By John Galt
May 17, 2011
The Commerce Department released the latest report on housing starts and permits revealed that no sane, logical, intelligent soul would accept the FIBS (Financial Infomercial Broadcasting Services, aka CNBC, FBN, BLM) mantra of the past year that housing has bottomed and that the recovery was well under way. Amazingly enough the preachings and screeching of the pro-regime talking heads was non-existent on the morning radio or television programs. Thus there is a realization that perhaps, just perhaps, free money from the Federal Reserve does not guarantee a housing recovery because it does not create jobs or qualified buyers out of thin air.
Housing starts being down 23.9% on a seasonally adjusted basis year over year is one statistic the experts did not anticipate but when analyzed with at 25% drop in non-seasonally adjusted plus a 19.6% NSA year over year drop in permits, then one begins to understand the severity of the economic slowdown underway.
The monthly chart package only validates that there is growing evidence of my prediction we will see a double dip recession starting in Q3 and ending in Q1 of 2012 may have more validity. First up, the starts which are still at pre-JFK levels:
Thus those 5 million plus unemployed 99ers who used to work in the field of construction should have no problem transitioning over to new careers at McDonalds. Er, never mind, they are not hiring anyone else, they are going all touchscreen. Ah well, be nice and give those construction workers a buck or two when they arrive on your street corners.
The permits numbers in total are no better. Obama may envision himself as a black JFK, but he’s really more like a tanned FDR as far as economic policies go. The projected future activity via permits tells anyone that the U.S. is not recovering but in fact witnessing further economic deterioration:
The glaring extract from this report is the 25.9% month over month drop in multi-family permits from 14.7 thousand to 10.9 thousand indicating a cooling or possible suspicion by developers that the apartment markets are starting to get over saturated. The single family permits were just as ugly:
Just because I like the 1964 Kennedy silver half dollars, it does not mean I want our economy to exist as it did in 1964.
Regardless, the single family permits and permits in total indicate that we might as well be using silver coinage again as our housing economy is performing as it were still 1964. Add in the units currently under construction and the era of historic lows continue:
The numbers were 14.1% NSA year over year and showing little signs of recovery, firmly indicating that the recession in housing never really has recovered and any bounce now is a dead cat bounce on the way to a new bottom. The millions of new homes unsold or waiting to be foreclosed on will only magnify this problem. The spring of our winter discontent is about to begin because the propagandists in the administration and at the NAR can no longer use the “snow” excuse for these abysmal reports. Lucky for them it is flood season and hurricane season is about to start thus they will be able to deflect attention from the ongoing depression in real estate right up until the official beginning of winter 2011 and well into the 2012 election season.