Awesome:
“National New Home Sales, on a monthly basis, don’t even add up to half of the total foreclosure activity in California alone in a single month.”
-Mark M Hanson
While yesterday's US stock market close was poor, Asia and Europe didn't follow today as debt in Greece, Spain, Portugal, etc... rallied, their CDS narrowed and stocks bounced. The Greek finance minister said January tax revenues came in above expectations and that spending was below target for the month and said "that means the deficit reduction for January is well within what we have promised." The euro is rising in turn. Also helping is the story that Trichet is headed to the European Union leaders summit a day early in order to address Greece's problems even as the Greek finance...
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July 27th, 2009 at 4:10 pm
Nice! Foreclosure green shoots
July 27th, 2009 at 4:15 pm
Nevermind these silly “facts”. It does not jive with the “green shoots” campaign. Let’s move along please.
July 27th, 2009 at 4:19 pm
WOOHOO! California number 1!! . . . .er. . . .wait a sec
July 27th, 2009 at 4:21 pm
Trying to get a handle on where markets are going that next day, by using the fundamental news is like trying to drive using a rearview mirror. It leaves you buying on the news and selling when? ? ?
Freaking the FREQuERS ? Well usually the time to acquire is when no one else is really interested, that kinda defeats the FREQUERS catching on to what your wanting, if your ahead of the crowd.
Real Estate has a lot of “TIPPING POINT” power as all the furnishings and all else hinge on whether houses are being bought. Sitting there empty isnt too good for the economy.
I have some hinky views, but hey, its a free country.
July 27th, 2009 at 4:27 pm
All the bearish whining in the world can’t change the fact that the numbers are, undeniably, improving.
July 27th, 2009 at 4:29 pm
Okaaaayyyy franklin. Make sure to put your Obama jammies on tonight.
July 27th, 2009 at 4:32 pm
On Mar 25th I tried to direct people’s attention to GFA, Gafisa. It is up more than 160% since then. I am not entirely certain that its trend is over. Worth a look. DYOGDD.
MRegan Says:
March 25th, 2009 at 1:13 pm
OT to those who may or may not care:
Inka Kola News (a blog on Latam equities etc) posted a note about a likely announcement from Lula da Silva concerning a govt sponsored housing buildout, the number being bandied about is ONE MILLION HOUSES (do yer own Dr. Evil impression).
That sort of thing may affect GAFISA (GFA) in which Sam Zell plonked down some of his hard-weaseled money. Worth having on the radar screen.
jdamon33- ACAS? XL? not even a fruit basket…
July 27th, 2009 at 4:32 pm
Your right Franklin,
All is well…
http://sonoranalliance.com/wp-content/uploads/2008/03/ChipDiller.JPG
July 27th, 2009 at 4:36 pm
All the bearish whining in the world can’t change the fact that the numbers are, undeniably, improving.
lol, about as accurate as your claim from last week that sentiment is still extreme to the bearish side.
July 27th, 2009 at 4:38 pm
with all due respect, its a silly quote. new home sales are a small part of the total housing stock that is sold in any month, its existing home sales that are relevant when looking at foreclosures.
July 27th, 2009 at 4:40 pm
@ben22: It seems just like all of the good “green shoots” cult members, franklin411 likes to cherry pick the numbers, when, in fact, they are mostly still very mixed.
July 27th, 2009 at 4:48 pm
@Mannwich
Oh, now they’re just “very mixed?” Welcome to the green shoot camp, my friend!
July 27th, 2009 at 4:49 pm
if the president was someone other than Obama- would franklin still have the same outlook- or would he be more pessimistic- assuming the same policy actions were taken-
hmm . . . I wonder
July 27th, 2009 at 4:57 pm
Franklin,
How about how prices were down 5.8% month over month? Or how this was driven by a $8000 new homebuyer credit and a big credit in California, which is due to expire before the end of the year?
July 27th, 2009 at 4:59 pm
Mannwich,
yeah, that is true, on tv they don’t get called out but we don’t have to abide by the “if you don’t have anything good to say about the economy don’t say anything at all” rule that applies to CNBC guests here at TBP.
July 27th, 2009 at 5:04 pm
@cfischer
It says the housing market is godawful, but conditions are improving. Note that “improving” and a “new boom” are two entirely different things. You’ll not hear that from the bears, though–they insist on two fallacies:
1. That there shall be no recovery until some apocalyptic event kicks us into a new golden age. I mean that literally–many of them want a return to the gold standard!
2. That anyone who dares to disagree, or even who suggests that the world is not ending, is some sort of doe eyed fool who will learn the truth when the ax slices through their skull.
July 27th, 2009 at 5:10 pm
Uh Franklin,
Mannwich hasn’t entered the land of the green shoots, he’s simply stating the fact, that some data is mixed, unlike the label you assign to EVERYTHING, which is green shoot. Being reality based with comments is not the same as your blind optimism, and if you think there is nothing but green shoots around, you are not reality based. There really isn’t anything else that needs to be said.
Oh, btw, sooner or later, you’ll give up on this kind of false description of people that are still bearish, these things are not the consensus view, the exist in your mind only or are written by a few anonymous commentors on a blog:
1. That there shall be no recovery until some apocalyptic event kicks us into a new golden age. I mean that literally–many of them want a return to the gold standard!
2. That anyone who dares to disagree, or even who suggests that the world is not ending, is some sort of doe eyed fool who will learn the truth when the ax slices through their skull.
July 27th, 2009 at 5:13 pm
Just round the corner from me in Texas, a local builder that cut its starter houses from $90k to $70k, is actually framing some more. Only a few, but I’d say that was quite something really.
I suppose a builder has to tick over somehow, and that would include building houses.
July 27th, 2009 at 5:14 pm
FWIW, the CA $10,000 credit for new homes has expired – though it was slated to run to the end of the year, there was also a specific amount of cash dedicated to the program, and it’s all gone…
July 27th, 2009 at 5:18 pm
“It says the housing market is godawful, but conditions are improving.”
No it doesn’t. You should read BR’s posts regularly on this. This total is down from last year; the ‘up’ month-to-month does not rise above the margin of error.
July 27th, 2009 at 5:18 pm
When looking at this quote can we conclude that home prices are still, in general, unaffordable for the first time home buyer? In my general area I say yes. Sure, there is a credit this year, however, at the same time banks require money down now, my guess is that for many this washes out any benefit the credit would have gotten them and allows people that in many cases shouldn’t be buying right now, a chance to lever up and join the debt party that most of the country already can’t lose the hangover from.
July 27th, 2009 at 5:20 pm
“doe eyed fool who will learn the truth when the ax slices through their skull.”
or more applicable-
“doe eyed fool who will learn the truth when his lifes savings are crushed- a second time”
why they would believe now I have no idea- especially after all the “experts” lost a big chunk of their money for them already
July 27th, 2009 at 5:20 pm
@franklin
Did you ever try to think that these “improvements” you mention could be a temporary blur? What is the fundamental reason for an “average” Joe to be able to afford a house? Steady employment. When was the last time you checked the employment numbers? And don’t give the b.s employment picture is improving. No its not. We are going to see double digit UE soon. It’s Japan redux in U.S.
http://www.generationaldynamics.com/ww2010/g070219b.gif
July 27th, 2009 at 5:21 pm
Is that right? New Home Sales in June were 384K. Bloombergs says foreclosure filings for all of the US were 336K. What do I have wrong here? Is one of these a SAAR number?
~~~
BR: Annualized data
July 27th, 2009 at 5:22 pm
Franklin,
Here you go, so you know I’m not “jus sayin” that you are wrong about sentiment, from AAII:
Results as of
July 23, 2009
Bullish 37.60%
Neutral 20.00%
Bearish 42.40% This week’s survey results saw bullish sentiment rise to 37.60%, below its long-term average of 38.9%. Neutral sentiment fell to 20.00%, below the long-term average of 31.0%. And bearish sentiment fell to 42.40%, above the long-term average of 30.0%.
And this is AFTER a monster rally that you’ve got 57.6% of people not willing to call bearish. I might also add that over a month ago, bullish levels had touched 80%, so again, your claims are about as made-up as Madoff.
July 27th, 2009 at 5:23 pm
@manhattanguy,
going to see??? the real unemployment rate (U-6) hit 16.5% in June, more than half the rate at the bottom of the GD in 1933.
July 27th, 2009 at 5:36 pm
@ben22
I’m talking about sentiment on this blog, which remains…um…is there anyone besides me who isn’t stocking up on gold, guns, canned goods and rosaries? Anyway, have you ever seen a bamboo shoot grow? They start off as the tiniest nub of green pushing through the ground. Growth is slow at first, but it speeds up over time. After a while, bamboo can grow several feet per day, all from a tiny green shoot. That’s all we have now–green shoots, not a rain forest.
@manhattanguy
The fundamental reason is that people still need a place to live, and 90% of the workforce remains employed. This does not mitigate the fact that 10% unemployment is horrid, but 10% unemployment does not mean that economic activity will grind to a halt. And all the numbers show that the unemployment numbers are improving. What would U6 be if we were still losing jobs at the rate of 700k+ per month, as we were in January? Clearly, things are improving. We will momentarily slice through 10% before we begin slowly chipping away at unemployment, as the Administration acknowledged during the debate over the ERRA.
I’ve laid out my case for growth several times, but I don’t recall any bear ever having laid out their projection for a return to growth. Is it because bears think there will never be economic growth in this country?
July 27th, 2009 at 5:47 pm
“I don’t recall any bear ever having laid out their projection for a return to growth”
I think cvienne asked you about this before. But I don’t recall you answering. In your mind what will be the next area that will drive “growth”? Technology, Real estate, Alternative Energy?
Honestly, I am not seeing anything in the horizon that will make me to project a return to growth. I don’t think we will see the 3% growth rate that was last seen in 2006 for a very LONG time. U.S growth will be similar to Europe for a foreseeable future.
July 27th, 2009 at 6:03 pm
@franklin411: I’m certainly not stocking up “gold, guns, canned goods, and rosaries”. I actually just returned from a great walk with my pup and feel great about my own situation. Personally, I have a great life and little to complain about. See, that’s your problem. You read what you want to read. Just because many of us aren’t optimistic about many of O’s solutions these problems (and I remind you, I was a volunteer and donated money to his campaign), does not mean we’re seeing the iminent apocalypse. What we sense is that we’re headed down the wrong path and that over the longer term the consequences will be quite dire, and the shorter term not great either. We want Obama to show real leadership and stop bailing out the bad actors that got us where we are today. That won’t solve anything. Any rational-thinking person knows that but when one sees everything through the prism of politics, then one is merely an idealogue that is no better than the Bush Kool Aide drinkers of the past.
July 27th, 2009 at 6:04 pm
@manhattanguy: I believe franklin411 answered that question. Nanotechnology……..
July 27th, 2009 at 6:09 pm
Is this considered a “green shoot”, franklin?
http://www.calculatedriskblog.com/2009/07/option-arms-good-news-bad-news.html
July 27th, 2009 at 6:12 pm
Mannwich,
Nobody here is stocking up on gold, guns, canned goods, and rosaries. The only thing I stocked up on earlier this year was stocks, but I’ve since sold most of them to someone else. Just another exaggeration from General Green Shoots. Besides, when he made the statement about sentiment last week it was in relation to the market, not this blog, despite what he says.
July 27th, 2009 at 6:17 pm
F411 is correct that growth will return, unless we all die. Economic growth is a function of the metabolic disequillibrium that is life. Humans require food, clothing and shelter. Even if things get really really bad–at the point where we’ve reached the base level of activity necessary to maintain life, then we’ve nowhere to go but up. He’s also correct in asserting that economic activity is not likely to bottom out at or near zero.
Now, whether robust, “bamboo shoots” of growth return anytime soon is another matter entirely. The base level of existence, which provides for a minimal growth that is necessary to sustain life, might be all that we get for some time to come. There are vast forces at play in the world that seem to militate against a return to rapid growth, or to even sustaining a lifestyle much above subsistence. Americans, fat as they are literally and metaphorically, will probably be forced to slim their waistlines and lifestyles in the coming decades. The years of every succeeding generation doing better than the next are likely over. Trees don’t grow to the sky, and neither do economic systems.
But the most important variable to US economic growth is immigration. Economic growth does not happen without population growth, and ex-immigration, the US is dying out. Japan, that does not allow immigration, will never return to sustainable growth unless and until its population ceases declining. Yet the Obama Administration, beholden to the backward-looking unionists that helped elect him, seems hell-bent to make immigration as difficult as possible going forward. All the stimulus packages in the world won’t make up for lost vitality if the Mexicans just decide to stay home, as was recently reported in the WSJ and elsewhere.
July 27th, 2009 at 6:18 pm
@Franklin411:
“I’m talking about sentiment on this blog, which remains…um…is there anyone besides me who isn’t stocking up on gold, guns, canned goods and rosaries?”
Yes, Franklin, there is. I don’t stock up on any of these. This is just one of your many strawman arguments here. Or your perception is very distorted.
But what about the 375% total credit market debt to GDP ratio, and still increasing? Have you got any idea in the meantime how this is going to play out? What consequences will this fact have for the US-economy or, generally, the capitalist world economy? Do you see any serious problem related to this mountain of debt? Or do you think this is not a big issue? If you think so, why do you think so?
rc
July 27th, 2009 at 6:19 pm
Im not sure if this quote makes sense even though I want it to. … Lets see the June # of new home sales is 384,000 while what Im finding on foreclosureradar.com’s June report for California is 137,000 in foreclosure related activity (meaning I added up all of the Notice of Defaults, Notice of Trustee Sales, and Foreclosure Sales)
Let me know if Im missing something… which I probably am.
You can get a copy of the foreclosure report for June by going to the following link and then clicking on “June 2009 CA Foreclosure Report” in the first sentence of the post. Its a pdf.
http://www.foreclosuretruth.com/blog/sean/june-foreclosure-report-moratorium-has-unexpected-impact-may-be-short-lived
July 27th, 2009 at 6:26 pm
“@manhattanguy: I believe franklin411 answered that question. Nanotechnology……..”
Yes I heard that 5 years ago and it’s already played out.
July 27th, 2009 at 6:30 pm
@manhattan: OK then. Maybe we can all just flip stocks and commodities to each other electronically and pretend that we’re all wealthier than we really are? Seems far easier than the home flipping game. If enough money is printed and put right into the market, why not?
July 27th, 2009 at 6:35 pm
Sadly that’s not sustainable. Growth will need to come from somewhere. We haven’t figured that out yet. Maybe space travel and colonization
July 27th, 2009 at 6:40 pm
@manhattan: I was being snarky (in case you didn’t notice!).
Of course it’s not sustainable. That’s why many of us here a TBP are quite cranky about the gov’t efforts to blow yet another bubble and not really solve the problems that ail this country.
July 27th, 2009 at 6:48 pm
“is there anyone besides me who isn’t stocking up on gold, guns, canned goods and rosaries?”
Yes, me. I’m not Catholic. And instead of canned goods, I stocked up on farm land. But I’ve got the gold and the guns.
July 27th, 2009 at 6:56 pm
@manhattanguy 6:26 pm
I thought that nanotechnology was responsible for the shrinking of the global economy to the scale of molecules …
July 27th, 2009 at 7:04 pm
@constantnormal
If that is the case, technology achieved its purpose
@f411: I don’t believe in any doom theories either, but I don’t believe we will see any phenomenal growth for a very very long time. Also, if we don’t change the way we live in the next few years (over consumption, utter carelessness for our environment, immigration control, falling investment in basic science & research), you can kiss goodbye to America’s position as the standing superpower.
July 27th, 2009 at 7:05 pm
ben22 Says:
July 27th, 2009 at 5:22 pm
Franklin,
Here you go, so you know I’m not “jus sayin” that you are wrong about sentiment, from AAII:
Results as of
July 23, 2009
Bullish 37.60%
Neutral 20.00%
Bearish 42.40% This week’s survey results saw bullish sentiment rise to 37.60%, below its long-term average of 38.9%. Neutral sentiment fell to 20.00%, below the long-term average of 31.0%. And bearish sentiment fell to 42.40%, above the long-term average of 30.0%.
And this is AFTER a monster rally that you’ve got 57.6% of people not willing to call bearish.
________________________________________________________________
So 62.4% of people are not willing to call bullish…….
July 27th, 2009 at 7:34 pm
A WSJ cold shower for housing, amazing!
http://online.wsj.com/article/SB124872653284684759.html?mod=djemheard
July 27th, 2009 at 7:41 pm
@Rightline,
Are you trying to claim that is extreme? lol, after a move from the 666.79 intra-day low to the 7/23 close price do you know 62% of people that would be bullish? You know a lot of morons if you do.
Franklin’s claim that was bearish sentiment was at an extreme, which it isn’t, what’s your point asshat?
The bullish levels were above 80% back in June, move along.
July 27th, 2009 at 7:41 pm
@manhattanguy:
“Also, if we don’t change the way we live in the next few years (over consumption, utter carelessness for our environment, immigration control, falling investment in basic science & research), you can kiss goodbye to America’s position as the standing superpower.”
Well,
“over consumption”
Why should this concern me whether someone else “over consumes”? It’s not my problem. I don’t need to do anything about it.
“utter carelessness for our environment”
That I consider as important, but not for the purpose you mention.
“immigration control”
I am not interested in “immigration control”. Why should I be? If people want to live and work in US, fine with me.
“falling investment in basic science & research”
That I consider as important also, but not for the purpose you mention.
“… America’s position as the standing superpower.”
I don’t need the United States in this role. So why care?
rc
July 27th, 2009 at 7:49 pm
Interpreting new housing trends the size of rounding errors while there are 19 million vacant homes.Deck chairs on the Titanic!
July 27th, 2009 at 8:00 pm
@ben22
Are you trying to claim that is extreme?
_________________________________________
No, jusst that nyou are whining too much. FU
July 27th, 2009 at 8:06 pm
I recommend reading “Collapse of Societies” by Jared Diamond. Speaks volumes on what is going on with our current civilization.
July 27th, 2009 at 8:09 pm
Rightline says:
No, jusst that nyou are whining too much. FU
lol, o.k. will do, thanks for clearing that up gangsta. I didn’t realize that correcting someone’s lies was considering whining.
July 27th, 2009 at 8:32 pm
i will 2nd manhattanguy’s recommendation of Collapse- excellent read
July 27th, 2009 at 8:33 pm
@ Curmudgeon
““is there anyone besides me who isn’t stocking up on gold, guns, canned goods and rosaries?”
“Yes, me. I’m not Catholic. And instead of canned goods, I stocked up on farm land. But I’ve got the gold and the guns”
—
x2
I LIKE THAT…
I’m not Catholic either (although I went to Catholic school for 5 grades and got rulers whacked on my knuckles by the nuns enough to know what THAT is all about)…I believe in God…maybe not a lot of priests & nuns though…
Canned goods? HATE ‘EM…Just give me FARMLAND (& a tractor)…
Guns? That’s tough…at this point I want to be pollyanna about it, but maybe someday??? Who knows? I can’t see messin’ with the 2nd Amendment…
Gold…Have that (pretty much actually)…Glad I do…Not particularly impressed with it at the moment)…
Here’s the kicker…
I’m going to make an attempt to side with FRANKLIN411 a little here…The dude is still young (so let him have his green shoots – especially now that the S&P is technically in LA-LA land and arguing against that risks to cause serious pain)…Earlier today I was impressed with his [Franklin's] comments that he is a handyman (skills in working with drywall, electrical engineering, plumbing, carpentry)…He also illuminated an aptitude towards “thrift”…
If nothing else, I have to give him the benefit of the doubt for those skills…If it comes down to SURVIVAL (and if what he claims as his own skills are true), he may be alright in the end (better than A LOT actually)…Therefore, he is entitled to his HOPE that the present system might work…
My motto is…AS LONG AS YOU UNDERSTAND THE RISKS, you’re FREE to act as you please…
If what I read today is true, Franklin may be more multi-dimensional than we all imagine…That affords a person the LUXURY of holding onto illusions…
July 27th, 2009 at 8:47 pm
Who is Mark Hanson?
July 27th, 2009 at 8:51 pm
“Canned goods? HATE ‘EM…Just give me FARMLAND (& a tractor)…”
Farmland? Tractor? What do I need this for, if society collapses? I am just going to order my food over the Internet, then.
rc
July 27th, 2009 at 8:55 pm
“i will 2nd manhattanguy’s recommendation of Collapse- excellent read”
Is there a comic edition with lots of splashes?
rc
July 27th, 2009 at 9:02 pm
@rootless
I’ll sell you my can opener on e-Bay my friend…how about that?
commerce at its finest!
July 27th, 2009 at 9:07 pm
Well I guess no one cares that this quote is looking to not be true.. based on numbers
July 27th, 2009 at 9:09 pm
I have to say, I’m starting to wish I didn’t already own a home outright.
July 27th, 2009 at 9:13 pm
@cvienne But is it a manual can-opener, or electric? Be pretty hard to run that electric can opener with no stinkin’ power plants.
I don’t own any farmland, guns, or gold, and it’s been decades since I stripped down and rebuilt a carburetor. But I am curious about how much farmland it takes to feel comfortable. cvienne, would you tell us how large your farm is, if you haven’t already?
@Mannwich
Seeing mention of Jared Diamond’s ‘Collapse’ triggered a memory of reading a presentation by Dmitri Orlov on how he lived through the collapse of the Soviet Union, and the lessons that might be useful for us. He’s sort of like Kunstler, except it’s less ‘I told you so’ and more ‘Here’s what to do when the bottom drops out’. Chilling, but ultimately hopeful… if you have multi-dimensional skills, and aren’t too proud to help others along as well.
July 27th, 2009 at 9:15 pm
@NakedHedgeFund Says:
“Well I guess no one cares that this quote is looking to not be true.. based on numbers”
I guess you are right. No one really cares. We already have moved on to the more important subject of selling can openers on e-Bay, if society fails.
rc
July 27th, 2009 at 9:18 pm
@cvienne
Heh! I’ll take what I can get, thanks! My Dad is a Depression-era child, so that’s where the do-it-yourselfism comes from. In those days, you either fixed what you had (or what someone else had thrown away), or you went wanting.
@Manhattanguy @ 7:04 PM
I agree with you completely. Mannwich is right that I advanced nanotech as an example, but my broader point was that America has to spend massive amounts of money on smart investments in building a new, sustainable economy. Universities will be key to this process. Now, what we can’t do is what Milton Friedman suggested–spend $700 billion on new jet skis and army bases; nor can we do what the Republicans wanted–spend $500 billion on tax cuts (how would cutting taxes change anything???). The President is the only one who has acknowledged that our 70% consumption economy is unsustainable.
@constant
No, I’m not at all troubled by massive borrowing so long as the cash is spent on smart investments. The world really has no choice but to lend us as much as we want, for all practical purposes. If we die, they die. But it won’t be that way forever. India and China are investing massively in developing their infrastructure and educational base so they won’t need us to buy their stuff anymore. When that happens, watch out. The only way we can avoid that fate is to borrow now, invest wisely in our primary competitive advantage–the American worker, and innovate our way back to the head of the pack.
So no. I see the choice as 1. massive borrowing now in exchange for prosperity later, or 2. “fiscal discipline” leading to our eating our own seed corn now with the guarantee of mediocrity later. That is no choice at all.
July 27th, 2009 at 9:19 pm
I mistitled my 3rd reply. It wasn’t to Constant, it was to Rootless.
July 27th, 2009 at 9:24 pm
Um…
New home sales are a leading indicator. Foreclosure activity is a lagging indicator.
You would expect to see both new home sales and foreclosure sales rising in a turn. That’s why they call it a “turn,” Sasha. (Obscure reference to Tom Clancy–sorry, I date myself)
So now I can duck. I’m not a “green shooter” or Obomamcon or anything ideological. I just want to make money, and stopped clocks are only right twice a day. I can’t invest that way. When the leaders look up, you look for the turn.
Okay, now I’m ready for the rotten veggies. Thanks for listening.
July 27th, 2009 at 9:39 pm
@cv-
you stocked up on gold on long time ago, no?
catholic school, i remember the hypocrisy well.
how big is the spread (your land, not interest rates)?
July 27th, 2009 at 9:46 pm
Translation of that statement is “Green Shoots”
July 27th, 2009 at 10:00 pm
My my – I drive home from work and look what I miss!
All I can say from reading all of the above is that I agree with Franklin that there are indeed many people who see only the negative. Unfortunately Franklin, the only different between you and the right wing conservative nuts you despise, is that you are on the other side.
Let me ask you this Teacher Man, aren’t you even aware that you are as blindly and naively optimistic as some of the folks you describe are negative and pessimistic? Is there no middle ground for you?
July 27th, 2009 at 10:21 pm
Boilerplate conversation:
——————————————-
F411: “An reduction in the rate of decline is an improvement. This is better than a continuation at the old rate of decline.”
Almost everyone else: “It’s still getting worse.”
——————————————-
C’mon, people! Remember “Tastes great! Less filling!”?? Both can be true. I don’t know why the heck you jump on F411 every time as though you’re saying something that contradicts/disproves what he said. It doesn’t. It’s orthogonal.
July 27th, 2009 at 10:23 pm
Truck tonnage looking choppy, NOT necessarily green shooty……
http://www.calculatedriskblog.com/2009/07/truck-tonnage-index-declined-24-percent.html
July 27th, 2009 at 10:29 pm
@Wes @pfmorrison
My farm is SMALL…very small…2 acres (but totally farmable)…
In a pinch, I reckon I could house and put to work a community of about a DOZEN (enough to feed everyone and get the chores done)…The “other” thing is this…Even with such a small spread of land, you need to look to your neighbors for support…I don’t have cows, hogs, or sheep (but my neighbors do)…I feel you need ACCESS to those to “standardize” your preparation…What I don’t have (in those areas), I can make up for in “skills”…
- I have vineyards – they don’t
- I know how to make cheese (not all do)
- Many don’t have “off grid” energy (that MAY end up being valuable), I do…
- Most don’t have nat gas powered vehicles (trucks, or motorcycles), I do…
- I have a boat and ample fishing tackle (not all do)
- Even INDOORS is a consideration…I have a “hydroponic” system (with filters & irrigation), most don’t (which means even if you have LAND, sometimes you can’t farm it due to disease, or, if there were sunlight blockage, or water shortage…
- Based on what I’ve planted, my BEE population is better…
- etc.
It takes awhile to sit down and figure out what you HAVE and what you can TRADE…
Bottom line…I’d say an ACRE = 6 person amplitude (give or take)
July 27th, 2009 at 10:33 pm
@pfmorrison
If I can get the right price…there are 20 acres nearby that I might get hold of…at that point, it would be all ANYONE would need…
July 27th, 2009 at 10:34 pm
Next Month should be fun. Seasonality starts to work against monthly data as from August. So we can now anticipate the headlines one month from now, along the lines of “Unexpected drop in housing sales”?!!
July 27th, 2009 at 10:38 pm
@Franklin411:
Your argument has a major flaw. It’s not possible to increase the relative debt level infinitely. You seem to live in the delusion, though, it were possible to just do that. As if many homeowners, credit card holders etc. who believed exactly the same, haven’t just been proven wrong. Debt has to be serviced. Interest has to be paid. When the debt to income ratio increases more and more then there will be point when all the debt to be serviced exceeds the income available for the debt service. When the debtor can’t service the debt anymore he will default and become insolvent. Then creditors are going to make losses. This has a domino effect on the economy and leads to a cycle of de-leveraging. The total US credit market debt to US GDP ratio is already much higher than it was before and during the Great Depression (375% today vs. about 175% before the Great Depression started.) Maybe it can go up to 500% or more. How much that I don’t know. But I know that every bubble bursts, and so will the global credit bubble, even if the wishful thinking is different. And the bigger the bubble, the more catastrophic the consequences in the end, when the bubble finally bursts.
BTW: I am not talking about government debt alone. US federal debt is currently at 70% of US GDP or so. Still way to go until it reaches Japan’s almost 200%, right? Nor am I talking about “fiscal discipline”. Thus, if you believe I wanted to make a point for such a policy choice, you have perceived wrongly. This is just the choice between catastrophic de-leveraging now and catastrophic de-leveraging later. The de-leveraging itself is inevitable. I am not making any proposals what politicians should do with respect to that. Because there isn’t much to do to prevent the inevitable. Of course, every politician who isn’t (politically) suicidal will choose postponing the inevitable and maybe hope for the best. And this is what the Obama administration does, if they aren’t equally delusional and believe all the debt isn’t a big problem. But I don’t believe that. They just don’t know what else to do compared to what they are doing now. There are some things about capitalist economy, about which even the morally most integer politicians with best intentioned and crafted policies can’t do anything.
rc
July 27th, 2009 at 10:38 pm
cvienne,
“Subsistence Farming for Dummies” — Do you think you could write one?
July 27th, 2009 at 10:39 pm
cv-
thanks for sharing
i’m on 1.33 acres
a bit small, but some very small scale farming possible, although i don’t do it
July 27th, 2009 at 10:39 pm
@pfmorrison
To explain…
2 acres is sufficient for a human thinking of their own well being…
But you have to jump to 20+ acres if you need to feed and provide grazing for herds of livestock…You need it to grow corn, hay, etc.
After all, you can’t be running to Wal-Mart to buy your cows or goats “Swanson TV dinners”…
July 27th, 2009 at 10:41 pm
@wunsacon
““Subsistence Farming for Dummies”
—
Chapter One
Plant a shitload of lavendar to attract bees…
Hey Wes – I was thinking of you this weekend…Were you watching the Tour de France?…The stage just before Ventoux, they were riding through the French countryside and they passed by some farms that literally had ACRES planted solely of lavendar (to attract bee populations)…
I was thinking…Now THAT’s what I’ve been trying to tell these TBP folks!
July 27th, 2009 at 10:43 pm
…feeding your cows Swanson Dinners!
that’ll start some greenshoots
if you don’t have to go into too much debt to get enough unhealthy calories into the ol’ gals
July 27th, 2009 at 10:45 pm
cvienne, as your agent, let me say: “That’s a start. But, I’m going to need to see more before I contact a publisher.”
July 27th, 2009 at 10:46 pm
nytol…
July 27th, 2009 at 10:47 pm
This strategy sounds…vaguely…familiar. Where have I heard it before? I hope the Chinese have a charismatic leader like Obama who can make their credit bubble disappear into thin air without consequences after it blows up.
July 28 (Bloomberg) — Bank of China Ltd., which doled out the most loans among Chinese banks in the first half, plans to keep growing credit unless the government clamps down on lending.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWxAXwhqPZmk
July 27th, 2009 at 10:49 pm
cv-
…awesome lavender in Provence, especially in the Luberons
yes, during that stage they showed some images of Lavender fields
Mount Ventoux – The Giant of Provence – the moonscape – awesome
July 27th, 2009 at 10:51 pm
@Mannwich:
As I have said before it’s like pumping oxygen into a burning house to safe the people inside from suffocating.
rc
July 27th, 2009 at 10:52 pm
@Wes
I’m not a huge LA fan, but I have to say I was impressed with how he handled Ventoux…He proved he’s still got it!…For the life of them, neither of the Schleck brothers could shake him off their wheels…
July 27th, 2009 at 10:53 pm
Exactly rc. Just buying time. I’m actually morbidly fascinated by how this is ultimately going to play out. I’m guessing not well. Could take a while before we’re blindsided after complacency sets in again when people assume (wrong again) there are no consequences for blowing bubbles, especially ones of the fiat credit variety.
July 27th, 2009 at 10:59 pm
rootless
re: http://www.ritholtz.com/blog/2009/07/real-estate-quote-of-the-day/#comment-197746
Thanks for taking the time to write that. That’s exactly the point that I try to make. We no longer have the option to deficit spend to stimulate the economy and thus keep us from great harm. We gave up that option when we decided to continue to pile on extreme amounts of debt over the last couple of decades instead of facing up to our problems and living withing our means. We acted like spoiled children, in the aggregate. And we’ve reached a point of no return of sorts. There is no good option.
But continuing to build the debt bubble is only going to make it worse when the final days of reckoning come. We’ve got to take our medicine or we’ll truly crash and burn down the road.
July 27th, 2009 at 11:00 pm
@cv -
the old guy hung in there pretty damn well
Andy was trying to break up the group, but not drop his brother Frank – very difficult, and in the end not possible
LA hung in there well and covered the “lowest common denominator” but did and, in any case, would have turned himself inside out to hold his position – mind over matter
In the day, that may not be past, they all took epo,testosterone patch and HGH – standard protocol. Some are still taking cera, the time release version of epo.
I think this is the first straight LA since the comeback after cancer.
Pretty impressive.
July 27th, 2009 at 11:04 pm
@Mannwhich:
Not just buying time, also fueling the fire. But this is just how it is. As I already wrote in response to Franklin, it’s the choice between de-leveraging w/ maybe catastrophic consequences now and postponing the day of reckoning to later and hoping for the best. Every politicians who isn’t (politically) suicidal will choose latter. This is what the Obama administration does and what probably any other administration would do too. And I don’t have any proposal for a better choice. Well, I could say better now than later. But saying this is easy from my position, since I won’t be held responsible for the consequences that could result from that.
rc
July 27th, 2009 at 11:06 pm
NakedHedgeFund
NOT annualized New Home Sales were a paltry 36k for the month – that is where they get the 384k crap…they ASSume that 36k will sell every month from here on out for the next year. Last month in CA there was total NOD, NTS and foreclosure counts of 100k.
Below are notes from my note today…hope this help clear it up.
“I can’t take it — I usually don’t comment on New Home Sales because on a monthly basis they don’t even add up to half of the total foreclosure activity in CA alone in a single month. But because of the relentless pumping of this number today, I put together some charts.
1. Upon closer monthly examination, builders dumped prices to clear out inventory ahead of the slow season. NOT seasonally adjusted sales only went up 3k units from 33k in May to 36k in June. 3k properties either got a Notice-of-Default or were foreclosed upon in CA TODAY alone.
2. The chart below shows NOT seasonally adjusted June 2008 vs June 2009 total sales counts and median price. 20% fewer homes sold and a much lower price than last year – 11%.
3. The follow chart showed where the sales took place — at the low end. The 3k increase over May was almost exclusively under the $200k price point. Mid-to-high end house sales are still doing terrible relative to previous years.
4. The following chart shows where the sales took place. One thousand homes selling in the Northeast and two thousand in the Midwest was the extent of the gain over May. Again, that many properties either got a Notice-of-Default or were foreclosed upon in CA TODAY alone.
By the way, the 3-month Relative Standard Error in the data is such that New Home Sales could have been down in June – we won’t know until next month.”
July 27th, 2009 at 11:07 pm
Again, Mannwich, not “Mannwhich”. Sorry about that once more.
July 27th, 2009 at 11:13 pm
@Wes
“In the day, that may not be past, they all took epo,testosterone patch and HGH”
Which makes Contador impressive…I’m not sure who can match his accelerations on the hills these days (save for perhaps Andy)…
You’re right in saying LA covered the LCD (which was Frank)…Andy sure must have had to do a lot of thinking…In the end, he probably felt that if push came to shove, he could even widen his 2nd vs. LA, but he tried as long as he could to give Frank a chance at the podium…
It probabably worked out in EVERYONE’s interest in the end…
July 27th, 2009 at 11:15 pm
Agreed, rc. Key distinction there on not only just buying time but fueling the fire. Thanks for elaborating and reminding. no worries on the moniker mishap. I’ve been called much, much worse.
July 27th, 2009 at 11:22 pm
@Onlooker from Troy:
On the other hand, all the debt has increasingly fueled world economy over the last two decades. And the increasing debt isn’t just a problem in United States. Additionally, it has happened before. Thus, I don’t think it’s just a mentality and attitude problem of the debtors or consumers. I think capitalist economy goes through cycles like that. In a later phase of each cycle, profitability can only be maintained by increasing the relative debt level, which, in turn, leads to increasing disproportions in the economy. These can only be resolved by a severe economic crisis. Then the next cycle starts or there will be a final system break at some point. And then something else will emerge. Probably something worse than what is now, hopefully something better.
rc
July 27th, 2009 at 11:30 pm
@rc
When we arrive to the point of SERFDOM…Then you can be assured that a new cycle will begin to emerge…
July 27th, 2009 at 11:32 pm
What I wonder is this…
Our “idea” of SERFS is mostly attached to Medieval Times…
But really aren’t many of us already SERFS to Goldman Sachs & politicians at the moment?
What’s the definition?
July 27th, 2009 at 11:41 pm
Pre-foreclosure activity simply doesn’t matter if the lenders can’t or won’t foreclose. July has seen a step back in trustee sales from June in So. Cal. (you can see mid-month updates for trustee sales on my blog, end of month trustee sales will be up Saturday) even while NTS and NOD are quite active.
The lenders and servicers are under tremendous political pressure not to foreclose and seem to be caving. I think as long as we have the trustee sales lagging so far behind NTS and NOD it is a mistake to be counting the NOD and NTS as normal leading indicators. From my observation of the public records cancellations of NTS are high, rescissions of NOD are high, neither are counted in the traditional statistics.
The market in So. Cal. could have absorbed so much more inventory during this spring. But the inventory wasnt there to be had. You have the tax credit and artificially low interest rates (1.25 trillion money buying MBS). You are going to have people re-upping there leases and giving up on the market. The government is missing a tremendous opportunity to solve a significant portion of the current markets problem. But they would prefer stagnation and kicking the can down the road instead.
So stupid.
July 27th, 2009 at 11:50 pm
[...] Green Shoot!?@@?#? [...]
July 28th, 2009 at 12:00 am
Here’s a beauty of a statement:
“You’ve got to have fewer people paying down loans…and you’ve got to get banks to loosen underwriting standards,” said RBC Capital Markets analyst Gerard Cassidy. “That is when you will see loan balances in the U.S. banking system expand from where they are today. When that happens, you will see the economy really start to blossom.”
Yeah, that would be great and possible if we weren’t already overleveraged to the gills. What a dolt. I wonder how much he makes to come up with this “analysis.”
July 28th, 2009 at 12:02 am
I hope future growth comes from organic/sustainable agriculture — I’d like to be able to buy a tomato from the grocery store that doesn’t taste like watery plastic.
July 28th, 2009 at 12:05 am
A good post by Michael Panzer along the lines of what we’ve been talking about here:
Will They Ever Grasp the Simple Truths?
July 28th, 2009 at 12:37 am
It appears that Apple is going to enter the tablet field – interesting stuff.
http://www.businessweek.com/technology/content/jul2009/tc20090727_709790.htm
July 28th, 2009 at 12:48 am
“A good post by Michael Panzer along the lines of what we’ve been talking about here:”
Actually, I don’t agree at all with Panzner or Faber with respect to that the Federal Reserve caused the global credit and asset bubbles. I consider this overestimating the power of the Fed to control market interest rates and the credit volume created. The Fed can only control interest rates of a money pool that is small compared to the total credit volume in the markets and hold by creditors like the banks. The Fed doesn’t control how much credit is created in the capitalist world economy. The banks don’t need the Fed to create credit. They do this according to their profit interests. I think the Fed’s doing between 2000 and 2007, like lowering the Fed Funds Target rate or increasing bank reserves, was rather reactive to the credit volume created and to the market interest rates. And when there is de-leveraging of the consumers going on and bank are decreasing the volume of credit, because there is a solvency crisis going on, like it is happening now, the Fed can provide liquidity and bank reserves as much as its want, the bank won’t start lending nevertheless, if it is against their business interests, and there won’t be more borrowing if the debtors can’t service the existing credit volume anymore.
rc
July 28th, 2009 at 4:24 am
This will just continue until a solution is in place. See: http://kevintren.posterous.com/theres-a-fairly-simple-solutio
July 28th, 2009 at 6:00 am
@cvienne: Thanks for the data… 2 sounds more my cup of lavender than 20 (I know plenty of people who’d be better cattle ranchers).
I do think your NOTION of ’serfs of Sachs’ is uncomfortably CLOSE to the truth.
July 28th, 2009 at 7:41 am
EffectiveDemand – “Pre-foreclosure activity simply doesn’t matter if the lenders can’t or won’t foreclose.”
I agree with everything you said my the absolute count and rate of change of NOD’s is a leading indicator of everything mortgage, housing and balance sheet related. NOD can kicking results in another NOD in 60% to 70% of cases 10 months down the road. Can kicking only changes ‘when’. And the way mods are becoming so official and ‘loan like’ fewer borrowers will want to deal with it or qualify.
July 28th, 2009 at 9:08 am
@pmorrisonfl
Becoming a serf
A freeman became a serf usually through force or necessity. Sometimes freeholders or allodial owners were intimidated into dependency by the greater physical and legal force of a local baron. Often a few years of crop failure, a war or brigandage might leave a person unable to make his own way. In such a case a bargain was struck with the lord. In exchange for protection, service was required, in payment and/or with labour. These bargains were formalized in a ceremony known as “bondage” in which a serf placed his head in the seigneur’s hands, parallel to the ceremony of “homage” where a vassal placed his hands between those of his lord. These oaths bound the seigneur to their new serf and outlined the terms of their agreement. [14] Often these bargains were severe. A 7th century Anglo Saxon “Oath of Fealty” states “By the Lord before whom this sanctuary is holy, I will to N. be true and faithful, and love all which he loves and shun all which he shuns, according to the laws of God and the order of the world. Nor will I ever with will or action, through word or deed, do anything which is unpleasing to him, on condition that he will hold to me as I shall deserve it, and that he will perform everything as it was in our agreement when I submitted myself to him and chose his will.” To become a serf was a commitment that invaded all aspects of the serf’s life.
Moreover, serfdom was inherited. By taking on the duties of serfdom, serfs bound not only themselves but all of their future heirs
July 28th, 2009 at 9:30 am
Well S&P-CS just had a +1.1% increase in the 10&20 city prices. YoY Apr -18.1% May -17.0% for the 20 city and YoY Apr -17.9% May -16.8% for the 10 city index. Isn’t this what happened with the prices in 2005 (I believe) when the prices turned down? Nobody wanted to hear it then so what about now.
July 28th, 2009 at 11:01 am
@AmenRa:
So what is it what you are saying? That house prices will go up from here in the same, but reversed way like the prices came down after 2005, because there is a m-o-m increase, but no one wants to hear now that this is going to happen? Is this your prediction?
rc
July 28th, 2009 at 12:03 pm
Fannie: The faster I go the behinder I get.
Freddie: Halloween XXVII
Ginnie: Not my behind!
Farmer Mac: My shoots are wilting, more Brawndough, Ben.
July 28th, 2009 at 5:47 pm
Too bad bubblicious areas of CA, AZ,NV and FLA are still pulling the numbers down. A long way to go for these areas. Especially, affluent markets that haven’t completely sdjusted yet. ALT-A and Option Arms should fix that.
http://www.westsideremeltdown.blogspot.com