The media could hardly contain themselves as they breathlessly reported the Case/Shiller 20 city home price index up 12.1%. But isn’t that in the rear view mirror of the looking glass?
The report is for April. Seems it takes Shiller a couple months to compile home prices in 20 cities. They must be employing ex-bureaucrats, my association reports the final number a week following the end of the month. Maybe they haven’t heard of computers yet?
Wouldn’t those closed home sales have had to go under contract in February or March in order to close in April? What were the mortgage interest rates in February and March compared to today Ms. Breathless?
Next up the short of breath shared new home sales rose 2.1% in May to an annually adjusted 476,000 the highest level in FIVE years! Ummm, Ms. Breathless, wouldn’t that be 2008 during the Great Recession?
Wow, we’re back to selling new homes at the same pace we could during a recession! Does that mean we are in a recession? Aren’t 476,000 new home sales only 40% to 50% of ‘normal’? Sounds like Ms. Breathless is making an optimistic sandwich without any meat.
Next up was the almost orgasmic reporting that Consumer Confidence rose unexpectedly beating everyone’s expectations, including Vern at the motor pool, to 81.4 the highest in FIVE years! No one saw this coming, especially the consumer.
Why couldn’t the consumer see this coming? Why couldn’t the wizard’s of smart, the economist see this coming? After all a confident consumer will spend baby spend.
The final GDP report for Q1 growth came in at 1.77 on expectations of 2.4. More revealing was the Personal Consumption Expenditure (PCE) in the first quarter fell from 3.4% to 2.6% on expectations of 3.4%. The PCE fell to only 1.83% of GDP. Doesn’t sound like spend baby spend.
Then again we know these were bureaucrats who need three bites at the apple to get the numbers to final reporting. This is yesterday’s news.
What about today? Seems mortgage applications have fallen seven of the last eight weeks to a nineteen month low. As Ms. Breathless rushed out and found the proper expert who reassured her that although mortgage rates had risen well above 4% they remain low from a historical perspective and would not take the wind out of the housing recovery sails.
While investors continue to try and determine whether Bernanke was serious about reigning in his bond purchases causing the market to go up and down like a typical marriage, President Obama said I won’t wait. I must do something to impede recovery so Ben will continue to devalue the dollar.