STOCKS FALL, OIL TANKS, GOLD GETS CRUSHED: Here’s What You Need To Know
Things got ugly.
First the scoreboard:
Dow: 13,927, -108.1 pts, -0.7 percent
S&P 500: 1,511, -18.9 pts, -1.2 percent
NASDAQ: 3,164. -49.1 pts, -1.5 percent
And now the top stories:
There was a hodge-podge of news today, and for the most part it was negative.
Housing starts dropped 8.5 percent to 890k from last month’s reading of 973k. This was much worse than the 920k level [...]
We got another bout of strong data today.
Initial claims came in well below expectations.
And housing starts came in well above expectations. Housing is the primary bullish tailwind for the US economy, so this is particularly gratifying.
That being said, the economy is not growing blazing fast just yet.
In a note out this morning, Goldman’s Shuyan Wu presents a note titled A Roadmap For Slow Growth In Q1.
Goldman expects growth of 1.5%, and [...]
From housing starts to home prices, renowned economist Robert Shiller acknowledged “there are a lot of positive signs” for the U.S. housing market right now, but told CNBC Wednesday it’s still unclear if a recovery is actually in place.
After all, Shiller noted the housing futures market for single-family homes was only “mildly optimistic” before superstorm Sandy struck the U.S.’s East Coast with expectations for just 3 percent growth per year over the next four [...]
Before the nonsense gets too far out of hand, let’s review very briefly why natural disasters aren’t a net plus for an economy.
Don’t laugh. Every time some region of the world suffers the ravages of nature, economists pump out silly reports outlining the benefits.
They all read pretty much the same:
“While said hurricane/tornado/tsunami/flood affected millions of people, disrupted the normal flow of activity and caused tens of billions of dollars [...]
Groundbreaking on new U.S. homes unexpectedly fell in July and gains from the prior month were revised lower, a reminder of the housing markets weakness despite some recent signs of recovery.
The Commerce Department said on Thursday that housing starts dropped 1.1 percent last month to a seasonally adjusted annual rate of 746,000 units.
The reading, which is prone to significant revisions, was below the median forecast in a Reuters poll of [...]
Housing Starts MISS EXPECTATIONS, Fall To 708K (Exp. 722K)
Housing starts declined 4.8 percent to an annualized pace of 708,000, even as building permits sharply outpaced expectations, jumping to 780,000.
Click here for updates >
Read more: http://www.businessinsider.com/housing-starts-2012-6#ixzz1yF3cYIMq
Gold’s London AM fix this morning was USD 1,646.50, EUR 1,258.41, and GBP 1,030.80 per ounce. Friday’s AM fix was USD 1,652.00, EUR 1,255.51 and GBP 1,035.54 per ounce.
Silver is trading at $31.61/oz, €24.16/oz and £19.78/oz. Platinum is trading at $1,577.25/oz, palladium at $656.90/oz and rhodium at $1,350/oz.
Cross Currency Table – (Bloomberg)
Gold fell $1.50 or 0.09% in New York and closed relatively unchanged at $1,650.20/oz yesterday. Gold traded sideways prior [...]
On Gross’s view that we may see a sign from Bernanke in April that QE3 will be rolled out:
“I think [Chairman Bernanke] is very satisfied…I think the Fed is outcomes-oriented. They want an outcome in terms of a higher stock market, in terms of housing starts and lower unemployment. What [Bernanke] said on Monday, in terms of the employment, he suggested that up until now, we’ve done very well in [...]
By Irwin Kellner, MarketWatch
PORT WASHINGTON, N.Y. — Rising prices are making some statistics look better than they really are.
Now that inflation is beginning to pick up, it is vital to distinguish between what is real and what is just an illusion caused by inflation. If one does not, one might very well come away with the impression that the economy is shifting into higher gear when, in fact, [...]
Singapore’s exports fell for the first time in three months in January on lower electronics and petrochemical shipments, as Europe’s debt crisis crimped demand and the Chinese New Year holiday shortened the working month.
Non-oil domestic exports slid 2.1 percent from a year earlier, after a 9 percent gain in December, the trade promotion agency said in a statement today. The median of 15 estimates in a Bloomberg News survey [...]
by Charles Hugh Smith from Of Two Minds
2011: The Last (Debt-Consumerist) Christmas in America
The end of debt-based affluence: welcome to The Last Christmas in America (TLCIA).
Almost 35 years ago, as unemployment rose toward 10%, the January 1975 cover of Ramparts magazine blared: The End of Affluence: The Last Christmas in America. (TLCIA)
The article wasn’t referring to the religious celebration; it was referring to the postwar concept of Christmas as the frenzied, [...]
From Zero Hedge:
Once again, the U.S. Department of Truth succeeds in fooling the algos. Today’s November Housing Starts number was a blockbuster… at 685k annualized units, it came higher than the highest estimate (range was 600k-655k), and certainly higher than the average estimate of 635k. It was obviously higher than the downward revised previous number of 627k.
All great. Housing is soaring, employment must be back. Right? Wrong.
One peek under the [...]
By Steve Goldstein
WASHINGTON (MarketWatch) – Confidence in the market for newly built single-family homes dipped slightly in September to remain in very low territory, according to an index released Monday. The National Association of Home Builders/Wells Fargo Housing Market Index fell by a point to 14, on a seasonally adjusted index where readings above 50 are considered good. The index, which correlates closely with single-family housing starts, has held between [...]
1) EU acknowledges possible Greek debt restructuring
“A senior European finance official acknowledged for the first time on Tuesday that Greece may have to restructure its debts, a move which could blow Europe’s sovereign debt crisis wide open again.
Speaking at a seminar on the sidelines of an EU finance ministers’ meeting, Jean-Claude Juncker, the chairman of the 17-country Eurogroup, said there was a need to move towards [...]
Since the triple dip in housing was recently circumvented courtesy of QE2, and was “transitory” in theory today’s subpar housing starts and permits data is the beginning of the quadruple dip. And subpar it was: starts came at 523K on expectations of 569K, down from revised 585K previously. Permits were also ugly, missing expectations by a comparable account, printing at 551K, with consensus of 590K(and [...]
What do you think the impact of the Japanese crisis will be on the economic recovery and global financial markets?
From a human perspective, it is obviously a tragedy. Economically, I do not think the Japanese crisis will have a major impact on overall recovery. Japan accounts for 8% or 9% of the global economy. This disaster could slow the growth of Japan’s GDP by 2% [...]
The Home Price Index came at 140.86 compared to 142.42 previously. Basically the double dip refuses to stop, and that even despite yesterday’s “stunning”(ly irrelevant) pending home sales number.“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. [...]
Stagflation, bitchez. PPI in February doubled to 1.6% on expectations of 0.7%, compared to 0.8% previously, and 5.6% Y/Y! This is the largest increase in finished goods prices since a 1.9-percent advance in June 2009. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 2.0 percent, and the crude goods index climbed 3.4 percent. On an unadjusted basis, prices [...]
The Fed’s monthly statement on the economy was out today and it was more redundant than a repetitive semantic pleonasm and less telling than a gay soldier (though it’s not clear that anyone asked).Â The FOMC statement was little changed from last month with the headline being that the economic recovery is still eating a fat dick (and not any fat dick, but an AIDS [...]
DEFLATION REMAINS THE PRIMARY RISK
The San Francisco Fed just published another great report titled The Breadth of Disinflation.
The fact that one of the most reliable research departments within the Fed system could publish such a report two years into the greatest experiment with fiscal, monetary and bailout stimulus and reflationary policies speaks volumes. Frankly, what it tells us is that the 4.3% yield on the [...]
Also includes % that are single family. Note the three worst years and also remember that these numbers do NOT reflect SALES. The new homes sales has dropped each of the last three years, November data comes out next week. Expect this year to drop below 300k.
Oct 1959 â€¦.. 1,316.7 â€¦.. 81.4%
Oct 1960 â€¦.. 1,095.1 â€¦.. 80.3%
Oct 1961 â€¦.. 1,127.8 â€¦.. 74.9%
Oct 1962 â€¦.. 1,248.0 â€¦.. 68.7%
Notice the comments on the bottom of the annual August data analysis for those of you who “cheered” yesterday’s bogus headlines:
Year â€¦.. Actual Start â€¦.. Single Family
Aug 1959 â€¦.. 138.2 â€¦.. 114.9
Aug 1960 â€¦.. 130.3 â€¦.. 105.4
Aug 1961 â€¦.. 127.1 â€¦.. 94.4
Aug 1962 â€¦.. 147.7 â€¦.. 101.7
Aug 1963 â€¦.. 144.0 â€¦.. 98.2
Aug 1964 â€¦.. 138.3 â€¦.. 92.0
Aug 1965 â€¦.. 128.3 â€¦.. 88.8
Aug 1966 â€¦.. 101.8 â€¦.. 69.4
Aug 1967 â€¦.. [...]
Tuesday, September 21 â€“ Housing Starts and Building Permits (Aug.)
Starts are expected to have fallen by 0.9% in August.
Building permits, though, will bounce up 1.6%.
Tuesday, September 21 â€“ FOMC Announcement (Sep.)
There is a greater-than-even odds that the Federal Reserve will reduce the interest rate paid on bank reserves to discourage excessive hoarding of cash balances held by banks. Expect the FOMC to retain the “exceptionally low for an extended period” [...]
Iâ€™m just saying, thereâ€™s hanky panky going on in the stock market, which, I think, is being propped up by the people responsible for the American economy. This is being done to reassure American investors, and there are lots of them, that at least, that measure of their wealth is not being eroded. But itâ€™s not just the stock market that is being manipulated. Every official economic government statistic has [...]
Even as the PPI data came out as expected, both on a MoM (0.2% vs exp 0.2%), and YoY basis (4.2% vs exp 4.2%), from a previous reading of -0.5%, and thus serving as no market moving indicator in either direction, housing starts of 546k came in well below expectations of 560k. And in keeping with tradition, the US government once again revised the prior period data, to make today’s [...]
This morning, US housing starts are expected to show a further fall-off in demand after the expiry of the homebuyerÃ¢â‚¬â„¢s tax credit. Without the US governmentÃ¢â‚¬â„¢s artificial support, the housing market is struggling to stand alone. The fall in the US housing index yesterday is further proof that demand for new homes has weakened further. Other releases should provide stronger evidence that the housing market is Ã¢â‚¬Ëœnow enduring a double-dip [...]
Some deep thoughts from David Rosenberg on the likelihood of a secular bear market and potential new lows:
Well, well, so much for consensus views.Ã‚Â Like the one we woke up to on MondayÃ‚Â morning recommending that bonds be sold and equities be bought on the newsÃ‚Â of ChinaÃ¢â‚¬â„¢s Ã¢â‚¬Å“pegÃ¢â‚¬Â decision.Ã‚Â As we said on Monday, did the 20%-plus yuan appreciation from 2005 to [...]