My post of February 23rd contained data showing a decline in Existing Home Sales and in the Purchase Price of Homes with mortgages backed by Fannie Mae and Freddie Mac.
Data released on March 23rd also showed a decline in New Home Sales, as shown on the graph below.
Data released on March 26th shows a further decline (into negative territory) of Pending Home Sales, as shown on the graph below. Since it's a "leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect…renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction," this declining data, along with the declines noted above, do not confirm what the stock markets have been doing.
The stock (and commodity) markets have been going up since 2009, while Existing, New, and Pending Home Sales have basically been stagnant at their 2009 low levels…this is a huge negative divergence.
This is obviously an area that has never been resolved by the Fed's QE 1&2 and Operation Twist programs, nor by the politicians (Republicans and Democrats), since the 2007/08 financial crisis began.
Thanks so much for having invited me, and providing me with the fantastic opportunity to participate in this wonderful & engaging world you have created online. In my humble opinion, the Almighty creator thinks most highly of us, when we ourselves also use our creative capacities, adding to the mystery that is life, and you clearly have done that here.
I regret to inform you, that I have decided to move on, as I can no longer intelligently engage in this faux market. It has gotten so bad at this point, that I simply have lost interest in something which I use to find so intriguing, and which gave me the greatest of pleasure.
I simply am unable to join in with the momo trend followers, whom I believe mistakenly confuse their trading acumen & brilliant timing, with a stock market that has simply been hijacked by the FED & TBTF banks;-)
I fear we will all pay dearly one day soon, for this lack of dignified leadership, mature responsibility & courage, being so consistently recklessly demonstrated by those in positions of trusted authority, when they clearly should know better.
Fortunately, even with the considerable beating I have taken in Q1 of 2012, I still somehow have manged to depart quite a bit ahead since I started in the late Summer of 2008, so I can not complain too much on that score.
Again, thank you very much for letting me participate, and so generously permitting me to share my thoughts as an avid, and enthusiastic SOH guest contributor. I would like to think that a few of my macro market observations / header posts, may have added some color & intrigue to your superior financial blog. I only hope that I have not mislead too many lurkers, with my unorthodox DOOM & BOOM Idiot Savant methodology.
I have nothing but good thought about you, and all the wonderful Slopers that you have attracted to your stimulating blog, and yes that even includes the misguided momo trend following, chart humping, price chasing, Bernanke whores;-)
All the best, and best of luck to all…………perhaps I will see you in the Fall
BDI SOH's Idiot Savant
Let me present to you, Entourage style, an investment idea.
Say a company leverages its entire future on one movie. And this movie opens with the third largest opening weekend of all time. And this movie blows away all box office expectations. And has fantastic critical acclaim. Would this be a company you’d be interested in?
The Headline reads "Ben Bernanke saved the global economy. So why does everyone hate him?"
I don't know for sure why everyone hates him; he seems like a nice enough fellow. But it could have something to do with the smug, myopic and academic surety with which he goes about his business of remotely managing an economy that should be allowed to purge itself of the excess leverage and unmanageable debt that has been systematically layered in over the years, enriching some and relatively impoverishing many.
It could be because people who care enough to see through the headlines know that he is systematically employing more of what already brought the system to this sorry state. They hate him because he and his ego are reworking the Treasury market to paint a desired picture that all is well and good. They hate him because being astute enough to extrapolate forward, they know that what he is doing paints things a certain way in the short term (for short term benefits to some) while hard wiring in future damage that would continue the progression – measured over years in the era of Inflation onDemand – of ever rising moral hazards.
I don't hate him, because that emotion is counter productive when it comes to managing this mess. He is just the self-satisfied face of those entities that would seek to destroy me (and my big picture investment stance) if I were to allow that to happen.
Look at him… look into those eyes… look at the powerful monetary god casting his gaze upon you. He cannot hurt you if you understand his modus operandi and his true mission, which is to inflate the banking system out of a black hole that was created by policy the likes of which is being employed today. Feel sorry for him, because his mission really is an impossible one.
I continue to wonder whether he is an evil genius or an impossibly dull stooge (as compared to his predecessor) who actually believes his own b/s. The US Treasury yield curves have been reworked by a powerful macro monetary manager. The curves are now telling us that there are few concerns about inflation, thus the Fed is free to keep ZIRP on tap indefinitely. We also see the economy revving up a bit… yet still no sign of a withdrawal of ZIRP.
What is this man afraid of? Go ahead, let the economy fly of its own merit. Go ahead genius, I dare you.
Cobra was saying at the weekend that the Dow is the leading index from a technical perspective at the moment. That may well be right. If so then the low on Friday at rising support from the October low looks particularly important, and it's obvious from the chart what will need to happen next if we are to see any more retracement this week. On a break below trendline and level support in the 13000 area the obvious next target is in the 12750 area. Without that break the main upward trend remains unbroken, and the next obvious upside target is in the 13400 area: