This page has been archived and commenting is disabled.
Atrocious New Homes Sales Data Sufficient To Force Another Algo Mediated Short Covering Frenzy
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.
»
- 7587 reads
- Printer-friendly version
- Send to friend
- advertisements -
Let's wait for the Chinese to accuse the US of being a statistics manipulator, then.
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.
Surely the whitehouse.gov and its salary czar will seek to claw back the economists' paychecks from the periods previously revised.
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.
you're not supposed to know that he didn't mean it. Who leaked that memo?
No question in my mind the govt is fudging the new home sales numbers.
Hmmmppphhh. Well, I never... The mere suggestion!
C'mon China, I thought we were pals...
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.
Hmm, what's next after that?
Oh, the Chinese will accuse the US of being a socialist state!
Are we seconds, minutes, days or weeks away from the crash?
I'm short, and patient. Reality bites...eventually.
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?
So sad that it's funny, as it hits close to home.
Insane. Let's hope patience is a virtue.
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.
I agree 100%, also short waiting for the crash.
I think tommorrows consumer sentiment below 50 will trigger the sell off.
HTF,
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
Rasna
Count me among the crowd. This market defies all reason.
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?
ORI
http://aadivaahan.wordpress.com
May the farce be with you, young Bennywan.
Truly insane and desperate.
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!
Well the news did make Erin Burnett smile and she is cute when she smiles - so I'm ok with it.
You clearly have never been outside Britain or the U.S. if you think she's "cute".. What a shame.
he meant cute in a no nothing arrogant bitch sortof way
Are we now waiting for them to revise the winners of the last 5 Super Bowls
...because Lance Armstrong shot up?
I nominate this post for consideration in "Best. Post. Ever." category.
The new numbers game is to beat the revised revision of the prior revised so-so numbers.......er......that 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.
<sarcasm>
Meanwhile, "General Jim" and his CIGA's are getting clubbed...
But but but - isn't this "IT"?
Just give Alf some cats to eat.
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.
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.
Thanks.
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?
+1 oz
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.
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?
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/
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.
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.
Yep.
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.
cirrus:
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.
The new normal:
http://www.youtube.com/watch?v=YcRGzjE_xcA
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.
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.
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?
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 SW. first 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.
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.
The Neo-Sophists are offically running the markets now.
Theosophists have been running the whole show for a long time. LOL.
The Neo-Sophists are offically running the markets now.
Sigh - let me make this easy for you Tyler:
That news does not matter - never did!
I feell your pain mate but this lesson should have sunk in a long time ago...
Yes. The only tool us shorts have now is to go long. Isn't it obvious we are nothing but a cork in the Asshole of progress? Heil Google!
pffff nah ... when in doubt ... sell more!! :-)
Institutional money is convinced the retail investor will be lured into another exciting run up. And we know they are always correct......LMFAO .
I can't find the link to the story you mention but the first thing I thought of was it's a cover story/disinfo to explain away all the outflows in the market for the past 3 months plus.
I noticed the story didn't explain exactly who the "institutional" money is (MF, pension, private, hedge, insurance company etc) that's doing all this buying but the zinger was at the bottom where we were assured that the dumb retail investors has been wrong more often that right.
Wow, good statistical info there for me to use.
here ya go.
http://www.bloomberg.com/news/2010-07-25/stock-buying-hits-bull-market-high-at-institutions-as-individuals-retreat.html
Thanks. When I read it at 4 am this morning, it was only 4 or 5 paragraphs. I suspect they filled in the blanks to add credibility. Or I may have read a truncated version on another site. My eyes were still crossed at 4 am.
The money quote.
Translation: Silly rabbit, retails customers are just kids.
In fact, the retail customers are learning that they've been sheep led to slaughter too many times in the past and they want less and less to do with "it", no matter how shiny the beads may appear to be. Eventually even the supposedly stupid learn the stove is hot only when you touch it, but not when they do.
That double pits to chesty trick from Axe has given investors confidence they've never experienced.
There is no coorelation between Main St. and Wall St. anymore. On those numbers, looks like nothing more than cooking the books. Numbers will be revised down later in order to keep current trading at the status quo levels.
If the MSM doesn't report it nobody cares. Next...
it seems that reality doesn't help to trade ...
is this the 'never fight the fed' meaning?!
never fight the big brother?!
well just don't invest but rather day trade buying on dips if u want to make money
Calculated Risk:
New Home Sales: Worst June on Record
ABC News:
Home Sales Surge in June
Nice find... Luv the site! Thanks!
Zina: Great idea!
Can you spot the canaries in the coal mine?
ABC News: "Home Sales Surge in June"
AOLNews: "The June Jump in New-Home Sales Is Welcome -- but Hardly Robust"
AP: "New home sales in June tick up slightly, but sales remain low as demand for housing slumps"
BBC: "US new home sales still sluggish"
CalculatedRiskBlog.com : "New Home Sales: Worst June on Record"
CBSNews: "New Home Sales Up 24%, But Sales Remain Slow"
CNNMoney: "New home sales rebound 24%"
DailyFinance: "The June Jump in New-Home Sales Is Welcome -- but Hardly Robust"
FoxNews : "Home Sales Report: June Was Jumpin', Growth Still Slumpin'"
FinancialTimes: "US new home sales rebound in June"
LATimes: "New homes sales up in June but still anemic"
MSNBC: "New home sales up, but sales remain slow"
NYTimes: "In U.S., New Home Sales Rise but Pace Lags"
Reuters: "Home sales surge in June"
USAToday: "New-home sales up, but sales remain slow"
WashingtonPost: "Stocks edge higher as home sales rise"
Yahoo: "New home sales up, but sales remain slow"
ZeroHedge: "Atrocious New Homes Sales Data Sufficient To Force Another Algo Mediated Short Covering Frenzy"
I might manage to mold this into a longer, more interesting post later on prof77.wordpress.com
and at CNBC:
New Home Sales Surge in June, Inventory at 42-Year Low
market-ticker: "New Home Sales: They Sucked"
Joe Goebbels would turn up his nose at what these people stoop to every day.
i wish a chart would be posted of new home sales going back a few years to put the catastrophe in visual context
I think you mean this chart
Thanks. It needs to be posted because it just doesn't get much worse than this.
Of course, the last dark vertical bar ended last year, which means the recession is over. So ignore that last little tail. Just a blip on the way to paradise. If you look real close, you can see the "surge" in all it's glory.
surge in all its glory ,,,,,,,and theres a long way to go to the top.....so theres plenty of growth coming
thanks Zina
notice how at the end of every recession, sales picked up (except this one of course). This was pointed by ZH in the past
Of course, if they factored in repos and jingle mail, the number would be very negative. In the small development I live in with 33 homes built in 2006-2007, 14 are in the process of foreclosure, most of them for at least 18 months. All 14 in foreclosure (and half of the remaining 19) were sold with no money down and low initial interest rates to young former renters. And in every single case of the 14, the people are still living there without paying the mortgage.
Including the two people on either side of me, both of whom have purchased new cars in the last year. Looks like the fool-on-the-hill (me) is sucking wind while the 14 have the best deal in town. No mortgage, much better cash flow, a roof over their heads, etc.
Of course they aren't paying their HOA fees so the HOA can't maintain the public areas very well. I know for a fact (because I'm on the HOA board) that a few of the non payers have had the gall to complain to the HOA about the poor maintenance. The entitlement generation in stark relief.
July 26, 2010, 10:01 a.m. EDT · Recommend · Post:
June new home sales rebound from record lowWASHINGTON (MarketWatch) - U.S. new home sales rebounded in June after falling to all-time low in May, the Commerce Department estimated Monday. The increase in new-home sales to a seasonally adjusted annual rate of 330,000 was well above the 316,000 pace expected by economists surveyed by MarketWatch. New-home sales in May fell a revised 36.7% in May to a record low 267,000 level compared with the previous estimate of a 32.7% fall to 300,000. New-home sales are down 16.7% compared with a year ago. The months' supply of homes on the market fell to 7.6 months in June from 9.6 months in May. Median sales prices have fallen 0.6% in the past year to $213,400.
http://www.marketwatch.com/story/june-new-home-sales-rebound-from-record-low-2010-07-26?siteid=bnbh
....and just focus on the propaganda headline spin.
Somone has to post this stuff so that when someone comes back to read this... they can better understand what the context was at the time.
I get it now, report fictional numbers for any economic statistic to make everything look fine and revise to real bad numbers two months later. Might try this on my tax return and see what happens.
Everyone takes lessons from the BLS, who''s been doing this for decades. I love how they "birth/death" into existence a million jobs over the year, only to revise them away when it's all "old news" and thus "baked into the cake".
This level of subterfuge doesn't exist in a vacuum. It takes the willing acceptance of the people. Especially the so-called professionals, who know their jobs depend upon Assets Under Management (AUM), the ultimate conflict of interest in the financial universe.
I actually did vote for the $87 billion before I voted against it....
CNBC had a segment (with all of the people in the boxes talking) discussing the strength of this housing number. There's the occasional qualifier, but one person even discussed some of the positive factors that "brought buyers back into the market".
If I remember right, the statistical confidence levels on this particular data point are extremely wide. I'd be surprised if today's numbers had any statistical significance at all. Of course, I've never seen this discussed in the MSM (statistical confidence levels).
I haven't seen the Dallas Fed number mentioned once either. Used to be quoted all the time when it was positive.
Does anyone keep statistics on overutilized words
in internet news items?
My money would be on "awesome" for 2008 and
"unexpected" for 2010 ...
Add "Uncertain", "Unusual", "Totally Fscked", ...
Before looking at ZH each morning, I take a quick scan at google news to see what's new in the MSM dimension.
Today I saw, courtesy of CNN Money, this headline: "New Home Sales Rebound 24%!" Twenty-four percent?!!!
If they said a hundred-foot tall gorilla was climbing the Empire State Building it would be easier to swallow.
Thankfully there is always Zero Hedge to turn to, when I need to know what is really going on.
The average person is sucked into these headlines for a number of reasons. Often they just don't understand percentages.
Sometimes a client will call me asking why I didn't perform as well as someone else, who was up X% last month/quarter/year whatever. Of course, my client didn't suffer the drop these other people did so they don't understand where the numbers are coming from.
I will sometimes play a quick numbers game with them on the phone to help them see. I tell them the stock market just dropped 50%. Then because I'm a genius, I was able to increase their account by 100% but for all that hard work, I want 25% of the account. They usually say that sounds great.
I then give them the numbers. The market starts at 10,000, drops by 50% to 5,000, increases by 100% to 10,000 but s/he has to give me 25% so it's now down to 7,500. Whoops. It's always eye opening for them to see how percentages can make anything look better than it is. Until the next time they call.
Just shows the lack of understanding of geometric (compound returns). Forget about the 25% "investment fee" in your example. $100,000*[1+(-0.50)]*[1+(1.00)] = $100,000 or no gain. Unfortunately, the average person thinks they made 50% on their money based on this return stream (down 50% and up 100% = up 50%).
There is another way of saying this from a trader standpoint.
It is the concept of preservation of capital.
A most useful concept in understading that we invest to produce a return, and as such every investment has a time horizon, an entry point and an exit point.
When starting from a set value, preservation of capital requires that part of your exit strategy is to liquidate after reaching a maximum loss, which for me is not very low. Sometimes as little as 4% given the trade time horizon. The reason is as you have stated, a nonsymetric weighted profile when working with percentages.
Simple example:
Start with $100.00
Lose 10% = $90.00
Gain 10% = $99.00
Start with $100.00
Lose 20% = $80.00
Gain 20% = $96.00
The greater the lose, the harder it is to break even. Because of this there is no concept of let it ride. When you hit your loss threshold sell, and take your loss. This is discipline, the heart of preservation of capital.
Mark Beck
I blame Public Schools, which focus on producing good little worker bees more than citizens that can read and write.
What do we see in this?
We see that our political system is controlled largely by corporate profits. The notion that traded equity reflectes or responds to economic reality is a well crafted lie.
We can see these effects in the importance placed in the stock market as an indicator of our nations health. It is a lie most effectively put forth by the FED (Greenspan).
But, we wonder how a negotiated instrument in an open market can possibly be placed above the importance of our nations budget, trade, and industrial policy needs.
I must admit the deception is very effective. Many people relate the success of the Administration and FED to market price gains.
----------
Experienced traders look with a much closer focus. Vigilent for the effects of price manipulation, and the required capital to sway futures.
But to what end?
Who benefits directly from an artificially high price on equity?
So we can formulated the beneficiaries, but beyond their ability to take profits on an artificially high stock price, how does the overall economy benefit?
Equity price no longer represents fair value, no longer represents future profits, no longer represents the economy.
----------
It is if investment no longer applies to economic growth. Perhaps growth has degenerated to government spending.
Maybe it is just too easy for large corporations. They only need to cater to one customer, the Federal Government. But what of the real costs? Will the system collapse under its own weight.
The evidence is before us.
GDP cannot be used effectively in times of vast Government stimulus. But, we do not hear any mention of how it behaves differently historically with and without stimulus.
When is growth not real? and if not real, certainly unsustainable.
----------
So we see equity price as manipulated, and growth fueled through debt. The real economy, the engine of democracy, no longer exists. The definition of a house of cards. We watch and wonder what will collapse first.
Mark Beck
but, wait, erin burnett, that student of economic history, said the housing data was stellar. It takes the double dip off the table. Very bullish data. really crazy that GE is allowed to paint the tape this way through their propaganda arm, all on the hope and prayer that their commercial real estate book can be forever extended.
LOL
Erin Burnett says what the teleprompter/ear piece/printed copy tells her to say.
Period. Anything else is just her mouth blowing in the wind.
All based on her economics degree from Williams and the 2-year analyst program at GS? If we can't smell her qualifications...
Can Anything else but short covering be salvaging a penny stock such as Citigroup?? I believe not. Hope we can all make a substantial difference before the sucker's rally ends, and it swallows the little retirement money there is left.
Dear Stockhouse Member,
North American stocks rose Monday, driven by better-than-expected home sales data and an improved outlook for FedEx. Here’s a quick rundown of the top news on Stockhouse for Monday and a look ahead to Tuesday’s trading.