- by New Deal democrat
As reported yesterday, the Case Shiller housing index, which bottomed on a seasonally adjusted basis in January, has turned positive YoY as well. This by the way is a good example of how YoY data lags seasonally adjusted data, since the YoY turn has come 5 months later than the seasonally adjusted bottom.
All of which means that the predictions of the Pied Piper of Doom have once again proven to be almost perfect indicators - of the exact opposite. In February he wrote:
Statistically speaking, perhaps the most underreported story on our economy, right now, concerns the “shadow inventory” nightmare that currently exists throughout the U.S. housing market. This has been further exacerbated by many years of misinformation (i.e.: ongoing overstatements of home sales figures) provided by the “ethically-challenged” National Association of Realtors (NAR).He went on to quote an article by Michael Olenick published at Naked Capitalism, and disseminated Olenick's insult of perhaps the nicest economic blogger there is:
Throughout the mainstream media, and even amongst some of the more normally-credible sources on our economy in the blogosphere* [*NDD note: this was a swipe at Bill McBride a/k/a Calculated Risk, as is clear below], we’re now hearing about how the housing market is “modestly improving.” Frankly, this is total propaganda; statistical “improvements” have been nominal, at best; since virtually all of these “reliable” sources are still, to this day, all but ignoring (both statistically and editorially) this extremely pertinent, albeit inconvenient, reality.
The normally astute Bill McBride of Calculated Risk has joined the chorus of cheerleaders to argue that an alleged decrease in housing inventory means that house prices are near their ethereal bottom.He concluded by taking one more swipe at CR:
Here's the link to the top story over at Calculated Risk, this morning... Case Shiller: House Prices fall to new post-bubble lows in December …and here's McBride's most recent piece on new home sales… New Home Sales: 2011 Still the Worst Year, "Distressing Gap" remains very wide by CalculatedRisk on 2/24/2012 12:09:00 PM (The shadow inventory issue is not mentioned in either piece.)He rivisited this prediction of ongoing Doom one more time in March:
All of those “housing-has-bottomed” memes you’re now reading about (which conveniently don’t even reference, let alone discuss or acknowledge, an unreported massive “shadow inventory” in U.S. housing that’s not covered in the common metrics used nowadays in the MSM, or even in the blogosphere), HERE’s the latest from Michael Olenick, a favorite of Yves Smith over at Naked Capitalism: “Beware of Housing Market Cheerleading.”Alas for the Pied Piper of Doom, the Case Shiller seasonally adjusted bottom of January 2012 was reported in March literally within days of his later screed. In fact, the Index is now up 3.5% from its January level, meaning that it has outpaced inflation as well. Further evidence of the bottom is that almost every other housing price index has followed a similar pattern.
He's stayed away from predictions recently, which is really kind of a shame, because he became almost a perfect bellwether.
Just not the kind of bellwether he thought.
10 comments:
He's on to other pursuits.... now he's writing about anything other than economics at DKos.
UK dealsThey can deal with leading book in the field. You can learn more about captive insurance at my website.
It is pretty unprofessional of you to keep harping on this one guy. He may or may not be wrong about the existence of shadow inventory,but his main point about statistics needing context is well-illustrated by other analysts (See comments http://bonddad.blogspot.com/2012/08/it-isnt-just-case-shiller-almost-every.html). You never really address these analysts in a convincing way. To you, house prices rising is always a good thing. You do not contemplate the implications of house prices rising in the absence of recovery in other dependent factors such as wages,or local conditions.
I have said before that perhaps the main difference between you and Barry comes down to the difference between Texas and New York. You make your analysis match what you see in your neighborhood, as does he.
Anon at 8:19 -
Horseshit. In the first place, you haven't identified either of the correct parties, since obviously you didn't click through to the links, nor even look at the identity of the poster.
Secondly, this post isn't about whether house prices rising is "good" or "bad," but about factually which direction they've been going.
I've been hearing about how shadow inventory was going to prevent a bottom for well over a year now. Well, guess what, contrary to their predictions, house prices DID bottom. The data is in. Full stop.
If you're going to keep blathering about shadow inventory, then you need to explain why it DIDN't, in the past, factually, done, over, prevent prices from rising even including seasonal adjustments for nearly the last half year.
Ohsnap NDD takes him out :P
The Big Idea behind the housing recovery is that house prices will return to levels seen in 2005, building from the current base.
The high prices of early 'aughts were driven by a flood of shadow banking credit from overseas (European and Chinese) 'investors' (gamblers). These investors are long-gone, the overseas areas are saddled with massive (real estate) problems themselves.
Current finance lending flows toward markets that are more liquid than real estate.
Housing expansion is in cities rather than in auto-dependent exurbs, in certain cities not in others. This is the consequence of high real fuel prices and accompanying high real debt costs.
Large parts of rural, small-town, old suburb, speculative and immigrant America -- in the South, South-west, Florida and the Rust Belt -- are crystal meth saturated hell-holes, with few jobs and few business opportunities. These areas are supported by govt disability and SS benefits and the resale of prescription painkillers on black markets, etc. Not good foundation for a real estate bull market.
The real estate bull market of 1995 - 2005 was fraudulent, a money market Ponzi scheme that has now collapsed. It cannot be re-inflated.
'Hip' and 'trendy' locations such as West Hollywood and the DC metro area have bidding wars over houses and rising prices but not so in Las Vegas or South Florida, West Virginia, Arizona or Dixie.
Most of America is car-dependent suburbia which in turn is dependent upon very cheap fossil fuel. That's gone and won't come back even if we give it candy. No cheap fuel = suburbia as stranded capital = national bankruptcy.
Not so fast. Look at this first.
Anona at 9:19,
You insult me on my blog, you get deleted. Go start your own. Buh bye.
You deleted a comment that was actually much more civil than some of your own comments wherein you call people fools and idiots. It would have been better to leave it up and answer the concerns, otherwise people might get the impression that you exult when you are right and delete when you are wrong.
Also many commenters have advised you to give it a rest with PPD.
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