Posted on 06/17/2009 3:06:39 PM PDT by FromLori
The housing numbers are as bad as they could possibly be. They show year-over- year housing starts to be down by 45.2% from May 2008. I cannot recall the numbers, but, if memory serves me, this decline is of the same magnitude as the housing decline which occured during the Great Depression of the 1930s.
Housing sales always are greater in April than in February. Furthermore, people almost always buy more houses in May than in April. The fact that they repeated that pattern in 2009 is not surprising. It's been happening since the days of the Roman Republic.
The real news is that housing starts are deeply down year over year. On top of that, we must consider that fact that 2008's numbers are way down from 2007, and 2007's numbers were way down from 2006. Housing starts in May, 2006 were running at a seasonally adjusted annual rate of 1,957,000 (www.census.gov/const/newresconst_200605.pdf). In other words, since the height of the housing market, housing starts have fallen so deeply that they amount to only 27% of what they were 4 years ago. That is very bad news and it justifies a deeply downward move on the stock market. Frankly, it is surprising that the DOW and S&P 500 didn't fall a lot lower than they did.
However, forget about all the doom and gloom of reality! Enter the Wall Street spinmeisters. Don’t bother them with reality. Here is the fantasy...
Bloomberg writes: “Housing starts jumped 17.2% to a seasonally adjusted annual rate of 532,000 units in May, up from April's figure of 454,000…”[i]
Marketwatch wrote:“Housing starts bounced back with a vengeance in May, rising 17.2% to a rate of 532,000 on a seasonally adjusted annual basis”[ii]
No, I am not making that up. I’ve given you the citation and you can read it for yourself. As ridiculously stupid as that is, they really did write “…bounced back with a vengeance…”.
But, no one beats Wall Street’s big bank analysts at the exceptional skill of being out of touch with reality.
Zach Pandl at Nomura Securities in New York, for example, explained: "This (housing) starts report is actually very encouraging…”[iii]
What kind of weed are these people smoking?
This is a horrible economic news week so far. To add to the bad housing numbers, the Federal Reserve reported that industrial production fell 1.1% in May from April and, in an unusual twist, admitted that this news was “worse than expected.” Six Flags, which owes billions of dollars to its creditors, has filed bankruptcy. Extended Stay Motel chain, which owes billions more, joined them in bankruptcy court.
The most frightening thing is that this is probably only a first taste of things to come. The green shoots are becoming impossible to find, if there ever were any.
Not to mention the construction workers who aren’t working on new starts, commercial is just as bad.
Oh yeah, and does unemployment take into consideration those who were sub-contractors and won’t qualify for unemployment? If not, and we calculate in those subs, unemployment is waaayyy higher.
These Housing number are bad given that Mortgage Rates were at historic lows during the period. Now, in just one month they have jumped about .75%, something that will put a crimp in Housing going forward.
The main factors making this April pretty good (relatively speaking of course) for home sales:
- lowest mortgage rates in many many years, at or below 5% for most of April and May
- lots of foreclosures coming on the market (up to 2/3 of sales in some areas), some at 2/3 or more off their bubble highs
You can call these distortions, but the foreclosures as a high percentage of sales is going to be a reality for some time to come.
Tell me about it my husband is a Project Superintendent for a large commercial construction firm and he has been there for over 36 years now and we have never, ever seen things so bad.
He just has until 1 April 2010 and retirement thank goodness.
2nd-worst number in decades. April was worse.
It smells like bail out publicity and advocacy to me.
Yes there are more waves of foreclosures ahead and then the stupid moratoriums states like CA put on them will ensure the painful process drags on and on.
If I read you correctly, both the banks and the previous owners of the houses are taking a loss on these sales.
Eat inside lol I know I always find the doomsday facts.
I have green shoots in my onion patch.
That’s about it.
A big percentage of a small number is still a small number.
We've turned the corner from the bottom, which was admittedly a horrid low.
The same thing is happening with the H1N1 Swine Flu. Funny you hear very little about it now, when it is very widespread and deaths are accumulating (All of which, when reported, are due to complicating health problems). You heard about it 24/7 when there were only a couple of thousand cases and no deaths.
Just another example of Media trying to manipulate perception. Same with the Economy IMO.
Which is why they are "seasonally adjusted" to take account of that fact. Doesn't this author read?
Do you disagree with the author’s statement:
“The real news is that housing starts are deeply down year over year.”?
Isn’t that just something how our communist news networks now see fit to spin the stories? Less bad is better than horrible and what not it aggrevates me.
That rebound is going strong eh!
And the loggers who can’t sell wood to those construction companies, and the wood mill workers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.