My take on the soft existing home sales numbers today
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2014 Mar 20, 7:38am 45,305 views 195 comments
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hrhjuliet
2014 Apr 1, 3:28am
Speaking of which, all of you should see the documentary, I was at recent conference with the Producer of "Money for Nothing" it's a documentary about the Federal Reserve and its impact on the economy
Here is the trailer, if you haven't seen it Gary you will like, it's a bit basic but in a great format
http://moneyfornothingthemovie.org/trailer/
Documentary website
http://moneyfornothingthemovie.org/
Watched it. Great video.
_
2014 Apr 1, 3:32am
Watched it. Great video.
It's a nice documentary and a good timeline of economic history with current and previous Federal Reserve members. The producer/director and I hit it off when he heard my interview on Bloomberg arguing Bernanke poor QE velocity thesis
hrhjuliet
2014 Apr 1, 3:39am
Watched it. Great video.
It's a nice documentary and a good timeline of economic history with current and previous Federal Reserve members. The producer/director and I hit it off when he heard my interview on Bloomberg arguing Bernanke poor QE velocity thesis
Definitely a must watch for anyone who is trying to figure out what is going on in the market today.
What is your take on the above chart?
It shows the correlation of crony Fed purchases (MBS etc.) and rising house prices (LA in this instance) with brutal clarity. Case closed. Real median income has been dropping, party's over.
_
2014 Apr 1, 4:09am
What is your take on the above chart?
California has had a massive rise in home prices since April 2012. One item to remember is that using mix sale data a lot upper homes are selling now and not a lot of low end homes to the market. So the people who have cash, strong incomes and assets and buying it and the lower end home aren't selling as much. So, the price inflation is rampant.
bubblesitter
2014 Apr 1, 5:30am
trong incomes and assets and buying it and the lower end home aren't selling as much.
Are you saying, rich are getting richer and poor are getting poorer?
_
2014 Apr 1, 5:37am
Are you saying, rich are getting richer and poor are getting poorer?
In every economic cycle that goes positive the rich will get richer because they own the assets and they usually own them debt free, while others have to take on debt which leaves a massive gap. If they do own equities they benefit from that. However, the gap will always rise for the rich and even richest of the 1% even. Professor Sufi from University of Chicago Booth asked me to come to go to his Housing conference in LA last year, we kind of see eye to eye on the wealth factor model and we both agree in this cycle it's going to be less for the lower end class
http://houseofdebt.org/2014/03/29/measuring-wealth-inequality.html
_
2014 Apr 3, 5:31am
.."TOAST"
limits to this expansion. This a big reason why we don't see top line revenue growth from the business in America
Bubbabeefcake
2014 Apr 3, 5:41am
.."TOAST"
limits to this expansion. This a big reason why we don't see top line revenue growth from the business in America
Damn! Coming up for air or going down for the third time?
_
2014 Apr 3, 5:42am
If any of you like economic charts updated daily my facebook page has almost every economic data updated on the wall with other charts as well.
_
2014 Apr 4, 3:27am
We got back all the jobs loss on the private sector side from the Great Recession, but........ #DTI #LTI even with the 10 year at 2.76% and ZIRP in play, it's a different cycle for sure and capacity consumption isn't a strong as many as thought. Hence why we don't have top line revenue growth and CAP X spending is light
_
2014 Apr 4, 6:51am
Housing market, tech stocks and first time home buyers?
Housing market
Exisiting home sales most likely will end the year between 4.9-5 million so flat market would be the best case but slightly negative most likely
New home sales will likely be up 8-12% in total sales
First time home buyers will be soft this year 26-30% of the market place which is very low on historical standards
Tech stocks are getting spanked, stock market will be ok Up 3-7% this year because ZIRP is in play and the 10 year note is still very low to help demand.
hrhjuliet
2014 Apr 4, 6:54am
Thank you. I really appreciate your input; always intelligent and practical.
_
2014 Apr 6, 4:24am
>
As you can see here, we clearly overbuilt for housing and the even new home sales and starts got impacted when housing inflation rose on both fronts
_
2014 Apr 6, 4:33am
Take all affordability indexes the media and financial companies like Zillow and the NAR promote with a grain of salt because they thesis is based on the fact that everyone has a 20% down payment. Comical with this cycle I know .... and yet they never add an * to their metrics
_
2014 Apr 6, 11:34pm
Hence rental nation, if this much can't create liquidity through liquid assets
_
2014 Apr 8, 12:51am
Mind that census always counts delinquent homeowners as homeowners, so with 3 million loan still in delinquency and many in California still, these numbers need to have an * to it because it's slightly worse
bubblesitter
2014 Apr 8, 12:52am
Come on, Logan, gives some hint on upcoming inventory situation!
bubblesitter
2014 Apr 8, 1:15am
Logan, good graph, but I have yet to see that inventory here in North OC.
_
2014 Apr 8, 4:10am
North OC.
Lower end market would be lighter than the upper end areas in California in general. More transaction are higher end homes rather than lower end homes.
bubblesitter
2014 Apr 8, 4:17am
Lower end market would be lighter than the upper end areas in California in general. More transaction are higher end homes rather than lower end homes.
That simply amazes me. I can't think of logical explanation. It seems as though investors would be more interested in those low end market for rental purposes and high end would be move up or first time live-in buyers. Confused.
_
2014 Apr 8, 4:24am
That simply amazes me
What I see once the Robo signing settlement was signed and California homeowners act law was put into motion the process of putting lower end homes into the market was simply just delayed because there is now a legal process on trying to make a loan modification work for these type of homeowners
bubblesitter
2014 Apr 8, 4:51am
there is now a legal process on trying to make a loan modification work for these type of homeowners
Won't it apply to both low and high end?
_
2014 Apr 8, 5:02am
Won't it apply to both low and high end?
There more financial struggle is on the lower end side. If you remember the sub prime credit cycle it was the lower end scale of income that took on that massive amount of capacity debt that can't be own.
There are plenty of people in California who have no problem making their mortgage payments before, during and after the housing bubble. So the higher end homes that went to distress are small in nature but they are still out there. Now the lower end homes it's another story and that is why lower end sales home are down like over 40% because they simply aren't to market
_
2014 Apr 8, 11:29am
Scary chart. How do we fix the transmission?
Pay better wages and get better income growth
One item to remember with this chart and many other economic charts. When you have constant bubble economics going, these highs in income and wealth aren't really supported by true supply and demand economics
So, even though home prices are back to mid 2004 levels median incomes aren't for the many factors in this cycle.
However, in world economy where
Globalization
Techonology
Debt
Demographics
Are 4 forces that are very strong can we really see income growth in areas where we don't have supply and pricing power.
We have tech boom ... that's a small workforce
Facebook 150 Billion Dollar Market Value only employs 5,000 people
JC Penny 2.7 Billion market cap employs 120K people
So the wealth is created in such few industries in terms of incomes and liquid asset wealth ( Stock Option)
Energy is a plus for us, we have that going for us and charts there are good to look at. So that is one area where we can expand and we have a decent jobs recently.
However, it's tough to fix this with those 4 items above.
Not to say everything is gloom and doom, but I believe naturally we are a 2-3% GDP country at best case nothing more than that and wage growth is going to weak in many sectors because those jobs.. the manual labor services just doesn't demand strong incomes
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