Today in history – September 4

Posted on September 4, 2013 by ScottC

1972 – US swimmer Mark Spitz helps his team win the medley relay in a record setting time, thus winning his 7th gold medal at the Munich Olympic games, setting a record that would last for 40 years. Spitz also set new world records in each of the other 6 events in which he won the gold. His tally of 7 golds will remain a record until 2012 when Michael Phelps took home 8 at the Beijing Olympics.

1957 – The Edsel, the first new car brand to be introduced by one of the Big 3 motor companies in 20 years, and perhaps the most infamous flop in car manufacturing history, is presented to the public by the Ford Motor Company. Veiled in secrecy, Ford had hyped the new car with a marketing campaign that showed only the hood ornament and promised simply “The Edsel is coming.” But when it was finally unveiled, the public was not impressed. Coming amidst a changing economic landscape, the car was too big and too expensive, and had a myriad of technical problems, including a hood ornament that tended to fly off on the highway. After only 3 years, and a loss of $250 million, the Edsel division folded.
edsel

1886 – The Indian wars of the American southwest effectively come to an end when Geronimo, the last remaining warrior chief to organize resistance to US forces, surrenders. Geronimo is sent to reservations first in Florida and then in Louisiana, finally ending up in Oklahoma, where he converted to Christianity, became a successful farmer, and even participated in Theodore Roosevelt’s inaugural parade.
geronimo

Filed under: This Day in History | 7 Comments »

Morning Report – House prices within 18% of peak 09/04/13

Posted on September 4, 2013 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1637.0 -2.1 -0.13%
Eurostoxx Index 2727.4 -25.9 -0.94%
Oil (WTI) 107.8 -0.8 -0.73%
LIBOR 0.259 -0.001 -0.19%
US Dollar Index (DXY) 82.29 -0.073 -0.09%
10 Year Govt Bond Yield 2.86% 0.00%
Current Coupon Ginnie Mae TBA 103.6 0.0
Current Coupon Fannie Mae TBA 102.8 0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.54
Should be a slow day with not much economic data and the Jewish holiday. Mortgage applications rose 1.3% last week. bonds and MBS are flat
Construction spending rose .6% last month and is up 5.2% year over year. Residential construction is up .6% month over month and 17.2% year-over-year. We are definitely seeing signs of life in the homebuilding sector, although the first time homebuyer is getting a bit of sticker shock from the higher rates. Pulte noted on their 2Q conference call that buyers at the lower price points (read the first time homebuyer) are backing away a bit. Toll Brothers (which is in the McMansion business) reported that the luxury homebuyer is unfazed by higher rates.
CoreLogic reported that home prices increased 12.4% year over year and and now within 18% of their April 2006 peak. Every state reported a year-over-year increase in prices if you exclude distressed sales. While they predict that August’s increase will be similar to July’s, they anticipate the appreciation to stall as seasonal demand wanes and people start to feel the effects of higher rates. As usual, the hardest hit states are reporting the strongest recoveries.
Yesterday’s ISM report showed strength in manufacturing. While manufacturing isn’t the driver of the economy that it used to be, it still matters quite a lot. The reading of 55.7 corresponds to a GDP growth rate of over 4%. Unfortunately, while manufacturing output is up quite a bit, manufacturing employment is not. Auto sales are up around the 16MM range, which is approaching pre-crisis levels. The average US car is around 11 years old, so we are due for a upgrade cycle. That will be bullish for the economy.

Filed under: Morning Report | 29 Comments »