May housing construction jumps by 17.2 percent
Igor The Terrible
break out the plastic
and......chhhhhhhhhhhhhhhaaaaaaarrrrrrrgggggeeee!!!!!
What..?? Jobs are still being lost? Consumer credit is sinking in
the toilet as credit card companies post record delinquencies for the
month of May? Record budget deficits? Record public debt?
Financially related family murder/suicide incidents are increasing?
Obama's health care reform is getting ready to be moved from life
support to the morgue, none of the fucking fortune 1000 companies are
doing anything meaningful to get back on track and get jobs back to
this country while more bail out bucks continue to flow out of the
treasury... But the fucking Obama economy is getting better?
WHAT THE FUCK???????????????????????
Who are these goddamned people trying to bullshit with these housing
starts? The LION'S SHARE of these housing starts are NOT attributed
to more people landing high paying jobs and taking the plunge. It's
attributed to all the compiled tornado and flooding devastation over
the past few months and the claims are now being realized as "new"
housing starts.
REALITY: This should be called REPLACEMENT HOUSING STARTS!!!
Bottom line: Insurance companies and bond insurers will post more
losses in the next quarter, a small blurb in new jobs in the
construction industry and a small increase in consumer spending
attributed to pent up demand. Tax refunds are having little impact on
economic growth; they are mostly used to pay bills and debts and for
those more fortunate, saved.
SO....what the fuck happens when all the stimulus money dries up and
the reality of no more easy money is left?
Hellllllllooooooooooo hyperinflation!!!
May housing construction jumps by 17.2 percent
AP – In this May 20, 2009 photo, new homes under construction are
seen on a local street in Parkersburg, Iowa. … By MARTIN CRUTSINGER,
AP Economics Writer Martin Crutsinger, Ap Economics Writer – 1 hr 16
mins ago
WASHINGTON – Construction of new homes jumped in May by the largest
amount in three months, an encouraging sign that the nation's deep
housing recession was beginning to bottom out.
The Commerce Department said Tuesday that construction of new homes
and apartments jumped 17.2 percent last month to a seasonally adjusted
annual rate of 532,000 units. That was better than the 500,000-unit
pace that economists had expected and came after construction fell in
April to a record low of 454,000 units.
In another encouraging sign, applications for building permits, seen
as a good indicator of future activity, rose 4 percent in May to an
annual rate of 518,000 units.
The better-than-expected rebound in construction was the latest sign
that the prolonged slump in housing is coming to an end, which would
be good news for the broader economy.
The current recession — the longest since the Great Depression — was
triggered by a collapse in the housing market that led to soaring loan
losses and a banking system crisis. A healthy home market is needed to
support an economic recovery.
President Barack Obama is scheduled to unveil on Wednesday the
administration's plan to overhaul financial regulation in an effort to
crack down on the lending abuses that triggered the most severe
upheaval in the nation's financial system in seven decades.
Even with the encouraging news, analysts don't expect a quick rebound
in housing, since the economy is still shedding jobs and home prices
are falling in many places, making people hesitant to commit to buying
a new home.
Many economists say home construction likely will stop falling in the
current quarter but any sustained rebound isn't expected to take hold
until next spring. That's partly due to the huge overhang of unsold
homes and a record wave of mortgage foreclosures dumping more unsold
homes on the market.
With foreclosures and other distressed properties for sale at deep
discounts, builders often can't compete. Rather than launching new
developments, they are waiting for signs of a broader recovery. Many
economists believe that home prices will keep falling until next
spring and that sales won't start to show significant gains until the
summer of 2010.
The 17.2 percent rise in housing construction for May still left
activity 45.2 percent below where it was a year ago.
The jump reflected a 7.5 percent rise in construction of single-family
homes, the third consecutive increase in this critical segment of the
market.
Construction of multifamily units rose 61.7 percent in May to an
annual rate of 131,000 units. This volatile part of the market plunged
49.4 percent in April.
Construction rose nationwide led by a 28.6 percent surge in the West.
Construction rose 6.8 percent in the South and 11.1 percent in the
Midwest. The Northeast had the smallest gain of 2 percent in May.
The National Association of Home Builders said Monday its housing
market index slipped by one point in June, reflecting many builders'
uncertainty about when their business prospects might improve. The
Washington-based trade association said the index fell to 15. It was
the first decline since January, when the index dropped to a record
low of 8.
That report was "proof that the rise in U.S. mortgage rates lately is
dampening activity," Jennifer Lee, an economist with BMO Capital
Markets, wrote in a research note.
Earlier this month, major builders Toll Brothers Inc. and Hovnanian
Enterprises Inc. reported smaller quarterly losses, rosier sales
trends and more prospective buyers visiting model homes. Industry
executives, however, say the recession and fear of job losses are
keeping many would-be homebuyers on the fence.
Michael Coburn
> WOW~!!!! Fucking prosperity is just around the corner!!! Time to break
> out the plastic
> and......chhhhhhhhhhhhhhhaaaaaaarrrrrrrgggggeeee!!!!!
>
> What..?? Jobs are still being lost? Consumer credit is sinking in the
> toilet as credit card companies post record delinquencies for the month
> of May? Record budget deficits? Record public debt? Financially
> related family murder/suicide incidents are increasing? Obama's health
> care reform is getting ready to be moved from life support to the
> morgue, none of the fucking fortune 1000 companies are doing anything
> meaningful to get back on track and get jobs back to this country while
> more bail out bucks continue to flow out of the treasury... But the
> fucking Obama economy is getting better?
Yes. It is. It takes a while to stop the decline. And until you stop
the decline you can't start a recovery. The numbers say we have seen the
worst of it. Many seem to want to misinterpret that into "recovery".
Very strange.
And BTW... We need some inflation really bad.
--
"Those are my opinions and you can't have em" -- Bart Simpson
John Galt
What's strange is the housing starts going up.
Everyone who looks at the housing market seems to agree that
foreclosures are still very high and there is a lot of inventory in the
"transition" period between foreclosure and the time it is actually
released on the market; some banks seem to be actually HOLDING inventory
off the market hoping to release it when better prices appear, which is
more than a little self defeating.
The big homebuilders don't build to order -- they build to spec. They
have to build in order to survive, so what appears to be happening is
they've decided to build and then compete on price with the used market,
which includes the foreclosures. The bet seems to be that people will
pay a premium for *new and good condition."
Probably so, but how MUCH of a premium?
ISTM that the homebuilders starting to build again right now could very
well throw us into another leg down, increasing inventories too
prematurely to the buyers returning to the market.
But, hell, Cramer announced today on his show that the housing market
had bottomed. I guess it must have, then. :-)
>
> And BTW... We need some inflation really bad.
Not sure about this. According to InflationData, we've only had two
consecutive months of DEflation, and it's been pretty mild -- neither
month annualizes out to more than -.75%. I don't think the final numbers
will show a negative in May, and if it does, it won't be much.
JG
>
Michael Coburn
> Michael Coburn wrote:
>> On Tue, 16 Jun 2009 09:48:36 -0700, Igor The Terrible wrote:
>>
>>> WOW~!!!! Fucking prosperity is just around the corner!!! Time to
>>> break out the plastic
>>> and......chhhhhhhhhhhhhhhaaaaaaarrrrrrrgggggeeee!!!!!
>>>
>>> What..?? Jobs are still being lost? Consumer credit is sinking in
>>> the toilet as credit card companies post record delinquencies for the
>>> month of May? Record budget deficits? Record public debt?
>>> Financially related family murder/suicide incidents are increasing?
>>> Obama's health care reform is getting ready to be moved from life
>>> support to the morgue, none of the fucking fortune 1000 companies are
>>> doing anything meaningful to get back on track and get jobs back to
>>> this country while more bail out bucks continue to flow out of the
>>> treasury... But the fucking Obama economy is getting better?
>>
>> Yes. It is. It takes a while to stop the decline. And until you stop
>> the decline you can't start a recovery. The numbers say we have seen
>> the worst of it. Many seem to want to misinterpret that into
>> "recovery". Very strange.
>
> What's strange is the housing starts going up.
I agree.... Seems fake on the surface.
> Everyone who looks at the housing market seems to agree that
> foreclosures are still very high and there is a lot of inventory in the
> "transition" period between foreclosure and the time it is actually
> released on the market; some banks seem to be actually HOLDING inventory
> off the market hoping to release it when better prices appear, which is
> more than a little self defeating.
>
> The big homebuilders don't build to order -- they build to spec. They
> have to build in order to survive, so what appears to be happening is
> they've decided to build and then compete on price with the used market,
> which includes the foreclosures. The bet seems to be that people will
> pay a premium for *new and good condition."
>
> Probably so, but how MUCH of a premium?
>
> ISTM that the homebuilders starting to build again right now could very
> well throw us into another leg down, increasing inventories too
> prematurely to the buyers returning to the market.
>
> But, hell, Cramer announced today on his show that the housing market
> had bottomed. I guess it must have, then. :-)
You make a lot of valid observations. But lets back up to basics here.
People have to eat and they must eventually produce stuff or they don't
eat. If the price of land is now in the toilet and so too the price of
the actual materials then it may well be that new homes can be marketed
for less than what the shyster bankers are trying to gouge out of the
current home buyers. After all, in reality land, all costs are actually
labor.
>>
>> And BTW... We need some inflation really bad.
>
> Not sure about this. According to InflationData, we've only had two
> consecutive months of DEflation, and it's been pretty mild -- neither
> month annualizes out to more than -.75%. I don't think the final numbers
> will show a negative in May, and if it does, it won't be much.
You misunderstand the point. If there is inflation then at some point
housing prices will stabilize and start to rise. Given a flat or
deflationary system the price of existing housing will NEVER recover.
bosola1
not...you're lucky.....who are you yelling at? We know all of
this.....new home construction? Aren't we crowded enough yet? Must
be a builder.....sorry, Bob
On Jun 16, 12:48 pm, Igor The Terrible
John Galt
I agree with all that. I'm not surprised that they're doing it; what I
wonder is (1) their ultimate ability to make a profit doing it, if they
further depress prices, and (2) even if successful, it just creates more
neighborhoods in need of the bulldozer.
>
>>> And BTW... We need some inflation really bad.
>> Not sure about this. According to InflationData, we've only had two
>> consecutive months of DEflation, and it's been pretty mild -- neither
>> month annualizes out to more than -.75%. I don't think the final numbers
>> will show a negative in May, and if it does, it won't be much.
>
> You misunderstand the point. If there is inflation then at some point
> housing prices will stabilize and start to rise. Given a flat or
> deflationary system the price of existing housing will NEVER recover.
"Never" is a long time. :-)
At any rate, it depends on how you define "recover." CNBC did an
interview a couple of months ago with a hedge fund manager in Dallas who
shorted the mortgage market because he observed the unsustainable
disparity between wage and home prices in the afflicted areas, and
invested thataways. So, if by "recover" you mean "return to an
unsustainable disparity", then you're right: it's NEVER going to
recover, nor should it.
Even at current price levels, prices in some areas have still not
dropped to meet historic levels of sustainability vis a vis wage. Thus,
IMO, there is still "another leg down".
JG
Nickname unavailable
misery out longer, driving pricing down even further. the trick to
stop the bleeding after a free market speculative bubble bursts is to
stop the bleeding before it cuts into the real wealth that was their
before the hyper-inflated bubble starts. today it appears that the
downside will take out the some real wealth to, that is a sign of
deflation, deflation is a lack of demand. demand is driven by wages,
and nothing has been done to rectify dropping wages. a lack of demand,
deflation, is a sign we are flirty with a depression. that depression
may already be here. this depression, will be like the other
depressions we have had, different every time.
squawk, hyper-inflation, hyper-inflation:consumer prices fell 1.3
percent in the 12 months ending in May, the steepest drop since 1950,
low consumer demand has made it difficult for companies to raise
prices
standard disclaimer:yes, we may see inflation roar back someday, but
that will take demand, and demand is still dropping.
Consumer prices rise less than expected in May
Consumer prices rise less than expected in May, slow economy keeps
inflation in check
• Christopher S. Rugaber, AP Economics Writer
• On Wednesday June 17, 2009, 10:51 am EDT
WASHINGTON (AP) -- Consumer prices rose less than expected in May and
posted the steepest annual drop in 59 years, according to government
data released Wednesday, fresh evidence that the recession is keeping
inflation in check.
Low prices will make it easier for the Federal Reserve at its meeting
next week to keep a key short-term interest rate near zero, where it
has been since December. Bond prices ticked up earlier this month on
concerns that signs of an improving economy would force the Fed to
raise rates later this year.
But most economists consider a rate increase unlikely until next year.
Still, as higher government spending pushes this year's deficit toward
a record of nearly $1.85 trillion, many economists warn that inflation
could be a threat in two to three years.
"Inflation may be coming, but it's not here yet and likely won't be
for some time," Richard Moody, chief economist at Forward Capital,
wrote in a note to clients.
The Labor Department reported that the consumer price index rose a
seasonally adjusted 0.1 percent last month, below analysts'
expectations of a 0.3 percent rise.
Excluding volatile food and energy costs, core prices also increased
0.1 percent, matching expectations.
The recession is holding down prices as the unemployment rate has
reached a 25-year high and factories are operating at record-low
levels. Workers concerned about their jobs are less likely to push for
higher pay, while low consumer demand has made it difficult for
companies to raise prices.
Separately, the Commerce Department said Wednesday the current account
trade deficit dropped to $101.5 billion in the first quarter, down
34.5 percent from the fourth quarter. It was the lowest current
account deficit since the final quarter of 2001 when the country was
mired in the last recession.
The financial markets dipped, partly due to a weaker-than-expected
profit forecast by FedEx Corp. The Dow Jones industrial average lost
about 30 points in morning trading, and broader indices also fell.
Gasoline prices rose 9.6 percent in May, before seasonal adjustment,
the department said. But they are still much lower than last year,
when prices at the pump topped $4 a gallon during the summer.
Due to that decline, consumer prices fell 1.3 percent in the 12 months
ending in May, the steepest drop since 1950. The core CPI has
increased 1.8 percent since last year.
Food prices in the U.S. fell for the fourth straight month in May, the
department said, as costs fell for all six of the major grocery food
groups, including fruits and vegetables, meats and poultry, and dairy
products.
Tobacco prices fell 0.3 percent after two months of large increases.
Cigarette makers increased prices in the spring ahead of a steep tax
increase.
Consumers, hammered by job losses, declining home values and dwindling
stock portfolios, are increasingly frugal. That has forced some
retailers to cut prices.
Electronics retailer Best Buy Co. Inc. said Tuesday that its sales of
flat-screen TVs were flat in the first quarter, compared with the
previous year, as it sold more units at lower prices.
The Richfield, Minn.-based company said its profits dropped 15 percent
in the January-March period, even as its rival Circuit City was
liquidated and left the market.
The Producer Price Index, which measures price pressures before they
reach consumers, rose a seasonally adjusted 0.2 percent from April,
the department said Tuesday. That was below analysts' expectations of
a 0.6 percent rise.
Despite the increase, wholesale prices fell 5 percent over the past 12
months. That was the largest annual drop in nearly 60 years. Excluding
volatile food and energy prices, the core PPI dropped 0.1 percent in
May, also below analysts' forecasts.
Falling prices can raise fears about deflation, a destabilizing period
of extended declines. Lower prices may seem like a good thing, but
deflation can cause consumers to postpone purchases, leading to drops
in production and wage cuts.
But most analysts say efforts by the Fed to stimulate the economy will
prevent that from occurring.
Besides lowering its benchmark interest rate to record lows, the Fed
has taken other measures to flood the banking system with cash to
counter a severe credit crisis.
There are concerns about deflation in other parts of the world,
especially in Japan, where prices have been falling. That country
underwent a destabilizing bout of deflation during the 1990s, when the
world's second largest economy struggled to emerge from a real estate
and banking crisis.
Price declines also have been registered in China and India.
A group of economists from the nation's largest banks predicted
Tuesday that prices will continue to fall this year. The American
Bankers Association's Economic Advisory Committee projects that core
consumer prices will decline at a 1 percent annual rate by the end of
2009.
But Bruce Kasman, chief economist for JPMorgan Chase & Co. and
chairman of the committee, said inflation is a greater risk than
deflation over the next several years, due to the expected huge budget
deficits.
Many economists don't expect the Fed to raise interest rates until the
unemployment rate stops rising. It rose to a 25-year high of 9.4
percent in May and many forecasters believe the jobless rate will top
10 percent by year's end.
Michael Coburn
All fine and good logical and reasonable. But I was trying to point out
that the current price of housing is totally artificial in that the
banks, as opposed to marketing the foreclosures at auction are holding
them and claiming asset values that don't actually exist. You are
absolutely correct in setting the price and the value to an equal number
in order to have sustainability. The WAGES MUST support the prices ---
(almost) always (:: it's like "never"::)
But this is where we get to the half empty, half full glass. If wages
can be dramatically increased then the current book value (bank contrived
fake price with no market) can be sustained by the rise in wages. As
wage inflation occurs then the book value (fake price) becomes
sustainable. Is that a "another leg down" or a "leg up"?
What has happened, perhaps, is that the actual market which is propelled
by the labor costs, is able to provide housing at a REAL PRICE that is
lower than the fake banker price.
John Galt
I quite agree.
You are
> absolutely correct in setting the price and the value to an equal number
> in order to have sustainability. The WAGES MUST support the prices ---
> (almost) always (:: it's like "never"::)
>
> But this is where we get to the half empty, half full glass. If wages
> can be dramatically increased then the current book value (bank contrived
> fake price with no market) can be sustained by the rise in wages. As
> wage inflation occurs then the book value (fake price) becomes
> sustainable. Is that a "another leg down" or a "leg up"?
That's where we got into our last argument. It's not "wages" per se, but
the amount of money left over after the normal expenses of life are
taken out, including taxes. Wages up, expenses down, same effect. That's
why I was arguing that a tax decrease was desirable. I was using the
euphenism "repair personal balance sheet" before, but I could well have
been using "support falling home prices at a higher level."
At any rate, the issue is still sustainability of price vs ability to pay.
>
> What has happened, perhaps, is that the actual market which is propelled
> by the labor costs, is able to provide housing at a REAL PRICE that is
> lower than the fake banker price.
Don't know. I suspect that the actual cost of the building materials
used to build the house is higher than the current ability to pay in
many areas. Been to Home Depot lately? Building materials are
outtasight. (Which would seem to presage a move to cheaper and more
energy efficient materials, but I'm told by builders that the minute you
move to another building concept, be it cinder blocks or concrete walls
or logs or whathaveyou, you immediately kick your cost of labor up so
much that it offsets the savings from the cheaper materials, since the
people who know how to competently build a house out of something other
than stick-and-board are hard to find and expensive to hire.
Pretty frustrating -- when I got to India (or anywhere in Asia, for that
matter) and I see a structure being built, its truck after truck of
8-inch thick 10x4 sheets of concrete on the construction site. I don't
know how they do it, but before you know it using nothing but hands and
sweat they have those walls vertical and in place. The R factor on an 8
inch slab on concrete has to be unreal.
JG
JG
>
-=DirtBag©
I have seen some homes with 2 foot thick HayBales covered with a blown
concrete like mixture.. that looked pretty interesting. R factor was
very high too I understand. Part of a building project for alternative
housing materials. Timber structural frame and hay bale and adobe
finishes exterior. With some creative and artistic tweaks it was quite
charming.. Nor for everyone or neighborhoods with restrictive CC+R's
but interesting as a second getaway home..
Bill Reid
"-=DirtBag©" <Di...@sonic.net> wrote in message
news:4a3944c8$0$1645$742e...@news.sonic.net...
> John Galt wrote:
>>
>> Don't know. I suspect that the actual cost of the building materials used
>> to build the house is higher than the current ability to pay in many
>> areas. Been to Home Depot lately? Building materials are outtasight.
>> (Which would seem to presage a move to cheaper and more energy efficient
>> materials, but I'm told by builders that the minute you move to another
>> building concept, be it cinder blocks or concrete walls or logs or
>> whathaveyou, you immediately kick your cost of labor up so much that it
>> offsets the savings from the cheaper materials, since the people who know
>> how to competently build a house out of something other than
>> stick-and-board are hard to find and expensive to hire.
>>
>> Pretty frustrating -- when I got to India (or anywhere in Asia, for that
>> matter) and I see a structure being built, its truck after truck of
>> 8-inch thick 10x4 sheets of concrete on the construction site. I don't
>> know how they do it, but before you know it using nothing but hands and
>> sweat they have those walls vertical and in place. The R factor on an 8
>> inch slab on concrete has to be unreal.
>>
> concrete like mixture.. that looked pretty interesting. R factor was very
> high too I understand. Part of a building project for alternative housing
> materials. Timber structural frame and hay bale and adobe finishes
> exterior. With some creative and artistic tweaks it was quite charming..
> Nor for everyone or neighborhoods with restrictive CC+R's but interesting
> as a second getaway home..
Hmmmm, reminds of the house-building machine that the guy who
Michael "Dumb Mikey Lubow The Liar" Tenenbaum claimed to be
has been pitching...it's some kind of wire-forming device that can
be used to set up a wire frame of a house plan in a matter of
minutes, then the wire frame is sprayed with concrete and voila!
you've got the outer walls of a house completed in like a friggin' day.
I've chatted with the guy several times about this and other issues
related to his business and he's told me some entertaining stories
about trying to sell these things in like South America with government
officials demanding bribes at gunpoint and stuff like that...
---
William Ernest Reid
Post count: took hundreds of days to assemble
-=DirtBag©
Bribes don't always work.. I like the gunpoint angle though. There are
a couple locals that are really good at nuisance suits. Like a complaint
that the stop light we're putting somehow screws up his commute to work
via that road.. Unfortunately it is cheaper to buy him off than to fight
it in court and have delays etc. Called 'GREENMAIL' you just pay them
rather than go to court or have delays with construction. With a large
project you plan on this stuff happening.