Empiric Student Property Share Discussion Threads

[briarberry] 25/1/2007 20:30

1987 - sounds like 1987, there was a big correction that year but that was before the PPT and short squeezing (pre-spreadbetting etc)


Home Buying Drops Sharply In the Suburbs
By THOMAS J. LUECK, SPECIAL TO THE NEW YORK TIMES
Published: July 27, 1987


The surging market for homes in the suburbs of New York City has abruptly shifted gears. In many suburban communities, where real-estate prices have more than doubled since 1980, industry experts say there is a huge inventory of unsold homes, and a sudden paucity of buyers.

In May, June and early July - normally the peak of the home-buying season - anxious sellers in much of the suburban region have been lowering their prices, sometimes repeatedly.

''The number of properties on the market is unbelievable,'' said Richard Palmer, regional vice president of the National Board of Realtors for New York, New Jersey and Pennsylvania. ''For the moment, the unsatiable demand for homes seems to be satisfied.''

[briarberry] 25/1/2007 18:10

HGX is nearer to it's boom highs than the lows that you'd expect after some of it's components posted losses.


Vix is still near long term lows, no fear, no risk



Junk bonds are showing no fear, no risk



Emerging markets are showing no fear, no risk



Small caps are showing some concern (relative to SPX) but it's still at it's highs



I don't think that Ben Banky is lowering rates fast enough to save the property boom and hence save the credit bubble ?

[briarberry] 24/1/2007 22:13

Florida property auctions started the new year very badly...


"At both days of the auction everyone spoken to said the bids came in too low and no one expected them to be accepted. Leibert was upset with the auction, calling it a 'farce.' She believes the bids were too low and the auction didn't deliver serious bidders."



(if you read the link - there's a lot of denial that the property market has weakened)



from post 661 above

[briarberry] 21/1/2007 14:31

Commodities seem to be pricing in a recession, but when Ben Banky reflates I expect the commodity bull market to continue



The USA imports a lot of copper, and the price fall reflects the US housing slow-down to some extent.

China's growth will slow but by how much? They still have $1 trillion to spend and a billion people to fuel demand. Power stations must take a lot of Cu to build - Chinese rural people are at least going to want electicity.


copper use...

A modern house requires some 200 Kg of copper, almost two fold what was required 40 years ago, since it has more bathrooms, electrical appliances, greater comfort, phones and computers. A new car uses some 20 Kg of copper, two fold the 10 Kg that it used in the 70´s

[briarberry] 21/1/2007 14:03

Commodities - Feeding the Dragon - By Mike Hewitt

For the period January–April 2006, new construction expenditure in China was 40 percent higher year on year, driven by increased infrastructure development in the leadup to the Beijing Olympics in 2008 and continued high rates of rural to urban migration.

As more of the Chinese population moves to the cities in search of employment the associated requirements for housing and other infrastructure are expected to continue to place pressure on global raw material supplies.

China will spend more on underground and overland rail networks in the next five years than the rest of the world has spent in the last 20 years! (Credit Suisse, Brave New World II, Nov 2006)

China is the global leader in consumption of aluminium, coal, copper, gold, lead, nickel, tin, and zinc.

[briarberry] 21/1/2007 01:43

Florida property crash, they're going to stop publishing some of the housing figures (this stinks)...


The Naples News. "The Naples Area Board of Realtors no longer will provide monthly home sales numbers to the statewide association that calls itself the voice for real estate in Florida. The local real estate board says it doesn't think the way the Florida Association of Realtors reports the numbers is relevant and that it can do a better job with its own reports, and better reflect what's going on in the local market."

"This comes as the state association's numbers have shown sharp drops in home sales and median home prices during the past year in the Naples area."





The News Press reports from Florida. "Property owners hoping for a quick profit left disappointed Friday as bids were low during the first day of a land and home auction in Fort Myers, where 68 residential and commercial lots were on the block."

[briarberry] 20/1/2007 22:22

Leading Economic Indicators - Mike Shedlock

Housing Permits - suggests that a recession is likely

The latest housing boom lasted longer than normal, from 1991 to 2005, I think this makes a recession even more likely, especially as it took 1% rates and subprime mortgages to keep it going...




Seven out of the last eight times the annual rate of change on permits was negative 20% or lower, the economy went into a recession (not counting the current situation). Currently the chart shows that building permits in November dropped 31% from the year earlier level.

In all seven recessions since 1959 building permits declined year over year. Using the 0% line as a threshold would have picked up the recession in 2001 but would have also resulted in false signals in 1965, 1985, 1987, and 1996 as well. This can be summarized as seven out of seven with four false positives.

Using 20% as the threshold the only false signal was 1987 but there would have also been a missed signal in 2001. This can be summarized as six out of seven with one false positive and one miss.

This is actually a reasonably good performance, especially if one uses a cross of the 0% line as a strong warning signal while waiting for continued confirmation. Note that dips below the 0% line tend to occur well before the onset of recessions. Leading indicators are supposed to lead and this one does. A crossover of 0% is a strong warning and a continuation below the zero line shows that a recession is likely.


also, money aggregates and yield curve





This turned out to be the top:



It takes a while for a housing slow-down to affect the wider economy





1990 - 1991 was the last real dip

[briarberry] 20/1/2007 13:05

recession watch...


NEW YORK (AP) -- Stock in Coast Financial Holdings Inc. plummeted to a new 52-week low Friday after the bank said borrowers of $110 million in mortgage loans may not be able to repay their debt.

A local builder contracted by 482 borrowers halted construction on single-family residential properties, for which the bank has committed funding, due to insufficient resources. More than half of the loans had already been paid out to the borrowers. Liens were placed on some of the projects.

Bradenton, Fla.-based Coast Financial is the holding company for Coast Bank of Florida. The bank is investigating the results of the loans, but the company expects to take a material charge for the bad debt.

At Sept. 30, the company had net loans of $531.4 million.








Local governments from Augusta, Georgia, to Oakland, California, are being lured by similar opportunities to speculate with derivatives created by the world's biggest banks. Most of the $400 billion of private agreements sold to municipalities escape taxpayers' notice and are little understood by the public officials and administrators who approve them.

[briarberry] 18/1/2007 19:53

Yen carry trade continues

The yen tumbled, touching an almost four-year low against the dollar, a nine-year low against the British pound and a two-week low versus the euro Thursday, after the Bank of Japan voted 6-3 leave interest rates steady at 0.25% -- the lowest rate among major economies.

[briarberry] 17/1/2007 22:26

SPX, markets often top on good news, might be worth shorting into the next short squeeze



Jan. 17 (Bloomberg) -- Apple Inc. said first-quarter profit jumped 78 percent after holiday shoppers snapped up iPod music players in record numbers and Macintosh computers.

Net income rose to $1 billion, or $1.14 a share, from $565 million, or 65 cents, a year earlier, Cupertino, California- based Apple said today in a statement. Sales rose 24 percent to $7.12 billion. Analysts anticipated profit of 78 cents, according to the average of 14 estimates compiled by Bloomberg.

[briarberry] 17/1/2007 20:07

J.P. Morgan Chase & Co. on Wednesday said that its earnings rose 68% as businesses like advising companies on mergers and underwriting stocks and bonds posted record results, although the traditional banking businesses showed some stress. (net rose 48%)

Investment-banking fees rose 36% to $1.6 billion. The M&A surge also helped lift debt-underwriting fees 51% to $771 million, and advisory fees 41% to $482 million.

Profit at the retail banking unit fell, primarily because of losses on some mortgage investments and costs associated with the acquisition of Bank of New York's retail operations in October.

J.P. Morgan's loan-loss provision in retail banking rose $104 million, or 66%, to $262 million.




It's now more difficult for over indebted consumers to go bankrupt in the USA...


Profit at the bank's credit-card division doubled after a more restrictive U.S. bankruptcy law cut defaults almost in half.

Operating profit at the company's credit-card unit surged 138 percent to $719 million as fewer customers defaulted on loans. Card provisions slipped 43 percent to $1.28 billion from a year ago, when consumers raced to file for bankruptcy before an October 2005 federal law made it tougher to wipe out debt.




profits increased due to boom time earnings, bread & butter earnings declined

[briarberry] 17/1/2007 17:43

yes it has been -2C in California the for the last few nights...


While we know energy prices are coming down, food prices are going to be a problem over the next month or two based on the recent freeze in California.

[briarberry] 16/1/2007 22:23

yes forgot, a lot of people will be waiting for Microsoft Vista before they buy a new PC

[briarberry] 16/1/2007 21:27

intc results, they don't sound good, plus forecast is for lower 1st Q sales...


Jan. 16 (Bloomberg) -- Intel Corp., the world's largest computer-chip maker, said fourth-quarter profit fell 39 percent. Sales beat analysts' estimates after new products fueled demand.

Net income fell to $1.5 billion, or 26 cents a share, from $2.45 billion, or 40 cents, a year earlier, the Santa Clara, California-based company said today in a statement distributed by Business Wire. Sales fell 5 percent to $9.7 billion, exceeding an average analyst estimate of $9.4 billion.

The company forecast sales of $8.7 billion to $9.3 billion in the first quarter.

[briarberry] 16/1/2007 17:00

'Many banks, including Citigroup Inc, Bank of America Corp and Washington Mutual Inc, have projected some credit deterioration in 2007. This could force some banks to set aside more reserves, cutting into profits. 'We have passed the inflection point on credit quality,' said Thane Bublitz, an analyst at Thrivent Financial for Lutherans in Appleton, Wisconsin, which invests $65 billion.'

'Personally, I think the writing is on the wall,' said Steve Scruggs at Bragg Financial Advisors Inc in Charlotte, North Carolina. 'There's a price for banks to pay for easier money.'

[briarberry] 16/1/2007 16:45

Big Bank... Commerce Bancorp Inc. (component of BKX + SPX) just fell 7%






edit added later...

Jan. 16 (Bloomberg) -- Commerce Bancorp Inc., the largest bank based in New Jersey, said it's being investigated by federal regulators over transactions between the company and its officers and directors.

[briarberry] 16/1/2007 15:27

I noticed that John Mauldin is bearish on oil, he may be right, I don't want us to run low on oil but he seems to be assuming that current production will be sustained into the future whereas I read that it's declining. So even as some new production comes online, spare capacity will still be tight. A recession could change things a bit, or a big find.

It sounds like there could be real problems after 2010 if they don't find another big well soon :( :(

[briarberry] 16/1/2007 15:14

US earnings growth has mostly come from, the financials and the oils - crude took a dump ages ago and the US property market is in the process of doing the same!

[briarberry] 16/1/2007 12:24

Japan has a lot of mountains and very little building land but it didn't stop the property bubble popping...


In come the waves - Jun 16th 2005 - From The Economist print edition

The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops

[briarberry] 16/1/2007 12:10

US property, it sounds like the rental market may not help underwater property owners, I've read that this is the case in other parts of the USA too...


Washington

Could he rent the condo? Yes, but that option is not appealing, either. Mr. Murphy estimates that the unit could rent for $4,000 a month, far short of the $6,800 a month the condo costs in mortgage interest, maintenance fees, insurance and taxes.

[briarberry] 16/1/2007 10:51

Corn, all the grains have survived the commodity downturn so far...


The USDA's 2006-2007 U.S. ending stocks estimate for:
Corn was reduced from 935 to 752 million bushels. (stocks/usage 6%, lowest since 1975)

The USDA's 2006-2007 world ending stocks estimate for:
Corn was reduced from 93 to 86 million tons. (stocks/usage 11.9%)

Ethanol production in the United States is growing so quickly that for the first time, farmers expect to sell as much corn this year to ethanol plants as they do overseas. (10% Ethanol is added to RBOB gasoline)

The commercials are short corn and other grains

[briarberry] 16/1/2007 10:26

UK RPI rose by an annual rate of 4.4 pct in December, its highest level since
December 1991