Bubbles Doing What Bubbles Do

Economists blaming weather for the real estate/housing “pause” were cautiously optimistic for March ahead of this week’s housing data windfall. Economists expect that sales rose 2.3 percent to a seasonally adjusted annual rate of 450,000 last month, according to a survey by FactSet. New-home buying dipped 3.3 percent in February. Harsh winter storms that month .. read more

The Unearned Age of Certainty

In continuing yesterday’s pointed critique of the current state of monetarism, there is another element to consider here. To reiterate, last year the yen devaluation was unquestionably seen as a catalyst toward rebirth of Japan Inc, and thus Japan economically (and maybe even demographically). This sentiment was as ubiquitous as it was accepted on faith: .. read more

Growing Detachment and Asymmetry Of Real Estate

I mentioned earlier today that pretty much the only sector of the economy (outside of government run lending for university waste) acting favorably toward interest rate “stimulus” was autos. Prior to the historic credit selloff and MBS rout in the middle of last year, you could add housing to the list. The latest figures for .. read more

Intentions On Housing

I speculated in May last year that the introduction of the taper concept was in large part due to what Jeremy Stein articulated in February 2013, namely the idea that certain “markets” were becoming overheated in the “reach for yield.” In essence, it amounted to an attempt to “talk down” assets, chief among them the .. read more

A Weak Dollar Environment

The US Dollar index exhibits the classic characteristics of a downtrending asset: Declining 50 and 200 day moving averages with the 50 solidly below the 200. Momentum indicators (MACD, PMO) both on sell signals. A longer term view shows the index on the edge of support: A break of the 78-79 support level would open .. read more

Frightening Fragility When Running Consensus Fails

Mortgage rates have swung back to a 2-month high, a unfortunate concurrent timing to Janet Yellen’s recent assurance that the FOMC remains in full support of the mortgage market. Taper is not tightening to her, so the 53% decline in the monthly issuance of MBS and agency securities in February against May 2013 (before the .. read more

Census Confirms NAR’s Absence of Snow

Not much new commentary is needed with the new home sales data from the Census Bureau since analysis of the NAR home sale data last week also applies in full part here. It does bear repeating, however, that the turn in housing is obvious and coincides with the dawn of 2013. No doubt the rapid .. read more

‘Support Mortgage Markets’

I quoted Janet Yellen’s statement from her first press conference yesterday, but it bears repeating: These sizable and still increasing holdings will continue to put downward pressure on longer‐term interest rates, support mortgage markets, and make financial conditions more accommodative, helping to support job creation and a return of inflation to the committee’s objective. We .. read more