Fast Facts

Lee Adler’s brief observations on the market, economy and financial system with illustrative charts

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New Home Sales Biggest Monthly Decline In History- A Warning Shot

New Home Sales Vs. Population

The Commerce Department reported today that sales of newly built homes posted a seasonally adjusted month to month decline of 7.6% to an annualized rate of 609,000. This was near the consensus guess of economists of 602,000 according to the Wall Street Journal. In terms of the game of pin the tail on the donkey-economists it was a non-event. The…

Housing Inflation- A Simple Case of Supply and Demand Exacerbated By Low Rates

Housing demand growth is slowing, so why is housing inflation continuing at a steady pace more than twice the rate of the CPI? The answer is simple- tight supply and a mortgage rate subsidy that reduces the effective cost of a house to the buyer, thereby increasing the purchase price that buyers can pay. The initial…

Falling Mortgage Rates Increase Buyer Subsidy But Don’t Stimulate Sales

Falling Mortgage Rates No Longer Stimulate Home Sales - Click to enlarge

There were two important releases on the US housing market today. One is the widely followed Existing Home Sales report from the NAR and the other is a lesser known but more in depth report from the online real estate brokerage The Wall Street Journal reported that “Existing-Home Sales Fall for Second Straight Month,” referring to…

Housing Starts Disappoint, Big Picture Worse, But Does It Matter?

Housing Starts and Contractor Employment - Click to enlarge

The Commerce Department reported that the headline number for August housing starts was 1.142 million units. This was below the overly optimistic consensus estimate of economists of 1.186 million, and below the July figure of 1.212 million. The numbers are reported on a seasonally adjusted annualized basis, which means that any month to month error…

Disaster In The European Banking System Exposed

Banks Fleeing Banks in Europe - Click to enlarge

ECB data on bank deposits for the Eurozone shows total bank deposits down sharply in July, breaking the uptrend in force since the low in 2014. That’s shocking considering that the ECB just boosted its money printing QE programs. Deposits should be rising steadily in concert with the amount of QE, not falling. But cash extinguishment and capital flight are increasing faster than the ECB can print.

Median Household Income Rose 5.2%! Yeah. PLA says That’s The Ticket

New York Times- Binyaming Applebomb-  Household incomes for American families rose strongly in 2015, breaking a yearslong pattern of income stagnation. The median household’s income in 2015 was $56,516, an increase of 5.2 percent over the previous year — the largest one-year rise since at least 1967, the Census Bureau reported on Tuesday. Wowza! We’re on…

Lower August Tax Collections Suggest US Near Recession, Fed To Delay Again

Real time withholding tax collections slumped badly in August after skyrocketing in July. The growth rate is now back to the lowest levels of the past year. As of September 1, the annual rate of change was +1% in actual, nominal terms versus the corresponding period a year ago.  That would be a negative number…