Mark Hanson delves even deeper into the housing data. It’s very hard to make an argument that sheds his superb analysis in anything other than a bearish light:
Year-to-date 2009 sales are 20k FEWER than 2008, one of the worst years on record. And we spent hundreds of billions to achieve these results.
From 30k feet, this is your housing recovery. What would have sales been without spending hundreds of billions on pulling out and forward demand from first time homeowners and investors?
Remember, organic move-up/across/down buyers have always led the market. First timers and investors have always been the weakest segments and cannot carry the market for long. This highlights the most important factor plaguing the housing market — epidemic negative equity prohibiting the typical homeowner from selling and re-buying. Epidemic negative equity is only fixed by ‘years’.
The tax credit extended the 2009 purch season a month (green) but as you can see from the MoM drop, seasonality reigns supreme. When this last push to get in before tax credit sunset, it sets the market up or a cash-for-clunkers effect over the near-term. If the credit is extended, it simply takes the pressure off and allows buyers to shop vs panic buy. Either way, the fundamentally weak housing market will show itself over the near term.
Lastly, in today’s release Lawrence Yun commented on the falling prices saying that…
“The national median existing-home price3 for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.”
But distressed sales were the lowest of the year at 29% from 31% last month due to HAMP and the lack of foreclosure inventory. Therefore, the median is actually being skewed higher as more orginic and short sales went off towards the end of the season.
“Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.“
Some of the best real estate analysis around. Thanks Mark!
There are over 3 billion ounces of gold in the world's deposits. The Top 50 of these mines alone contain over one-third of the total gold. North America is the 'cheapest' place to produce gold and Africa the most expensive. Gold producer profits are getting squeezed from both directions: lower gold prices and rapidly inflating costs...
SKS - Saks, Inc. – High-end retailer, Saks, Inc., popped up on our ‘hot by options volume’ market scanner this morning on heavier than usual trading traffic in upside calls. Shares in Saks are up 10% on Tuesday morning at a new 52-week high of $13.54 after the company posted first-quarter earnings in line with analyst expectations on higher-than-expected quarterly revenue. Shares in Saks are up more than 30% since this time last year. Bullish positions initiated in SKS options ahead of the earnings release yester...
Another day of no economic data left the markets looking for cues. The Nikkei closed with a fractional gain of 0.13%, and the EURO STOXX 50 slipped a fractional 0.10%. So today's focus was on couple of the more dovish Fed presidents, Bullard and Dudley. For an interesting visual of the Fed Presidents on the Dove-Hawk scale, see this graphic from Thomson Reuters. Bullard's presentation is available here. Dudley's speech is available here. But of course it's Bernanke's testimony to Congress tomorrow that will be the main event for Fed watchers. The S&P 500 traded in ...
U.S. equity futures traded lower in early pre-market trade following a weaker than expected GDP report from the eurozone for the first quarter. GDP growth rose to -0.2 percent on a quarterly basis from -0.6 percent but missed forecasts of a 0.1 percent contraction. Weakness was notably seen in Germany, France, and Italy in the report, with the annualized rate of growth for Germany dropping to -1.4 percent vs. 0.2 percent growth forecast.
In other news around the markets:
The U.K. had fewer people claim unemployment benefits in April than expected, a positive sign for the labor market as the ...
So, what did the market want today? Nothing it appears. It traded on weak volume and had very little movement. This morning the market hated commodities especially silver, but by days end, the market liked silver, gold and even oil but not the dollar. Why?
Last week the economic reports were tough, with bad misses on more than one occasion. But the market tended to ignore the bad news, probably because money continues to pour into equities from money market funds, long term fixed income, and many struggling foreign economies. On Thursday, investors finally caved to even more bad news from Initial Jobless Claims and weak Housing Starts. Then on Friday, when Michigan Sentiment and Leading Indicators posted large positive surprises, the money came pouring back to generate qui...
Again, not much to add to this market in terms of analysis – nothing matters other than central banks. Last Wednesday/Thursday there were some 9 economic reports, 7 of which were disappointing or could be considered as such and all it got was one rare day down, and then new highs Friday. Markets are up 10 of the past 12 sessions and 17 of 21. Friday's move to 1666 was an exact 1000 point rally from March 2009's 666 bottom. Since this most recent leg of the move has been medium fast rather than a huge spike ala 1999, things are not necessarily overbought on the daily chart but we are seeing extremely rare action on the ...
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I am going to share with you how I manage my IRA and the power of reducing your cost basis. My goal each year is a 20% return in my IRA. Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis. To illustrate the power of reducing your cost basis here are some trades we did last year. These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.
We bought RIG on 5/15/2012 for $44.13, sold it on 1/18/2013 for $46 but booked a profit of $1,154.
We bought MT on 1/4/2012 for $19.24, sold it on 12/21/2012 for $15 but booked a profit of $454.
We bought CHK on 1/27/2012 for $21.93, sold it on 10/19/2012 for $18 b...
Stock market posts another record setting week, but the big news came after Friday’s close.
Courtesy of NASA
The stock market put on another record setting show with the Dow Jones Industrial Average (NYSEARCA:DIA) closing at a record high 15,118 and the S&P 500 (NYSEARCA:SPY) closing at 1633.70, another all time closing high.
For the week, the Dow Jones Industrial Average (NYSEARCA:DIA) gained 1%, the S&P 500 (NYSEARCA:SPY) climbed 1.2%, the Nasdaq Composite (NYSEARCA:...
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Well, well, well....it is good to know that there are others in the scientific arena who believed that YMI Bioscience's data (cough - Gilead) is a better drug than Incyte's Jakafi. Now, the definitive data are still unknown, but there was enough evidence from a Phase 2 trial to take a small risk for a huge reward. So, let's forget about Apple (AAPL), and do nothing but biotechs from now until Congress passes universal health care coverage for prescriptions....and drive the prices down so that research and development is no longer feasible to conduct in the US. Even Seattle Genetics (SGEN) has been on a tear as of late...
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