Credit Conditions

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The New Home Sales Farce: Department Of US Economic "Data" Revisions Full Frontal





Moments ago the Census Bureau reported that 458K new homes were sold in October (with a 16.5 error confidence), which missed expectations of a 471K increase from last month's 467K print, but that's ok, because last month's number was also revised substantially lower from 467K to 453K, which in turn will allow the mainstream propaganda to tout that New Home Sales jump in October to match the highest print since October 2013. There is one problem: here is what the update chart of New Home Sales data looks like on a historical basis... and as revised. It sure puts that 458K "increase" in a slightly different light.

 
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US Homeownership Rate Drops To 1983 Levels: Here's Why





The last time US homeownership declined down to 64.4% (which the Census Bureau just reported is what US homeownership declined to from 64.7% in Q2), was back in the fourth quarter of 1983. Here's why.

 
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Pending Home Sales Disappoint As 15% of Realtors Report Clients Unable To Obtain Financing





Less than a week after the NAR reported September existing home sales which surged at a 5.17 million annualized pace, the highest since September 2013, rebounding from the August drubbing which was also the worst miss in 2014, today the NAR flip-flopped and disappointed sellside expectations of a 1.0% rebound following the August -1.0% decline, rising a modest 0.3%, and less than half the 2.2% expected increase from a year ago, rising only 1.0% Y/Y. This was the third miss in the series in the last 4 prints.

 
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You Know It's Bad When...





President Obama is saying the economy is better, Bernanke is warning that real people don't believe that; and while earning $250,000 per speaking engagement, Ye 'Olde' Fed head was unable to refinance his mortgage...

 
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What The Fed's "Crystal Ball" Says Is The Reason For The Worst Recovery Ever





"In conclusion, this analysis finds little evidence of the permanent structural damage to the economy’s productive potential that many commentators see as the main culprit for the subpar recovery from the Great Recession..." and Surprise... "our model suggests that monetary policy played an important role in cushioning the blow from the financial crisis and in sustaining the recovery, which could have been significantly more disappointing without the aggressive actions undertaken by the Fed."

 
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Frontrunning: September 5





  • Euro left reeling after ECB's liquidity splurge (Reuters)
  • Coalition Emerges to Battle Islamic State Militants (WSJ)
  • Ukraine Gas Chief Takes on Gazprom in Race With Winter (BBG)
  • Nato leaders fail to agree spending targets (FT)
  • JPMorgan Had Exodus of Tech Talent Before Hacker Breach (BBG)
  • Mercedes-Benz Sales Rise Despite Weak German Demand (WSJ)
  • Secret Network Connects Harvard Money to Payday Loans (BBG)
  • ICE looks to crack financial data market (FT)
 
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ADP Private Payrolls Miss, Add Only 204K Private Jobs, Lowest Since March





In what will hardly be a good sign for tomorrow's "critical" non-farm payrolls report, moments ago ADP reported that in August only 204K private payrolls were created in the US economy, below the downward revised 212K in July, and below the consensus estimate of 220K. The good news, as Carlos Rodriguez, president and chief executive officer of ADP said, is that "August marks the fifth straight month of employment gains above 200,000, continuing an encouraging trend for the U.S. labor market.” Just barely. The bad news: this was the lowest ADP print since March, and hardly the "lift off"  trend that many were expecting. Notably, the June 281K jobs print was revised even higher to 297K the highest in years and makes one wonder how much forward demand was pulled back into Q2 as a result of abnormally easy credit conditions and generous government spending.

 
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Double Whammy China PMI Misses Spark Sell-Side Demands For More Stimulus





A record-breaking surge in monthly credit creation and a trillion Yuan of QE-lite was enough to provide a glimmer of hope into the tumbling Chinese economy for one or maybe two months but with the real estate market continuing to free-fall, it should be no surprise that China's PMIs finally catch down to the erstwhile reality simmering under the surface in the ultimate centrally-planned economy. China's official government PMI dropped from 30-month highs, missed expectations and the early month flash print, to less exuberant 51.1 reading (with Steel industry new orders totally collapsing) with both medium- and small-companies printing contractionary sub-50 levels. Then (after Japan's PMI beat - of course it did as hard data crashes worst on record), HSBC China PMI also missed, printing a slightly expansionary 50.2 Showing, as BofA warns "the two PMIs both show that the current recovery is relatively weak and choppy..." and RBS adds "we expect the government to interpret such an outlook as challenging its growth target and to take more, and more significant, measures to support growth."

 
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Hilsenrath Warns Fed Rate-Hike Timing Debate Intensifying





The Wall Street Journal's Jon Hilsenrath unleashed an instantaneous reaction to today's FOMC minutes and the message is clear - markets are much less uncertain than the Fed about the timing (sooner rather than later) of the first rate-hike. The minutes of the meeting, Hilsy notes, provide fresh evidence of an intensifying debate inside the central bank about when to respond to a surprisingly swift descent in the unemployment rate and rising consumer prices. The minutes appeared to reflect a slightly more aggressive stance than Ms. Yellen's testimony.

 

 
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Here's What Wall Street Bulls Were Saying In December 2007





The attached Barron’s article appeared in December 2007 as an outlook for the year ahead, and Wall Street strategists were waxing bullish. Notwithstanding the advanced state of disarray in the housing and mortgage markets, soaring global oil prices and a domestic economic expansion cycle that was faltering and getting long in the tooth, Wall Street strategists were still hitting the “buy” key. In fact, the Great Recession had already started but they didn’t have a clue: "Against this troubling backdrop, it’s no wonder investors are worried that the bull market might end in 2008. But Wall Street’s top equity strategists are quick to dismiss such fears."

 

 
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Pending Home Sales Tumble From Recovery Highs, Biggest Miss In 2014





Following last week's collapse in new home sales (and last month's massive beat and surge in pending home sales), it was likely not a total surprise that pending home sales would slow, but the -1.1% MoM print is the worst in 2014 (and the biggest miss in 2014). The median existing home price continues to rise (up 4.3% year-over-year) but this is the slowest rate of gain since March 2012. NAR is quick with the excuses and this time.. no weather is to blame.

 
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Frontrunning: June 24





  • The Kerry Konfusion Kontinues: Kerry urges Kurds to save Iraq from collapse (Reuters)
  • Abe Unveils Japan’s New Growth Strategy (WSJ)
  • Because the recovery: Avon to Cut 600 Jobs as CEO McCoy Seeks to Trim Expenses (BBG)
  • Iraqi Parties Pressure Prime Minister Nouri al-Maliki to Step Down (WSJ)
  • Ukraine Rebels Call Cease-Fire to Match Government Truce (BBG)
  • IRS accused of obstruction over lost emails in Tea Party affair (Reuters)
  • IRS chief scorched as 'liar' (WND)
  • Big Investors Missed Stock Rally (WSJ)
  • U.K. Jury Finds Coulson Guilty of Conspiracy to Intercept Phone Voice-Mail Messages (WSJ)
  • HSBC to halve countries served by private bank, sells assets (Reuters)
  • Bond Market Has $900 Billion Mom-and-Pop Problem When Rates Rise (BBG)
 
Tyler Durden's picture

Key Events In The Coming Week





This week brings PMIs (US and Euro area ‘flash’) and inflation (US PCE, CPI in Germany, Spain, and Japan). Among other releases, next week in DMs includes [on Monday] PMIs in US (June P), Euro Area Composite (expect 52.8, a touch below previous) and Japan; [on Tuesday] US home prices (FHFA and S&P/Case Shiller) and Consumer Confidence (expect 83.5, same as consensus), Germany IFO; [on Wednesday] US Durable Goods Orders (expect -0.50%, at touch below consensus) and real GDP 1Q anniversary. 3rd (expect -2.0%) and Personal Consumption 1Q (expect 2.0%), and confidence indicators in Germany, France and Italy; [on Thursday] US PCE price index (expect 0.20%), Personal Income and Spending, and GS Analyst Index; and [on Friday] Reuters/U. Michigan Confidence (expect slight improvement to 82, same as consensus), GDP 1Q in France and UK (expect 0.8% and 0.9% yoy, respectively), and CPI in Germany, Italy, Spain and Japan.

 
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Draghi Is "Desperate To Avoid A Japan-Style Lost Decade"





As we noted previously, it is likely that whatever Draghi does this week "will not deliver a significant impulse to the real economy" in Europe but while negative rates are almost guaranteed (based on the consensus), reviving the ABS market (via focused QE) is being heralded by many as a positive swing factor. Unfortunately, as SocGen explains, even if the ECB began purchasing ABS in H2 2014, the size and reach of the market is not enough to move the scale as Europe acts desperately to avoid a Japanese-style lost decade.

 
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