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Point Out The Housing Recovery On This Chart

Tyler Durden's picture





 

No this is not a trick question... well maybe a little. Minutes ago the National Association of Home Builders announced that its Housing Market index soared from 25 to 29, trouncing not only expectations of a 26 print, but just like the Empire Fed, the highest forecast. This was supposedly the highest since May 2007. In other words, everyone is confident, and the commentary is that this print is "reinforcing optimism that the housing market is finding a bottom" and that "this consistency suggests that the housing market is moving toward more sustainable growth." That at least is the spin. Below we show the reality, in the form of the Mortgage Brokers' Association mortgage applications index. We somehow fail to see just where the onslaught of demand for new home loans is, and just where all this optimism comes from.

 


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Wed, 02/15/2012 - 11:20 | Link to Comment LawsofPhysics
LawsofPhysics's picture

FAIL (or everyone is making 100% cash purchases).

Wed, 02/15/2012 - 11:22 | Link to Comment HoofHearted
HoofHearted's picture

Failing to smoke the hopium, you terrorist ZHers.

And as my undergrads have now taught me... #FAIL

 

Wed, 02/15/2012 - 11:33 | Link to Comment redpill
redpill's picture

There won't be a housing recovery until 2015.  However keep in mind this data is just homebuilder sentinment, and these home builders have literally been on deaths door for years, the smallest incremental improvement gets them excited.  Plus, typically they get more optimistic at the beginning of the year because spring selling season is right around the corner.  If volumes are up year-over-year, even minorly, expect this dataset to continue to go up.  Based on the early 2012 data, things look very slightly better than 2011 (which isn't saying much) so that's what's driving this.

Conversely if at any point sales volumes go negative relative to 2011, this data will immediately plunge again.

Wed, 02/15/2012 - 11:42 | Link to Comment xtop23
xtop23's picture

 Amazing you were able to give the exact year of the housing recovery.

 Housing isnt going to recover for quite some time.

 2015 is optimistic.

Wed, 02/15/2012 - 11:47 | Link to Comment Don Birnam
Wed, 02/15/2012 - 13:15 | Link to Comment Jumbotron
Jumbotron's picture

Plenty of these green shoots here in Florida !

 

http://www.scgov.net/sustainability/images/sandspur1.jpg

 

 

Wed, 02/15/2012 - 13:40 | Link to Comment Triggernometry
Triggernometry's picture

100% cash purchases? By the time one finished counting the cash it wouldn't be enough.

Wed, 02/15/2012 - 13:44 | Link to Comment ShankyS
ShankyS's picture

Maybe when Niburu passes in 2012 ... nah better not go there <sarc>

Wed, 02/15/2012 - 11:55 | Link to Comment redpill
redpill's picture

It's not that amazing, it's just an estimate based on a mathematical calculation of how long it's likely to take to absorb distressed inventory so that home values can start catching up to inflation again.

Wed, 02/15/2012 - 12:03 | Link to Comment xtop23
xtop23's picture

Understood. I would just say , that it is more than likely , the values used to project absorbtion in housing supply are a work of fantasy.

The amount of "massaged" numbers out there indicating current value and trends is staggering.

Wed, 02/15/2012 - 12:07 | Link to Comment redpill
redpill's picture

I concur.  I just happened to have real numbers :)

 

Wed, 02/15/2012 - 12:11 | Link to Comment Silver Dreamer
Silver Dreamer's picture

We may have a housing "recovery," but it will be from the government owning them all.

Wed, 02/15/2012 - 12:14 | Link to Comment redpill
redpill's picture

They already do, the share of Fannie/Freddie backed mortgages is nearing 100%

Wed, 02/15/2012 - 12:25 | Link to Comment Silver Dreamer
Silver Dreamer's picture

Yes, that's the plan and has been for a while.  We are slowly being turned back into serfs both behind the scenes and openly.  Sure, we'll lower your payment, forgive the underwater amount, etc.  In exchange however, you'll simply never pay down the principle and basically be a renter from now on.

Wed, 02/15/2012 - 12:31 | Link to Comment smithcreek
smithcreek's picture

One thing to remember about homebuilder confidence is lots, I mean a huge percentage of homebuilders are gone, so of the ones that are left, many do have better prospects.  Just like people falling off extended unemployment brings down the unemployment number, home builders getting out of the business boosts this index.

Wed, 02/15/2012 - 12:45 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Is there a human alive with an IQ above 100 and who is at least non semi-comatose who can't see the incredible batches of propaganda headlines being generated by the Main Stream Media, as a proxy misinformation arm of the state, and its other surrogates, during this election year?

Down is up through November 2nd even more so than usual in this election year, bitchez!

Never mind reality. Just be amused watching the true sheep dazed and confused as they try and reconcile what they see in their lives and the lives of their family, friends and neighbors with what they're being told and what they're reading as propagated by The Ministry of Truth MSM.

The CONFIDENCE FAIRY is out in a show of force that I've NEVER seen before in my life, ignoring actual bad data or spinning terrible data that is a pig's ear into a Gucci handbag.

Charge up the credit cards and borrow if you can, debt serfs, all your debts will easily be repaid when you feel the recovery that's kicked in on a personal level. /sarc-a-lark

Wed, 02/15/2012 - 12:23 | Link to Comment lotsoffun
lotsoffun's picture

but as to the home builders - absorption ISN'T facilitated by increasing the amount to be absorbed.  you know that.  it comes with the prescription for the red pill 'do not take more than the prescribed amount'.  our culture is built on more is better and it's not always the case.

 

Wed, 02/15/2012 - 12:09 | Link to Comment mirac
mirac's picture

agreed...decades maybe

Wed, 02/15/2012 - 12:19 | Link to Comment redpill
redpill's picture

Keep in mind housing is likely to benefit if/when the entire stock market illusion begins to evaporate, there will be a desperate rush to put capital in something that is real and has some utility, and frankly many of the big money people in the US still don't understand gold/silver and won't buy it.

Wed, 02/15/2012 - 12:23 | Link to Comment xtop23
xtop23's picture

Housing will benefit ..... or farmland ? I would think that anyone that actually has any dry powder , and is intelligent enough to put it into something relatively safe prior to high inflation , wouldn't be buying houses. They'd be purchasing farmland in Iowa.

 

 Assuming they have already bought plenty of Ag/Au.

Wed, 02/15/2012 - 13:18 | Link to Comment blunderdog
blunderdog's picture

I personally doubt the affluent are going to start buying up houses.  They're holes into which you pour money UNLESS the cashflow works for rental, but that's not likely until valuations are reasonable.

Wed, 02/15/2012 - 14:28 | Link to Comment VelvetHog
VelvetHog's picture

I personally doubt the effluent are going to start buying up houses.  They're holes into which you pour money UNLESS the cashflow works for rental, but that's not likely until valuations are reasonable.

 

Fixed it.

Wed, 02/15/2012 - 16:30 | Link to Comment blunderdog
blunderdog's picture

Wordplay!  Ar ar!

(I don't get it.)

Wed, 02/15/2012 - 12:20 | Link to Comment lotsoffun
lotsoffun's picture

housing is over.  life and corporations are cyclical.  bubbles start and end.  the next phase is the belief in building more 'rentals'.  but - who will have income to rent?  is kodak going to recover?  is woolworths going to recover?  or GM?  after a massive heartattack, recovery takes a long time.  bennie is pumping as fast as he can, that is all he knows.  obama is brain dead, as is the congress and tiny tim is keeping a low profile.  i suspect bill dudley is next treasury secretary.  he has a great recipe for i-craps.

 

Wed, 02/15/2012 - 12:27 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture

RE works in 12 year cycles. Since they say we are five years into thsi downturn....we only have 7 more years of downturn to go.

So most likely prices will turn around May 12, 2019 (plus or miuns a day or two). That's if everything goes well.

Wed, 02/15/2012 - 14:26 | Link to Comment VelvetHog
VelvetHog's picture

Yeah, but, its different this time...........

Wed, 02/15/2012 - 11:44 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

By 2015 gasoline prices will be so high that a good portion of the existing houses out there in 20 minute commute land will be essentially worthless. 

Wed, 02/15/2012 - 11:51 | Link to Comment Woodyg
Woodyg's picture

If people don't have jobs and the price of food, health care and energy are thru the roof then the chances of a housng recovery are ZERO.

At least a housing recovery where normal people buy them that is.

Let me add that ending the TBTF jackals monopoly over the economy and their Capture of the governing process coupled with ending the endless war machine would help.

Unfortunately Not enough pain yet.

When we see this then we'll know the tide is turnng.

http://www.custermen.com/ItalyWW2/ILDUCE/Mussolini.htm

Wed, 02/15/2012 - 12:04 | Link to Comment redpill
redpill's picture

The US ponzi will be able to be dragged on much longer than it can in some other places, and as such the timeline will be longer.  Housing will have a chance to recover a bit before the SHTF in earnest.

Wed, 02/15/2012 - 13:27 | Link to Comment sasebo
sasebo's picture

And where is the "money" coming from to buy all these houses? From producing something (GDP), getting paid & then saving some, or by some bank printing it? A BIG difference. Remember what happened in 07'? All the money came from some bank printing it. Then BAM!!!!!!!! 

Wed, 02/15/2012 - 12:31 | Link to Comment baserunr
baserunr's picture

This is precisely why we don't count "the volatile food and energy components" in our inflation calculations.  The prices of these are not relevant, silly people!  As long as there is enough money to buy a new iPad, the world is fine.

 

I must go now, I hear helicopters outside.  No, they're not black.  It says on the side F-E-D-E-R-A-L......

Wed, 02/15/2012 - 13:46 | Link to Comment Breaker
Breaker's picture

Silly boy. They don't send helicopters unless you say "Constitution," "Sovereign," or "God" in your post. Go ahead, be brave. Just pick one of the words and write it down. Then wait for the helicopters :)

Wed, 02/15/2012 - 12:10 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

It's a tough market right now.  I'm getting married this year and I'm torn on whether to buy or lease.  Problem with leasing (in western suburbs of Chicago) is nothing is cheap!  And you're stuck with whatever condition the place is in.  Buying gives you the option to remodel and make the place your own.  But buying in the state of Illinois gives me pause.  I mean this state is really fucked up!  Financially & constitutionally.  We're the only state in the union that offers NO permits to conceal carry or open carry a firearm.  - Unless your part of the Chicago crime machine of course..

Wed, 02/15/2012 - 12:29 | Link to Comment machinegear
machinegear's picture

Neither. I recommend swimming across the Mighty Miss into Iowa; a slightly less socialized State. You can even get a weapons carry permit while you're there. Just bring $50 bucks.

Wed, 02/15/2012 - 13:52 | Link to Comment FrankThinkTank
FrankThinkTank's picture

I can attest to the Western suburbs and Chicago being a shit hole - it truly is.

While you can't get a conceal permit, the state and municipality will be happy to charge you for every invented permit known to man in order to fix that house up.

Illinois was the first experiment, it's since moved onto the country as a whole. 

Wed, 02/15/2012 - 15:58 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

That's no exaggeration either.  I was in someone's home yesterday starting a project in their kitchen.  They said the town inspector was recently by and made them rip open an entire finished wall (painted, trimmed, etc) to verify enough wall insulation was used!

Wed, 02/15/2012 - 12:37 | Link to Comment JPM Hater001
JPM Hater001's picture

Keep those predictions coming.  This one looks like a gem.  I'll take that to the bank.

Wed, 02/15/2012 - 14:33 | Link to Comment ilovefreedom
ilovefreedom's picture

Mortgage Brokers' Association mortgage applications index--- demand for new home loans.

What does that have to do with homebuilder sentiment?

Based on the chart above, I don't see how there is any positive senitment except for being 2 ticks higher than the period ending Jan 2012 which was extremely dismal.

It's like the mortgage industry has cancer, but let's ignore that because their pimple before prom cleared up.

 

Wed, 02/15/2012 - 11:34 | Link to Comment Richard Chesler
Richard Chesler's picture

NAHB, The Onion, BLS, ...

It's getting really hard to tell the difference anymore.

 

Wed, 02/15/2012 - 11:43 | Link to Comment Rainman
Rainman's picture

Turbo Timmay is fast underwater too. Now renting out the old bungalow in Larchmont since 2009.

 

http://money.cnn.com/2009/06/03/real_estate/Geithner_housing_market/index.htm

Wed, 02/15/2012 - 11:41 | Link to Comment Cdad
Cdad's picture

"Point Out The Housing Recovery On This Chart"

Tyler...that's easy.  It's just a little off of the screen to the right.  Sheesh...not enough hopium smokin' goin' on out dere.

Wed, 02/15/2012 - 11:52 | Link to Comment Woodyg
Woodyg's picture

'Just off the screen' - yea right behind the ads.

Wed, 02/15/2012 - 15:18 | Link to Comment Car 54 Where Are U
Car 54 Where Are U's picture

Yes they are for cash...it's investors picking up properties on the cheap at forclosure auctions and REO sales.  Not 100% of the market yet but a very very significant porton.

Wed, 02/15/2012 - 11:19 | Link to Comment undercover brother
undercover brother's picture

if your fudging one report, you may as well go all in and fudge them all

Wed, 02/15/2012 - 11:23 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Thanks for the pointer.

I'll try that on my 1040 this year. Wish me luck bro. :>)

Wed, 02/15/2012 - 11:33 | Link to Comment EscapeKey
EscapeKey's picture

Proles are not invited to the party.

Wed, 02/15/2012 - 11:19 | Link to Comment trade the day
trade the day's picture

Duh!!  You have to hit the "invert" button on your chart.

Wed, 02/15/2012 - 11:20 | Link to Comment holdbuysell
holdbuysell's picture

Phrases/words of the year for 2012 so far:

"Seasonally Adjusted"

"Vaporized"

Anything else to add yet?

Wed, 02/15/2012 - 11:24 | Link to Comment Fox-Scully
Fox-Scully's picture

Mislabeled!

Wed, 02/15/2012 - 11:25 | Link to Comment pods
pods's picture

Well the meme du jour according to the radio news is:

"Iranian terrorist"

pods

Wed, 02/15/2012 - 11:25 | Link to Comment Vincent Vega
Vincent Vega's picture

"gargantuan"

Wed, 02/15/2012 - 11:20 | Link to Comment Snakeeyes
Snakeeyes's picture

Mixed news. HB gains optimism (still below 50), MBA purchase apps shrank 8.4%.

http://confoundedinterest.wordpress.com/

They can't even get a decent refi going with historic low mortgage rates and the goverment pouring on the coal in terms of mortgage refis and Fed easing.

What a mess!!!!!!!!!!!!!!!

 

Wed, 02/15/2012 - 12:12 | Link to Comment lotsoffun
lotsoffun's picture

they may have inside information on how many/where obama is going to start offering free homes to foreigners.

 

Wed, 02/15/2012 - 11:19 | Link to Comment kaiserhoff
kaiserhoff's picture

I see it.  I do.  The housing recovery is right under that flat rock that Ben and two milk cows are pissing on..., or maybe not.

Wed, 02/15/2012 - 11:22 | Link to Comment homer8043
homer8043's picture

Two virtual cows on Ben's Zynga farm?

Wed, 02/15/2012 - 11:20 | Link to Comment Xibalba
Xibalba's picture

So....we're in deflation then?  Why is Gold....nevermind. 

 

 

 

/sarc.

Wed, 02/15/2012 - 11:21 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

30 year job security is gone, so why would banks give some smuck a 30 year mortgage?

Wed, 02/15/2012 - 14:54 | Link to Comment ilovefreedom
ilovefreedom's picture

Good point, the US is one of the ONLY countries that currently has 30 year loans readily available to the mainstream.

It didn't always used to be this way as a more common loan term at the turn of the 20th century was 5 years @ 50% down.

Even in other advanced countries like China 5 years at 50% down is the norm.

The only reason 30 year mortgages worked is because of the monopoly of the dollar and "confidence" of USD denominated credit of all sorts; commercial, industrial and residential.

Even today you still have a glut of "regular joes" looking to take out loans for property to rent because rents are slightly higher than mortgage payments, but of course that prices in the risk of being unable to pay the mortgage in the long term.

Gone is the era of US exceptionalism and hegemonic economic dominance and consumer driven excess. We MUST live within our means.

But Frankly, the jig is up, all of the powers that be have decided to plunder and strip mine instead of any talk of domestic austerity. Gold is eventually worthless compared to other investment classes, EXCEPT for when all other asset classes flip and become worthless.

ExxonMobile's production and Apple's value are irrelevant in a world where gas is too expensive to get to work, and nobody has jobs to buy an iphone/ipad. Yes in ideal situations these investments are superior to gold, but not once shit hits the fan and we're recycling people to make Soylent green.

Wed, 02/15/2012 - 11:21 | Link to Comment homer8043
homer8043's picture

We need to find out which Pharma company is making these hopium pills and go long.

Wed, 02/15/2012 - 11:21 | Link to Comment Atomizer
Atomizer's picture

Tyler, can you chart between 2006 -2009?

Wed, 02/15/2012 - 12:17 | Link to Comment Atomizer
Atomizer's picture

Thank you

Wed, 02/15/2012 - 11:22 | Link to Comment spastic_colon
spastic_colon's picture

its a "sentiment" survey...so who cares...it should be obvious propaganda as it is sponsored by the NAHB

Wed, 02/15/2012 - 11:48 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Hopium is the motherhood of sentiment.  :D

Wed, 02/15/2012 - 11:22 | Link to Comment smithcreek
smithcreek's picture

For the past three years, through "green shoots", "we stopped the next great depression", "summer of recovery", "fragile recovery", and now whatever the hell this stage of BS is, I've felt like a man trapped in an insane asylum with all the inmates staring at me, calling me crazy because I don't have a tinfoil hat on.

Wed, 02/15/2012 - 11:25 | Link to Comment spastic_colon
spastic_colon's picture

easy to explain....

intelligence=logical thought=resistor=suspect=crazy=terrorist

there......

Wed, 02/15/2012 - 11:30 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

I feel the same way man, the doctors even put me on anti psychotics, but instead of taking my pills I crush them up and put it in the water supply.  I'm not the crazy one, it's the general public that needs to take their medicine. What's really crazy is that since I have no income I get a low income subsuidy for my pills, and a month supply cost somebody somewhere 500 hundred bucks.  And they call me crazy.....

Wed, 02/15/2012 - 12:21 | Link to Comment Race Car Driver
Race Car Driver's picture

That would prolly be me, but I'm too apathetic to really care.

Water supply, you say?

Wed, 02/15/2012 - 11:33 | Link to Comment Quintus
Quintus's picture

Well put.  I know exactly what you mean.  

Wed, 02/15/2012 - 12:02 | Link to Comment Dukepinewood69
Dukepinewood69's picture

I am glad you said that....I was starting to think I was the only one.

Wed, 02/15/2012 - 12:14 | Link to Comment Silver Dreamer
Silver Dreamer's picture

Please report to the nearest Office of Counterintelligence and turn yourself in.

Wed, 02/15/2012 - 12:32 | Link to Comment Problem Is
Problem Is's picture

smithy...

You are advised to drink your share of Obama-bot Green Shoots Lime Kool-Aid...

Wed, 02/15/2012 - 14:50 | Link to Comment ilovefreedom
ilovefreedom's picture

Arrogance -> Confidence -> Hope -> Faith -> Prayer -> Hail Mary

Reagan/BUSH 1 and before was the era of Arrogance

BUSH2 and Clinton were the Era of Confidence

Obama is the era is of Hope, now entering Faith that our amateur president can turn things around. Juke employment and other metrics, meanwhile the debt ceiling

Crescendo will come into play around Q2/Q3 and I keep saying to count Obama out one way or another on purely economic terms for a second term.... the situation will be so bad by elections that he won't have a prayer. 

 

Unless of course... another war begins... Obama will have to choose wisely, lackluster fool's gold legacy (how will he go down in history?) or additional temporary power ushering in the end of US global hegemony and potentially WW3.

Wed, 02/15/2012 - 11:23 | Link to Comment Snakeeyes
Snakeeyes's picture

Here is a longer term version of Tyler's chart. I call it "The Penalty Box." Housing is STILL in the penalty box, so I don't know what homenbuilders are smoking.

http://confoundedinterest.wordpress.com/2012/02/15/mba-purchase-applications-down-8-4-while-housing-most-affordable-in-a-decade/

Wed, 02/15/2012 - 11:42 | Link to Comment waterwitch
waterwitch's picture

That 'box' will be a coffin once we hit $4.00 for gas. Kiss suburbia bye bye.

Wed, 02/15/2012 - 13:20 | Link to Comment respect the cock
respect the cock's picture

Kinda like the barren wastelands of suburbia after the last few rounds of $4/gallon?  

Wed, 02/15/2012 - 12:11 | Link to Comment ljag
ljag's picture

I do. It's that load of blueberry cheese I had to throw into Century 21's dumpster when 5-0 came busting thru my front door.

Wed, 02/15/2012 - 11:23 | Link to Comment dracos_ghost
dracos_ghost's picture

NAHB read the chart upside down. Looks good from that perspective.

Wed, 02/15/2012 - 11:27 | Link to Comment EyeQ
EyeQ's picture

your right, the NAHB should sit on the other side of the table and take another look.

Wed, 02/15/2012 - 11:24 | Link to Comment somethingelse
somethingelse's picture

"But wishing did not make it so, which was very annoying to Alice."

-Lewis Carroll "Alice in Wonderland"

Wed, 02/15/2012 - 12:30 | Link to Comment Problem Is
Problem Is's picture

And Lewis Carroll was a practitioner of logically valid reasoning... aka a Mathematician and a Logician...

Wed, 02/15/2012 - 11:25 | Link to Comment Mercury
Mercury's picture

Homebuilder confidence index?

Are you shitting me...that's a real metric that people pay attention to?

Wed, 02/15/2012 - 11:30 | Link to Comment kaiserhoff
kaiserhoff's picture

Of course.  It's right underneath the data for "gamblers anonymous" and "in lotto we trust."

Wed, 02/15/2012 - 11:34 | Link to Comment Mercury
Mercury's picture

And we're supposed to be encouraged that it's back up to where it was in May '07....just before TSHTF.  Nice logic guys.

INVULNERABILITY CONFIDENCE HIGHEST SINCE TITANIC!

Wed, 02/15/2012 - 12:27 | Link to Comment Problem Is
Problem Is's picture

+1...  "that's a real metric that people pay attention to?"

Yes.

And just as important as the Used Mortgage Salesmen Confidence Index or the Real Estate "Professionals" Market Index...

Wed, 02/15/2012 - 11:29 | Link to Comment disabledvet
disabledvet's picture

Here some news: housing is in fact a LIABILITY! And does "genius disabled vet" know this? Because all the banks that claimed it as an asset are DEAD. Move along sheeple...move along...

Wed, 02/15/2012 - 11:30 | Link to Comment Fastback
Fastback's picture

If we "Tell everyone it's OK" then "Everyone will believe it's OK". This Propaganda is just to much to handle anymore!

Wed, 02/15/2012 - 11:30 | Link to Comment OutLookingIn
OutLookingIn's picture

More of the "same old, same old".

Just one more pile of hot bullshit from the NAHB.

Nothing to see - move along.

Wed, 02/15/2012 - 11:32 | Link to Comment xtop23
xtop23's picture

HFT orgy in 3..2..1..

So much great recovery news I can hardly contain my exuberance.

Wed, 02/15/2012 - 11:32 | Link to Comment uno
uno's picture

the only people I hear of buying homes since 2008 have walked away from their underwater house and got a loan for a nicer home down the street, the loan may be in a family member's name or their own.

Wed, 02/15/2012 - 11:31 | Link to Comment Downtoolong
Downtoolong's picture

Everyone’s looking for a silver lining in the housing market. Unfortunately, once they find it they discover it’s not even real silver. It’s just bullshit shares of SLV.

Wed, 02/15/2012 - 11:34 | Link to Comment uno
uno's picture

34 ceiling in effect again, from Ed Steer's Monday's article http://www.caseyresearch.com/gsd/home

Well, the Commitment of Traders Report lived up to my worst fears.  In silver, the Commercial traders were the not-for-profit sellers once again...as they increased their short position by a monstrous 5,921 contracts, or 29.6 million ounces.  The total Commercial net short position in silver is now up to 34,650 contracts, or 173.3 million ounces.

Back at the end of December, when silver hit $26 the ounce, the Commercial net short position in silver was all the way down at 14,100 contracts, or only about 71.0 million ounces.  So, in the space of less than six weeks, the Commercial traders have added a bit over 20,000 contracts to their short positions...or 100 million ounces.

If these commercial traders, who neither produce nor consume the metal, were not there to go short against all the new long positions being placed, then the price of silver would be well north of $100 the ounce right now.  Readers ask me what I mean by 'not-for-profit' sellers...well, here they are.

The Commercial traders are only there for one reason and one reason only...and that's to prevent the price from exploding to the outer edges of the known universe.  Their rewards for doing this dirty work, besides making big profits on their engineered price declines, is protection from prosecution by the CME and the CFTC.

It is also obvious to me that JPMorgan and the other large Commercial traders are in no rush to cover their obscene short positions.  I'll have more on that when I discuss the Bank Participation Report further down.

Wed, 02/15/2012 - 11:32 | Link to Comment adr
adr's picture

Homebuilders must feign confidence becuase they are all publicly traded now. The guys at the top don't make nay money actually building homes, they make money on stock options. Can you imagine if they actually told the truth and said, "The market for new homes is terrible". They would lose out on all the cash they would gain when the stock they granted themselves goes up after the survey.

Wed, 02/15/2012 - 11:32 | Link to Comment fishface
fishface's picture

Chart is outdated.

There is a humangus jump after the 10.2.

Wed, 02/15/2012 - 11:33 | Link to Comment scatterbrains
scatterbrains's picture

I'm waiting for my free mortgage from mobama and everyone else should too.

Wed, 02/15/2012 - 11:34 | Link to Comment PicassoInActions
PicassoInActions's picture

Tyler is there a way that you can write an article on the oil and where are those crazy prices come in?

As i understand the oil companies that take the delivery paying near 80$ per barrel, why do we have to pay more?

And wtf is with the gas prices? all those tech excuses and itnerpretations are scam. where is a suply and demand?

Wed, 02/15/2012 - 11:38 | Link to Comment scatterbrains
scatterbrains's picture

no no when demand is down XOM/CVH etc have to raise gasoline prices in order to make up the difference. When the depression hit's it's stride and no one's driving, imagine how expensive gas will be then.. $10 a gallon maybe ?

Wed, 02/15/2012 - 11:59 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

There's way, way more to gasoline prices than all the conspiracy around XOM gouging.  Oil is a proxy for currencies, if not a currency itself.  It encapsulates nearly all world activity in its price.  And to understand the supply/demand logistics fully, you need to look at refinery capacity, distillate specs, and follow crack spreads to understand the incentives to which refiners respond.

Just sayin...don't oversimplify.

Wed, 02/15/2012 - 12:03 | Link to Comment PicassoInActions
PicassoInActions's picture

oil for any country is national security, it should not be left for gamblers. Companies already bought the oil for the next 6 month, so all that bs with Iran or any other excuse that in 6-8 month oil will go up is lame. Why , today do we have to pay high prices ( if contracts already has been bought 6 month ago) coz some faget or analyst thinks that in 6+ month will be a bigger demand?

Oil is not an optional thing for majority, it has to be protected.

Wed, 02/15/2012 - 12:31 | Link to Comment riphowardkatz
riphowardkatz's picture

What about the security and right of the people producing the oil to charge a price they feel is commensurate with the risk involved? Oh I see national security boils down to your financial welfare. It really isnt about protecting the nation it is about protecting you at the cost of someone elses security or right to their product.

Wed, 02/15/2012 - 12:13 | Link to Comment scatterbrains
scatterbrains's picture

I agree, was being sarcastic.

Wed, 02/15/2012 - 12:27 | Link to Comment riphowardkatz
riphowardkatz's picture

There are 3x the dollars in existance. Supply of paper through the roof. Demand for oil is falling at a slower rate than supply of dollars. 

What can't you understand about that? If you were selling a product in Dollar terms and the government increased the supply of those dollars by 3x wouldn't it make sense to charge more?  

Wed, 02/15/2012 - 11:37 | Link to Comment rosiescenario
rosiescenario's picture

A Confidence Game, which gave us the often heard term 'con man'.......

Wed, 02/15/2012 - 11:40 | Link to Comment HileTroy
HileTroy's picture

Ok quick admin Note: FYI As a former builder the bench mark of 50 ( Fifty is supposed to be NORMAL) it dropped as low as i think 16 on this index this is total BLS style BS. Nothing to see move along and yes there is still over 30 to 45 months of homes on the market depending on what price point and where in the country you are.

So there you go a totally worthless number. That was also when the NHAB had membership but the last few years membership has dropped by over 60% so it must be the builder algo feeling bullish and by that I mean,  BULL SHIT ish !!!

 

 

 

 

Wed, 02/15/2012 - 11:45 | Link to Comment NEOSERF
NEOSERF's picture

A reading of 50 is supposed to be "good" so 25 to 29 is just a less gray shade of "bad".. delinquencies are up in Dec and Jan and the Fed is stuck with ZIRP even if this reading were 60 because as soon as the mortgage rate joes from 4 to 5, the "recovery in housing" will be over.

Wed, 02/15/2012 - 11:50 | Link to Comment prodigious_idea
prodigious_idea's picture

Volume enhancers:  Low rates and HAMP

Wed, 02/15/2012 - 11:53 | Link to Comment Snakeeyes
Snakeeyes's picture

I am speaking at Virigina Association of Realtors today. Everyone else will be saying "The recovery is here!" Then I will point to my Penalty Box chart of housing prices, new home sales, mortgage purchase applications. and everyone will get angry.

Don't shoot the messenger!!

Wed, 02/15/2012 - 12:08 | Link to Comment Grey-Ghost
Grey-Ghost's picture

In a delusional nation feeding on magical thinking of all sorts, as it sinks into medieval madness (of all sorts) the truth is an enemy.

Wed, 02/15/2012 - 12:42 | Link to Comment rrrr
rrrr's picture

The truth is never the enemy; it is only called the enemy by those who are enemies of the truth.

Wed, 02/15/2012 - 12:40 | Link to Comment rrrr
rrrr's picture

Everyone who cannot say outright that a lie is a lie is just as guilty as the original liar, because their action constitutes and active support of the lie.

Wed, 02/15/2012 - 11:59 | Link to Comment dwdollar
dwdollar's picture

More people are becoming psychotically bipolar as they try to grasp their declining living standards. Their instincts tell them something is wrong, but the vast amount of social programming is constantly spinning them the other way. I don't trust any sentiment indicator no matter how well it's run.

Wed, 02/15/2012 - 12:02 | Link to Comment therearetoomany...
therearetoomanyidiots's picture

Dear Leader needs to be rehired by JPSachs and spend 4 more years in the DC branch of Goldmann.  

This report fresh on the SURGE in employment and now the latest CBS/NYT poll showing 50 percent of americans approve of him.  

Grab your ankles and bite the bit...due to austerity there will be no lube when you get yours.

Wed, 02/15/2012 - 12:22 | Link to Comment Silver Dreamer
Silver Dreamer's picture

I know at least one person who's withdrawing US Dollar backed investments and cash, buying low end properties outright, and setting them up as extremely profitable rentals.  He's making way more money that way, and it is a decent hedge against inflation.

Wed, 02/15/2012 - 12:22 | Link to Comment Problem Is
Problem Is's picture

Tyler: "Point Out The Housing Recovery..."

That's Easy

The National Association of Home Builders is having their annual convention in Las Vegas this year...

You receive a free voucher for a complimentary blonde, stacked, tan LA prostitute (Read: Wannabe Hollywood "actress")... for a "hugely positive" response to the Housing Market Index survey...

Survey: A gathering of a sample of opinions...

Wed, 02/15/2012 - 12:28 | Link to Comment AldoHux_IV
AldoHux_IV's picture

Who needs applications when you have robosigning back in full force and all that cash on the sidelines-- I hear that AAPL is in the market.  Afterall it's the patriotic thing to do: support the administration's efforts to ruin the economy.

Wed, 02/15/2012 - 12:45 | Link to Comment rrrr
rrrr's picture

It's better to state outright that it's not patriotic.

Wed, 02/15/2012 - 12:30 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

There is a huge survivor bias in the homebuilder sentiment numbers.  A lot of their members have gone out of business.

Wed, 02/15/2012 - 12:37 | Link to Comment rrrr
rrrr's picture

Those who cannot say outright that a lie is a lie are just as guilty as the liars themselves, because their action constitutes an active support of the lie.

Wed, 02/15/2012 - 12:44 | Link to Comment hawks5999
hawks5999's picture

Houses must be being bought with Gold.

Wed, 02/15/2012 - 12:56 | Link to Comment Richard Head
Richard Head's picture

Buy now or be priced out forever!

Fri, 02/17/2012 - 12:06 | Link to Comment Sunshine n Lollipops
Sunshine n Lollipops's picture

And the Lord Ben spoketh unto the huddled masses, 'I hear your cries, my children, but despaireth not, for behold: the latest numbers are good--better, even, than I expected! Yowsers!--as I have solemnly promised thee. In these trying times, you mustn't allow your faith in me to waver, for I am all-powerful, and salvation awaits the true believers among thee. Oh--before I forget--we have a tiny correction in the Good Book, I think it's page 2 or 3. What I actually said was that the Apple represents all that is pure and good and holy, and that nonsense about it being forbidden, and not touching it, or eating it--hahaha, oh, that is too funny--apparently just a mix-up at the printer. No, really. So, I hope that clears things up. Apple is good. Take all you want, please.

"OK, that's about it for now. Oh, one more thing--we also have jobs numbers and CPI coming out this week, which I'm pretty sure (wink wink) are gonna be super-duper, too. So if I was you, I'd be shortin' the you-know-what outta that Euro, but, please, no hoarding of barbarous relics. Now get outta here, you crazy peasants, before I give you a group wedgie. Ok, now. Bye-bye."

Wed, 02/15/2012 - 13:04 | Link to Comment Tom.the.Bomb
Tom.the.Bomb's picture

I'm in the housing "business"… and trust me fellow ZH readers, said industry has a very long way to go (probably 10+ years my guess) before all is cleaned up and out. If ever ! I say this out of respect to those who contribute to this place of information. I have learned a lot here, and follow daily. Until the word "median" means something again the housing gig is up. Happy Wednesday… Onward and Upward.

Wed, 02/15/2012 - 13:25 | Link to Comment Shizzmoney
Shizzmoney's picture

Pretty much come to grips that unless I win a World Series of Poker bracelet, I'm never going to be able to buy a home.

But at least I know that, and have come to grips with it.  The majority of my friends, under the age of 30, don't.

Wed, 02/15/2012 - 14:10 | Link to Comment VelvetHog
VelvetHog's picture

I'll make you a smoking deal on mine.  Want it?

Wed, 02/15/2012 - 15:41 | Link to Comment ATG
ATG's picture

Case Shiller declined -30% since 2006.

There is no uptrend:

http://bit.ly/xz7VPP

Martin Armstrong thinks it does not bottom until 2033:

http://bit.ly/wvAwBg

The Anglo American debt usury inflation tax financial system is at stake,

with three of the top three trade surplus nations in the world, 

China, Japan and Russia,

Russia with 13% flat tax,

setting up alternatives:

http://bit.ly/AqEhoK

 

 

Wed, 02/15/2012 - 16:02 | Link to Comment engineertheeconomy
engineertheeconomy's picture

Bottom most likely in 2020 or 2030

Wed, 02/15/2012 - 16:12 | Link to Comment engineertheeconomy
engineertheeconomy's picture

Housing recovery in 3012

Wed, 02/15/2012 - 16:14 | Link to Comment engineertheeconomy
engineertheeconomy's picture

If they build just 1 house that would be an increase of %100 over building zero houses

Wed, 02/15/2012 - 16:40 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Punch that in yer calculator (1-0) / 0 =...I don't think you'll get 100%.  But that might just be me.

Wed, 02/15/2012 - 21:51 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

Fractal Image

        By

                     Buy Bye Fiat                                            

                                                              HOME

 

 

                                                    Inverted        reality 

                                                                   .            ( Reality)

                                                 prison                 cell

                                                              self 

             ........................................... consumption .................................................

                                                              HELL 

                                                 Dollar     .          Bills 

                                    (Delusion)        

                                                       ZERO      Worth

 

 

                                                           BITCHEZ

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