Wednesday, September 26, 2012

US Home Price Index Continues Climb

All signs continue to point to a recovery in the U.S. residential real estate market The summer 20-City Case Shiller Home Price Index shows that property prices increased in June and July. Standard & Poor’s reported that the adjusted numbers were not as impressive, but they were still positive. All 20 cities, which included hard-hit towns like Atlanta and Las Vegas, all showed average gains throughout the summer. The news is dampened somewhat due to the fact that banks are still keeping many distressed homes off the market to juice prices, but experts believe that sales and prices will continue to rise through 2012. For more on this continue reading the following article from Iacono Research

The nation’s housing market continued to rebound over the summer as Standard & Poor’s reported(.pdf) that the Case-Shiller 20-City Home Price Index rose 1.6 percent in July following a surge of 2.3 percent in June. The most respected measure of U.S. home prices now indicates a gain of 1.2 percent from a year ago.

On a seasonally adjusted basis, prices rose for the sixth straight month with the July gain at a less impressive 0.4 percent, after an increase of 0.9 percent the month prior, however, there is no mistaking the fact that home values are rising steadily this year after languishing for nearly two years following the initial rebound from the 2008 financial crisis and the myriad of home buyer incentives from the U.S. government.


 All 20 cities showed gains in July, paced by surges of 3.7 percent in Minneapolis and 3.3 percent in Detroit. Even Atlanta home prices are on a tear as June’s 4.4 percent jump was followed by a 2.6 percent advance in July. On a year-over-year basis, Atlanta is still the clear laggard at -9.9 percent, along with Chicago, Las Vegas, and New York one of only four cities where prices are lower than a year ago and one-time housing basket case Phoenix leads all cities with home price gains of 16.6 percent over last year.

Of course, recent gains are due in part to limited housing inventory as banks continue to hold distressed properties off the market and move slowly on new foreclosures at the same time that mortgage rates have become freakishly low, setting new records just about every day in the wake of the Federal Reserve’s latest money printing extravaganza in which they’ll buy $40+ billion in mortgage backed securities each month.

Don’t you just love it when a good asset re-flation plan comes together?

This blog post was republished with permission from Tim Iacono.

Thursday, September 13, 2012

Significant Shift in Employment Pattern

quasi-employment status as the recently unemployed searches for new full-time work, but the latest labor report shows a significant number of people going from being employed to not wanting a job. Some experts believe this is due to more people retiring now that the U.S. is climbing out of the recession, but others are more skeptical and think that it may be the sign of more bad news to come in the jobs market and for the economy as a whole. For more on this continue reading the following article from Iacono Research

Friday’s August labor report (as detailed here last week) has spawned some interesting discussion about the possible cause of the 30-year low in the labor force participation rate, stemming from the household survey’s odd collection of data in which totals for all three of these groups fell – employed, unemployed, marginally attached workers (those still wanting to work but who have given up looking).

Usually, the newly jobless go from being employed to unemployed and then, sometime later, to marginally attached (and out of the labor force), but, last month an unusually large number went directly from having a job to not wanting one. This is depicted below via this item at macroblog and this offering from the Wall Street Journal economics blog also discusses the subject.


Retirees are probably the biggest factor in this surge and it makes sense that a large number of individuals delayed retirement in recent years due to the financial crisis and are now packing up office boxes and picking up their last paycheck. Others are no doubt going back to school or quitting work to raise a family, but, perhaps the most curious thing about this recent change is that the last time it occurred was just when the 2008 recession was starting back in late-2007.

Is this s a good sign or a bad one?

Well, it might be good and it might be bad because, as indicated by the red arrows above, previous surges in the number of people moving from employed to out of the labor force have come when times were good with a peak occurring when recessions began. This likely means that people are comfortable enough today to pack it in, but, more importantly, that a new recession may not be far off.

This article was republished with permission from Tim Iacono.

Thursday, September 6, 2012

Bernanke Bluster Boosts Precious Metals

Federal Reserve Chief Ben Bernanke recently announced a plan for more central bank money printing and experts believe it means the course will be set for much of the same as the year progresses. The news of more money in circulation acted to boost values of precious metals, and gold and silver shot to levels not seen in 10 months. The jump pushed gold to $1,669.70 an ounce and silver to $30.78 an ounce, but experts say this is not so impressive when viewed in context of cyclical lows and economic forces that have pushed precious metals prices down from previous heights. For more on this continue reading the following article from Iacono Research

Following an impressive technical breakout the week prior that constituted the biggest combined jump in gold and silver prices in ten months, precious metals moved sharply higher again last week, capped by a late-week surge spurred by heightened expectations of more central bank money printing after Fed Chief Ben Bernanke defended previous easy money policies, what many viewed as paving the way for more of the same.

After surging nearly $40 an ounce on Friday, the gold price ended at a five-month high while posting its biggest monthly gain since January, and silver jumped more than $1.00 an ounce after the Fed Chairman spoke, rising to its loftiest level in four months.

For the week, the gold price rose 1.3 percent, from $1,669.70 an ounce to $1,691.30, and silver rose 3.1 percent, from $30.78 an ounce to $31.74. Spot gold is now up 7.8 percent for the year, down 12.0 percent from its 2011 high, and silver is up 13.9 percent in 2012, down 35.6 percent from its peak last year.

The recent move higher for the gold price appears far less impressive when viewed in the context of recent corrections as shown below and, importantly, the current recovery now appears to be “on track” with the last two major cyclical upturns that followed moves down that began in 2006 and 2008.

[To continue reading this article, please visit Seeking Alpha.]