Jump to content
House Price Crash Forum
Sign in to follow this  
Willy Weasel

Us Homebuilder Confidence Falls To 16 Year Low

Recommended Posts

It has taken the US builders 12months or there abouts to go for boom to bust. The UK builders stocks started their slide a couple of months or so ago. So about May next year...

Share this post


Link to post
Share on other sites

Not surprising really. It will be interesting to see if Bernanke makes significant reference to problems in the housing sector during his testimony to Congress tomorrow. The problem he has is that with rising oil costs and and a weaker dollar, the inflation outlook for the US looks bleaker now than at any time over the past few months. A rate cut seems out of the question and were he to allude to such a possibility then it would be a mega surprise, even if markets seem to be pricing it in.

Share this post


Link to post
Share on other sites
Not surprising really. It will be interesting to see if Bernanke makes significant reference to problems in the housing sector during his testimony to Congress tomorrow. The problem he has is that with rising oil costs and and a weaker dollar, the inflation outlook for the US looks bleaker now than at any time over the past few months. A rate cut seems out of the question and were he to allude to such a possibility then it would be a mega surprise, even if markets seem to be pricing it in.

Hi Sebastian

I agree that a weaker Dollar looks bad for inflation but which is worse for the Fed - inflation around 2% or growth below 1%? If there's any threat of the latter the Fed will cut IMHO.

Share this post


Link to post
Share on other sites
Hi Sebastian

I agree that a weaker Dollar looks bad for inflation but which is worse for the Fed - inflation around 2% or growth below 1%? If there's any threat of the latter the Fed will cut IMHO.

And China dumps all those lovely treasury securities.

No, America is screwed either way, which is why they will hold for the foreseeable future because any move is damaging. Raise and the housing market will collapse with a recession. Drop and they send the message they will not defend the dollar to the markets.

Share this post


Link to post
Share on other sites
Hi Sebastian

I agree that a weaker Dollar looks bad for inflation but which is worse for the Fed - inflation around 2% or growth below 1%? If there's any threat of the latter the Fed will cut IMHO.

Yes, but growth in quarter 2, which will be reported officially next week, looks like coming in above 3%, a major uplift from the paltry 0.7% in quarter 1. When one considers the drag that the housing sector has had on the economy that is some feat. Bernanke will be armed with these growth figures when he goes in tomorrow and this will allow him greater scope for sounding more hawkish. Any softening by the Fed at this stage would be a major capitulation and I don't see any chance of that happening. Markets have totally misread this Fed over the past 6 months, preferring to justify much of the rally in the Dow on the hope of rate cuts that were never going to come.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 355 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.