Housing: The West Goes Nuts

I have been hearing this from my children up in the Seattle area…but look at what’s in the S&P press release just out on housing prices:

NEW YORK, JANUARY 30, 2018 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for November 2017 shows that home prices continued their rise across the country over the last 12 months.

YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in November, up from 6.1% in the previous month.

(Continues below)

 

The 10-City Composite annual increase came in at 6.1%, up from 5.9% the previous month. The 20-City Composite posted a 6.4% year-over-year gain, up from 6.3% the previous month.

Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In November, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with a 10.6% increase, and San Francisco with a 9.1% increase.

Six cities reported greater price increases in the year ending November 2017 versus the year ending October 2017.

But look closely at the price chart nationally and tell me what you see:

Could the 20-city average be doing a long-term double–top?

While the national average is already above 2006, we have to wonder how far – and what that figures to on an inflation-adjusted basis?

Some thoughts possibly tomorrow on the subscriber side.

Beginning of the End or End of…

Besides the Housing data this morning  there is this ugly thing going on in the markets today with the Dow set to open down 150 to 200 – and that would be on top of a 177 point nosebleed Monday.

As I told Peoplenomics readers Saturday:

“Cowardly George is back in cash because there’s something in the replay of 1929 scenario that is bugging him.  Namely, there was a short, sharp pullback in the 1929 bubble that could be coming due and I’m not too sure of the timing of it.”

Historically, we are in a strange rhyme.  And using our Aggregated markets approach, the parallel to the 1920-1929 run-up continues to be remarkably useful.

While in 1929’s timeline, we would have already been up to the peak and just finishing the B-wave bounce after the ’29 crash bottomed out, we have gone up much slower this time.

A couple of reasons are likely:  First is that the 1929 run seemed to go up faster (on a weekly closing basis) because there was a lot of Saturday trading going on.

When we back out 6 days per week into 5 days, we would expect the blow-off top this time to take 16.6% longer on the calendar.

On the other side, we don’t know if the massive head and shoulders technical formation seen in 1929 will repeat.  There’s a fair chance it will be one big top and then things will cave in.  Monday and Tuesdays action might fit though…so a look at that on the subscriber side tomorrow.

What really is “different this time” is dispersal of information through the financial system – something much cleaner now that it was back then.

In the 1920’s, when a person received stock market data, it was usually in the evening newspapers.  And by the time an order was entered with a brokerage firm, the transaction would not even make it to the floor until the next day, perhaps around 10 AM.

Counter-intuitively, faster information slows market action, perhaps because price-discovery is quicker

The Depression’s low-speed trading (and time lags) introduced a lot of asymmetry into the market in terms of information homogeneity.  Now, (with the crooked exception of high-frequency trading) most the market information is reasonably uniform.  Near as I can figure it, that tends to slow volatility.

A lot will depend on how the balance of this week rolls.  A drop ahead of the Fed meeting is a regular occurrence.  Scare them a bit…hold back a rate hike?

But, for now, our best case looks like we will take a pause here, then make one more run to all time highs perhaps in April to mid-May.  A pullback for the semi-annual Sell in May and Go Away event.  Then one more blast-off to the final highs around that third week of August timeframe which didn’t happen last year.

Fortunately, though, our charts kept us out of the ditch when last summer didn’t show up as we figured.

Amazingly, our model hasn’t been short since Trump’s election.  And been long hasn’t been a bad place to sit…as long as I don’t second-guess my own work.

Bitcoin, meantime, continues trading in the $10,900 area when we checked on that.  Sadly, that is still in the downward trend channel we described last week.

The good news for the coiners is that if they can keep BTC from collapsing in five waves to our $483-850 target range, they might be able to log a three wave decline, in which case something down in the $8,500 range might be a bottom from which another run to the new all-time highs could launch from.

No point in over-thinking either one of these markets, though.  We just look at the data (with a very unconventional view) and for the most part we’ve been  pleased with the results

When I ignore the short-term model it’s usually a strong “spidey sense” – which is why I clicked out Friday.  I sleep better in cash.  YMMV.

The end of January is in sight and the applicable old saying is “As goes January, so goes the year...”

With Trump-hating very much in vogue, it seemed illogically logical that the end of January would see a sharp sell-off, because without it, Trumponomics could go stratospheric.

So we’re braced for more downside (watching, not short) as we see if you-know-who stays on script with the SotU tonight and what the Fed unveils in the way of a possible rate hike tomorrow.

Shocks of any kind?  That could press down hard on markets, but to try and “catch falling knives” (which works in options) doesn’t play so well in stocks.  We’ll have lots of time to enter a collapse after the wave 1 at the top of a wave 2 bounce, if that’s hbow it plays.

Speaking of the SotU Tonight

There they go again, the NE media digging every chance they can to get in snide remarks about the president.  We didn’t think the Washington Post’sState of the Union gives Trump the chance to ‘act presidential,’ at least for a night…” was particularly clean.

What do they mean ‘act presidential at least a night?‘  See how bias is worked into the mainstream?  False narratives abound and while it may play well with the Trump-haters and sell a few papers to them, we read it as yet another of too many jabs by the erudite left.

If they would just remember Trump IS the President and newspapers are poor theater critics when comes to acting judgements.

Sour grapes?  Absolutely.  You see,  I’m old enough to remember when the Post did less slurrish reporting.

While CNN keeps selling “Trumps war on Russia probe” it’s nothing but the left worried about what’s coming.  Even the NY Times mentions that Andrew McCabe who just left the FBI…well, here, you read what they said:

“He [McCabe] first drew Mr. Trump’s ire because his wife, Jill McCabe, ran for a State Senate seat in Virginia as a Democrat and accepted nearly $500,000 in contributions from the political organization of Gov. Terry McAuliffe, a longtime friend of the Clintons.”

Meantime, stories like this one “Report: Trump called Andrew McCabe’s wife a “loser” in a bizarre call” but they don’t highlight that yes, McCabe’s wife did lose her political campaign.

I must be some kind of stupid because if someone didn’t win, they are a what?

China Eyes Taiwan

While the North Koreans have dialed back their annual winter military maneuvers due to the impact of sanctions hitting hard, our military affairs chief has become focused on China and its designs on Taiwan…

“Keep an eye on events surrounding Taiwan.  Most recently, China unilaterally began flying unauthorized air routes to Taiwan.

Link to source article

Naturally, the Taiwanese cancelled the flights, yet the mainland airline company is alleging financial harm to the company and gross inconvenience for its customers.

Sly tactic, yes?  Just one more indicator (along with Man made islands and an electronic ‘wall’ being erected around Taiwan by the mainland, that this area of the world is about to get interesting.

Oh, and watch also for signs of the N. Korea ‘head fake’ which will likely accompany any move on Taiwan by the PRC.”

Meanwhile, Back at the Distracto-mat

Joanna Gaines reportedly won’t be receiving $150K an hour for deposition.

Kim Kardashian poses naked with Bo Derek inspired hair.

‘Black Panther’ premiere has fans super excited.

Naturally, we’re wondering why the SJWs aren’t pressing for a White Panther, Latino Panther, Gay Panther, Lesbian Panther, Trans Panther, Asian Panther, Native American Panther, and a Panther Foundation for the Special Panthers.

I’m sure they’ll get to it…as soon as they get over Trump-bashing.  In 2023, maybe?

Comments

Housing: The West Goes Nuts — 37 Comments

  1. Hi George,

    What is this “electronic wall” around Taiwan? I’ve been trying to find what you’re referring to and China/Taiwan is one of my interests. I would like to see a peaceful negotiation and peaceful arrangement but I doubt that will happen.

    BTW, the Kim Kardashian distraction is fake news. She’s not the least bit naked. She is wearing a fur coat and thong, and the one breast hanging loose has the nipple fuzzed out. It’s really annoying when media claims naked and it’s a lie.

  2. Use Schiller chart for housing prices adjusted for the past hundred years. We were always between 80 to 120. Then 2000’s we went up to 200. Crashed to 120. Which corresponded to 40% actual drop. Now we are at 165. A 25% drop just will get us back to top of 100 year range. What happen to home prices if we hit 100. That is 65% drop in home prices. Could happen with all the debt.

  3. Is it odd that three of the six member steering committee to England’s Operation Kenova inquiring into the Irish troubles are American? Is someone new trimming the sails of history?

    See today’s thebrokenelbow dot com for a pictured historical mob scene.

  4. George. It’s not like Trump hasn’t brought the criticism upon himself. I mean, is it really necessary to tell 5 – 6 lies every single day? And take money from Russian operatives? If the shoe fits, it’s not fair or helpful to brand the messenger a hater. Mike.

    • There you go – making up stuff – must be hard to hear reality in a liberal spun mind.
      IF there was any EVIDENCE other than the demo/hil bought dossier don’t you think a YEAR IN there would have been charges by now?”
      Quite the monkey mind, study facts not that crap on CNN and stay up with the class…

      • A year is not long when the ‘matter’ of the concern may bring down a presidency – look at the historical record . . . the investigation must be through and without question. (Are you not ignoring the evidence of money laundering, and other monetary crimes? Greed will bring down the most powerful.)

  5. Since everything is a business problem, here it goes: It’s NOT about GB, Germany, EU, or the USA — no — it’s about personal issues of politicians that we are much too dense to comprehend. The people in politics take us for suckers, that we are! Caso cerrado!

  6. The 1929 chart is proving to be an interesting comparison as this monster rally continues. Good call on this downturn. It has allowed me to buy back into AAPL at about break even when I sold it a couple of weeks back due to news of slower iphone sales in the far east. I think the rumor was fake news because right after I sold AAPL, it went up. I lucked out.

  7. I may have had a vision but I am not sure it qualifies. What is the word MEN spelled backwards. NEM. What does it mean…NOTHING, exactly what the liberal politions think of our opinions.

    • Ya see, I get words like “Dutch” coming through but it
      Is actually Deutsche. Then I look and see Deutsche Bank today predicts that GE is being removed from the Dow. Which is HUGE. Since GE has been on the Dow since its inception.

      https://www.zerohedge.com/news/2018-01-31/ge-be-kicked-out-dow-deutsche-predicts

      I too struggle with translation. I’m way better at it than I used to be. Takes time. If probably be better at translation if my diet was more healthy and I didn’t chain smoke, drink gallons of coffee, energy drinks and have an occasional chew. Lol

      I get tons of info in my personal life. And tons of info as it relates to music and art. Perhaps what your seeing is Eminem. Something related to him.

      One thing I learned is to allow your feelings to flow through you and do not cling to them. Just let the info/data present itself. It’s an art. I have been at it a looooong time. Sometimes something seems like a huge event and I find out later it’s a little league baseball game and sometimes something seems small and I find out it’s something huge like a false flag.

      Always comes to me in forms of puns too.

      Example. The term “Bull-sh!t.” Which I noticed has come into my view bunches lately every where I visit on the web and the people around me have been saying it quite a bunch in reference to non related issues. My primary focus lately has been economical vision. Bull is a market condition. Bull “sh!t” is a market correction. Or at least that is what it says to me.

      So I note that up tick on language shift in the people around me and in the language on the net.

      Hope that makes sense. Hope that helps.

  8. George, I’m getting some “chatter” in the aether about HSBC. A Dutch bank. Not anything significant.. But derivatives came up twice while I was meditating and ‘Dutch’ is a hot word. Not sure when but the feeling reminds me of “Washington mutual.”

    Feeling better. Good thing I went to work. :)

    Have a great day.

  9. As I was working on my Elenco siren project learning how to read resistors and solder, at the end it said ” Using the proper soldering iron is of prime importance. A small pencil type soldering iron of 25 watts is recommended. I checked my soldering iron and it is 60 watts. I ordered a 25 watt soldering iron on ebay for 6.94 with free shipping. Should be here by Friday. Also, it mentioned to tin the tip before you store it to protect the tip from oxidizing & pitting. I check my 60 watt & it was not tinned. So I got some practice and tinned the tip.

  10. Waiting for an economic depression? Well, its already here! It has been here for several years, only to be masked by puppet-masters who are “batting down the hatches” to keep themselves in their privileged positions when “the crap hits the fan!” Read Executive Order 6102 from 1933 where gold was confiscated from the public to keep the economic facade going. Same thing happening today, only different elements/actors in play. So what are economic depressions? They are the only times in history where the public REALLY sees the TRUE state of their economy. Come to think of it, this could apply to the REAL value of Bitcoins and Tulips. Tulips were a better deal, you could at least eat them. Bitcoin for lunch?

  11. The last I heard, Bloomber, Reuters and WSJ price small time traders out of the market for realtime news. I guess that is considered even information dispersal; some are just more even than others. Volatility gets killed when the big traders hit their edge so hard that prices already reflect the news before it gets published. It would seem that the penny splitting front runners wouldn’t do much to volatility until they push prices ahead of really determined or desperate traders.

  12. Will Trump beat the 50 year GOP jinx in the aforementioned 2023?

    When Nixon got tangled up in Watergate in 1973,I noticed this 50 year trend that started with Grant and Credit Mobilier in 1873,followed by Harding and Teapot Dome in 1923.

  13. Just checked the Baltic dry. It’s headed south too. Looks similar to the bit coin chart.

  14. Calling someone a loser, today, goes against the everyone gets a trophy ideals of today.

    • Doesn’t change the outcome, though. Trump is just old school and people who lose are what?
      Trump is NOT the prince of POLITICAL correctness.

  15. Reporting that someone isn’t presidential who doesn’t act presidential isn’t biased. Your disagreement doesn’t disprove the truth of the statement that trump doesn’t act presidential.

    If folks want to see the nature and character of the office of POTUS change that’s cool, but don’t whine about it later when a dem wins the office and acts like trump.

    Why did all the gnashing of teeth about long form birth certificates end? Why’d did all the republican whining about rounds of golf vacations end?

    • You need to look up the term presidential in the ORD.
      Since your busy: relating to a president or presidency.
      Trump is THE president, so whatever he does IS presidential.
      Face it Wave, you don’t like the guy. I’m down with that… but two lines
      “I still hate trump” would suffice… You just don’t like it when I call out the snide remarkers, lol

    • If Arpaio jumps into the Arizona Senate race,you’ll be hearing a lot more about the birth certificate.

  16. It’s not that housing and stocks are up that much, it’s because money’s value is down that much. However, I’m just a simpleton ;-)

  17. Technically my vision was right on about the correction being Friday. “The after market” sales turned negative. What was shown to me is a correction. The general feeling I got was a 20% correction in the markets.

    Like I said it’s not the end of the world. Just a correction. I just relay the information given to me as it comes to me.

    Seeing another major EQ. Next couple weeks. Maybe as soon as this weekend. Soel keeps coming up. Not sure why.

    I’m not feeling well today. Got the flue. I’m going to go to work today anyway.

    On a personal note: I have money coming to me from all directions.

    As was stated. Rich Me!

    • I’m selling a gas powered washer and dryer on a Facebook page. Guess who calls me to buy it. A Senior Vice President at Jp.Morgan Chase. Hahahahahah. Asks me if it will fit in his Range Rover. Ummm no. I do have a pick-up truck. But it’s going to cost you some gas money to drive it down to your house capitol hill.

      Nice guy. Will be sure to ask him for his off record opinion of Bitcoin. Hahahahahah

  18. There is a lot of good news to say at the State of the Union tonight…I just wish that Trump wasn’t saying it. Trump is the other woman’s big red lipstick stain on the collar of a groom at the alter of a wedding. Great moment ruined by a horrible cheat. Maybe Jeff Flake can speak in his place and bring it all into perspective for the Trump base.

    • Everything is unfolding as was stated before Trump won the Republican nominee. Trump will look like a savior. This is the part he looks like a savior. There will be a period of perceived prosperity. This is what is happening now.

      As was stated Trump will be left holding the bag. The economy will collapse under his watch the first term. Everyone will blame Trump. But we all know it was the Fed policies under Obama that lead to this giant bubble.

      Remember all the animosity against the 1% in 2008? That times 1000 when this bubble pops.

      Civil war part 2 keeps coming up. Not sure about the locale. Feeling is it is here in the US. That is what I SEE. I’m not right all the time. But I’m pretty accurate.

      I have updated my forecast in Georges comment section. And I have a back up burried on an obscure thread on a forum.

      Need to put it all in a pdf. And sell it.

      I see the March is when we will be back in the green. Bitcoin and all the crypto to move upward then. Along with the market.

      *** you know, when George and I are seeing the same thing. Best pay attention.

      Doubt I will listen to the speech tonight.

    • Well you know we expect to much from the one in the oval office.I was watching Putin and his meeting with all the journalist at a forum,and one said she thought he had a very negative outlook about the U.S.,his reply was that yes for we were incapable of making any agreements and abiding by them,that presidents come and go but the retoric remains the same, regardless of what he would like to do, and that after he takes office the one’s in the black suits show up with their briefcases and tells him this is the way it will be, and that’s why I don’t bother nor waste my time watching the so called State of The Union…

    • Seems to me that you want to blame trump…BUT the real blame for all that is wrong with this country IS the CONgress…career politicians that have become very WEALTHY while’serving the public’……if the federal government was SHUTDOWN…the States would do what they are suppose to do….Legislate for THEIR citizens….at the State and local level…feds are LIMITED ….in what they can do….but I am a dreamer of sorts as I believe in the Founders Constitution….my mistake….imho