and are allowed to spend the money on a tax-exempt basis... I reckon that for the $2000 or so I save in taxes each year, between myself and the recordkeepers at least $300 in productive time is wasted. That's an expensive tax break and I'm sure there are thousands of these peppered around the tax code...)
However, I've got a family to mobilize this morning. More later...
Big drop on the DJIA at 9:43AM with some big volume too!
and the band plays on: full article here: http://www.bloomberg.com/apps/news?pid=20601127&sid=a6BGZsZBmwbo
Lawyers for the property owners, who formed a group called Develop Don’t Destroy Brooklyn, said the distinction was an excuse to seize their homes for a developer.
Wisdom Speaker wrote:
The perversity of being a doomer is not the tax is a bad idea but what will happen.
The Automatic Earth: November 24 2009: Bonds, herds and game theory
Wisdom,
FYI (page 12):
Receipts exclude capital gains and dividends
received, expenses exclude depletion and capital losses and losses resulting from bad debts,
http://www.bea.gov/scb/pdf/misc/nipaguid.pdf
Now you'll see why I am so angry. Bankers (and insiders, CEOs, etc.) stripped the real cash out of the vault and left a bunch of worthless derivatives and over-priced assets for the tax payer to deal with. It was obvious. No way can profits increase at that kind of rate while GDP was growing at sub-optimal levels for a decade.
The biggest swindle in history. This was not an accident. Bernanke (and the fed) should be held to account.
OT:
Reuters.com
The development of a good relational database design relies on the sort of cooperative effort that only exists in a handful of companies. That’s because extracting all the information from the involved parties is a daunting task. The rule of thumb is that it can represent upwards of 85% of the effort involved in re-engineering a corporation’s data assets, while the actual code to accomplish the job accounts for less than one-fifth of the work
I can second this. Comprehensive Databases of CDS/MBS components were non existent. In extension any pricing model (e.g. Copulas) are useless as they dont have the representative inputs. Garbage in Garbage out.
I can't help you with what you must soon face, except to say that the future is not set. You must be stronger than you imagine you can be.
Cinco-X wrote:
Watch the Transports for cleaner trends. And if oil follows.
Rob Dawg wrote:
Seems to be:
Dow Jones Averages | Home
OT
Economy Is Forcing Young Adults Back Home in Big Numbers, Survey Finds - NY Times
I see what CR means by household formation; when grown kids move back home or postponing marriage, its household contraction I suppose!
November 24, 2009
Economy Is Forcing Young Adults Back Home in Big Numbers, Survey Finds
By SAM ROBERTS
For more young adults, there is no place like home for the holidays, and for the rest of the year, too. Ten percent of adults younger than 35 told the Pew Research Center that they had moved back in with their parents because of the recession.
They also blamed the economy for other lifestyle decisions. Twelve percent had gotten a roommate to share expenses. Fifteen percent said they had postponed getting married, and 14 percent said they had delayed having a baby.
In the Pew study, 13 percent of parents with grown children said one of their adult sons or daughters had moved back home in the past year. According to Pew, of all grown children who lived with their parents, 2 in 10 were full-time students, one-quarter were unemployed and about one-third said they had lived on their own before returning home.
According to the census, 56 percent of men 18 to 24 years old and 48 percent of women were either still under the same roof as their parents or had moved back home.
A smaller share of 16-to-24-year-olds — 46 percent — is currently employed than at any time since the government began collecting that data in 1948.
Meanwhile, the portion of adults 18 to 29 who lived alone declined to 7.3 percent in 2009 from 7.9 percent in 2007, according to the Current Population Survey. A decline that big was recorded only twice before over three decades, in the early 1980s and the early 1990s during or after recessions.
Spunkmeyer wrote:
Nah. That tells me how much DC is in for some serious pain down the road. The homeowner mantra here is "prices have overcorrected because this region is special". When in fact, income levels aren't nearly close to supporting these price levels. Expect DC to see some serious pain ahead. Most of those b.s. stimulus jobs are either far from this area or are a bunch of $45k/yr positions, not nearly enough to make a dent in this ridiculously expensive market.
Spunkmeyer wrote:
oh, nice. thank you.
Does anybody have a link to this month's data in xls? That's how I'm used to seeing it, and can punch in my own equations. I'm only seeing it in pdf right now...