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Post by unlawflcombatnt on Jan 26, 2007 18:30:33 GMT -6
Friday's New Home Sales report provided another falsely optimistic view of the housing market. The December increase of 4.8%, coupled with the upward revision of November's numbers, provides the ammunition for those falsely claiming that the bottom has arrived. The currently published annualized 1.5% price decline contradicts any positive interpretation. Furthermore, the annualized sales rate for December 2006 of 1.120 million is 11.5% less than December 2005's previously posted 1.266 million. The year-over-year change in New Home Sales for 2006 was -17.3%. This can be seen in the chart below from the U.S. Census Bureau. Also of interest is the downward revision of every single monthly New Home Sales report from March 2006 through October 2006. The previously posted numbers are in italics and parenthesis on the right side of the most current numbers for each month. The sum total of the downward revisions totals -524,000 New Home Sales. Every month prior to November was overstated initially, and then downwardly revised at a later date. Since the number of New Home Sales were overstated every month, it provided a more optimistic number than the actual, final number. Existing Home Sales have also declined sharply since last year. Below is a copy of Briefing.com's January 2007 report (on the top), compared with their report published in January 2006. There was roughly a 1 million decline in sales between August 2005 & August 2006, and another 1 million decline between September 2005 & September 2006. There was an 850,000 decline between October 2005 & October 2006, and a 730,000 decline between November 2005 & November 2006. The December 2006 vs. 2005 decline was 380,000 sales. Also note the huge inventory increase of +1.7 months' supply from December 2005 to December 2006. Consistent with this "supply" increase, the median year-over-year price increase rate has gone from 10.5% in December 2005 to 0.0% in December 2006. (In fact, prices have declined since December of 2005. This simply denotes the monthly rate of price change for December, at an annualized rate.) ---- Another factor, pointed out by economist Dean Baker, was the effect of the warmer-than-usual weather in the Midwest & Northeast in December. The expected effect of warmer weather would be an increase in the number of homes sold in the affected areas. Sure enough, the entire increase in New Home Sales was confined to the Midwest and Northeast. Sales in the South were essentially unchanged. Sales in the West declined 11,000. The increase in New Home Sales in both the Northeast and Midwest alone totaled an annualized increase of 68,000, more than the nationwide total increase of 51,000. It appears likely that the "increase" in the annualized rate in December would not have even occurred without the unseasonally warmer weather in certain parts of the country.
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Post by LibSlayer on Jan 27, 2007 9:31:51 GMT -6
Today's New Home Sales report provided another falsely optimistic view of the housing market. The December increase of 4.8%, coupled with the upward revision of November's numbers, provides the ammunition for those claiming that the bottom has arrived. The currently published annualized 1.5% price decline contradicts any positive interpretation. Furthermore, the annualized sales rate for December 2006 of 1.120 million is 11.5% less than December 2005's previously posted 1.266 million. The year-over-year change in New Home Sales for 2006 was -17.3%. This can be seen in the chart below from the U.S. Census Bureau. You can try your convuluted nonsensical ramblings to try to sping good news into bad but it doesn't fly. The numbers out Friday are good, so good that the market is afraid of further rate increases.
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Post by unlawflcombatnt on Jan 27, 2007 15:03:37 GMT -6
The numbers out Friday are good, so good that the market is afraid of further rate increases. Once again, don't you ever get tired of being wrong? The market is "afraid" that there won't be the much-anticipated reduction in the Fed rate. They're worried that the over-valuation of stocks (and homes) won't be maintained unless the Fed reduces interest rates. They were really, really counting on more government assistance through an interest rate cut. But that big rat Bernanke may not give it to them. Waaaaaaahhhhhhh! The markets are petrified that the government won't step in an actively manipulate the market to maintain their exorbitant profits, and protect their quarterly bonuses based on share price increases. The last thing in the world Wall Street and Corporate America want is for the Fed to allow free market forces to reduce stock prices. What Wall Street is really saying is that "free markets are good, but let's not get carried away here." Since Bush's plan to Corporatize Social Security failed (which would have provided massive Corporate Welfare for the stock market), Wall Street's Corporate welfare queens have run out of sources of government handouts. The only giveaway still available to them is a reduction in interest rates. Without such a giveaway, Wall Street's Corporate Socialists won't be able to further increase their already exorbitant profits. Poor babies. How are they going survive on only $10 million/year salaries? It's just too much to bear.
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Post by LibSlayer on Jan 27, 2007 18:04:33 GMT -6
" Once again, don't you ever get tired of being wrong? The market is "afraid" that there won't be the much-anticipated reduction in the Fed rate. "
Wrong once again, the market is afraid the Fed will RAISE rates because of the good economic news that came out Friday.
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Post by unlawflcombatnt on Jan 28, 2007 14:12:24 GMT -6
" Once again, don't you ever get tired of being wrong? The market is "afraid" that there won't be the much-anticipated reduction in the Fed rate. " Wrong once again, the market is afraid the Fed will RAISE rates because of the good economic news that came out Friday. So you think there's fighting chance that the Fed will RAISE rates when final 3rd quarter GDP growth was only 2.2%, when 4th quarter CPI allegedly declined by 0.5%, and when a majority of analysts are admitting that the economy is slowing down? Raising rates would make no sense from the Fed's own previous standpoint.
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Post by LibSlayer on Jan 28, 2007 14:55:37 GMT -6
"So you think there's fighting chance that the Fed will RAISE rates when final 3rd quarter GDP growth was only 2.2%, when 4th quarter "
It is not the growth that will be the factor, it will be the risk of inflation. If the risk of inflation is high they will raise rates even if 4th Qtr GDP is under 2%.
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Post by LibSlayer on Jan 28, 2007 15:02:24 GMT -6
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Post by Ryan on Jan 28, 2007 21:34:00 GMT -6
You know the funny thing is. No matter how bad it gets economic wise, the news media will keep saying the economy is "great" or it's in a "soft patch" even when people circle around city blocks just waiting for the soup kitchens to serve them. Propaganda does wonders huh? By the way our country's been in a "so called expansion" for what 6 years now? Eventually a recession is bound to occur whether one likes it or not.
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Post by unlawflcombatnt on Jan 28, 2007 23:11:34 GMT -6
You've quoted exactly 1 economist, and even that link doesn't work. Brian Jones's "assessment" doesn't really mean too much to me. He's stands to profit directly by deceiving the public into thinking the economy is better than it is. From the economists' reports I've seen, like those of Dean Baker and Nouriel Roubini, they are calling for less than 2%, and a - % for 2007.
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Post by blueneck on Jan 29, 2007 18:45:39 GMT -6
Where is this surge in consumer spending supposed to come from, now that housing prices have slowed and declined, removing the easy credit reload? abd the negative savings rate as people max out thier credit lines?
Judging from the disappointing holiday retail sales it is overly optimistic to think that additional consumer spending is going to continue to drive the economy .
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Post by unlawflcombatnt on Jan 29, 2007 20:46:07 GMT -6
Exactly. With home equity withdrawal declining, and mortgage payments on ARM mortgage holders expected to rise, the amount of money available for consumers to spend can't help but decline. There just isn't anything left to boost consumer spending, and a lot of things that will reduce it during the next year.
The 1st evidence that consumers are tapped out came from Christmas season spending. The 3% increase in Christmas season spending was less than the previous year's 5% increase. Declining home prices mean declining home equity and declining home equity extraction.
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Post by unlawflcombatnt on Jan 29, 2007 21:54:43 GMT -6
Another under-reported statistic is the rapidly rising number of home vacancies. Since the 4th quarter of 2005, the home vacancy rate has increased 35%, from a 2.0% vacancy rate to 2.7% vacant. Since January of 2001, the home vacancy rate has almost doubled, from a vacancy rate of 1.5% to the current rate of 2.7%. Below is copy of table from the U.S. Census Bureau showing the vacancy rate changes. Increased vacancies indicate the supply is exceeding the demand, which almost guarantees continuing price declines.
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Post by LibSlayer on Jan 30, 2007 13:02:16 GMT -6
"You've quoted exactly 1 economist, and even that link doesn't work. Brian Jones's "assessment" doesn't really mean too much to me. He's stands to profit directly by deceiving the public into thinking the economy is better than it is. From the economists' reports I've seen, like those of Dean Baker and Nouriel Roubini, they are calling for less than 2%, and a - % for 2007. " "A month ago, the median estimate for fourth-quarter growth was about 2%, matching the third quarter's tepid growth. It looked as if consumer spending would remain soft. But then gasoline prices dipped, the holiday shopping season kicked in, and suddenly economists are projecting that consumer spending ran closer to 4% annualized than 2%, with GDP at 3%, very close to the economy's potential. " www.marketwatch.com/news/story/gdp-job-growth-looking-stronger/story.aspx?guid=%7B3BDD3088-F819-4471-A929-73AD0E0600CA%7DThere you go again with your conspiracy nonsense. He would get his salary whatever the economy does. And you would have to be an idiot to think that what analysts predict a week or two before the release will change the number of what has ALREADY happend. Finally, I showed that analysts ARE predicting that growth is higher than 2%.
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Post by unlawflcombatnt on Jan 30, 2007 17:47:01 GMT -6
There you go again with your conspiracy nonsense. He would get his salary whatever the economy does. No, there you go again with complete nonsense. They'd fire Jones in a heartbeat if he predicted a recession, or even if he routinely provided "pessimistic" assessments. These analysts get paid to sell stocks and promote company & corporate business. They reduce their employers' profits if they honestly predict a recession, or even a slowdown. Jones's salary would not only "change" if he provided an honest analysis, like Nouriel Roubini provides. He'd have 0 salary because his employer would terminate him. He's not paid to analyze. He's paid to sell and encourage investment.
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Post by LibSlayer on Jan 30, 2007 19:06:29 GMT -6
" They'd fire Jones in a heartbeat if he predicted a recession, or even if he routinely provided "pessimistic" assessments.[/quote]
No the hell he wouldn't economicsts make predictions all the time that are wrong.
An no the economists are not paid to sell stocks, they are paid to analyze the economy.
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Post by unlawflcombatnt on Jan 30, 2007 23:38:15 GMT -6
No the hell he wouldn't economicsts make predictions all the time that are wrong. An no the economists are not paid to sell stocks, they are paid to analyze the economy. Yes, an economist who works for an investment company is paid to publish information that is optimistic regarding the company that pays his salary, and those stocks that his company is invested in. Yes, he would be fired in a heartbeat if his predictions caused his company to lose money, even if he correctly predicted a future slump. There are few economists working for investment firms that aren't mainly cheerleaders. And if they can't do a good enough cheer-leading job, they're replaced with someone who can. Most of the honest economic analysis comes from independents or from non-Corporate-supported entities like the Economic Policy Institute, or from honest economic analysts like Paul Krugman, Paul Craig Roberts, Bill Bonner, Gary Shilling, Dean Baker, & Nouriel Roubini
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Post by unlawflcombatnt on Jan 31, 2007 3:58:28 GMT -6
Foreclosures increase 51% NationwideAnnual nationwide foreclosures increased 330,000 in 2006 from 2005,going from 641,000 in 2005 to 971,000 in 2006. This is a 51% increase in one year. This is also an additional 330,000 more homes available, in addition to the all the New Homes built in 2006. In 2005, California foreclosures increased 94% to 157,417 homes statewide. The state of Nevada had the highest rate of increase in foreclosures. Nevada foreclosures were 175% more than in 2005.
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Post by LibSlayer on Jan 31, 2007 8:16:04 GMT -6
YYes, an economist who works for an investment company is paid to publish information that is optimistic regarding the company that pays his salary, and those stocks that his company is invested in. " You don't have a clue about how things work, he is paid to ANALYZE the data and provide an analysis, if he provides an incorrect rosey picture and the company acts on that inaccurate analysis then it will HURT the company. finally, it looks like he WAS correct: "Gross domestic product or GDP, the broadest measure of overall economic activity within U.S. borders, expanded at a 3.5 percent annual rate during the October-through-December quarter, the Commerce Department reported." www.unlawflcombatnt.proboards84.com/index.cgi?board=housing&action=post&thread=1169857833"e=1170221895
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Post by unlawflcombatnt on Jan 31, 2007 17:02:00 GMT -6
Yes, an economist who works for an investment company is paid to publish information that is optimistic regarding the company that pays his salary, and those stocks that his company is invested in. " You don't have a clue about how things work, he is paid to ANALYZE the data and provide an analysis, if he provides an incorrect rosey picture and the company acts on that inaccurate analysis then it will HURT the company. No, that is not correct. His analysis is supposed to help his company. And that happens by encouraging investment, because that increases stock values. Of course, he does encourage clients to invest in the best of the available investment opportunities. But he never, ever encourages clients not to invest at all, regardless of how bad things are going. Which is exactly the type of advice given by most analysts prior to the 2001 crash. Furthermore, an overwhelming majority of analysts and economists were denying the possibility of a recession, even when we were already in one. And that's exactly the way it was in 1929 as well. With a few exceptions, Corporate-owned analysts never predict recessions or downturns, and they never discourage overall investment. Yes, thanks to manipulation of the GDP price deflater, (down to 1.5%, vs. 3.3% in the 1st 2 quarters of 2006), the numbers were concocted upward to a 3.5% increase. More specifically, the Durable Goods concoction is the most unbelievable. (See Table 3) Unlike every other GDP item, the "inflation-adjusted" number for Durable Goods is always increased over the current dollar value. The 2006 current dollar value for Durable Goods purchases was $1.071 trillion. However, the inflation-adjusted number was $1.204 trillion. Thus adjusting for inflation increased the value that Durable Goods purchases added to the annual "real" GDP by $133 billion, or $0.133 trillion. In other words, $133 billion in extra value was added to the total real GDP by simply upwardly adjusting the contribution made by Durable Goods purchases. If there had been 0 inflation-adjustment for Durable Goods purchases, it would have reduced the stated real GDP growth by $133 billion, which would have reduced the total real GDP growth in 2006 from $373.8 billion to $240.8 billion. That would have reduced 2006 real GDP growth to only 2.2%. It's also worth noting that in the BEA's current release, they've downwardly revised 2005's real GDP growth to only 3.1%, from their previously posted 3.2%. (see bottom of page 3 of current release). And 2005's original GDP had been published as 3.5% by the BEA, as late as June 29th, 2006's "final" report for the 1st quarter of 2006 report. (See Table 1) Thus 2005's real GDP has already been adjusted downward by 0.4%, from the initially published 3.5% down to the current 3.1%. What a difference 6 months makes. (I guess there's no such thing as a "final" report, when it comes to downwardly revising previously overstated numbers.) It'll be interesting to see how many times 2006's GDP is downwardly revised in future reports.
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Post by LibSlayer on Feb 1, 2007 8:12:57 GMT -6
[quote author=admin board=housing thread=1169857833 post=1170284520
No, that is not correct. His analysis is supposed to help his company. [/quote]
And he does that by being as accurate as he can with the forecast.
[quote author=admin board=housing thread=1169857833 post=1170284520
Yes, thanks to manipulation of the GDP price deflater, (down to 1.5%, vs. 3.3% in the 1st 2 quarters of 2006), the numbers were concocted upward to a 3.5% increase. [/quote]
The GDP price deflator is a CALCULATED value that is derived from nominal and real GDP, not the other way around.
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Post by unlawflcombatnt on Feb 2, 2007 2:42:03 GMT -6
The GDP price deflator is a CALCULATED value that is derived from nominal and real GDP, not the other way around. The GDP deflator is calculated by using the price of a market basket of goods in the current year, divided by the price of the same market basket in the base year. Obviously no "market basket of goods" covers every item that's included in the GDP. (It's not even close.) Thus, the price deflator calculated from the comparison of these 2, very limited market baskets is the "GDP deflator." And this is multiplied times the total current dollar value of goods to get the "real" GDP, exactly the way I described it.
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Post by LibSlayer on Feb 2, 2007 8:10:45 GMT -6
The GDP price deflator is a CALCULATED value that is derived from nominal and real GDP, not the other way around. The GDP deflator is calculated by using the price of a market basket of goods in the current year, divided by the price of the same market basket in the base year. And it is not used in the calculation of GDP real or nominal, it is the other way around.
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Post by unlawflcombatnt on Feb 2, 2007 22:17:41 GMT -6
The GDP deflator is calculated by using the price of a market basket of goods in the current year, divided by the price of the same market basket in the base year. And it is not used in the calculation of GDP real or nominal, it is the other way around. No, you are absolutely wrong. It is impossible to include every single item in the "market basket of goods" that is included in the total GDP. Therefore, a GDP deflator is calculated from only those goods that can be measured in comparison, and that are included in this "basket of goods." And the number calculated from that is multiplied times the current dollar GDP to derive the real GDP. Certain items, like home prices, are not even used to compute the GDP deflator. But home sales are definitely part of the total GDP. And that is the case with many items. The number of items included in the "basket of goods" is limited. The number of items added into the total GDP is not. The total GDP includes all items, not just those used in the "basket-of-goods" to calculate inflation.
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Post by LibSlayer on Feb 3, 2007 10:35:06 GMT -6
"No, you are absolutely wrong. It is impossible to include every single item in the "market basket of goods" that is included in the total GDP. "
I haven't said anything about the market basket. I am refuting the claim that the deflator is used to calculate real GDP and that by using a different deflator than was used it makes growth look more than it is. This was your claim yet you keep on an on about the market basket.
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Post by unlawflcombatnt on Feb 3, 2007 15:31:27 GMT -6
"No, you are absolutely wrong. It is impossible to include every single item in the "market basket of goods" that is included in the total GDP. " I haven't said anything about the market basket. I am refuting the claim that the deflator is used to calculate real GDP and that by using a different deflator than was used it makes growth look more than it is. This was your claim yet you keep on an on about the market basket. The point I'm making is that there is no way to directly measure the "real" GDP. The "real" GDP cannot by determined without having a GDP deflator to start with. The only thing that can actually be measured is current dollar GDP. In order to get the real GDP, you have to derive a mechanism to adjust for inflation. That's where the "GDP deflator" comes in. Without using a GDP deflator, there is no way to determine real GDP. Real GDP is not what's actually measured in the reports from the BEA, Only current dollar GDP is directly measured. I can't measure my hourly wages in terms of 2000 dollars. I have to calculate my "real" wages (measured in 2000 dollars) using a price index. Along the same lines, I can't just measure how much money I have in the bank in terms of "real" dollars. All I can measure is the "current-dollar" value of my account. In order to calculate the "real" dollar value of my account, I have to multiply (or divide) it by some number to factor in inflation. It is this factor that is calculated from the value of a market basket of goods, derived from the price difference between the "current dollar" value of that basket and the previous value of the same basket measured at an earlier date. And, once again, this basket is not all-inclusive. One cannot simply measure "real" GDP. It has to be calculated from "current dollar" GDP (since that's what actually is measured), and then factor in the inflation adjustment (the GDP deflator) to get the "real" GDP.
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