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Carrie Butler Shares Some Thoughts On Leading Indicators
From today's thoughts by ISI's Carrie Butler
For those of you who like conspiracy theories: The Fed is no longer publishing MEW (Mortgage Equity Withdrawal). This was one of the engines of the financial crisis - so much for an early warning on the next housing crisis. ISI will estimate the three main components of the Fed's report and like our estimate for some the old "M" statistics it will be there down the road when needed again.
While the traditional reference to this data set has usually come from the Greenspan and Kennedy paper "Estimates of Home Mortgage Originations, Repayments, and Debt On One-to-Four-Family Residences" the MEW, in the housing bubble peak times, was simply the indicator of the home equity ATM, and how much money was being was coming out of "excess housing value." We are not so sure if this was actually tracked previously and will follow up on this, however the Fed going counter to demands for increased transparency and in fact removing usable information would not surprise us.
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as equity in homes drops this is probably irrelevant now anyway.
FHFA US Housing Price Index dropped again.
We're lucky they tell us anything at all, seeing how they own us.
Since MEW is the decision by consumers to borrow against the real value of their house... and with little real value left in peoples homes and the rate of MEW so closely linked to a consumers ability to consume... then I would think that a vanishing MEW might be helpful to decrease transparency and keep the magic kool-aide flowing.
Junk Watch:
Stock Charts
you forgot wfc, bac, aig, rf, key, sti, fitb, hban (cramer fav),ms, lol!
"ICSC-Goldman Sachs reports weakness in the Sept. 19 week, with week-to-week sales down a steep 2.0 percent and the year-on-year rate at plus 0.6 percent vs. plus 1.6 percent in the prior period. These results point to trouble for what's left of the back-to-school season and do not suggest that August's strength in non-auto non-gas sales will be repeated in September."
"Redbook, like ICSC-Goldman, reports mostly disappointment in the Sept. 19 week. Redbook's tally shows a 2.6 percent year-on-year decline vs. a 1.9 percent decline in the prior week. Redbook said back-to-school sales were mixed as the season winds down, noting special weakness at department stores. But it said discount stores did well as consumers stick to basics. Both Redbook and ICSC-Goldman say traffic has slowed. Today's chain-store reports raise questions over the strength of September non-auto non-gas sales." http://www.bloomberg.com/markets/ecalendar/index.html
haha, don't tell that to the bulls
Nice catch, not much banter about this with auto sales a week away and the end of the housing incentive on the horizon.
Did you see the stats on home sales?
The monthly rate of first-time buyers increased from 32% in January and February to 43% every other month of the year except July, when it was 42%.
Almost half of all buyers are buying their first foreclosed house in a short sale with a $8,000 tax credit.
I just wish I could see an estimate of how many potential first time home buyers with a job, a down payment and perfect credit there are left...Last I checked there were only 307 million Americans which has to represent some kind of theoretical cap on all this.
http://www.housingwire.com/2009/09/22/study-estimates-tax-credit-added-3...
yes this is a conspiracy of continued suppression of information....the fed took away m3 in 2006 - a series which correlates much better with cpi inflation than any of the other m-series....its discontinuation also allows some large monies to move without tracking...
the fed is a mobster organization whose life should be exterminated with haste.
fuck the fed
The Fed is enemy #1 of citizens of the United States
MEW disappears conveniently just like the M3 disappeared when it was convenient.
Q2 2009 MEW down $ 48 billion.
Courtesy : Calculated Risk