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More Confusion - Soon To Be Restated To Bemus...ion
From Peter Tchir of TF Market Advisors
I Am Confused....(Soon To Be Restated To Bemused)
Somehow the revisions to home sales don't affect how many months of supply there is? I guess so, but that does seem like a stretch.
What I'm more curious about is the starts and permits numbers. Yesterday the market celebrated 685k starts and 681k permits. We thought we were running at existing home sales of 5 million per annum. That number was too high by 603,000 on an annual rate. Are builders basing starts and permits on real demand or were they looking at the NAR numbers? Were building scratching their hand wondering why they weren't seeing demand but NAR kept coming up with big numbers?
Yes, I understand that the new construction market is different than existing home sales, but nothing about these revisions gives me a warm fuzzy feeling. Maybe with Santa here, the ECB acting as the primary source of lending to banks, or some progress on Capital Hill, the strength in the market makes sense? I just can't believe that being so far off on existing home sales can be so immaterial.
In the meantime the rally in credit seems to be running out of steam. SOVX and MAIN are both well off their tightest levels of the day and are almost unchanged (though with bid/offer spreads you could drive a truck through). IG17 and HY17 are both a touch weaker and even HYG and JNK are managing to show slight declines.
With a far better chance of getting bad news out of Europe rather than good news (though no news is the most likely), I think the market is too high, and will drift toward 1225 again. It does feel that once again, longs went all in yesterday and don't have the conviction to load up, merely based on the calendar.
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'It does feel that once again, longs went all in yesterday and don't have the conviction to load up, merely based on the calendar.'
Calendar trading? That sounds interesting tell me more...
"Were building scratching their hand wondering why they weren't seeing demand but NAR kept coming up with big numbers?"
?
Peter may understand the difference between the new construction market and existing home sales, but he still cannot grasp sentence contruction.
Everyone needs a drink or three to start to morning the way the market works nowadays
C'mon now, people.
It was only 3 million homes that were to have been reported to have been sold, but that were in the NAR's updated, truth-ier estimations, not sold after all.
And keep in mind that this was over a 4 year time period, so it doesn't include 2011, nor the pre-2007 years.
How much impact could an average transaction price of, oh, I don't know, maybe $150,000 per unit (or use $120,000 if you prefer, or $180,000) x 3,000,000 units...
...have on the overall economic data, and the actions, trading and other follow-up behavior taken by those people and institutions who actually relied on such a minor discrepancy*?
*And this assumes that NAR is even coming clean at this juncture.
**p.s. What's 3,000,000 x $150,000 (wait...I get a solid 1/2 trillion USD in just sales - NOT including the furniture, landscaping, sprinker systems, alarms, carpeting, appliances and taxes on those 3,000,000 units that many probably surmised were purchased/transacted)
It appears that statistics-challenged (i.e. liar) Lawrence Yun is running around ZH and junking away! LOL!
Hey Larry, get busy with some more revisions, because it's never been a better time to buy a house™!
***Edit - It appears that Lawrence Yun has unleashed the zombie hordes of Realtors™ as bot attackers, junking posts on all forums discussing this issue. LMAO.
LOL- that's funny......
Builders and Realtors get SO touchy when their Ponzi gets uncovered.......
Apparently he was confused, but now claims he is more confused. That seems confusing...
'NAR's' ONLY purpose is to get their dues paying realtors into commissions, thats it. Theyve had ONE ad for years which says 'Right NOW is the best time EVER to buy a home, talk to one of our realtors today!'
real estate brokers are like stock brokers, with fewer rules
Apparently, just about everything we have heard from Realtors (tm) in the past several years has been untrue.
But they got paid, right?
Here we go again. Another redtroll dinging away on posts. Lawrence Yun, is that you?
After scratching my hand, are builders starting on demand or were they looking at numbers, merely based on the calendar?
Builders...........heads. Fixed it.
The calendar matters more then you think. I don't have the confidence to load up my shorts right now because no major news will be coming out before New Years and the market will leak up to 1,300 on no volume to give the mkt it's Santa Rally.
Do you really think S&P will downgrade on Xmas? I think they'll wait till Jan 2 or 3. Start the year off with a bang.
I see alot of Lumber trucks on the road lately, loaded with materials. Flippers are still flipping so we have a long way to go to bottom.
20 Years long..
You do? What I see at the end when I go to buy lumber for projects is total crap wood, the worst of the worst theyre trying to pass off as 'premium'.
And there aren't many projects going on today either, everyone I know in the building/remodeling business is scratching the bottom of the barrel.
Zero down loans are still quite prevalent my former RE agent tells me. She says they combine FHA with other sources and only place $500 or so down to get the ball rolling. Closing costs are rolled into the loan so the buyer pays almost nothing to ulitmately move in.
Does not bode well for a RE recovery.
Going to China because they erased their forests? Course you didn't say where you see these trucks?
Hey virgilcaine.
You see, lumber trucks with building materials...?
These are called supply trucks/materials delivery trucks.
Lumber trucks haul... wait for it.......Lumber.
So i can tell you are aa couple nuggets shy of a happy meal
Dude, apparently you didn't get the memo- flipping died awhile ago....
You see "alot of lumber trucks on the road lately", eh?
Where in China do you live?
For every lie that gets busted, another 300 get through unfazed. BTFD !
So in essence new home prices are over-inflated, or under-inflated due to S/D characteristics?
Somewhat OT: LOL! Sales/Deliveries of Gas is back to late 90’s levels as well as Supplied Petroleum
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=C100000001&f=M
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WRPUPUS2&f=W
*edit* correction, on gas it looks more like early 2000's.
Gasoline pricing has never been linked to true supply and demand since the Rockefeller days.....100% manipulated market.
Oil is treated like diamonds.
If all things were equal, inflation adjusted price per barrel should be $31.32 ish.
Builders seem to be jumping into the multi-unit rental market without any real demonstrated demand, much less increase in demand, in the single unit market. Once again, real-estate seems to be getting overloaded with speculators assuming demand rather than reacting to market conditions.
There are so many condos popping up in the NY area I just wonder what the resale value of them will be. There was an article a while back talking about a recovery in Brooklyn condo sales but when there are another 40 condos being built at the same time what chance does a buyer have to resell it in a few years? I'm pretty sure the multi-unit supply is going to outstrip demand and all these new condos will turn to Section 8 cribs
where is the population growth to fill all these places coming from? is new household formation really so strong? or is this just another bubble in the making?
For real. A big chunk of people I know have adult children and grandkids moving back in with Mom and Dad. For young people, reminds me of the crap 70s when I was their age. 4 or 5 sharing a rental. The apartment complexes I see are still offering "One Month Free" if you move in NOW! I would bet that, no, new household formation is not rising, unless you count the tents in the forest and the cardboard boxes under the bridges.
to me, the multi-unit rental building is just like the codo/loft boom, the builders didn't pay attention to that market for so long, but when they started budlign condos and lofts, the made big bucks, but those were the first things to deflate, because they overbuilt to supply, and overbuilding condos and lofts was easier to ramp up than single family house, convert an apartment building or an old warhouse, retail place, sneak a bunch of units in on a small parcel etc.
There is currently demand for apartment rentals because of shift in consumer demand, not an overall increase in demand.
As hosuing deflates, even people that can afford, get a loan for a house prefer to rent. Many people that used to buy single family houses just to be in appreciation game, like single young people, who now are just renting, really prefer to live in nice multi-unit with amenities. Doing yard work and maintenance on a house loses its charm when it is losing you money.
Also, people are shifting from suburbs to living close to work, walkable neighborhoods, shorter commutes etc, and even a decent share suburban in multi-units. Here in MN there are so many tight, multi-units with mixed use (retail, commercial space) that are going up in burbs that formely only built single family homes on big lots or condos similar to houses for those that could not afford the houses.
I hear that builders finally are getting hip to people wanting flexible multiple generation options, by building houses that are both a single family home plus a smaller, fully-equipment attached second unit. Who woulda thought? With so many immigrants living with so many people in a house, with people having different housing needs over the years, some times needing more rooms, sometimes less, giving them a unit they can rent out and earn income when they don't need it, whats not to like? And developing a lot is great expense, so putting two units on one lot saves dollars per square foot. But before, all they could come up with was duplexes. Really, builders seem sort of dense, few of them will think like a Jobs and guess what they might like before people even realize its perfect for their needs. Thus, someone that gets it right first, makes a lot of money, but in a few years of copying, demand is satiated.
A one time shift in consumer tastes and the sort of housing they are looking for has caused rents to go up, but I dont see it as a permanent trend. Once supply over reaches, everything from apartment rents to price of houses will be going down, slowly but surely for many years to come.
Demand for housing is based on population growth, household formation, wages and cost of mortgage lenders. Mortgage rates cant go much lower, wages are not going, immigration and birth rates are down, and people continue to double up, kids without jobs do not form households, parents who have lost their house move in with kids etc..Is their anything overall that is driving need for more units, more houses? Besides shifts in population, regional hot spots like ND, there is not overall where for housing demand to go up. Meanwhile, while supply of new homes is way down, there is still a vast inventory of houses...yes some are degrading quickly, but many still available to be used. Supply can contract enough to keep up with decrease in demand.
In the world of Bullshit the new construction numbers must include apartment complexes by unit created...kind of like fiat currency.
DEUS EX MACHINA
With most of the world’s major economies as well as the financial system bankrupt, there is only one solution that can save the world economy. Like in the Greek tragedies, Deus ex Machina is now the only way that the world can avoid a total economic collapse. This would involve God being lowered down onto the world stage and miraculously saving the plot.
http://www.mmnews.de/index.php/english-news/9031-deus-ex-machina
Denniger is crapping in his pants...
http://market-ticker.org/akcs-www?post=199514
Looked like a pretty good article to me. Indeed, Europe has pulled the pin and strapped onto the bomb....YEEEEEEE HAAAAWWWWWWW!!
that's what happens when you are clearing counterfeit loans?
Taylor Whitaker and Bean and how many others that were given a pass from SEC (unlike Farkas) for simply disclosing.
The fraud team accomplished this by distributing mortgage data to Colonial Bank for loans that didn’t exist or that TBW had already committed or sold to further third-party investors. According to his own statements, Bowman himself thought that Plan B data included data for loans that didn’t exist and knew that without Plan B, TBW would likely fail and go out of business.
TBW used their mortgage servicing rights (MSR) to collateralize an effective capital line of credit at Colonial Bank, and it kept third-party companies to operate periodic MSR valuations. In his plea, Bowman admitted that he, at Farkas’s demand, directed co-conspirators to control TBW’s borrowing base by billions of dollars to artificially inflate the MSR valuations and to avoid a margin call.
http://www.loansafe.org/former-taylor-bean-whitaker-president-pleads-gui...
no REAL home no reduction in inventory required!?!
First, you need to separate out builders who are building rental units and builders who are building single family residential units. Builders building single family residential units base a start on the demand in the location of the prospective home. They definitely don't look at the NAR numbers. I doubt many of them even know what the NAR stands for. There are local data crunchers that are providing fairly accurate statistics on any given local market. Permits and starts are at a historic low, so any bounce is going to translate into an even bigger percentage gain. Those numbers yesterday will prove to be an anomaly, if not made up, over time.
Since economic activity is limited by the amount of new debt available, we should expect to see numbers that don't match up with reality. Hoping for the best is one thing. Paying for it, is another matter.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Hi Georges. Have you ever thought of throwing in the towel on the whole 'Blog Thing'(since you're obviously STILL having trouble getting anyone to visit your site), and maybe - INSTEAD - writing Fortune Cookies?
More Biflationary news....that somehow supports housing???
(Reuters) - The population of the United States is growing at its slowest rate in more than 70 years, the U.S. Census Bureau said on Wednesday.
The country's population increased by an estimated 2.8 million to 311.6 million from April 1, 2010 to July 1, 2011. The growth rate of 0.92 percent was the lowest since the mid-1940s.
http://www.reuters.com/article/2011/12/21/us-usa-census-idUSTRE7BK17K201...
It's worse than you think. Because they won't tell you
Sheep dog the bubble is still going in the Ny metro area. Prices are high and they are building and renovating. Like a last hurrah. Prices on the "High End" estates etc... are tumbling though.
That could be, I dont know about NY I live out near the Vegas area...sucking big time here.
Only reason not crashing more is because banks were under orders not to foreclose in exchange for Fed largesse and support in many ways. That was 3 years ago. None of them thought it could go this low
Syria
Yea but this is just the financial world here, not much in the area of 'WW3 about to kick off big time any day now' is factored in.
We need more young, stinking rich and drop-dead hot-n-wild Russian girls with billionaire daddys coming to the US. A couple million each buying prime condos or townhouses would help our stinking housing market.
Of course, they all need to spend their free time at Tifs and, by night, poll-dancing.
And by day, trying to avoid the predator drones and Viper Squads from DHS/FEMA.
"by night, poll-dancing"
That starts in November, right? Oh, were you talking about Gallup?
hehehe... pole-dancing.
Got freaking too much politics on my mind.
Let's solve all this by attacking Iran right?
Reality in greece :
http://taxitzhs.blogspot.com/2011/12/nonymous-12-2011.html
So what is happening right now in Greece?
- People pay more taxes even though they cannot afford it
- Pensions have been cut off, so the elderly cannot even afford their medicine, rent and bills
- People are getting evicted due to loans
- Electricity company forces people to pay a lot more than they’re supposed to, either wise they shut down their power at home
- Banks are in charge
- Media spread propaganda and not covering the true stories such as, protests, riots, deaths, beating, police brutality, political scandals etc
- Getting a job is rare and even if you find one, the payment is not enough
- Stores are shutting down
- Homes are being abandoned
- People are living Greece to find a better life abroad
- Kids are fainting from starvation
- Junkies and homeless people use used up needles to get infected with AIDS so they can get the 700 Euros the state is forced to pay on their expenses
- Protesters die, bleed, suffer
- 70% of the Greek families won’t turn on their heat during the winter cause they can’t afford it
- 1.500.000 Greeks are unemployed
- Families being destroyed
- The average Greek is being treated like dirt by the politicians and people outside Greece who bought on the media spread propaganda
- Censorship took over, blogs are closing, Facebook activists are being targeted, freedom of speech is being threatened
- Reporters are getting killed
And much more. All coming here in due time.
You could have gone with this:
'- Banks are in charge'
We would safely assume the rest...
In short, Greece is Screwged. Tiny Tim dies in the Greek tragedy version of "Christmas Carol".
Greece is our end game....they did not tax rich, there was massive tax evasion of the wealthiest Greeks, but they did have a high VAT tax, which of course effects people that have to spend every dime they make to buy food, energy, cant spend outside coutnry etc. They kept up their social safety net and union wages initially, not via taxing the rich, or real domestic growth, but via deficits and financialized bubbles. Then they could get no more loans. So now the poor and regular folks must pay for debt, thru even higher taxes and by forgoing any social safety net. Meanwhile, the economy is in tail spin, so even as they decrease their govt spending, less tax revenue comes in due to less economic activity, out-migration.
So debt is not reduced, even while suffering is immense.
Ireland in seem austerity death spiral, they cut their govt spending immensely to pay off all the debt they incurred, not by over-spending, but by backing their banks, that failed anyways, but their economic growth and tax revenues shrunk faster than their massive spending cuts, and their debt remains the same.
This is exactly want they have done in US...tax cut for the rich while we are fighting terrorism and two foreign wars, and decide to spend a fortune for overprice pills for seniorsno problem, we will run up the debt....now that debt is unsustainable, it is regular people that must pay. So while regular people face higher property taxes, possibly a Federal VAT tax, no more FICA payroll tax cut, no more 99 weeks of UI etc...they will also get less from Soc Sec, have to wait longer to collect etc...this of course is instantly hard on domestic economy, tax revenues go down but govt debt gets no smaller. Meanwhile stores are boarded up, roads got to pot holes, vicious cycle down.
The solution is not more debt, that is nearing the end game, nor is it austerity that yields no net gain defecit reduction, instead just leaves behind more misery and contraction. The solution is to let it all crash and/or have a debt jubilee.
If Greece defaulted, they would be back on a path of growth in a year or two, but if they stay in Euro and pay the rich bankers all the loans their souless, cowradly polticians racked up, the will be in this state for 30 years...just ask any Third World country that had IMF loans to pay.
So which one of the EU countries is the Archduke Franz Ferdinand? Somebody gotta take the bullet.
Hungary!
Check out that debt to GDP ratio that no one is talking about.
While you are confused, I'm wondering if many market players have any money left to trade?
http://vegasxau.blogspot.com
ot: The broker/dealer etf IAI is down more then 6% measured from early December (Dec. 5th) when equities began rolling over and heading south. While at the same time SPY/RKH etc. are down less then 1%
This may all be meaningless.. can anyone point to things to watch for as an early sign of a run on Brokers that are re-hypothocating customer accounts?
Bloomberg:
Tougher Clawbacks Needed: NYC Comptroller
New York City Comptroller John C. Liu, who oversees $108 billion in pension funds, said Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and Morgan Stanley should target senior executives’ pay to prevent improper or risky practices.
Hey Boss here are those end of year sales numbers you want, I think I'm within 15% give or take, we're cool with that right?
umm yeah..
They are gearing up for the end game:
http://www.thedailybeast.com/articles/2011/12/20/local-cops-ready-for-war-with-homeland-security-funded-military-weapons.html
http://confoundedinterest.wordpress.com/2011/12/21/nar-revised-existing-...
Who the hell junked EVERY comment in this thread? C'mon I dare you to junk rate me.
I traced their IP address, and these appear to be the culprits:
http://images.cheezburger.com/completestore/2009/8/4/128938894415084216.jpg
http://2.media.collegehumor.cvcdn.com/3/c/collegehumor.1df18c333048624e5...
http://www.city-data.com/forum/attachments/other-topics/7111d1188509980-...
http://wthsigns.com/wordpress/wp-content/uploads/2010/01/bettyjotherealt...
http://static.panoramio.com/photos/original/33424318.jpg
Thanks TIS. These people are about to be educated on the meaning of the word "Junk".
O/T
Well done Peter,
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/12/21/bloomberg_ar...
I don't see why it matters much about how many houses were or were not sold in the past. Even the data show the housing bust was worse than previously thought, it doesn't change the reality of the situation then or now. The measurement is immaterial in itself. Unless the measurements are creating the reality via modeling.
I see a recovery in home sales on the way. Fed money printing has been slow to make it's way into capital goods market, but there are few places for banks to make money anymore other than loaning out money. The re-flation is on and it'll eventually hit consumer goods in a nasty round of price increases all next year.
The Fed already announced the next round of money printing with the swaps rate decrease. They're not going to announce another LSAP, there's too much political capital at stake. Rates will stay low for another two years. It's bubble blowing time.
Just like Law-Makers need to make laws, Builders that are traded need to build, the building of mutifamily apartments will add to the existing glut and lengthen the recovery.
What are they supposed to do , sit on their hands for 3 years?
Smaller builders in Phoenix,AZ ( a depressed market) are only building and selling high end homes (1 mil+) , and are purchasing land 40 cents on the dollar.
The housing industry was clearly manipulating the housing sales information to perhaps trick people into buying more overpriced homes. It's as if the housing collapse wasn't a painful enough lesson for them.