Shenandoah

October 30, 2009

by John Galt

From demotivatorsite.com comes the only appropriate answer to Mr. “Buy Bear Stearns at 32″……

by John Galt

October 30, 2009

Even though the Bubblemedia might have you believe that all is improving with the housing market, unless there’s a whole lotta birthin’ going on, we’re in some serious trouble with 18, 843, 000 vacant homes per the latest Census Bureau Report for Q3 2009(PDF File).  As you can see below, the raw numbers do not look that bad at first glance:

That chart, for those who wonder is direct from the report. When you start to review the historical data back to 2000 though, you get a better picture of the condition of our housing markets and realize that this will take years to dig through the inventory, even if we stopped building tomorrow. In the graph below, I decided to post the quarterly data along with the Census Bureau’s category for “Held Off Market” which is a subset of the massive vacant inventory number:

With the Cash for Clunk Houses tax credit soon to expire, a wee bit more of the inventory was put on the market but as you can see, the total number still being held is at a historic high and with the demographics of a retiring population, unless these homes are in prime retiree regions (which some are by the way) and affordable and less than the 2900 square foot McMansions than they will not move. Unless the economic “expansion” gets real and creates millions of new jobs soon, this number will continue to grow and act like an anchor on our economy, creating such a drastic drag that the statistical recovery will be dragged into a prolonged period of flat to negative GDP for many years to come.

By John Galt

October 30, 2009

I’m often told that I blabber too much and don’t let the facts speak for themselves. Well, too bad, I’ll blabber less though and let three key figures do the talking from today’s BEA GDP report.

1. Durable Goods/Non-Durable Goods

Basically we are still below the quarter when the recession started. As many love to say on the financial media only to be shouted down, this is a “Statistical” recovery as this chart and the next two shall bear out.

None too impressive, eh? Stick that in  your Liesman and smoke it.

2. Residential and Non-Residential Structures

Both are still far below the beginning quarter of the recession thus officially making GDP a Bubblevision “lagging” indicator. Wait until they find out that commercial and residential construction still has further to fall.

3. Gross Private Domestic Investment

Uh, that’s not what I would call a “V” shaped recovery in that number. Nor is it that awe inspiring a future indicator for the quarters which follow. Perhaps Obama can double down and get the Congressional spendpigs to double down and add another $2 trillion to the deficit to insure their re-election.

And just for fun, I’ll drag out an oldie but goodie private chart that I shared last year just to illustrate that when you start to compare economic growth via the Nominal GDP numbers compared to the equivalent in 1982 and 1967 (Gold Standard era) dollars, you realize just how much destruction we’ve imposed on our society by diluting our currency:

Woo-Hoo! Rip roaring happy days are here again times return.

Once again boys and girls, don’t believe everything you hear. Once the government trough is taken away and the realization that risk has been assigned to taxpayers while profit assigned to campaign contributors, the capitalist system some of us grew up with will fade quickly into the background.

Parlez-vous Francais?

Say around 1973?

Ugh.

by John Galt

October 27, 2009

The report today was hailed as good news by the MSM but as usual, the lack of in depth analysis when the initial announcement was made thanks to American’s attention span and the depth of the problems reflected within these reports says much, much more. First, the housing index reflects an approximate return to September 2003 prices not seasonally adjusted:

The key aspect of this report that should catch everyone’s attention is that the declines may have a seasonal pause now, but thanks to the overwhelming shadow inventory and pending or probable foreclosures in the pipeline another 20-25% decline should not shock anyone bringing us down to the 110 range on the index. The condo survey is never highlighted by the MSM nor Bubblemedia but with the current GSE restrictions and unwillingness of the banksters to finance condo mortgages it should be front page news. For the purposes of apple to apple comparisons, I’ve charted the data from September 2003 to date but only used a simple average of the prices from the five cities (Los Angeles, San Francisco, Boston, Chicago and New York; note no Southern Cities) to get some idea of the price situation for these locales.

Despite popular fantasy, there is no reason for those markets to hold their price averages much longer and as we dip into the second wave of resets in 2010 through 2012 I can foresee the average prices moving into the low 100′s without very much resistance as investors attempt to dump these turkeys to stay liquid or escape pending bank actions with negotiated settlements. This will not end well for the Obama administration as the government can not create a demand for housing that the current wages and earnings of the average American citizen can not afford.

From IMF Website:

10/26: $1.00 U.S. =1.59566 IMF SDR

10/23: $1.00 U.S. = 1.59732 IMF SDR

10/22: $1.00 U.S. = 1.59670 IMF SDR