As you know, I’ve been expecting something to come along that would spur the markets to new highs in coming months and may be able to hold the upward track into our projected 2016 blow-off top.
This morning, the odds that inflation in the Housing Sector could lead the way just went up a notch: Good supply, incredibly low rates, the prospect of higher rates to come – and rising rents, what’s not to love about home ownership?
New York, May 26, 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 March 2015 show that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.
Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year increases in March. The 10-City Composite gained 4.7% year-over-year, while the 20-City Composite gained 5.0% year-over-year. The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 versus a 4.2% increase in February 2015.
San Francisco and Denver reported the highest year-over-year gains, with price increases of 10.3% and 10.0%, respectively, over the last 12 months. San Francisco’s 10.3% annual gain is its first double digit year-over-year increase since July 2014. Dallas reported a 9.3% year-over-year gain to round out the top three cities. Ten cities reported higher price increases in the year ended March 2015 over the year ended February 2015. Tampa led the way with a reported increase of 1.4%. Ten cities saw their prices decrease annually, led by Cleveland, down 1.2% in the year ending March 2015.
It’s not all peaches and cream, though. The chart at right reveals that the housing prices of today are at 2005 levels.
That wouldn’t be so bad if we didn’t have the Minneapolis Fed inflation calculator handy.
However, since we do, we note that in order to equal housing prices adjusted for inflation, today’s homes would need to be priced 22.75% higher than a comparably priced home in 2005.
Don’tcha just love inflation of the money supply? The flip side is housing as a long ways to go up…provided the economy can hang together and that where it becomes a slippery bet.
Dow futures were down 40 after the announcement, which we’ll take as the market saying results were in line with expectations.
Killer Rains of Texas
Waiting on the release of Housing data, so we will have an update about 8:20 this morning, do check back.
It looked like the sky was on fire for a few minutes last night out back at our place. Not that with all the rains here in Texas that anything could burn….
I dumped our rain gauge at exactly noon Sunday and since then, we have been soaked with 1 3/8ths of an inch – almost as much as Los Angeles has had all year. One inch of that in the last 24-hours.
USA Today places the body count at one dead from tornado activity and 12 missing in the flooding that has been covering the whole area from where we are, north to the ArLaTex. Storms moving east, but more in the wings through Friday. Yuck.
Flood waters are rising in Houston where the Chronicle has some pictures of cars not floating.
Chinese Lighthouses
Oh, I just love this story. OK, so you know how China is building islands for military bases and huge runways in the South China Sea, right?
Well, now they are planning to put light houses on them.
Why, with such concern for the safety of mariners at sea, who in the international community could possibly object, right?
As mentioned before, these are about 600-miles from Chinese landfall. Which pales compared to our navigational obstructions at Guam and Diego Garcia, but I’m sure, if challenged, we would claim to have lighthouses there, too.
Diego Garcia’s lighthouse is called the Minni Minni light, over here. And here, we can study the Guam Lighthouses including Rittidian Point.
Fine testosterone exercises of chi (qi), is it not?
But the real deal is this: The US is up to its butt in Treasury paper to China. At some point, we are not going to be able to pay off that debt with things of real value (how do you think China is able to buy up land in Idaho?).
So the lighthouse stuff is just a proxy for what we need in the future. A war.
Look, the economy may have one more bubble spike up, but then a Second Depression Crash sure looks likely to me: You can’t have open borders, growth in robotics and software, and no water in the west and not run out of food and jobs at some point.
When we do it will be messy, not the least of which reason will be that the USA (corporation) will need to stiff China on its debt. So the lighthouse is just a distraction to make it seem like China is the bad boys down the road a ways. We need to make them seem like Evil Empire II in order to proclaim moral high ground.
“Oh, we’re not stiffing honorable China with 5,000 of civilization compared to our 250…no, we are stiffing the Evil Empire II. “
In the meantime, the Imperial President takes a solemn occasional – Memorial Day – and proclaims we’re not in a ground war for the first time in 14-years.
“He noted it was the first Memorial Day in 14 years without U.S. forces engaged in a major ground war…”
WTF? How many US forces are in Afsmackistan, the ‘Raq, and South Korea? These may not be “major” to the Deluder in Chief, but for the people dead, injured, and away from families, this is a bullshit claim to make. Get Ash Carter on the blower and chat him up about numbers by country…do the math. That belies the lies, pal. Can’t fool a ‘Merican with cell phone calculator apps so easy…
About here, I went for the ViseGrips and gave myself a stout pinch. :””Who are these people and what are they doing on my planet?” In wondered while screaming in pain. Maybe a slug of rum would dull the ache…
Bottom Line: US War with China is Inevitable, headlines a British paper today.
When it comes – after the economic collapse and stiffing China on our paper – remember where you read it first. If you live.
Not So Durable Goods
Press release just out from Census:
New Orders
New orders for manufactured durable goods in April
decreased $1.2 billion or 0.5 percent to $235.5 billion,
the U.S. Census Bureau announced today. This
decrease, down two of the last three months, followed a
5.1 percent March increase. Excluding transportation,
new orders increased 0.5 percent. Excluding defense,
new orders increased 0.2 percent.
Transportation equipment, also down two of the last
three months, drove the decrease, $2.0 billion or 2.5
percent to $77.9 billion.
Shipments
Shipments of manufactured durable goods in April,
down three of the last four months, decreased $0.1
billion or 0.1 percent to $240.5 billion. This followed a
1.5 percent March increase.
Primary metals, down six of the last seven months,
drove the decrease, $0.5 billion or 2.1 percent to $21.6
billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in
April, down four of the last five months, decreased $0.3
billion, or virtually unchanged, to $1,203.1 billion. This
followed a 0.1 percent March increase.
Machinery, down six of the last seven months, drove
the decrease, $0.9 billion or 0.7 percent to $115.7
billion.
Pick your chair for when the music stops, carefully.
Dow futures were only down 21 when I looked. Does this mean we’re going to have one of those “It could have been worse data” rallies?
Where is the FAA When We Need Them?
Two people were hit by a drone at Marblehead, Massachusetts over the weekend. No serious injuries, but shouldn’t the FAA have something like a Leash Law for such operations? Licensing, maybe?
The War With Mexico
Yeah, here comes another report that says the border is “wide open” still.
Think Jade Helm is Fun?
How about this lil’ gem from our Canadian News Analyst fellow in Winnipeg:
Dear Mr. Ure,
You may wish to plan your promised visit to the Pacific North West region outside an apparently still-scheduled September 2015 U.S Navy electronic warfare exercise. I skimmed through the public Navy document and it reads absolutely fine. No one need worry. Both main Washington state test areas are adjacent to “Indian Reservations”, which I gather is a quaint historical term for First Nations or Aboriginal lands, and one borders Canada demarcated as a grey blob. Another enjoys a peaceful National Park setting.
It should placate all to know that emf radiation hazards to humans are speculative according to a 2009 study named in the Navy report, so the estimated 55,000 children in the test area boundaries will not be at risk. Environmental groups are probably gearing up for a massive court battle for all I know. Anyhow, the Navy report does state that individual tests will be moved or called off if human hikers and campers or animals “refuse to move”. I don’t imagine special interest lawyers are required to disclose that to their clients, but caveat emptor. The Navy report does not specify the decibel level in the operating theatre for the planned Boeing EA-18G Growler jets. Thanks to the wonders of YouTube however, we can catch an anecdotal afterburner cackle from this video especially about the 3m30s mark and onwards. As with Tchaichovky’s “1812 Overture”, lower the volume on your speakers before enjoying.
Regards,
I’ll pack my tin foil hat and grounding gear.
Protein Powder Nation….(Oh buy the whey)…
From warhammer (geekly computster that he is)…
Hi George,
I found this piece fascinating – Silicon Valley engineers are too busy to go out to eat ‘real food’ or make meals to share with their friends, so pre-prepared protein shakes are now all the rage, despite their often terrible taste.
Perhaps we are not too far away from the machines taking over – we have some of the brightest minds on the planet working their entire lives away on developing tech products, essentially willingly enslaving themselves to technology at the sacrifice of their very humanity (socializing around meals, taking time off of work to spend with friends).
It’s not a stretch to envision babysitting robots in a decade or less, feeding human kids liquid diets while they tutor the children in abject servitude to technology.
[sigh] We appear doomed as a species.
Cheers, warfhammer
Oh, I think the reports of protein powder use are terribly exaggerated, don’t you? By the whey, did you want chocolate (left) or vanilla (right)? We like the vanilla, thanks…
Go easy on the protein powder. Too much damages your kidneys.
In all fairness Diego Garcia is a British Possession. I don’t recall seeing that light there but there is a light on an island at the entrance to the lagoon. I do recall two facts about Diego Garcia. Its a huge fine if you eat one of the Queens crabs, and the Swimming pool is 12 feet above sea level and is therefore the highest point on the Island. Guam is a US territory and the citizens get welfare benefits. The Spratly thing was known and talked about way back in the 1980’s. Okinawa is much closer than Guam and is much more Militarized than Guam.
George, Muscle Milk is the best protein,you get that as chocolate or vanilla and of course it’s purchased at your favorite shopping hole on Amazon
Instead of a leash law for drones, how about a stamp like one purchased for migratory waterfowl so that this invasive species can be brought under control ;-). Personally, I think like coyote, there should be no closed season or bag limit.
The best meal replacement shake is by Garden of Life, Vega Sport is very good too.
Walking barefoot on bare Earth for one hour a day is also a good grounding technique, found on Solarhealing.com
I’m going to die anyway – but I don’t tolerate ANY of those powdered or liquid protein drinky things. They make me sick (as if I’m not already sick) and gag and in the end, throw it all up.
and read the label on “muscle milk” – then read the label on a gallon of “whole milk” (not that 2% crap).
Good news…Lake Mead water is back! http://lakemead.water-data.com/
In the land of many pills and potions Whats a few more chemicals we can injest?. Half of our nation is now drug addled from eating and Mexican imports so whats a few more chemicals it might not add to the ADD problem by killing them earlier.