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Try this PDF: Goldman Sachs: The Great American Bubble Machine

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Market watchers waiting to decipher the latest Federal news, which left rates unchanged, were not impressed. The Dow gave away gains following the afternoon release. Simon Constable reports after the bell.

WSJ 6/24/09

May New Home Sales, a measure of contract signings of new homes, totaled 342k annualized, 18k less than expected and down a touch from 344k in April. Mortgage rates remained below 5% for most of the month so this data doesn’t reflect the recent rise but it does take into account the government’s $8,000 home purchase tax credit for first time buyers and the California $10,000 tax credit for buyers of new homes. Purchases in the West however rose by only 1000 as foreclosure sales remain stiff competition for builders. The same in the South where sales fell by 17k. The Northeast rose by 6k and the Midwest rose by 8k. Months supply fell to 10.2 from 10.4 to the lowest since July ’08 but still remains well above the 30 year average of 6 months. The absolute # of new homes for sale did fall to the lowest since ’01. The median price rose 4.2% m/o/m and is down 3.4% y/o/y and is off 15.6% from its July ’07 high. Net-net, new homes make up a small part of the market where existing homes with foreclosures are making up a bigger and bigger portion but the drop in months supply and rise in prices are the focus of homebuilder investors.

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I am off to the mid-town Bailout Nation discussion!

Wednesday June 24, 2009 6:30 PM
Barnes & Noble
555 Fifth Avenue, New York

Stop by and say hello!

Billionaire investor Warren Buffett discusses America’s “economic war” with CNBC’s Becky Quick.

Airtime: Wed. Jun. 24 2009 | 11:50 AM ET

The FOMC began with talk on the economy that was very similar to the April one. “The pace of economic contraction is slowing.” It followed with the caveats of constrained household spending due to job losses, lower housing wealth and tight credit and also referenced businesses cutting back on fixed investment and staffing and they believe the economy will be weak for a time. The main change came in the 2nd part when they mentioned the rise in commodity prices BUT they continue to hang their hat on the ‘output gap’ in giving them comfort that “inflation will remain subdued for some time.” The final part was identical to the April comments in saying the fed funds will be at an exceptionally low level for an extended period and maintaining their current QE plan. Traders were looking to see how the Fed was going to respond to the game of chicken with the bond market and the Fed somewhat turned their head and bonds are lower in response. Fed members can say they are not conducting the monetization of US debt as they couch it in helping the markets but its just semantics.

Peter Boockvar

Managing Director

Equity Strategist

Miller Tabak + Co.

No change — in anything.

Even the statement looks the same:

Read the rest of this entry »

In light of today’s FOMC announcement, enjoy this Britslang:

Queasing n. British slang for “quantitative easing,” the UK’s policy of printing money to stimulate the economy. The US is doing much the same thing, but Fed chair Ben Bernanke calls it “credit easing”—and so far pundits haven’t spun “creasing” into the vernacular.

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Source: Wired

click for video

Bloomberg