Housing Starts

Case-Shiller Index Resumes Decline Following Small Gain To End 2014

Weather-crushed January saw seasonally-adjusted Case-Shiller home prices - and as a reminder Case-Shiller expressly warns not to use seasonal data but opts for raw, unadjusted reporting - rise 0.87% MoM (better than expected), slower than the revised 0.91% gain in December. However, away from the 'make-everything-feel-better' adjustments, home prices slipped in January following December's brief interlude, leaving the index down 4 of the last 5 months. Of course, it goes witghout sayiung that weather was blamed, as they suggest, "unusually cold and wet weather may have weakened activity in some cities." What is more worrisome however, and farcical, is Case-Shiller's ominous warning against rate hikes, "home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback."

Futures Jump On Chinese Easinng Speculation, False Rumor Of PBOC Rate Cut

With the rest of the developed world's central banks waiting for the Fed to admit defeat for one more year and delay its proposed rate hike (or launch NIRP/QE4 outright) it was all about China (the same China which a month ago we said would launch QE sooner or later) and hope that its central bank would boost asset prices, when over the weekend the PBoC governor hinted that more easing is imminent to offset the accelerating drag after he admitted that the nation’s growth rate has tumbled "a bit" too much and that policy makers have scope to respond. How much scope it really has now that its bad debt is rising exponentially is a different question. It got so bad, Shanghai Securities News leaked a false rumor earlier forcing many to believe China would announce an unexpected rate cut as soon as today, in the process sending the Shanghai Composite soaring by 2.6%.

Some Folks At The Fed Are Lost - No Juice To The Macros, Part 1

Does it really take purportedly intelligent people six years to see that the macros are not responding? Better still, isn’t it time for the Fed to explain the exact channel by which its interest rate pegging and forward guidance is supposed to be transmitted to the main street economy? After all, if these channels are blocked or ineffective - then its flood of liquidity never leaves the canyons of Wall Street. In that event, the central bank actually functions as a financial doomsday machine, inflating the next financial bubble until it bursts. Then, apparently, its job is to rinse and repeat.

The Canadian Housing Bubble Has Begun To Burst

Energy accounts for 10% of Canadian GDP and around 25% of exports and the swift fall in oil prices is having a profound effect in the nation’s oil producing regions where home sales are collapsing by as much as 65%.

New Home Sales Data Goes Full Retard With Report Frozen Northeast Saw 153% Surge

This is how ridiculous goverment data has become: in the same month in which both Housing Starts and Existing Home sales significantly missed expectations, misses which were promptly blamed on the weather, the Census Bureau moments ago released a stunner of a New Home Sales number, which supposedly rose from an upward revised 500K to 539K, a 25% spike from a year ago and up 7.8% from January, which incidentally is also the highest number since February 2008, even as the median home price dropped to the lowest since September.  All of this would be great... if it was remotely credible. It isn't.

The Fed - Hawk, Dove, Or Chicken?

We often hear various Fed officials described as hawks or doves but Janet Yellen’s Fed brings to mind another avian metaphor. They are afraid to raise rates for fear that doing so would upset the asset market inflation process and derail what is left of their theory. In her press conference last week Yellen said that stock market valuations were on the high side of historical norms, an appellation that only works if one includes the stock bubble of the late 90s. It seems that she and the other members of the FOMC have decided that another epic stock market bubble is better than admitting they were wrong. This FOMC doesn’t have any hawks or doves, only chickens.

Underwater Homeowners "Here To Stay" Zillow Says

The percentage of homeowners underwater in the US was flat from Q3 to Q4 which doesn’t sound all that terrible until you consider that this figure had fallen for 10 consecutive quarters. Things look particularly bad in Florida and the midwest where more than 25% of borrowers are sitting in a negative equity position. A new report from Zillow says negative equity will become a permanent fixture in the housing market.

Pushing On A String: The Fed's Spectacular Failure To Stimulate Housing

What we have here is another powerful case of the Great Immoderation. That is, the havoc that the Fed’s bubble finance policies have visited upon the main street economy. In short, in the name of improving upon the alleged instability of the private economy - absent the Fed’s expert ministrations - the geniuses in the Eccles building have actually caused the rate of housing starts to gyrate wildly. To wit, by a factor of 5X from top to bottom - so far this century.

Futures Weak Ahead Of "Impatient" Fed, Oil Slide Continues; China Stocks Go Berserk

The only news that matters to algos today is whether Janet Yellen will include the word "patient" in the FOMC statement as a hint of a June rate hike, even though the phrase "international developments" is far more important in a world in which everyone (such as the 25 or so central banks who have cut rates in the past 80 days) is now scrambling to export deflation to everyone else. And with carbon-based traders recuperating from St. Patrick's day, few will notice that the oil tumble continues as WTI touches new 6 year highs after yesterday's shocking 10MM+ API build, and is now openly eyeing a collapse into the $30s. Just as nobody will notice that even as futures in the US and European stocks are looking a little hungover ahead of the Fed and perhaps on the latest bout of anti-austerity out of Europe, the China levitation has gone full retard, with the SHCOMP up another 2.1% yesterday and now in full-blown parabolic mode as housing data confirms the Chinese housing bubble has truly burst, and as shadow bankers dump all their funds into stocks in hopes of making up for losses due to regulatory intervention.

Something Strange Is Going On With Nonfarm Payrolls

"Seasonally adjusted housing starts for February plunged by one of the largest amounts in the post-crisis period. The chart below shows a subset of the February non-farm payroll report, residential construction jobs. Seasonally adjusted these jobs increased by 17,200 in February, the most in two years (Feb 2013 was greater) and the second most in four years.  So while economists are blaming the weather for the plunge in housing starts, residential construction jobs were fairly robust in February. This makes no sense."

Housing Starts Collapse Most In 8 Years To 18 Month Lows

Housing Recovery? Yellen, we have a problem. Housing Starts for February collapsed 17% - this is the biggest MoM drop since February 2011. At 897k SAAR, this is the first sub-900k print since September 2013 and biggest miss since Feb 2007. Multi-family starts are the lowest since June 2014. The collapse was dominated by the Northeast (-56.5%) and Midwest (-37%) so it must be the weather, right? Not so fast, The West region saw starts collapse 18.2%. Permits for multi-family units rose notably as single-family permits dropped to one-year lows...

Frontrunning: March 17

  • Israelis vote as 'King Bibi's' reign hangs in the balance (Reuters), Factbox: Main candidates in Israel's election (Reuters)
  • Iran Can Add Million Barrels a Day of Oil If Sanctions Halt (BBG)
  • Kremlin rules out handing back Crimea to Ukraine (Reuters)
  • Saudi Arabia Needs More Oil to Feed Local Refinery Expansion (BBG)
  • How Lafarge’s CEO Went From Holcim Merger Architect to Obstacle (BBG)
  • When Yellen Gets Less Predictable She’s Getting Back to Normal (BBG)
  • Iran nuclear talks intensify as sides face tough issues (Reuters)
  • Debunking $1.4 Trillion Europe Debt Myth in Post-Heta Age (BBG)

S&P Futures Weak As Fed Meeting Begins, 10 Year Yield Drops; Oil Back Under $43

Following yesterday's inexplicable ramp in stocks, which perhaps was driven by the collapse in oil (which sent energy companies higher because a 30x energy forward PE is cheap), and by the latest battery of disappointing economic data which made it less likely the Fed will proceed with a tightening move, overnight futures have given up a portion of the gains, and were trading down 0.3% at last check. And yet, if yesterday's weakness was driven by USD weakness, today's jump in the EURUSD above 1.06 (on absolutely disastrous German ZEW investor index print) is now somehow responsible for risk offness? And, adding confusion to insult, the 10 Y is down to 2.05% and in danger of re-entering a 1% handle. Sadly, nothing makes sense any more and today's conclave of central planners in the Marriner Eccles building ahead of tomorrow's 2pm FOMC "impatient" announcement isn't going to make it any better.

Traders "Furious" Market Didn't Close Higher

In what most traders dubbed an "extremely disappointing" performance, stocks ended Monday's session with modest gains of 1.35%... "Honestly, what more could the market ask for'?" queried one frustrated floor trader. "When the market can't gain at least 2% on disappointing manufacturing and housing data, something is very wrong."