Thursday, December 30, 2010

Pending Sales of U.S. Existing Homes Rose 3.5% in November

The number of contracts to buy previously owned homes rose in November far more than Keynesian forecasts.

The index of pending resales increased 3.5 percent after jumping a record 10 percent in October, the National Association of Realtors said. The median forecast in a Bloomberg News survey of Keynesian economists  called for a 0.8 percent rise in November.

Bottom line: The November to March housing sales number can be distorted by all kinds of factors, so they are not the best indicators of housing trends, but the fact the Keynesians low-balled the number that actually came in points to two factors that are indicative of these guys:

1. They don't understand how monetary policy impacts an economy.

2. They are simply a bunch of econometric trend following sheep.

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