Atrocious New Homes Sales Data Sufficient To Force Another Algo Mediated Short Covering Frenzy

Tyler Durden's picture

So June new home sales come in at 330,000 on expectations of 310,000: a decent beat by 20k or so, and a "record" increase from the May revised 267k. However, this "beat", and massive 23.6% MoM surge only occurred due to prior downward (of course) revision which took away 57k from the past two months! The May number was revised down from 300k, or by 33k, to the lowest sales number on record of 267k. And April, not to be undone, two months after the initial release, has received its second downward adjustment, this time down by 24k from 446k to 422k. So let's get this straight: this was the worst June on record, following the worst month on record in new home sales ever, the beat was completely drowned out by 57k worth of prior revisions, the average new home price slid another 1.4% to $213,400, yet just because the new home supply is down to "just" 7.6 month from 9.6 in May it is enough to push stocks to the moon (of course this completely ignores that existing homes sales are back to 9 months, and shadow inventory is more than double that. Who cares - machine language does not add, it only multiples). Another day, another insane day in stocks, which are now programmed to ignore reality, and just focus on the propaganda headline spin. 

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emsolý's picture

Let's wait for the Chinese to accuse the US of being a statistics manipulator, then.

Tarheel's picture

The US government is NOT being honest with us. They want wall street to be honest brokers when they themselves are not. Announcing bogus numbers and revising them down later under the radar is total BS. I'm so sick of this shit.

hedgeless_horseman's picture

Surely the and its salary czar will seek to claw back the economists' paychecks from the periods previously revised.

Let them all fail's picture

The government is hypocritical? Shocking!!
And by the way, CONGRATS WIKILEAKS, you have served your country well (no sarcasm) - I guess they are allowing the "record transparency" promise of Obama's despite the fact that he didn't mean it.

DaveyJones's picture

you're not supposed to know that he didn't mean it. Who leaked that memo? 

ghostfaceinvestah's picture

No question in my mind the govt is fudging the new home sales numbers.

MayIMommaDogFace2theBananaPatch's picture

Hmmmppphhh.  Well, I never...  The mere suggestion!

C'mon China, I thought we were pals...

unwashedmass's picture


quite something to watch the government blatantly lie to us....and then allow the banks to move the markets up.....

this smacks of something way beyond desperation.

malek's picture

Hmm, what's next after that?

Oh, the Chinese will accuse the US of being a socialist state!

HitTheFan's picture

Are we seconds, minutes, days or weeks away from the crash?

I'm short, and patient. Reality bites...eventually.

Cursive's picture

Me too.  I'm beginning to think bears will go belly up in the middle of a depression.  How's that for a hedge that didn't work?

Jeff Lebowski's picture

So sad that it's funny, as it hits close to home.

Young's picture

Insane. Let's hope patience is a virtue.

drwells's picture

As Jim Grant once put it, the crash only happens once the bears have turned to doubting their own senses.

Personally, I'm not there yet, as my capacity for cynicism and disgust has been expanded quite a bit by the last few years.

Borat's picture

I agree 100%, also short waiting for the crash.
I think tommorrows consumer sentiment below 50 will trigger the sell off.

Rasna's picture



I'm in the same situation... We got turned upside-down last year and went short way too soon trying to time pullbacks... After the meltdown, I crafted a plan for the longside that would have worked out like a charm had we not trided to get aggressive on pullbacks... So, right now we are short and will remain so for the long haul, until this plays out


grunion's picture

Count me among the crowd. This market defies all reason.

Oh regional Indian's picture

Too funny. But micro does not matter anymore. Value does not matter anymore. We are living the fine edge of arbitrage, a tipping point indeed.

When will the machines become self-aware?


VK's picture

May the farce be with you, young Bennywan.

Hondo's picture

Truly insane and desperate.

umop episdn's picture

Maybe next month will beat this month's massive 23.6% MoM surge-of course, we'll have to reduce this month's number by a few tens of thousands. The fun never ends!

Overpowered By Funk's picture

Well the news did make Erin Burnett smile and she is cute when she smiles - so I'm ok with it.

Young's picture

You clearly have never been outside Britain or the U.S. if you think she's "cute".. What a shame.

DaveyJones's picture

he meant cute in a no nothing arrogant bitch sortof way

unionbroker's picture

Are we now waiting for them to revise the winners of the last 5 Super Bowls

MayIMommaDogFace2theBananaPatch's picture

...because Lance Armstrong shot up?

Cursive's picture

I nominate this post for consideration in "Best. Post. Ever." category.

Cognitive Dissonance's picture

The new numbers game is to beat the revised revision of the prior revised so-so is before the post revised revision was revised and applied to the first part of this......sentence.....sort of.....maybe.

Easy as pie. Ramp em baby.


RobotTrader's picture

Meanwhile, "General Jim" and his CIGA's are getting clubbed...


molecool's picture

But but but - isn't this "IT"?

Zina's picture

 Just give Alf some cats to eat.

taraxias's picture

Yeah, I know what you mean, gold CRASHING today now a whole $4 and change down.

Just stick to posting porn pics on here, it's the only time you are contributing anything of value.

old_turk's picture

I don't know why the junkers are out this Monday.

I therefore 'unjunk' you and +QE 2.0!!!

It's good to have a chuckle now and then.


hound dog vigilante's picture

Riiiiiiiiiight.  As if Sinclair hasn't been correct for years now. 

Enjoy these brief opp's to trash the goldbugs, because such opp's are becoming very rare.  And remain anonymous - the goldbugs will be your landlord/boss one day, so why burn bridges?


cirrus's picture

The lower this number gets the more bullish you have to get on housing.  Sound crazy?  Think about the formula:

Net Long Term Inventory  =(directly related to)=  New Construction - Household Formation - Condemnations


If you think about healing our housing market wounds long term, I can't think about anything more bullish than very low new construction.  Sure...not great for the now but eventually we will see traction. 

I am no permabull or permabear on anything...just calling it like I see it.

Calvin Jones and the 13th Apostle's picture

And you are willing to wait at least five years?  Because there is still plenty of shadow(meaning off the books) inventory out there.  Heck, there are probably a lot of foreclosures that haven't happened because the banks don't want all those houses coming on the market at once.  So better yet, are you prepared to wait up to 10 years?

LeBalance's picture

There are at least 20 months of supply available.  As in shadow + listed + really hidden.  And that is saying that folks are going to buy (with pocket lint) at anything like today's rate (with no jobs, no lending, etc.)

So what does it say when the number is 125k units sold?  It says Nothing, because there is no context to the underlying supply, the consumer need, the national situation, and the systemic rot.

/no sarcasm/

adem's picture

There are 4 houses with for sale signs in font of them within 4 blocks of my house. (SF Bay area)

A search of zillow, redfin, estately, google .... shows NONE of them, let alone the ones I haven't seen cars in front of in MONTHS (but the yards are still nice).

The shadow inventory is massive.

Takingbets's picture

It is huge, I have two on my street of six homes and another one across the street is waiting for the sheriff to evict them. They haven't made a payment in almost two years.

hound dog vigilante's picture


Not to mention to millions who have already made the decision to "sell", but can afford to wait for a "sellers market" to return... the shadow of the shadow inventory. These folks will be waiting a long time and they still won't re-coup their 'investment'.

The US economy is handcuffed to the housing market, and for this reason TPTB will fabricate massive lies & false statistics in an attept to paint over reality. But like an empty home, a paint job can only cover so much when structural deterioration is visible from the curb.

I believe those here patiently sitting on their 'short' positions will be rewarded very soon, because unlike corporate earnings, the housing depression cannot be spun... it is very visible and very obvious to everyone, everywhere.


hangemhigh's picture


been around construction for a very long time.  was residential builder in the late 70's when that mess tanked.  

you're right.  the most bullish thing that could happen to housing is no new permits pulled, no new starts and a big jump in existing sales.  that might mark a bottom.

the real downside is 4M houses on the market and another 8M in shadow inventory. 

at sales of 330K per month, as recorded in June 2010, that's 3 years of sales just to clear the existing overhead.  


LeBalance's picture

The new normal:

The traumatic place this world is going is truly interesting.  And since I am here (unless I leave) I will go there as well for my personal bliss.  As will everyone.

Rockfish's picture

As far as i'm concerned this was just what i was expecting and wanted. If you expect any repair to the value of existing home stock the last thing we need are more NEW homes. Citi, BOA, WFC,...... are all sitting on large shadow inventories of foreclosures that will have to be released for sale. 

Calvin Jones and the 13th Apostle's picture

Citi, BOA, WFC,...... are all sitting on large shadow inventories of foreclosures that will have to be released for sale.



Will it ever get to the point where they'll bulldoze stuff and take losses?  Or is that too much wishful thinking?

hangemhigh's picture

Will it ever get to the point where they'll bulldoze stuff and take losses?  Or is that too much wishful thinking?

it will.  in mid 80's moved from NW to SWfirst job was going into existing subdivisions and bulldozing existing structures so bare land coud go back onto market.

this has already happened in some parts of california and midwest.  more of same would mean bottom in sight but upturn still not visible.

freshman's picture

Can't wait for the month where the new home sales is 0.

The month after that would see a "infinite" % growth as long as it has a positive sales number.

Boy, that would send the stock market to the 3rd heaven.

molecool's picture

The Neo-Sophists are offically running the markets now.

LeBalance's picture

Theosophists have been running the whole show for a long time. LOL.

molecool's picture

The Neo-Sophists are offically running the markets now.