Morning Report: Real estate prices rising, but problems developing at the high end? 4/26/16

Posted on April 26, 2016 by Brent Nyitray

Talk about it here: http://thenadtearsheet.blogspot.com/

Stocks are up this morning on overseas strength. Bonds and MBS are flat.

The S&P / Case-Shiller index of home prices rose .66% on a MOM basis and is up 5.38% YOY. Their take on the housing market: “Mortgage defaults are an important measure of the health of the housing market. Memories of the financial crisis are dominated by rising defaults as much as by falling home prices (see first chart). Today as well, the mortgage default rate continues to mirror the path of home prices. Currently, the default rate on first mortgages is about three-quarters of one percent, a touch lower than in 2004. Moreover, the figure has drifted down in the last two years. While financing is not an issue for home buyers, rising prices are a concern in many parts of the country. The visible supply of homes on the market is low at 4.8 months in the last report. Homeowners looking to sell their house and trade up to a larger house or a more desirable location are concerned with finding that new house. Additionally, the pace of new single family home construction and sales has not completely recovered from the recession.”

In other economic news, durable goods orders rose 0.8% in March, versus Street expectations of an increase of 1.9%. Capital Goods orders (a proxy for business capital investment) was flat. The Markit US Services PMI and the Markit US Composite PMI indices both improved in April. The Richmond Fed Manufacturing index fell, as did consumer confidence.

The FOMC begins their two day meeting today. Here is Mohammed El-Arian’s take on what to look for in the statement. Here is a more in-depth parsing of what the Fed may say and what it means.

What is going on this weekend aside from the NFL draft? Buffetapalooza or Woodstock for Capitalists. The Berkshire Hathaway shareholder meeting in Omaha, where you can play ukelele with the Fruit of the Loom guys listen to Warren wax poetically about value investing. This year, it will be streamed live.

We are starting to see weakness in the top end of the hottest real estate markets as supply surges and foreign demand begins to wane. Will it spread?

Did you know Trump and Hillary share the same address?

Filed under: Economy, Morning Report |

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35 Responses

  1. yellojkt, on April 26, 2016 at 9:31 am said:

    I’d be surprised if the Clintons didn’t have corporations registered in Delaware as that would show that they hired incompetent lawyers. Is there any evidence the Clintons are hiding income in some way?

    Hillary has released her tax returns. For example, in 2014 she and Bill paid $9M in federal income tax on an income of $28M.

    We will never, ever see Donald Trump’s tax returns because they will show three things:

    1. Trump isn’t really as rich as he says he is.
    2. He pays little or no taxes because of various real estate tax dodges. (NTTTIAWWT)
    3. He gives no money to charity. This has been documented independently by the Washington Post. (In 2014 the Clintons gave $3M to the Clinton Family Foundation)

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  2. jnc4p, on April 26, 2016 at 2:40 pm said:

    Amusing and sad that the progressive position on race, gender and equality has degenerated from asking for a chance to compete fairly on merit to explicit quotas, but I’m probably a few of decades late in mourning it’s passing.

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  3. Kevin S. Willis, on April 26, 2016 at 2:56 pm said:

    “asking for a chance to compete fairly on merit to explicit quotas”

    While demanding that those who have enjoyed white privilege are punished explicitly, if not legally (but we hope so) then at least culturally. “White privilege” is kind of a modern code for lazy, not-that-bright, not truly civilized, and naturally lacking in morals. White folks, and especially white men, and especially white Christian men, need to be ridiculed and lampooned and caricatured and derided. Those pale-faced cretins need to know their place and stay there!

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  4. jnc4p, on April 26, 2016 at 3:09 pm said:

    Worth a note:

    “Editorial: McAuliffe’s vigilante justice on felon voting rights
    …

    First, he has disregarded the clear language of Virginia’s Constitution. While that document allows the governor to restore voting rights, it also stipulates:

    “The Governor shall have power to remit fines and penalties . . . to grant reprieves and pardons . . . to remove political disabilities consequent upon conviction for offenses . . . and to commute capital punishment. He shall communicate to the General Assembly, at each regular session, particulars of every case of fine or penalty remitted, of reprieve or pardon granted, and of punishment commuted, with his reasons for remitting, granting, or commuting the same.” (Emphasis added.)

    In his executive order, McAuliffe cites the language granting the governor power to grant reprieves, but makes no mention of the requirement to communicate particulars of every case. Nor does the order communicate such particulars in any case, let alone every case. Nor is the General Assembly in regular session.

    This is a flagrant violation of the constitution’s demands — regardless of what Virginia Attorney General Mark Herring or UVa law professor A. E. “Dick” Howard might say to give McAuliffe political cover. The language is clear and unequivocal. That might be why McAuliffe’s Democratic predecessors, Tim Kaine and Mark Warner, never tried a similar stunt.

    The politics are obvious as well. McAuliffe’s order has the potential to increase voting rolls in by 3.8 percent, and the strong likelihood is that most of the felons who register to vote in November will cast ballots for the Democratic nominee. That nominee is almost sure to be Hillary Clinton, a longtime friend of McAuliffe. Virginia will be a swing state in what could be a tight presidential election, so McAuliffe’s order will affect far more than just the Old Dominion. If the situation were reversed, Democrats would be screaming bloody murder — and rightly so.”

    http://www.richmond.com/opinion/our-opinion/article_9bc335a3-6f1d-5bc3-8627-72651e40c164.html

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  5. Kevin S. Willis, on April 26, 2016 at 3:23 pm said:

    More on the Clinton Foundation:

    http://www.americanthinker.com/blog/2015/04/the_clinton_foundation_as_a_moneylaundering_scheme.html

    http://thefederalist.com/2015/04/29/is-the-clinton-foundation-just-an-international-money-laundering-scheme/

    https://www.quora.com/What-percentage-of-Clinton-Foundation-money-goes-to-real-and-actual-charities-that-are-not-controlled-by-the-Clintons

    If you define “actual charities not controlled by the Clintons” as “programmatic grants,” then it appears the number is 15%, with 85% staying with the foundation itself:

    Checked and somewhat “clarified” by PolitiFact: http://www.politifact.com/punditfact/statements/2015/apr/29/rush-limbaugh/rush-limbaugh-says-clinton-foundation-spends-just-/

    There’s a grain of truth here — roughly 85 percent of the foundation’s spending was for items other than charitable grants to other organizations, and a large chunk of this 85 percent did go to Clinton Foundation staff for travel, salaries and benefits. However, the foundation says it does most of its charitable work in-house, and it’s not credible to think that the foundation spent zero dollars beyond grants on any charitable work, which is what it would take for Limbaugh to be correct.

    The claim contains some element of truth but ignores critical facts that would give a different impression, so we rate it Mostly False.

    The Federalist Responds: http://thefederalist.com/2015/04/29/punditfact-a-case-study-in-fact-free-hackery/

    While it is true that Jacobson clearly admitted to me via e-mail that my research findings were “technically true,” I unfortunately cannot say the same about several other claims he attempted to make. For example, Jacobson told me that “it seems misleading to say that only 15 percent of what they spend went to ‘programmatic grants.’” Actually, it is grossly misleading and factually inaccurate to say anything but that. It is a simple, demonstrable, indisputable fact based entirely on publicly available financial filings. Here, for example, is how the Clinton Foundation’s 2013 tax filings list the expenditures:

    The problem here is not one of facts or accuracy, but ideology. Jacobson simply doesn’t like the implications of the fact that the Clinton Foundation spent less than 10 percent of its budgets on charitable grants in 2013. He doesn’t like the fact that the two single largest “charitable” initiatives of the Clinton Foundation — by its own admission — are the Clinton Presidential Library, which exists solely to put a positive spin on the 42nd president’s term in office, and the Clinton Global Initiative, which the New York Times characterized as a “glitzy annual gathering of chief executives, heads of state, and celebrities.” If hanging out with celebrities at glitzy dinners is the height of charity, then it’s time to beatify the Kardashian sisters.

    The Federalist articles are links to even more in-depth analysis, depending how far one wants to go down the rabbit hole.

    I like the end to the Federalist response to PolitiFact/PunditFact:

    [UPDATE: Phil Kerpen notes on Twitter that PunditFact and PolitiFact are funded by a large and active Clinton Foundation donor and partner, a fact PunditFact conveniently failed to disclose in its defense of the Clinton Foundation.]

    From:

    http://www.discoverthenetworks.org/funderProfile.asp?fndid=5382

    In 2004, New York developer Robert Congel donated $100,000 to the Clinton Foundation. Soon thereafter, Senator Hillary Clinton reportedly helped Congel access millions of dollars in federal assistance for his mall project.

    The Clinton Foundation has collected many millions of dollars in donations to fund the Clinton Presidential Library. As of 2004, at least 57 separate donors had given $1 million or more. Among these were Hollywood director-producer Steven Spielberg and his actress wife Kate Capshaw; movie producer Stephen Bing; insurance magnate Peter Lewis; and the Soros Foundation, which is the European arm of George Soros’s Open Society Institute. Another notable donor was Denise Rich — ex-wife of Marc Rich, a billionaire fugitive who had fled to Switzerland to avoid prosecution for 51 counts of racketeering, wire fraud, tax fraud, tax evasion, and illegal oil transactions with Iran; Mrs. Rich gave the Clinton Foundation $450,000.

    And don’t forget, Clinton happened to pardon Marc Rich before leaving office. Odd coincidence, that: nypost.com/2016/01/17/after-pardon…

    Tangential: The pardon of Marc Rich turned out to be very profitable to Clinton:

    http://nypost.com/2016/01/17/after-pardoning-criminal-marc-rich-clintons-made-millions-off-friends/

    Nigerian businessman Gilbert Chagoury is well known as a close ally and business associate of Rich. The Nigerian media declared in 1999 that the “Gilbert Chagoury-Marc Rich alliance remains a formidable foe.” They sold oil on international markets together. In 2000, Chagoury was convicted in Geneva of money laundering and aiding a criminal organization in connection with the billions of dollars stolen from Nigeria during the reign of dictator Gen. Sani Abacha.

    As part of a plea deal, the conviction was later expunged.

    Chagoury has been very generous to the Clintons in the years following the Rich pardon. He has organized an event at which Bill was paid $100,000 to speak (in 2003), donated millions to the Clinton Foundation and in 2009 pledged a cool $1 billion to the Clinton Global Initiative. The Chagourys were also active in Hillary’s 2008 presidential bid. Michel Chaghouri, a relative in Los Angeles, was a bundler and served on her campaign staff. Numerous other relatives gave the maximum $4,600 each to her campaign.

    Then there’s Russian investor Sergei Kurzin. He worked for Marc Rich in the 1990s, traveling around Russia looking for suitable investment opportunities in the crumbled former Soviet Union.

    An engineer by training, Kurzin has been involved in lucrative deals in Kazakhstan and other countries, including the lucrative Uranium One deal that involved Bill Clinton and Frank Giustra.

    Russia bought 20 percent of all uranium production capacity in the US, a deal that needed to be signed off on by the State Department when it was headed by Hillary Clinton. While the deal was going through, Bill Clinton was paid $500,000 to give a speech in Moscow, paid for by a Russian investment bank promoting the uranium deal.

    Kurzin, meanwhile, donated $1 million to the Clinton Foundation.

    And just that one article goes on and on, and a lot of the pay off’s from Marc Rich’s friends get funneled through the Clinton Foundation.

    And that’s barely the tip of the iceberg.

    More:

    http://radaronline.com/celebrity-news/clinton-foundation-bill-hillary-chelsea-clinton-tax-records-revenue-grants/

    Google. I suggest “clinton foundation fraud” and “clinton foundation money laundering” and “clinton foundation bribes” and so on. There’s plenty of information out there. I don’t even include the crazier stuff, like the Clinton Foundation promising the Hammond Ranch to the Russians . . . which I am dubious about, but who knows.

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    • jnc4p, on April 26, 2016 at 3:49 pm said:

      Pity Sanders won’t make this an issue. He sure would if a Republican was doing it.

      Liked by 1 person

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      • Kevin S. Willis, on April 26, 2016 at 7:58 pm said:

        Sander’s writing about women’s rape fantasies back in the day got nothin’ on the Clinton Foundation. I’m curious if the Republicans will touch it, or if they’ll worry the 15% good works they do with that 15% of cash will make it look like they are attacking the concept of charity and giving back to the community, and avoid it.

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    • Brent Nyitray, on April 26, 2016 at 10:00 pm said:

      I thought voter fraud was a figment of the fever-swamp right wing nutjob imagination…

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      • Michigoose, on April 27, 2016 at 7:06 am said:

        And, evidently, Hollywood nutjob imagination

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        • yellojkt, on April 27, 2016 at 7:32 am said:

          Tim Robbins was in a relationship with Susan Sarandon for 23 years. It shows.

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        • ScottC, on April 27, 2016 at 7:56 am said:

          Mich:

          And, evidently, Hollywood nutjob imagination

          I am wondering if there is any other activity, besides voting, where great amounts of money are at stake but in which the existence of fraud is routinely assumed to be implausible or impossible.

          Banking fraud? Obviously those banksters are guilty.

          Billing fraud by government contractors? Routine.

          For profit universities? Practically fraud by definition.

          Voting fraud? Only a nutjob believes in that!

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        • Brent Nyitray, on April 27, 2016 at 10:19 am said:

          I know the left loves to say voter fraud doesn’t exist, but how can you tell if you aren’t allowed to look for it?

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        • ScottC, on April 27, 2016 at 10:28 am said:

          Brent:

          I know the left loves to say voter fraud doesn’t exist, but how can you tell if you aren’t allowed to look for it?

          The insistence that voting is the single activity in which no human will ever cheat or deceive in order to accomplish their goals is so contrary to all common sense and human experience that I have to assume that the left’s routine denials of its existence can only derive from a calculation that voter fraud is ultimately beneficial to the left.

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