Wednesday, Nov 18, 2009

Contrary report. Sorry, Smuggy.

Bloomberg: Housing Starts in U.S. Unexpectedly Plunge 11%

"Builders in October unexpectedly broke ground on fewer U.S. houses as the sales outlook darkened with the looming expiration of a government tax credit and mounting joblessness. "

Posted by rumble @ 02:10 PM (1481 views)
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13 Comments

1. cynicalsoothsayer said...

Followed by Smuggy poison. Poor Smuggy.

Wednesday, November 18, 2009 02:55PM Report Comment
 

2. crunchy said...

Americans need to be increasingly weakened before the infamous "Haliburton" Fema camp gates open. (research)

It's all for your own good and safety! The volitile revolution movements are still growing, and the spark awaits.

Diplomacy will not be an option..........Oh yes, "House prices down."

Wednesday, November 18, 2009 03:15PM Report Comment
 

3. Insanity said...

China has now become the biggest risk to the world economy
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6575883/China-has-now-become-the-biggest-risk-to-the-world-economy.html

Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its "beggar-thy-neighbour" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession.

At some point, American workers will rebel. US unemployment is already 17.5pc under the broad "U6" gauge followed by Barack Obama. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.

Wednesday, November 18, 2009 03:28PM Report Comment
 

4. smugdog said...

Crunchy, I couldn't agree more.

Wednesday, November 18, 2009 03:44PM Report Comment
 

5. will said...

This has happened because of the withdrawl of QE. It has to happen here soon.

Wednesday, November 18, 2009 03:47PM Report Comment
 

6. mark wadsworth said...

How does this reconcile with the headline two posts lower down on this blog? Either starts are up or they're down.

@ Will, please note QE (in this country) has nothing to do with anything, has no particular impact neither good nor bad. What is impacting this house prices is bank bail outs, forced lending, govt buying up overpriced properties under "shared ownership" nonsense, SDLT holiday, the fact that banks can't repossess people any more, Council Tax freezes, the fact that the govt will pay your mortgage if you lose your job etc etc etc (the list is endless).

The one thing that does not belong on the list is QE.

Wednesday, November 18, 2009 03:57PM Report Comment
 

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8. Insanity said...

No jobs and a weak dollar is not going to jump-start the housing market but that didn’t stop “expert economists” from expecting 600,000 housing starts this month. Gee, if they can be 15% wrong about that, I wonder what other optimistic crap they’ve been telling us is going to fall apart. Permits also fell to 552,000 from 575,000 last month, possibly because 10.9% of the US housing supply, or 14.2M homes, are currently vacant and more and more families are evicted through foreclosure every day (averaging over 300,000 a month). When the number of people being thrown out of their homes exceeds the number of people moving into homes – generally there is a problem.

Wednesday, November 18, 2009 04:39PM Report Comment
 

9. cynicalsoothsayer said...

QE has an indirect effect on house prices. QE has pushed down the price of gilts, which has kept government borrowing costs down, which has allowed government to do bank bailouts, buy up overpriced properties under "shared ownership" nonsense, SDLT holidays, council tax freezes, pay your mortgage if you lose your job etc etc etc.

Wednesday, November 18, 2009 05:15PM Report Comment
 

10. Yoss said...

Housing starts slump after tax breaks end? Unexpected? I wonder if the also be an 'Unexpected ' drop in auto sales when the cash for clunkers gets wound up? and the corresponding Unexpected increase in un-employment?

Wednesday, November 18, 2009 06:01PM Report Comment
 

11. mark wadsworth said...

@ CST, sure, QE pushes down interest rates in short term (i.e. days or weeks or even months).

But the biggest driver of gilt interest rates is overall indebtedness of the government. Seeing as QE does not change overall govt indebtedness by one red cent (actually it increases it slightly), the overall impact is too small to measure (and probably pushes up interest rates ever so marginally in the medium term, six months or more).

Wednesday, November 18, 2009 06:23PM Report Comment
 

12. icarus said...

You can also try to put downward pressure on long-term IRs by buying long-term Treasury bonds. This can support house prices, as the Fed is trying to do in order to prevent huge writedowns on adjustable Alt-A and prime residential mortgages (a much bigger problem than sub-prime). The purpose of this, of course, is to protect banks' balance sheets.

Wednesday, November 18, 2009 08:05PM Report Comment
 

13. cynicalsoothsayer said...

MW I agree, QE has a short term interest rate depression effect that when ended will probably rebound beyond what they would have been without QE. This does effect house prices though; it helps keeps them up possibly until the election, but then the hangover starts with a vengeance.

Wednesday, November 18, 2009 09:13PM Report Comment
 

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