Morning Report: New home sales still anemic historically

Vital Statistics:


Last Change
S&P futures 2821  9
Eurostoxx index 380.4 1.8
Oil (WTI) 58.12 -0.14
10 year government bond yield 2.60%
30 year fixed rate mortgage 4.28%


Stocks are higher this morning on overseas strength, particularly in China and Japan. Bonds and MBS are up.


New Home Sales fell to 607,000 in January, according to the Census Bureau. This is down 7% MOM and 4% YOY. New Homes Sales is a notoriously volatile number, and the margin for error is generally in the mid-teens %. Still 607,000 is roughly in line with historical averages over the past 50 years. That said, population has grown since then, so it isn’t really comparable. Take a look at the chart below, which is new home sales divided by population – we are still only at levels associated with the depths of prior recessions. In other words, we are still in very early innings with the housing recovery, and you can make an argument that the recovery hasn’t even begun yet.


new home sales divided by population


Industrial Production rose 0.1% in February, and January’s initial 0.6% drop was revised upward to -0.4%. Manufacturing production fell 0.4%, while January’s 0.9% drop was revised upward to -0.5%. Capacity Utilization fell to 78.2%, while Jan was revised up again. So, Feb wasn’t great, but January wasn’t as bad as it initially appeared to be.


We have entered the quiet period for the Fed ahead of their meeting next week. No rate hikes are expected, although we will get new economic forecasts and a new dot plot. Sentiment regarding the Fed has changed massively over the past few months. As of now, the the Fed funds futures are estimating that there is a 75% chance the Fed does nothing this year, and a 25% chance they cut rates by 25 basis points. The fed funds futures are pricing a 0% chance of a hike. While Trump’s jawboning of the Fed was bad form, and you generally don’t want to see presidents doing that, you also can’t escape the fact that the Fed Funds futures and the markets think he was right!

37 Responses

  1. Texas, you disappoint me.

    Aren’t there any wealthy suburban moms trying to get their kid into Duke to go after? You know, the kind of crime that impacts our quality of living?


  2. I’m fascinated by the TrueCon disappointment in Senator Sasse over his vote in the Senate yesterday. It’s as if there is a belief that politics is a noble calling and those holding office should be looked at as moral exemplars. Take a look at George Washington’s expense submissions sometime,ffs.

    Politics is about the accumulation and exercise of power, nothing more, nothing less. There is something fundamentally wrong with someone who wants to hold power over another, why do people put so much faith in these people? I do not understand.


  3. Awful shooting in New Zealand, terrible tragedy. It appears that the deaths at one mosque were limited (if you can cal 9 or 10 deaths limited) because a mosque attendee was armed and returned fire.

    Then there’s this:

    ‘The manifesto left by the terrorist — whose name I don’t think deserves mentioning — is a mishmash of ideas. He calls himself an “Eco-fascist,” one who combines environmentalism, racism and authoritarianism into one repulsive package. In his mind the world is dying from over-population, but over-population of the “wrong” kind. He hates capitalism, free markets, and free trade but he loves the Communist Chinese government and fascism. He takes the racist rhetoric of Donald Trump and mixes it with Marxist rhetoric about the poor workers of the world.”

    Is this the same climate of right-wing hate that caused a Marxist to kill Kennedy?

    Liked by 1 person

    • “because a mosque attendee was armed and returned fire.”

      Apparently he wasn’t armed but attacked the gunman and took his gun.


    • McWing:

      Is this the same climate of right-wing hate that caused a Marxist to kill Kennedy?

      Here in the UK the media spent all morning referring to the shooter as a “far right extremist”. I raised the question in the office, what makes the guy a far “right” extremist, and not a far left extremist. No one had an answer, though they all seemed to think it was self-evident and therefore needed no explanation.


      • My guess it was choice of targets that made them label him right wing.

        Liked by 1 person

        • jncp:

          My guess it was choice of targets that made them label him right wing.

          My guess is that it is the media’s (ie the left’s) natural desire to associate violence with the right that made them label him right wing. If a Christian church got shot up, I doubt very much they would automatically label the shooter a far left extremist just because most people who disdain Christianity are on the left.


        • Why do you think “National Socialism” was based on socialist economic theory? It was clearly based on fascism, which is neo-feudalism. Private ownership was encouraged, but economic power was consciously in groups we would call trusts and unions, politically guided by a totalitarian state, but also influencing it. The state did not own the means of production and distribution. The monopolies in Germany got rich from the war effort and the slave labor.

          Capitalism essentially refuted basic tenets of both feudalism and mercantilism, the current economic models in 1776. Fascism and the Chinese economy are the evolution of feudalism and mercantilism, respectively, like birds from dinosaurs.


        • Mark:

          Why do you think “National Socialism” was based on socialist economic theory?

          I don’t. But I do think it was grounded in precisely the same, anti-liberal philosophy that grounds socialist economic theory. Specifically, it is grounded in a worldview that holds the community (the volk) as the highest value, and thus subordinates the individual to “society” and, ultimately, the state. It holds that the primary purpose of the government is not to protect individual rights, but rather to promote what it deems to be the common good of the community. You’ll note that, despite the fact that the Nazis allowed private ownership, the government still controlled and directed private industry. The difference between the communists and the fascists rested not in their fundamental value system, but rather in the means used to achieve those values. They both rejected liberal individualism and embraced its opposite, the elevation of society over the individual. Or, in other words, socialism.

          Do you suppose that, in calling themselves National Socialists, they were ignorant and unaware of the meaning of the words they were using? Or that they were just trying to fool someone?


        • It’s kind of funny…the modern progressive left thinks that German fascists were not socialists, despite the fact that they called themselves exactly that, but the modern progressive left also thinks that calling itself liberal actually makes it liberal.


        • Progressives turned against the Fascism on June 22, 1941. Up till that point they were an ideology celebrated on the left.


        • The main similarity between fascism and socialism (and I don’t think it’s a coincidence fascists frequently cut their teeth amongst socialists) is the belief in the state as the ultimate authority and the ultimate good. National Socialism was a progressive movement of the early 20th century as was Italian fascism, but the “socialism” of both is prett far removed from Scandinavian socialism, for example. But it National Socialism was also about a all-powerful state for the greatest good of the public. So … similarities but also profound differences between the progressivism of the early 20th century and today.


        • Mark re fascism and socialism economics.

          I think the way the government handles the electric utilities is exactly how things work in fascism. The government tells the company exactly how much they are permitted to charge based on a percentage return on assets. They will mandate all sorts of unprofitable consumer policies on them (things like allowing consumers to “sell back” largely useless electricity for a discount on their bills) and capital expenditures (the way New York State extracted $11 billion in green investment as a condition to allow Iberdrola to acquire Energy East. The utility raised capital from the private sector, all of the returns are in the mid single digits.

          At the end of the day, a fascist government is basically using “off-balance sheet” financing. They own these entities in terms of how they are run, they just outsourced the financing to the private sector.

          A socialist government would basically raise the capital via taxes or borrowing to create basically the same thing.

          And in terms of which class the government works for, those periodic shakedowns on the utility sector fund A LOT of consumer advocates and non-profit jobs. The make-work aspect of government policy is there, just not in a way that is immediately obvious. So, how much of a tangible difference is it if the State of NY PSC has a small budget but an army of nonprofits are out there to harass the company and the NY PSC having the budget to do that?

          Can I say that fascism is basically socialism with off-balance sheet financing?


        • I think the main reason the modern left, progressivism, has made such an effort to disassociate itself from the label of fascism is because of its association with anti-semitism via the Nazis. Fascism = Nazis = Holocaust. But anti-semitism was a defining feature of German fascism, not fascism more generally. If Hitler hadn’t sullied the notion of fascism with the Holocaust, I suspect progressives would be a lot less averse to the label. Certainly it is the case that as a matter of policy, modern progressives have a lot more in common with fascists than they do with communists, who are more readily admitted as being on the left.


        • “The difference between the communists and the fascists rested not in their fundamental value system, but rather in the means used to achieve those values. ”

          The two groups themselves would beg to differ. If anything, the means are the same (violent revolution) and the outcomes are vastly different.

          Wiki is actually pretty good here:

          “Liberal opponents of both fascism and the Bolsheviks argue that there are various similarities between the two, including that they believed in the necessity of a vanguard leadership, had disdain for bourgeois values and it is argued had totalitarian ambitions. In practice, both have commonly emphasized revolutionary action, proletarian nation theories, one-party states and party-armies. However, both draw clear distinctions from each other both in aims and tactics, with the Bolsheviks emphasizing the need for an organized participatory democracy and an egalitarian, internationalist vision for society while the fascists emphasize hyper-nationalism and open hostility towards democracy, envisioning a hierarchical social structure as essential to their aims.”

          Scott, I guess this makes you a “Liberal [opponent] of both fascism and the Bolsheviks”.


        • jnc:

          Scott, I guess this makes you a “Liberal [opponent] of both fascism and the Bolsheviks”.

          I am indeed.

          I think the international vs national aspect is a real difference between the two. But I am not aware of any participatory democracy that survived, much less was implemented by, a communist revolution. The absence of any real democratic processes is a feature that fascism and commmunism seem to have very much in common, Bolshevik pretenses to the contrary notwithstanding.


        • Regarding the socialism in National Socialism, their manifesto explains it in their own words.

          Two series that have actually treated it seriously recently are Man in the High Castle and Babylon Berlin. I’d recommend both.


      • I’m assuming they think Hitler and Mussolini were right wing as well.


        • McWing:

          I’m assuming they think Hitler and Mussolini were right wing as well.

          They do, which is exactly where the discussion devolved to. And then they rolled their eyes in irritated impatience when I pointed out that the National Socialists were, er, socialists and asked whether socialism was a feature of the left or the right.


    • I read a lot of articles on this this morning. None of them touched on his eco-warrior, Marxist pro-China bit. Saying he was a fascist was mentioned. Nothing to suggest his politics were leftwards at all. In a dozen articles.

      There is no reportage. Just propaganda.


      • And of course in an supposed effort to de-platform him, they won’t post the entire manifesto so people can decide for themselves.

        Liked by 1 person

        • Yet I feel pretty certain that if the entire manifesto were a pro-Trump, pro-conservative, Bible-thumping Jesus screed with complaints about taxes and talk about “sovereign citizens”, the urge to deplatform would not have been nearly so compelling.

          Just read an article on the new details about the NZ shooter. No mention of his politics, interestingly. Apparently haven’t learned anything about that yet.

          Vox has a whole article on the manifesto that doesn’t hint about being anti-capitalist or anything but a right-wing extremist. Huh.

          Found another article on Vox that mentioned eco-facism, with a link, but that’s it. Otherwise: right-wing, right-wing, right-wing. Because white nationalism is “right wing”, but all that other stuff about eco-fascism and being anti-capitalist is, uh, not relevant or something.

          As always: supporting lower taxes and less regulation = fascist white nationalism.

          And love this from Vox:

          Conway’s recommendation to read the shooter’s manifesto is highly irresponsible.

          This from Vox, which in the same articles quotes the manifesto and tells you what it said . . . cuz, you know, they are gatekeepers and whatnot and it’s okay for them to tell you what parts of the manifesto they want you to know. They also directly reference the objectionable messages they think people shouldn’t hear, supposedly–and immigrants being characterized as invaders, for example–so is that highly irresponsible? Or not?

          Things that make you go “Hmmm.”


  4. The Beto oppo dump will be a blast.


  5. I admire the capitalist entrepreneurial spirit at work here. Any chance we can swap them for some of the home grown socialists?

    “Tailored to the new, booming aspect of unauthorized U.S. migration — parents bringing children — the new express bus system’s success would not have been possible in previous eras when the vast majority of migrants were single adults from Mexico whose goal was to avoid getting caught.

    Instead, recruiters are selling clients in Guatemala on the journey with presentations akin to the benign pitch of a travel agency. They offer a range of price points at different levels of passenger comfort, according to U.S. and Guatemalan officials who spoke on the condition of anonymity to share sensitive details about smuggling networks’ operations.

    Customers paying as little as $2,500 are typically made to ride in trucks or stand in cattle cars, while others buying packages for $7,000 or more get premium bus service. Children generally travel free, because those who arrive at the U.S. border with a minor only need to be guided to the edge, not smuggled across it.

    The express journey is typically financed by migrants’ relatives already working in the United States or with microloans that leverage homes and property as collateral, in some cases with notarized documents that allow the smuggling organizations to collect unpaid debts. In an especially worrisome sign for U.S. officials, the price of the journey has been dropping in recent months as the rapid bus routes allow smugglers to cut costs and boost volume.”–and-across–the-southern-border/2019/03/15/940bf860-4022-11e9-a0d3-1210e58a94cf_story.html


Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: