Friday, January 3, 2014

Yardfarmer Brings It

  • "As just reported, the numbers put out by the Census Bureau completely defy this historical seasonality."

    Uhhh ... that might have something to do with the fact the numbers are seasonally adjusted! You can't look at seasonally adjusted numbers, and conclude they don't fit historic seasonal patterns, because you aren't looking at UN-adjusted numbers!

    30 Dec 2013, 02:25 PMReplyReport AbuseLike4
  • Incidentally, I find it curious the writer of this article had no problem with the new home sales report for July when it came out ...
    ... but now that November's report does not go the way he expected/wanted, it suddenly becomes "not credible."

    30 Dec 2013, 02:42 PMReplyReport AbuseLike4
  • Some times I think nobody should respond to this guy because he is intentionally putting out this garbage just to gain responses.

    Anyway market is voting with both feet and making look like a fool.

    If Market has a another double digit gains and Gold a 25% drubbing in 2014 then that will put him in his place.

    Have you seen Eric Sprott recently wow after getting kicked out of his own fund still whining about Gold manipulation.

    30 Dec 2013, 03:14 PMReplyReport AbuseLike6
  •  The Pending Homes Sales report today was a disaster too.

    The SAAR showed a slight gain vs. October, but November this year vs. Nov last year showed a 4.5% drop. The non seasonally adjusted number for November vs last month absolutely plunged 18%.

    The housing market is going to collapse again in 2014 if the Fed doesn't start buying homes as part of QE.

    New mortgage rules hit Jan 1 that will really tighten the screws on getting a mortgage.

    30 Dec 2013, 03:37 PMReplyReport AbuseLike3
  •  My body of work stands for itself and withstands any critical scrutiny from those who refuse to look beyond the seasonally adjusted/manipulated miscarriage emitted by the Government. My bet is that this kid didn't even read my article.

    What's amazing is that anyone could possibly believe that the 3-month average for Sept-Nov actuals could be anywhere near Jun-Aug, especially with the big move interest rates made starting in mid-Oct.

    30 Dec 2013, 03:40 PMReplyReport AbuseLike3
  • It's known as "people adjusting to higher interest rates." Has happened many times.
    30 Dec 2013, 03:43 PMReplyReport AbuseLike2
  • hey Dave, while it seems to belabor the obvious, there are some persons out there who are purely and simply agenda driven to the point that the most blatant statistical manipulations emanating from our Orwellian ministry of truth merely reinforce their own deep seated and myopic statist prejudices. the static dimension of what passes for thought in their constricted craniums is as scripted, predictable, and monotonous as the stale propaganda they seek to buttress with their own hopelessly juvenile testimonies. these two same tiresome buffoons show up with disturbing regularity to contest your usually well founded analysis. to them i would say along with Emerson, "A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."
    30 Dec 2013, 06:32 PMReplyReport AbuseLike7
  •  Great comment YF
    30 Dec 2013, 07:02 PMReplyReport AbuseLike1
  • "the most blatant statistical manipulations emanating from our Orwellian ministry of truth"

    This is the permabear's version of, "If you don't like the message, blame the messenger."

    30 Dec 2013, 08:36 PMReplyReport AbuseLike2
  • Yardfarmer, bringing the vocab.
    31 Dec 2013, 12:40 PMReplyReport AbuseLike0
  • oops! http://bit.ly/1hapOUF
    30 Dec 2013, 07:43 PMReplyReport AbuseLike2
  • How is that DHI short working out? You still have a chance to get out with a small gain. #squeezed

    It's ok. We all get it wrong sometimes.

    31 Dec 2013, 10:09 AMReplyReport AbuseLike0
  • Here's a nice article for Dave, who seems to be constantly telling us how bad the Denver real estate market is:

    31 Dec 2013, 12:23 PMReplyReport AbuseLike1
  • gee, that's a nice big glossy full page feel good spread there at Bloomberg, OF. I live right in in Platte Park in D'never and I can solemnly attest to the vast budding building boom here in this increasingly congested and polluted megalopolis. I wouldn't have believed it possible a few years ago! But perhaps what you fail to realize or perhaps realize all too well considering your obvious partiality to all things shining with the hypnotic shining patina of filthy lucre, is that our cities are rapidly bifurcating into two distinct and opposing regions of economic schizophrenia. Take Camden or Detroit or Gary for instance and behold the other side of the abysm or even less savory segments of our brave NWO city here, a sight which might be less becoming to your unassailable, Panglossian "best of all possible worlds" utopian paradise. Scratch the surface a little deeper and realize that the vast majority of home purchases are being made here with 60/100% up front cash! or being scarfed down in 10,000 lot tranches by megalithic institutional entities such as Blackstone with 0% interest Fed funny money. Meanwhile millions of foreclosures with hopelessly impaired mortgages clog the balance sheets of the zombie banks counted as "assets".
    1 Jan, 03:38 PMReplyReport AbuseLike0
  • "Meanwhile millions of foreclosures with hopelessly impaired mortgages clog the balance sheets of the zombie banks counted as "assets" "

    Funny you should mention foreclosures. Here's some interesting information for you:

    1 Jan, 06:59 PMReplyReport AbuseLike1
  • Screw data and truth! Let's all live in the permabear fantasy world of Zerohedge and Shadowstats! Zerohedge where there is no data that is too good to be perverted into bad data, and Shadowstats where they just make up their own data, and it is always bad even during strongest economic times! Everyone, get your aluminum hats and underground bunkers ready!
    2 Jan, 10:49 AMReplyReport AbuseLike1
  • dave,

    while i agree with most of your premise, and especially that the government released numbers might not be reliable due to ulterior motives (economic ones via lower COLAs), it appears not only the economy is bifurcated between the say 20 to 30% that are doing exceptionally well and the 70 to 80% that are either struggling or feeling insecure (because so much of this bailout money and bailout ZIRP policy benefits the upper few rather than the majority of us), the real estate market is also bifurcated, and while existing home sales have topped or are slowing down, new home sales lie in the realm of the upper segment of the economy, the people doing well and are able to afford new home purchases or 2nd home purchases. It's not unreasonable that existing home sales are slowing while new home purchases are rising (for now). A look around the retirement communities might show this strength, a large percentage of baby boomers retiring will migrate to dryer, warmer climates for health reasons, and perhaps to move into better tax situations, too. Homes in Phoenix or Las Vegas or Dallas or Denver are far cheaper than those in New Jersey, NY, & California.

    31 Dec 2013, 02:23 PMReplyReport AbuseLike0
  • Thanks for the feedback, OF. What intrigued me about the article was the following. "Although this indicates progress, the "normal" serious delinquency rate is under 1%". When one considers the following from your friends at Bloomberg, it is more than apparent we are dealing with a new frontier in so called "home ownership" which along with the present "tapered" Fed backstop of $80 billion in mortgage security acquisition raises some considerable questions as to the nature of not only foreclosure volume but the very nature of "home ownership" in the US. Combined with the vast amount of alleged "shadow inventory" of foreclosures remaining on the major bank's balance sheets, one has to honestly question the ability of such restructuring to sustain and maintain any substantial recovery in the housing markets. Thoughts?

    "Private-equity firms, hedge funds and individuals are all buying foreclosed or distressed homes to turn into rental properties as prices remain 28 percent below their 2006 peak. Companies including Blackstone Group LP (BX), which has invested more than $5 billion to buy almost 30,000 homes, and Colony American Homes Inc., which owns more than 12,000 properties, are helping to increase prices in areas hit hard by the real estate crash by draining the market of inventory as low borrowing costs and improving employment fuel demand from buyers".http://bloom.bg/1iuPwmV

    1 Jan, 07:49 PMReplyReport AbuseLike0
  • The foreclosure stats are headed in the right direction. That was the point.

    Your Bloomberg link is 6 months old. The percentage of purchases of homes by investors was 18.8% in November, which was down from 23% earlier in the year. And *institutional* investors - those buying 10 or more houses - accounted for a whopping (sarcasm) 8% of purchases.

    But please continue to short the housing market all you want. Go ahead, make my day. It's amusing watching people like you defend Dave, even though one can read his blog and see he's been a permabear since 2009, and thus, WRONG for 5 years straight. As the saying goes, you get what you deserve.

    1 Jan, 08:12 PMReplyReport AbuseLike1
  • from the self same article:
    "But although home prices have recovered, the continued presence of larger, cash-rich investors in the market have squeezed out traditional first-time home buyers and homeowners who wish to trade-up.

    Those investors continue to be the biggest purchasers of foreclosed homes, accounting for 57.6% of all sales in November. The share of distressed properties ticked up in November, explaining some of the heightened investor activity.

    But it turns out that investors are making their biggest market-share gains in the conventional housing market.

    In November, investors accounted for 13.2% of purchases of non-distressed properties based on a three-month moving average. This was up from 10.5% in August."

    OF, perhaps you think people don't actually read your suggested links, but you seem also to prefer cherry picking those very articles you reference conveniently ignoring the very glaring information which confirms my attributed suppositions and which you are only apparently attempting to reply to. I find this highly disingenuous confirming my suspicion of an agenda driven campaign to discredit by misdirection and ad hominem argument the analysis in Kranzler's article. as with most flawed logic and mere assumption, your rough bluster only serves to reveal a clumsy attempt to evade the logically tenuous and insupportable nature of your position.

    2 Jan, 01:14 PMReplyReport AbuseLike0

  • Haha, I love your writing style. But are you bearish on homebuilders over the next 5 years? It seems that those 'squeezed' out traditional home buyers will only serve to build pent up demand. Eventually these people will save up enough money to buy. Unless you think there will be a large permanent shift to renting instead of owning.
    2 Jan, 02:08 PMReplyReport AbuseLike0
  • If you want to accuse anyone of cherry-picking and having flawed logic, you would be wise to spend time doing so of Dave, who is one of the biggest cherry-pickers and illogical debaters around.
    2 Jan, 02:42 PMReplyReport AbuseLike1
  • Let me guess, this is cherry-picking too, right? LOL!

    2 Jan, 02:46 PMReplyReport AbuseLike0
  • I am certainly no expert on the issues presented here. (ask Oil Finder about that!) However, the scope of the systemic housing market failure which began in 2005 and was signified by the unprecedented subsequent insolvency of Fannie May and Freddie Mac and which largely contributed to the injection of $85 billion /month into mortgage backed securities by the FED indicates the extent of our seriously impaired housing markets and lending institutions.

    What we are dealing with here is a macro-economic phenomenon of gargantuan proportions and consequences not so easily remedied by the simple metrics of supply and demand. As Mr. Kranzler has stated along with many others, after the injection of trillions of dollars by the FED, the housing market has been bouncing on the bottom since 2008 unable to attain the "escape velocity" needed to regain levels similar to home sales of +117,000 units in late 2005.

    Indeed the non-annualized home sales which admittedly have risen only marginally from a low of +20,000 in early 2011 to some 40,000 presently are obviously fueled by the large institutional buying to which I have referred and equally significantly on the downside by record and officially ignored unemployment and the creation of a permanent underclass.

    As you have perceptively suggested, the large institutional buying by funds such as Blackstone and Colony is, on the other hand, fueling a burgeoning rental market as these entities lease out their recently acquired trances of "distressed properties". I believe this is the face of the new American housing. There has been as well a predominant surge in multi-unit housing starts over the availability of single family starts So yes; a permanent shift to renting and growing production of units in clusters of high density urban complexes. And it remains to be seen if the cells in these "hives" can continue to be effectively sold in a rapidly declining economic infrastructure.

    3 Jan, 02:54 PMReplyReport AbuseLike0
  • You might as well have included the ISM and Markit indices hitting respective 2.5 year and 11 month highs as well, along with a concomitant and expected "broad jobs growth and manufacturing hiring" In addition orders for durable goods rose 3.5% in November! And to top it all the Market Watch article predicted an equally roseate picture for non-residential commercial construction albeit with no statistical documentation.

    However, spending on home construction, while an indicator of investment is ultimately dependent upon the sales of said growing home inventory end product to consumers. But, no worries. According to the glowing report on Market Watch "recent data signal that both businesses and workers feel that they may be better off in 2014." But wait just a moment.

    Despite the "flood of positive economic data" effused about on MW, there might be a little and yet growing cloud in all that silver lining. Despite the surge of aggregate household wealth to a record $77T, when one drills down a little into the data some troubling prospects emerge. Try this on for size from a December 9, 2013 report from Fannie Mae.

    “Real financial wealth per household surpassed its pre-recession peak in the second quarter of this year, while real housing wealth
    per household remained a stunning 39 percent below the cycle high.This is by far the worst performing recovery in inflation
    and household adjusted housing wealth since record keeping began in 1952."http://bit.ly/1lFBz2Q

    The message seems to be that, once again, while financial institutions and equities benefit from the massive infusions of FED electronic digital entries onto the balance sheets of its favored banks, in the words of the Fannie Mae Report itself. "Sluggish Housing Rebound Limits the Broader Economic Impact of Recent Wealth " In other words the bifurcation into the present two tiered and highly unequal economy spells uncertainty at best for any quick resolution to what is still a deep and systemic crisis in the housing market.

    3 Jan, 04:09 PMReplyReport AbuseLike0

  • "Another very important development is in the housing industry, where it seems nothing new was learned by the major collapse in 2008-09. Blackrock has been buying a large number of distressed single family homes. It has sold a $500 million IOU that is secured not by the homes but merely by the rents on 3,200 of the homes it has purchased. Really, it’s a bad joke, because to quote Yogi Berra, “It’s déjà vu all over again!” The $500 million is being split into tranches where you can own AAA rated paper that pays a mere 1.3% per year down to the “F” portion, which pays a pitifully low 3.8% as long as all the renters meet all their payments. Amazing!"


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