Posts Tagged ‘Case Shiller’

What, Me Worry Wednesday – Fitch Warns on China

The futures are bouncing!

Why are they bouncing?  Why not?  We went down and people love to buy those dips and that means they are just going to love this chart, courtesy of Barry Ritholtz's team.  We don't get our next Case-Shiller data point until the 26th but we did get mortgage applications this week and they are down ANOTHER 6.7%.  This is despite the fact that an average 30-year mortgage is still just 4.98%.

I know that we have been trained to ignore supply and demand in commodities as well as to pretend that all prices are inelastic and that American consumers will buy anything at any price because they are generally mindless sheep that you can lead into anything with the right jingle but, if they are not willing to buy a $250,000 home with a 5% mortgage – what's going to happen when that mortgage is 6%?

At 5%, a $250,000 mortgage has a monthly payment of $1,342.05.  At 6% that payment jumps up to $1,498.88 – 10.5% higher!  At 7% it's $1,663.26, 24% higher – that's the "cost" of housing as rates tick higher but, of course, that will force housing prices even lower to compensate and the Fed will tell us that inflation is low because home prices will be falling faster than food prices are rising – so we have that to look forward to…  

I mentioned yesterday that China tightened their rates and home prices in Beijing fell 26.7% in the month of March.  I waited all day to read more about it in the WSJ or Bloomberg or to see them discussing this on CNBC but no – it's not the kind of news they want you to hear so – for your own good, it is not mentioned.  I had to find this news in Business China but it's also in the China Daily and the People Daily but where it isn't is in any US newspaper I've looked at and neither is there mention of the problem caused by giant-sized, irradiated Asians poking buildings with sticks!  (just kidding).  

We talk about Chinese censorship and control of information but what is this?  If a Nigerian Rebel spits at a pipeline or if…
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Testy Tuesday – Topping or Popping?

 Looks like we picked the wrong week to short FCX! 

Copper hit a new all-time high in Shanghai this morning (as the guy who owns 90% of London's closed for the holiday exchange supplies sold it to himself for more money than he did yesterday) and gold is back at $1,400 in the futures and that should give us a better entry on FCX puts than we expected for round 2 but Paul Krugman has me worried now that maybe commodity prices are just high because the World hasn't got enough of them to go around.  Usually Paul and I agree but i think he may be discounting the effect of a 10% decline in the dollar a little too much – which is understandable as he is still arguing for more stimulus while I'm arguing that the way they are stimulating now is causing this problem and can not and should not be sustained.  

Still, we have to be pragmatic.  That's why, this weekend, I posted our "Secret Santa Inflation Hedges for 2011" as a follow-on to the "Breakout Defense – 5,000% in 5 Trades or Less" ideas of the 11th and, in the week between the two, we had bullish bets on  HMY, XLF, CAKE, TNA, IWM, CCJ, CHK, EXC, TNA, XLF, UNG, GLD, AAPL, GLW, TOT and AXP – which I had mentioned on the 19th in the weekend post "It's Never too Early to Predict the Future."  Just because I think there's going to be a disaster doesn't mean we can't go with the flow while we wait, right?  

We don't have to like the market to buy it above our breakout lines but we do need to keep in mind that this is a very thin rally that is very likely nothing but window dressing aimed at dragging money off the sidelines so the IBanks who have been propping up the markets can, once again, stick the retail shareholders with the bag as they load up on puts (watch the VIX to confirm) and crash the markets once again.  I've seen it happen in 1999, I saw it happen in 2008 and, both times, the rally lasted longer than seemed logical but the smart play was to hit and run – not to leave your money on the table but
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The Pragmatic Capitalist reports on the S&P CASE SHILLER: THE HOUSING DOUBLE DIP IS HERE.Ilene 

This morning’s Case Shiller data shows more of what we’ve been seeing in other housing data despite being a lagging indicator. Clearly, the weakness in the housing market is back:

“New York, November 30, 2010 – Data through September 2010, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index declined 2.0% in the third quarter of 2010, after having risen 4.7% in the second quarter. Nationally, home prices are 1.5% below their year-earlier levels. In September, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down; and only the two composites and five MSAs showed year-over-year gains. While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market.”

“The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 1.5% decline in the third quarter of 2010 over the third quarter of 2009. In September, the 10-City and 20-City Composites recorded annual returns of +1.6% and +0.6%, respectively. These two indices are reported at a monthly frequency and September was the fourth consecutive month where the annual growth rates moderated from their prior month’s pace, confirming a clear deceleration in home price returns.”

Source: S&P

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Trade War Tuesday – China, Japan and US at Odds

War does not determine who is right, only who is left. – Bertrand Russell 

Just when you thought it was safe to go back in the water, Japan and China are at it again.  We discussed the "fishing’ incident last week and Japan has released the Chinese captain who rammed one of their Coast Guard vessels.  Now shippers in several Chinese cities said customs officers have stepped up spot inspections of goods being loaded onto ships bound for Japan and being imported from the country. Traders said officers in some cases were taking the highly unusual step of looking at every item in a container instead of following normal practice of examining a small sample.  The heavy searches, which can add costly delays to shipments.  For it’s part, Tokyo wants China to pay restitution and now China’s navy is moving into disputed waters.

China is fighting a trade war on two fronts as they are threatening to retaliate against US businesses operating in China if Congress passes legislation intended to force a revaluation of the Yuan.  The House of Representatives is set to consider legislation this week that would let companies petition for higher duties on imports from China to compensate for the effects of a weak yuan.  Forcing China to raise the value of its currency may create 500,000 jobs in the U.S., most in manufacturing at above-average wages, according to C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington. China’s currency, which is undervalued by as much as 25 percent, is the most important trade issue facing the U.S., he said in testimony last week.  

$USDSo we are pressuring China to strengthen their currency, which would make our currency relatively weaker.  One would think the dollar couldn’t get much weaker than it is now (see Dave Fry’s chart).  We’ve been shorting GLD (buying GLL) and TLT, expecting a dollar bounce off these levels but if we fail here – we’re going to have one very ugly chart.  

Of course a 10% drop on the dollar could be just the ticket for the markets – since our stocks are priced in dollars.  That makes them look pretty good compared to cash that’s sitting on the sidelines (or tied up in notes) that’s lost over 10% of it’s buying power since June.  

That’s right, JUNE!  As people who travel to…
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Testy Tuesday – Real Estate Edition

We have Case-Shiller at 8:30 but that’s not my main concern.

Inflation is much worse than it seems and Doug Kass made an excellent point in  "Few economists or pundits have noticed that the BLS has increased the weighting of OER to 24.433% of CPI. It had been 23.158%. (Because it’s now declining?) And let’s not ignore the fact that Americans’ misery index in reality is far worse than the above official numbers indicate due to fraudulent U.S. economic statistical methodology. U.S. solons have relentlessly altered CPI, jobs data and GDP statistical methodology to obfuscate declining U.S. living standards. John Williams notes, "On the inflation front, the CPI-U annual inflation rate jumped to 2.7% (3.4% for the CPI-W)…. Adjusted to pre-Clinton (1990) methodology, annual CPI growth rose to 6.1% in December vs. 5.1% in November, while the SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, rose to about 9.7% (9.68% for those using the extra digit) in December vs. 8.8% in November." Plug in the pre-Clinton or the SGS-Alternate Consumer Inflation Measure as well as a more reasonable nominal income metric — U.S. solons greatly overstate jobs and income — and the American misery index would be more in line with the palpable ire in the U.S.A."

The whole article is a good read on CPI and the fallacy of the Owners Equivalent Rent calculation that has been keeping inflation "in check" for those fantasy consumers that are buying one of the 300,000 homes being sold in the US this year.  We talked about it at length last year but it’s very nice to see it getting some attention in the MSM since we are still making policy decisions based on this nonsense.  Nonsense won a victroy in California yesterday as Moody’s, S&P and Fitch won dismissal of a negligence and fraud lawsuit by two California investors who lost money on their A-rated bonds.  U.S. Magistrate Judge Dale A. Drozd in Sacramento threw out the case in a ruling filed today, saying the investors’ complaint wasn’t specific enough about the alleged fraud.  

Ronald Grassi, a retired California attorney, and Sally Grassi, a retired teacher, sued the New York-based companies in federal court in January 2009, claiming they gave high ratings to risky mortgage-backed bonds packaged and sold by Lehman Brothers to curry favor with the investment bank, which filed the biggest bankruptcy…
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Case-Shiller: Home Price Recovery Stumbles, Results Worse Than Expected

Case-Shiller: Home Price Recovery Stumbles, Results Worse Than Expected

tbi - houses for sale

Courtesy of Joe Weisenthal at Clusterstock

Home prices fell 9.4% in September, according to the widely-respected S&P/Case-Shiller housing index. Analysts had been looking for a 9.1% decline, so this is a bit worse than expected.

On a sequential basis, home prices rose .3%, again, a bit worse than the .8% analysts had been looking for. The market is now back to where it was in Fall 2003.

The housing market is creeping back, but at a pace disappointing to the bulls.

Speaking on CNBC S&P’s David Blitzer said the report showed clear signs that the strong momentum seen over the summer is starting to crack.


The full report is embedded here:


double dip - tbi

See Also

Actually, Case-Shiller Shows That The Housing Crash Has Already Resumed

The Housing Double Dip Has Arrived

Housing Starts Unexpectedly Plunge 11%


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Case Shiller CPI At Negative 5.1%

Case Shiller CPI At Negative 5.1%

Courtesy of Mish 

Case-Shiller CPI is formulated by substituting the Case-Shiller housing index for Owner’s Equivalent Rent in the CPI. For a complete description of the reasons and methodology, please see What’s the Real CPI?

The chart and commentary below is courtesy of my friend "TC" who writes:

CS-CPI continues to fall albeit at a less rapid pace and measures -5.1% YOY. Meanwhile the government’s CPI-U also continues to fall at a slower pace and measures -1.5% YOY. The divergence is to due to the government’s housing metric of Owners’ Equivalent Rent (OER) continuing to show price increases (+1.7% YOY) vs. Case-Shiller data showing price decreases (-13.3% YOY).

click on chart for sharper image

Since the Case Shiller housing market peak in June 2006, OER is up +7.7%, while the Case-Shiller index is down -30.9% – an amazing 3860 basis point divergence!

CS-CPI YOY has now fallen for 11 consecutive months and 14 of the past 18. Meanwhile the government’s CPI-U YOY has fallen for 6 consecutive months.

Thanks "TC".

With rental prices and food prices starting to drop, I expect to see CPI-U (the official CPI) to continue to decline. Moreover, with the coming end of the $8,000 housing tax credits for new home buyers and a phase-out of treasury monetization by the Fed, a reversal in the housing index is likely.

It’s highly unlikely that home prices have bottomed in the bubble areas as well as most major cities, even though some select markets, especially Florida areas that have been hammered mercilessly, may be in a bottoming process now.

Dr. Housing Bubble outlines a solid case for "the bottom is not in" viewpoint in Shadow Inventory Case Study. Please take a look. It’s a good read.

Mike "Mish" Shedlock

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Improvement In Case-Shiller Housing Index – Will It Last?

Improvement In Case-Shiller Housing Index – Will It Last?

housing, "don't make us beg"Courtesy of Mish

Over the past couple months, I have had many people tell me "the housing bottom is in". Supposedly the stock market bottom is in as well, and in just a couple years the S&P will be back at 1500. Really?

Stock market bulls have no idea how weak earnings will be as consumers continue to retrench and unemployment climbs. As noted previously a "Buy The Dip" Mentality Is Fully Entrenched among fund managers and individual investors in spite of the fact Insiders Dump Shares at Fastest Pace in 2 Years.

Moreover, housing bulls ignore shadow inventory, seasonal factors, and temporary effects of the soon to expire $8,000 first-time home buyers credit.

Shadow Housing Inventory Will Halt A Housing Recovery

iStockAnalyst is reporting Shadow Housing Inventory Will Halt A Housing Recovery.

Any optimist talking up a housing recovery might want to pause and look deeper into the housing crisis. Amherst Securities Group analysts believe the market faces about 7 million properties that are likely to be seized by lenders have yet to hit the open market. There are two sources that contribute to a huge shadow housing inventory; ARM mortgages which are due to reset now through 2012 and current home owners who are struggling to make payments.

Assuming no other properties are on the market, it would take 1.35 years to sell this inventory based on the current pace of existing-home sales, analyst Laurie Goodman.

The favorable seasonality will be over come the October housing numbers and the reality of a 7-million-unit housing shadow inventory is likely to set in.

The uptick in the housing numbers are due to banks slowing down the filing of forecloses due to the government loan modification program, the spring/summer seasonality strength of the housing market, buyers rushing to take advantage of the soon to expire $8,000 first-time home buyers credit and the record low mortgage rates thanks to the Federal reserve buying treasuries to help keep mortgage interest rates artificially low but that program is due to be over during the 1st quarter of 2010.

When the shadow inventory is unleashed and government is out of stimulus gun powder for the housing market, reality that the housing correction is not over will set back in.

In Breakfast with Dave, Rosenberg

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Case-Shiller, FHA And Home Prices

Welcome back from the break to Tom Lindmark.  I was happy to click on your link and find something new!

Case-Shiller, FHA And Home Prices

housing marketCourtesy of Tom Lindmark at But Then What

I’ll jump back into posting with a few thoughts on housing.

First, Case-Shiller as out with its July home price survey. It followed the trend of improving prices established over the last couple of months. Nationwide prices were up 1.6% and the number of cities showing price declines dwindled to just two. Here are the numbers for the twenty cities in the survey.

    (About the numbers: The Case Shiller indices have a base value of 100 in January 2000. So a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the metro market.)

    Home Prices, by Metro Area

    Metro Area July 2009 Change from June Year-over-year change
    Atlanta 110.06 2.3% -11.8%
    Boston 154.53 1.2% -4.9%
    Charlotte 121.23 0.6% -9.0%
    Chicago 128.32 2.7% -14.2%
    Cleveland 107.93 1.5% -1.3%
    Dallas 121.17 1.2% -1.6%
    Denver 128.79 1.5% -2.9%
    Detroit 70.25 1.1% -24.6%
    Las Vegas 106.08 -1.1% -31.4%
    Los Angeles 163.86 1.8% -14.9%
    Miami 147.27 1.3% -21.2%
    Minneapolis 118.68 4.6% -17.3%
    New York 173.66 0.8% -10.3%
    Phoenix 106.66 1.8% -28.5%
    Portland 150.06 1.1% -13.9%
    San Diego 150.99 2.5% -12.3%
    San Francisco 128.86 3.3% -17.9%
    Seattle 149.44 -0.1% -15.3%
    Tampa 142.84 1.4% -18.4%

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House Prices and Case-Shiller: a false bottom?

Christopher Fountain agrees with Joe’s (Clusterstock) Case-Shiller Flashing The "Ultimate False Bottom" In Housing. 

Christopher is another non-practicing lawyer "and glad of it."  He’s been selling real estate in Greenwich, Ct for many years.

House Prices and Case-Shiller: a false bottom?

2009_08_underwater.jpgCourtesy of Christopher Fountain, For What It’s Worth

I think so and have said so repeatedly but here’s a genius who thinks so too (the mark of genius in a person being the extent to which he agrees with you). The pessimist’s argument is that the only high end houses currently selling are those bought pre-bubble for, say, $1,000,000. Their owners watched the value soar to $2.5 and then drop to $1.5 but they still have equity they can cash out and use to buy a cheap house in a retirement spot. The C/S index would be really whomped, the argument goes, if it accurately reflected the loss of value of all those houses that aren’t selling.

Of course, Case-Shiller reflects actual sales, not present value of houses still unsold and since they aren’t selling, the index is accurate, as far as it goes. But if the homes with no remaining equity ever do begin to move, either through foreclosure or abandonment (not a problem in Greenwich, yet, but I’m hearing reports of it happening in Stamford, in good neighborhoods), watch out.

Photo: Courtesy of Lockhard at Curbed.  


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Zero Hedge

PBOC Raises Interest Rate On Open Market Operations

Courtesy of ZeroHedge. View original post here.

Moments after the Fed did as expected when it raised rates by 25bps, we - along with most other central bank watchers - made a prediction: now it was China's turn.

And now, it's China's turn to hike

— zerohedge (@zerohedge) March 21, 2018

And since in recent years, the PBOC has not hiked the main benchmark rate but engaged in "targeted" tightening using the various reverse-repo facilities, we had to wait until today's open market operation was un...

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Phil's Favorites

After Tempe fatality, self-driving car developers must engage with public now or risk rejection


After Tempe fatality, self-driving car developers must engage with public now or risk rejection

An autonomous vehicle struck and killed a pedestrian on March 18. via AP

Courtesy of Andrew Maynard, Arizona State University; Jameson Wetmore, Arizona State University, and Thaddeus R. Miller, ...

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Insider Scoop

20 Stocks Moving In Wednesday's Pre-Market Session

Courtesy of Benzinga.


  • Proteostasis Therapeutics, Inc. (NASDAQ: PTI) shares rose 12.4 percent to $5.80 in pre-market trading after the company reported withdrawal of equity offering due to market conditions.
  • China Auto Logistics Inc. (NASDAQ: CALI) shares rose 10.8 percent to $4.40 in pre-market trading after surging 15.41 percent on Tuesday.
  • Fennec Pharmaceuticals Inc. (NASDAQ: FENC) rose 8.9 percent to $10.38 in pre-market trading a... more from Insider

Digital Currencies

Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Why accountants of the future will need to speak blockchain and cryptocurrency if they want your money


Courtesy of Anwar Halari, The Open University

If you haven’t already heard of Bitcoin, you either haven’t been paying attention or you’re a time traveller who just touched down in 2018. Because by now, most of us will have heard of Bitcoin and some of us have even jumped on the bandwagon, investing in cryptocurrencies.

But despite its popularity, many people still don’t understand the technology that underlines it: blockchain. In...

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Chart School

Stall in Decline

Courtesy of Declan.

The good news for bulls was the lack of follow through on the selling. An argument could be made for bullish harami doji in some key indices with stops on a loss of yesterday's lows.

The Semiconductor Index held on to breakout support in what looked to be a successful defense by traders in what could still be a pullback buying opportunity. There was a MACD trigger 'sell' which was a follow-through from Friday - leaving only stochastics in the green. However, relative performance remains in bulls favor. Long opportunities...

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Peter Thiel: Need To Rethink Tariffs In Light Of Trade Deficit With China; SF Sucks, Bitcoin Rocks

By VW Staff. Originally published at ValueWalk.

PayPal cofounder Peter Thiel in a wide-ranging interview on President Trump’s trade tariffs, China’s economy, technology regulations and his outlook for bitcoin.


Check out our H2 hedge fund letters here.

Peter Thiel: Need To Rethink Tariffs In Light Of Trade Deficit With China

Peter Thiel On Leaving Silicon Valley For Los Angeles

Billionaire investor Peter Thiel argues Silicon Valley is is a ‘totalitarian place’ where people are not allowed to have dissenting views.


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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)


"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...

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How your brain is wired to just say 'yes' to opioids

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.


How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida


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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.


EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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