Housing Sags a Tiny Bit (Updated)

Hot of the Press Release:

imageNew York, June 30, 2015 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for April 2015 show that home prices continued their rise across the country over the last 12 months.

Both Composites and the National index showed slightly lower year-over-year gains compared to last month. The 10-City Composite gained 4.6% year-over-year, while the 20-City Composite gained 4.9% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.2% annual gain in April 2015 versus a 4.3% increase in March 2015.

Denver and San Francisco reported the highest year-over-year gains with price increases of 10.3% and 10.0%, respectively, over the last 12 months. Dallas reported an 8.8% year-over-year gain to round out the top three cities. Nine cities reported faster price increases in the year ended April 2015 over the year ended March 2015. Las Vegas prices rose 6.3% in the year to April versus 5.7% in the year to March 2015. In 11 cities, however, the rate of annual price gains slowed. Boston home prices were up 1.8% in the 12 months ending in April compared to a 4.6% gain in the 12 months ending in March 2015.

Before seasonal adjustment, the National index increased 1.1% in April and the 10-City and 20-City Composites posted gains of 1.0% and 1.1% month-over-month. After seasonal adjustment, the National index was unchanged; the 10- and 20-city composites were up 0.3% and 0.4%. All 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 12 were up and eight were down.

imageWe are always guided by the second chart in the series, which as you can see reveals that housing prices have caught up to autumn 2004 levels.

Or, have they?

You see, the problem which we get into is when we look at the Hooley-gooley way the Fed has been slapping money around and when we consider inflation.

While owning your own home is still the best investment most people will ever make in their lives, there are some asterisks.

imageThe first is that the Fed inflation data reveals that in order for a 2004 $185,000 home to to hold the same intrinsic purchasing power today, thanks to inflation, it would need to be priced around $234,740.

The second problem is that even this is not fully priced, since taxes and M2 money supplies are up, too.

And somewhere in the asterisks, we mention the commission spread. 

While the S&P data is the “gold standard” in housing numbers, it is still good to remember your mileage may vary, since real estate commissions, points, origination fees, yada, yada are going to eat your shorts.

But in the end is it still the best savings plan most folks have.

Tiny Dead Cat Bounce Tuesday (TDCBT)

varphi = frac{1+sqrt{5}}{2} = 1.6180339887ldots.(Tacoma, WA)  The “normal” bounce to look for when the market is dropping like a piano off the 10th floor balcony is 50%.  Sometimes the Golden Ratio (61.8%) comes into play, too.

But this morning, about all we go into the Housing Data with is a sense that “it ain’t over” on Greece, yet.

So maybe a 1-0.618 =  38.2% bounce, then.

With a midnight deadline fast approaching, we shall see if the sun comes up tomorrow, or not.

Not that it would signify the end of the world.  Just some pain for people in high finance who can mostly afford it.  And sure, Greece has to eventually pay for the free lunches they have enjoyed for years.

But off in the background, there are some lesser reported events and some of these are encouraging.

For example, the Baltic Dry cargo index, which had been languishing around 600 for several months, has gained 33% which ought to tell you business confidence is crawling out from under the covers.

First thing you know, one of these mornings, we’ll be reporting how our long-forecast return of bond money to equities will have gotten underway and how the Dow just sailed through the 25,000 levels.

Not this morning, though.  Today we look for a simple  TDCBT (Tiny dead cat bounce Tuesday) and tomorrow, after the deadline passes, we will size things up again.

Our real focus continues to be oriented toward 2017- 2018 because out there, the service economy should begin to auger in.  Worry today?  No.  Worry down the road where a zillion financial cans have been kicked?  Hell yeah.

Government Replacing Unions

Once upon a (*historical) time, America had unions.  Where did the 490-0hour work week, the two weeks of paid vacation, medical coverage, and so on come from?

Unions don’t exist, as they once did in this country.  Mainly because we haven’t figured out how to build unions for regular working people in small business and such.

And unions have been in decline since the corporate takeover of government, too.  (Don’t start me on Citizens United or the two corporate-owned parties.)

Still, what used to happen is that when people’s standard of living began to tank, unions would step up with wage and benefit demands.

With the passing of Unions, and their replacement by government, we see now how the Neighborhood Organizer in Chief is planning to drive some wage inflation into the marketplace by adding 5-million workers to those who will be entitled to overtime pay at time and a half.

It’s a good thing and it’s a bad thing.

The good is that a few of the nation’s less well-off will sneak closer to making ends meet.

The bad news is that when the other shoes of Obamacare hit next year, all those gains will disappear and maybe then some.

Still, we continue to see the playbook outlined in Report from Iron Mountain as being played out before us.

One of the ways to hold the country together, forecast the book from the 1970s, would be to set up a massive national healthcare system.


Eventually, even that will fail,  but in the meantime, it’s amusing to see how many people don’t get it.

Ebola:  It’s Back

A death in Liberia reminds us that the whole world is still just one international jetliner away from global pandemic collapse.

Witchcraft:  It’s Back

Think Salem was stupid?  As we counsel our kids:  “Stupid never goes out of style.”

And to prove it today, here’s how ISIS is now beheading women for “sorcery” rather than burning them at the stake.

Speaking of Stupid

Wal-Mart wouldn’t bake a cake with a Confederate flag on it, but it would back an ISIS cake.

EAH Data

If you are into heavy exercise, the article over here about limiting water intake after hard sweats in order to avoid crashing blood sodium levels is worthy of study.

Me?  When I sweat enough to feel it, a dill pickle (high in salt) seems to help.  Somehow, may Farman’s Dill and Gatorade diet  may not catch on, but I keep searching for that zillion seller diet book, since it seems like the best path to easy millions.

Foodies Note

Sysco will not be acquiring US Foods.  Too much concentration of power per the gov’t.  Apparently, America needs at least two large hamburger helpers. No super-sizing allowed.


Housing Sags a Tiny Bit (Updated) — 3 Comments

  1. “First thing you know, one of these mornings, we’ll be reporting how our long-forecast return of bond money to equities will have gotten underway and how the Dow just sailed through the 25,000 levels.”

    Yes, and the next question is how do you get out of a big bond position like EMs and Euro Sovereigns. To liquidate a large position, it may take a few weeks, and every time a sale is made the whole issue is repriced. It does no good to sell a % of your position when the market is so thin you have to make an appointment. Presto… Waterfall Event

    This gets us to our bloated US bond market, in a rush to sell as ole Yeller raises rates. Bond redemptions will be pouring into share markets. Could the Dow run to @ 40k since there is no overhead resistance? This can only happen if money rushes from one market to another like unsecured cargo in a gale. #Herbert Hoover Memoirs #Martin Armstrong

  2. NO YOU DO NOT WANT those mcdonald hamburgers or any big food chain burgers,90 % of them have human kids from the 100s of thousands that are missing , after they torture and kill and drink their blood from the excited fear hormones that are excreted and then dispose of the bodies in the meat processing plants every year , want proof , you can find it or i will post it

  3. I don’t agree with the means behind the overtime thing, and kind of agree with it (all overtime should be paid not some arbitrary break point) but do find it interesting for the arguments people are playing out as if this was a minimum wage or obamacare threshold argument.
    It is said that your hours will be cut… isn’t that kind of the point, either you’ll be able to work a 40 hour week because they higher someone else to take your overtime hours, or the company will continue to work you and pay you the overtime, or they’ll force you to stick to 40 hours regardless of if the job is done or not (being the most dangerous because that’s how contracts are lost and companies also like to get paid).
    It is said people will be fired… outside of inefficiency or incompetence that was causing you to work overtime which should have cost you the job anyways, you will not be fired because of this because they have a job to do and are obviously not at the minimum staffing requirements if you’re forced to work overtime.
    It all goes back to basic economics, if it’s worth it have you work overtime the company will have you work it… if it’s not necessarily you that needs to work it they’ll hire someone else to fill in… if it’s not needed and just busy work it will disappear.
    In general I try to work 40 hours as a salaried employee. If something needs to be done because it broke, I’ll work over to fix it. If something needs to be done because you didn’t manage the priorities well or oversold without my input, if I have nothing better to do I might help, but it will most likely still be there on Monday. Overtime without pay means you’re stealing from me, especially when the contract between us states 40 hours… if it stated till the job was done or 60 hours or something, then I’m a bad negotiator.