Tuesday, September 25, 2012

More On The Housing Market...

This league (the NFL) is a Mona Lisa and they're painting a moustache on it - Rick Reilly on the set of ESPN after the replacement referees stole the game from Green Bay and gave it Seattle on an obviously bad call on the last play of the game.
I was going to rant about the replacement referee situation in the NFL, but I decided anyone who cares can tune into ESPN to see the problem.  I will say that it was revealed this morning that three of the referees on last night's crew were former Pac-12 referees who were fired for poor performance.
Toll Brothers is having a "national sales event starting Friday - incentives, low-rate mortgages and free customization" - I thought the housing market was strong...why the incentives?  -  a long-time market colleague, "Hal" from Chicago
Many of you probably turned on the business news this morning - or will hear it tonight when you get home from work - to hear  that housing prices rose strongly in July vs July last year and that the increase was bigger than was forecast.  If you bothered to read my post yesterday and the links in it from Mark Hanson, you would understand why the Case Shiller 20 city price index is statistically problematic.  You would also understand that a small price increase over last year was expected for several reasons, including the fact that mortgage financing rates are at a record low and credit standards have deteriorated.  In fact, Hanson said this:
Based on various other more real-time prices indices – and even NAR’s monthly existing sales data, which do a great job leading CS by a quarter — prices trended “higher” this spring and summer, as they usually do for the ‘season’...Obviously, the monthly Case-Shiller index will now ‘rise’ through Oct representing the rise in purchase prices from March through July we already know occurred. Then in Nov the CS will start heading lower again for the season. Because the index will still be comping against the CS 2011 “double dip” readings for many more months prices paid will be the last to fall into the “triple dip” occurring now, yet they will experience significant headwinds beginning shortly  LINK
I really hate to rain on the parade of optimism regarding the housing market.  But to me it's one of the glaring areas in which the Wall Street, political and media spin-masters are having a field day manipulating the emotions and expectations of the public ("If you tell a lie big enough and keep repeating it, people will eventually come to believe it" - Joseph Goebbels, Hitler's Propaganda Minister).  Thus, I'm not really raining on a parade, rather my interest lies in getting out the truth.  And truth ain't gonna be found in the mainstream media, Capitol Hill or Wall Street.

The fact remains that the housing market is getting ready to fall off another cliff.  The Fed's mortgage purchase QE program will provide some tenuous support and it might delay the inevitable, but housing is going lower. A lot lower. The basic ingredient to support housing values, even more important than credit availability, is income levels. Real income levels are declining - pretty quickly I might add. That plus true oversupply adds up to lower housing prices.   There is not any public policy implementation that can fix this.  The only fix is to let the free market fix the problem.  What the Fed is doing, and what the politicians are doing, is only succeeding in transferring a lot more wealth from the middle class taxpayer to the bankers, mortgage brokers and Wall Street mortgage trust syndicators...


  1. "What the Fed is doing, and what the politicians are doing, is only succeeding in transferring a lot more wealth from the middle class taxpayer to the bankers, mortgage brokers and Wall Street mortgage trust syndicators... "

    Exactly. See...

    LoRD oF THe CRoNY FLieS...

    The Crony's are now in formation
    These pests are a bad infestation
    Their immoral sleaze
    Transmits a disease
    That threatens the heart of the nation

    The Limerick King


  2. Refs cost the Saints a game too, when they overturned a Pierre Thomas TD reception, with zero proof the ball hit the ground. I have no idea why that's not mentioned at all. The Saints then missed the FG. I will add, it's not like the real refs are much better, they cost the Seahawks a Superbowl XL win with their awful calls.

    Here's the best angle they had on the call, how the f*ck does that get overturned???


  3. Does anyone really give a shit about the NFL? I mean really? The country IS the Titanic and the hooples are all fixated on a bunch of overpaid monkeys bashing each others brains in. Turn it off and get prepared!

  4. 2nd poster Joe's comment above.

    Yeah, I watched sports back in my 20s and 30s. Then I grew up.
    Threw the TV away 5 years ago. Can't even remember the last time I saw something from the MainStreamMedia (big corp owned and with oh-so-slanted- views. Pure garbage).

    Dave, you might be younger, I certainly won't criticize you regarding whatever 'floats your boat'.
    But seriously folks, the country/world is in the crapper, the forces of evil appear to be winning and apparently they really are intent on turning the world into a 'prison planet' .... and yet the overwhelming general public remains fixated on bread & circus.

  5. @Joe Kernan, This might be hard for you to understand but it's actually possible to be "prepared" and also enjoy football. Glad to hear you apparently don't have any hobbies and just stare at your Eagles all day.

  6. I love hobbies....


    .....oh and TV sucks.

  7. I think the point JoeK is making is something along the lines of, "It is insane that there is immeasurably more outrage at a bad NFL call than the fact that the Fed implicitly stated that they will be turning your US dollars into toilet paper.