Wednesday, November 30, 2011

Keynesian Forecasts Obliterated by Soaring Pending Home Sales

The index of pending home sales increased 10.4 percent, the biggest gain since November 2010, reports the National Association of Realtors. Keynesian economists forecast a 2.0 percent increase, according to the median estimate in a Bloomberg News survey.

Estimates for pending home sales ranged from a drop of 2 percent to an increase of 5.6 percent, according to the median of 37 forecasts in the Bloomberg survey.

Pending home sales are a volatile tricky number, however, it is instructive that the Keynesians all had forecasts way below where the index number came in, some even forecasting a decline in sales!


  1. Zero Hedge seems to think the uptick in numbers is because US economic reporting is as credible as China's

    I'm with the Wenz on this one though. The economy is showing signs of "strength" (until the Bernanke or his successor takes their foot off the gas)

  2. A big factor in this is that for the 5 months in a row preceding September, home prices as measured by Case-Shiller have fallen. Overall index fell around 4% YoY.

  3. @Major_Freedom

    I think RW's point is that the Keynesians missed it, not even realizing that falling prices would, duh, produce greater sales.

  4. You sure this isn't some sort of cyclical, seasonal trend? After all, November 2011 is the highest since November 2010.

  5. I don't know why you call them Keynesians since I doubt even Keynes was a Keynesian. They are State Terrorists.