31 replies to this topic

[OEXCHAOS]

From MarketWatch: U.S. existing-home sales rise 6.5% in December as prices fall

Guys, this is better than I expected.

There's a tsunami of cash about to hit this economy and this market. Maybe the first waves are coming?

Look at gold.

Why didn't they kill it on Friday? They "should" have. It was a no brainer.

Something has changed.

[traderpaul]

Foreclosure auction sales?

[OEXCHAOS]

Doesn't matter, either way. It's a decrease in supply. Mark

[ogm]

Gold is running on fear of dollar destruction, not because of tsunami of cash. The US has lost well over 10 trillion in wealth between stock market and real estate market decline. Banks are insolvent. The 2-3 trillion dollars that the Fed will create will not offset the deflationary pressures of contracting credit, layoffs and pay cuts. 19 states are insolvent and on a brink of collapse. California will run out of cash ithin days for example. Layoffs are mounting huge. 56,000 layoffs announced this morning alone by the big companies, consider the ripple effect on the small businesses. All that "mountain of cash" doesn't even come close to offset the loss of domestic and global business. Global economic contraction is much bigger then the stimulus package will create. There is a sh*tload of hidden supply by people who pulled homes off the market as prices dropped and yet the layoffs will continue pressing more and more supply onto the market.There are estimates that there is about 15 mil of homes in total supply in the country. If people are losing jobs they'll be losing homes. One month "adjusted" data is an illusion. Jobs jobs jobs.

Edited by ogm, 26 January 2009 - 10:46 AM.

[NAV]

Mark, I respectfully disagree with your premise, that the economic activity (in this case the home sales) precedes or will act as a catalyst to stock market advance. Let the stock market show the way. The only tsunami i see is the "tsunami of job losses hitting the shore everyday". Maybe they are just lagging indicators

Edited by NAV, 26 January 2009 - 10:54 AM.

[vitaminm]

Something has changed.

vow! undeletable!

[Cirrus]

Russ Winter has a great piece on housing. If anyone knows him he has a great grasp on macros....and is NOT a cheerleader for any camp (bulls or bears). He basically makes a case the housing is approacing a turning point the the LT data is now beginning to show a light at the end of the tunnel. Some areas of the country could well bottom by the end of this year. The macro picture isn't so bleak. I think the key is now new starts. As long as it stays around or below 800k or so we know we're working off inventory...and that's a pessimistic or conservatively slanted viewpoint. There's a 500k rate necessary to just stay even (demolitions, condemnations, etc). Then you have to add in new household formations.

[OEXCHAOS]

Mark,

I respectfully disagree with your premise, that the economic activity (in this case the home sales) precedes or will act as a catalyst to stock market advance. Let the stock market show the way.

The only tsunami i see is the "tsunami of job losses hitting the shore everyday". Maybe they are just lagging indicators

Jobs have NOTHING to do with the stock market. They're always lagging anyway.

CASH does have much more to do with the stock market.

Right now, the market needs a lot more visibility than normal. If you look or think back to past nasty markets, it has been the same way. That's all I'm saying about fundamentals affecting the market.

I'm saying that the cash is coming and it's huge and going to get huger. There's no place for it to go, really, so a big chunk is going to hit the stock market. Give folks a bit of hope and billions upon billions that are earning nil will come flooding back into the stock market.

So, while technicals lead (say, why didn't the market get creamed on Friday?), now is the time to watch out for hints of good news that folks can hang their hats on. It matters now. It won't when things are looking better.

Mark

[Data]

there was a 24% drop last month. so the data is smoothing itself out.

[OEXCHAOS]

Russ Winter has a great piece on housing. If anyone knows him he has a great grasp on macros....and is NOT a cheerleader for any camp (bulls or bears). He basically makes a case the housing is approacing a turning point the the LT data is now beginning to show a light at the end of the tunnel. Some areas of the country could well bottom by the end of this year.

The macro picture isn't so bleak. I think the key is now new starts. As long as it stays around or below 800k or so we know we're working off inventory...and that's a pessimistic or conservatively slanted viewpoint. There's a 500k rate necessary to just stay even (demolitions, condemnations, etc). Then you have to add in new household formations.

Right. And it's not all sugar-plums, either. But no market goes all one way all the time.

M