Posted on 11/20/2007 5:50:36 AM PST by Hydroshock
U.S. home construction starts were up 3 percent in October, the biggest monthly gain in eight months, but building permits were down 6.6 percent to a level not seen in 14 years, a government report on Tuesday showed.
The Commerce Department said housing starts set at an annual pace of 1.229 million units in October from a 1.193 million unit pace in September. It was the biggest monthly increase since February and came after starts tumbled 11.4 percent the prior month. Economists were expecting to see a slight decrease in starts to a 1.17 million unit pace from the initially reported 1.191 million pace.
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Building permits fell 6.6 percent in October to a 1.178 million unit pace. That was the lowest level since July 1993 and well below the 1.200 million unit level economists were expecting.
(Excerpt) Read more at cnbc.com ...
>>The loudest, shrillest words coming out of the Hildebeast’s mouth?
...”IT’S THE ECONOMY, STUPID!”<<
Which merely proves that a stopped clock IS right twice a day.
Those who followed that prescription in 1978-80 have been clipping their 20% bond coupons for the past 27 years.
Rinse and repeat. The next opportunity is close at hand.
I guess that’s the crux of the argument. If you believe housing prices, nationwide are a huge bubble then yes it’s a bubble.
Or maybe you believe that a free market (for the most part) economy will have it’s excesses and froth once in awhile that will be corrected.
Yes there are certain bubble areas (that are being corrected).
Overall most areas have not seen the excesses that everyone wants to talk about.
But others think differently and think Armageddon is coming for the economy
>> These things always take longer to get here than people expected, but once here, they unfold faster than people expected.
True, that. Also:
There are always abundant signs that the bubble is about to burst; a rising chorus of voices points out the obvious, but it is inevitably ignored, even denigrated.
Then, following the bursting of the bubble, people look back with 20-20 hindsight and say (while kicking themselves) “How the heck could I possibly have missed those signs??!?
PERMITS are future constuction projects that will eventually turn into STARTS.
Although sometimes permits are filed and then never started or delayed indefinetly.
OK, you've confirmed what I was thinking as well and therefore it raises the question of how important are the PERMITS ISSUED numbers. If they are nothing more than "wishful thinking", why are they a significant factor in gaging the health of the building industry? Why not just factor in the STARTS?
Hydroshock doesn’t post only doom and gloom stories. He posts stories about housing, the markets and economy, and there isn’t much good news to report since the housing bubble burst and the liquidity crisis began, which is now affecting the real economy.
I appreciate his posts. He is not the one responsible for creating these problems.
>> Or maybe you believe that a free market (for the most part) economy will have its excesses and froth once in awhile that will be corrected. Yes there are certain bubble areas (that are being corrected).
Call it what you will: excesses, froth, or a bubble. It does need to be corrected. And the correction is not to lower interest rates to sustain the froth (bubble, excess, what-have-you)!
>> But others think differently and think Armageddon is coming for the economy
Well, I am optimistic about our nation and our economy over the long haul. I think we’re headed for a recession; I think it’s likely deserved; I think we need to get it over with, wring the excess out of the housing market, (i hate to say this but) PUNISH the stupid and greedy so the DON’T TURN RIGHT AROUND AND DO IT AGAIN, and get on with working for a living like we ought to be doing as a nation.
Now... if we don’t come to grips with this problem (and it IS a problem) — if we delay it and rig up all sorts of explicit and implicit bailouts of government’s friends in the investment banking, building, real estate and related industries...
THEN we’ll have Armageddon.
Building permits give you a gauge on what future business will be. It is a prediction, that is all.
It did, but Hydroshock wasn't here yet to ping everybody, so we missed it.
The dollar is like a piece of sheet metal attempting to stop bullets. If the metal is strong and/or the bullets are small, they don’t penetrate. As the metal thins, or the calibre and/or muzzle velocity of bullets increase, it is possible for the metal to finally be penetrated.
The dollar was stronger and the attacks were weaker back then. Both are more impactive today, but not as impactive as they will be.
Sounds odd. Starts up, permits down??
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In my area permits are greatly affected by taxes ,, huge “impact fees” to go into affect Jan 1,’08 ... get the permit 12/31 and you save $10k or so ,,, still permits are down... also many older apartments are being remodeled to get higher rents or converted back from condo to rental units..
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