Thursday, July 21, 2016

BOOM Home Sales Strongest in Decade; Positive Jobs Streak Best On Record

Sales of previously owned homes rose to their strongest pace in nearly a decade in June.

The pace of existing home sales increased 1.1% last month from May to a seasonally adjusted rate of 5.57 million, the National Association of Realtors said Thursday. That puts them at their highest level since February 2007.

Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 253,000 for the week ended July 16.

Claims have now been below 300,000, a threshold associated with a healthy labor market, for 72 straight weeks, the longest stretch since the Labor Department started keeping this data in 1973.

US stock market indices are at record highs.

A recession looks nothing like this.

The idea advanced by Austrian-lites that the Fed will reverse its December rate hike and possibly go negative is absurd.



  1. On this subject, do you think home prices are currently overpriced i.e. the real estate bubble is being reinflated, or is their increasing prices just an indicator of inflation? Or both? Would you say it has more to do with one or the other?

    1. There is no way to know. In fact data also show that the percentage of working age people that are actually employed has been declining. Also, the average wage rate is no better than in the 1970's. Purveyors of empirical data use only the data that best tells their story. Ignore them. This economy is not what a growth economy looks like.

  2. You have just predicted that the FED WILL raise rates. Therefore, if they do, the dollar will climb, the stock market will head downwards, bonds will also go down, along with the price of gold. Therefore I'm willing to GIVE YOU the spot price of gold today if you are willing to sell to me. In return you will save face and make me look like a fool, while you line your pocket with my money. Therefore AGAIN, I ask; I will gladly take your gold, and in return you can make a tidy profit from me. Do you accept my proposition?

    1. You misconstrue the role of interest rates.

      Normally during a boom, falling rates indicate the banking system inflating credit and the money supply. Im sure you'd agree with this. However, as the boom continues, according to the ABCT, inflation will hit, and thus rates will RISE to attempt to accommodate the rise in prices. Whether or not its successful depends on how fast the interest rates are risen. These rising rates are an INDICATION of acknowledged inflation, and are thus consistent with a rising price of gold.

      So Wenzel is being consistent here.

    2. No response huh? (Crickets...huh?) Not even a F*** Off, from you, huh? You seem to ignore all my posts Wenzel. Don't tell me little old RafFink has got your tongue tide?

    3. Not that RW needs me to defend him, but ...

      You realize that RW is bullish on gold, right? He's been and continues to recommend slow accumulation. He's gone on record saying the expected bump in the FED rate will drive gold (and the stock market and other commodities) down temporarily and will provide a buying opportunity.

  3. Hubris, sir. Ignoring all else and focusing on asset prices and certain labor stats to proclaim a boom is not very convincing. Rail and trucking? Inventory to sales? Industrial production? Oil prices heading down again? Real estate market slowdown in key markets now includes The Hamptons? There's more every day.

    The BOOM is over.

  4. FWIW, if you are always saying everything is a disaster, then like a broken clock you'll eventually be proven correct. However, in between is alot of opportunity. In my understanding, this is what RW is focusing on.

  5. You think Obama is going to let the Fed crash the party right before he leaves office? Or that Hillary/Trump is going to let the Fed crash the party right after they gain office?

    The macroeconomics mean nothing. The Fed is political. Maybe if Trump wins they raise rates. Then the headlines can gloat "market pulls back after Trump victory."

    I think it's unlikely and that your analysis is only looking at half the picture. The Fed is a political institution.

    Unless you think a minor rate hike means nothing in the very short term. If you elaborate on the temporary effect of a minor rate hike, I may be persuaded. From my understanding, even a minor hike signals more to come hence the smart money starts to cash in their chips.