“Economists polled by MarketWatch had expected the gauge to rise to 20.1 in May.”
It came in at…3.9! The economists, those oh-so-smart men who stare knowingly at their screens every day, had expected the indext to RISE by nearly 3 points to 21. In reality it droped by over 15 points to 3.9. An 80% error.
For those charitable souls among you who might have been thinking, ‘well, maybe it’s just the economists in Philadelphia having a bad hair moment’, it turns out the economists fraternity’s prediction for the New York area was similarly excellent.
The Empire State manufacturing survey (for the New York area) had been at 21.7 in April, the highest it had been in a year but fell in May to 11.9 the lowest since December. Once again, it’s not the dip which catches the eye, but the fact that, as Market Watch again reports,
“The size of the decline surprised economists.”
It surprised them…But wait, as they say in advertizing, there’s more…
“Resales of U.S. single-family homes and condos fell 0.8% to a seasonally adjusted annual rate of 5.05 million in April, the National Association of Realtors reported Thursday.”
Now call me an old grump, but unless economists read different newpapers and raw data form the rest of us they must have noticed the way unemployment has not really been part of the wonderful ‘recovery’. And so long as people are not earning a great deal and are still in fear of losing what little income they have, from their McJob, it seems to me that house sales NOT going up, falls in the, bears in woods and Popes being Catholic range. And yet, Market Watch continues,
“The drop came as a surprise to Wall Street. Economists surveyed by MarketWatch had expected sales to rise to 5.25 million.”
It seems to me the economists surveyed by MarketWatch spend a lot of their time being surprised. I wonder if MarketWatch surveys a particularly thick bunch or if they’re all like that?
By the way, median home prices in the US fell a fairly hefty, recovery-tastic 5% from a year ago. No doubt there is another room somewhere, where a whole other bunch of economic experts with degrees from top institutions are also all ‘surprised as heck by that one too’.
Do you suppose in bars frequented by Wall Street economists the whole place is one long startle-fest of amazed expressions? Everyone ‘surprised’ that eveyone else is there – “Didn’t expect to see you here! Or him or her, or me for that matter! Wow, they have drinks in here! Surprised me! And bar stools. Didn’t expect that! Did you? No. Me neither. And have you seen the prices? Do you think they take credit cards here? Yeah? Really? Amazing.”
Their offices must be like working in a jack-in-the-box factory. It must be exhausting to be that surprised that frequently. No wonder they have to be paid so much.
Anyway, this domestic shock and amazement comes on top of this one, as reported over at Zerohedge, from Japan, which really caught the boys off balance,
“…the latest data out of Japan which is yet another stunner to most, as nobody, nobody, could have possible predicted that the Japanese economy would literally fall off a cliff in Q1, plunging at a 3.7% rate (down from -3% previously), which is double the consensus print of -1.9%. DOUBLE. And in nominal terms the collapse was simply epic: -5.2%!”
Who’d have thought that a devastating earthquake, a Tsunami and a full scale uncontrolled, blow the tops off 4 reactors, nuclear disaster, complete with open-to-the-air fuel rods melting down, would cause an already crippled economy to slip back in to recession? No really, that’s a tough call.
And to think that over the last two months ‘experts’ have been expecting and predicting that the disasters would not only NOT cause a further recession but would ‘stimulate’ a faster recovery based on – yes you guessed it – the government of Japan, like all governments everywhere, simply pulling a few trillion from who knows where and sending the bill to a future generation who luckily can’t vote yet. And if you think I’m making up and exagerating such stupidity, read this, from the same Zerohedge article,
“We look for a classic V-shaped recovery in the July-to- September period and after,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “A self-sustaining recovery in production, an increase in government consumption and reconstruction demand centered around public works will likely support the economy.”
Next up, surprise that Greece will default, that Spain will find new undeclared debts hidden away in its regions and municipalities, that cities and States in the US won’t be able to pay their bills, that German’s banks will suffer huge losses when Greece and Portugal eventualy default, that there will be another global banking liquidity problem which will do nasty things to Australian and American banking and that the decline of and volatility in US stocks and in Commodities now that QE2 has finished in America, will prompt QE3 in the US – all of this will be one long carnival of surprise.
Allegedly.
Either they are dumber than a big bag of pricks or they are lying to us.
hi golem
the property situation in a reasonable
(neither poor nor rich-doing not too badly) mid-west city in the US is showing that property is slumped by about 50%, in the condo category. It is acknowledged that condos are the blackest part of the property market.
A condo nearby that was mortgaged to about 110k in 2007 is at 81K valuation but will sell, almost certainly back to the bank, with the mortgage, for the lowest acceptable bid of 54k. i suppose they have no interest in maintaining the original owner in a home. ( the original owner has in fact become pretty much dysfunctional, due to stress and depression, a factor that never seems too be taken into account). The social costs are very high.
Now I am not sure of this point but I think there is a federal scheme for 'losses' on property foreclosures that banks have access to. The foreclosure gives them a loss of about 56k, most of which they recover. However there is very little interest in buying condos, despite the likelihood that the property could let out at a reasonable return.
Maybe Fungus in San Diego can be helpful here in clarifying the situation.
I checked out what was happening in the courthouse where the foreclosure sales are held. Most places just revert to the mortgage holding bank. I wondered what would happen if I bid against the bank. would it mean they would bid against me? As the price rises what happens to the banks losses? well nothing really- it jusrt means i might pay a proportion of the banks losses as I bid above the true market value.
I am confused, as all this does not seem to add up properly. it almost seems like a scheme to create as much disruption or destruction as possible.
The MacPuddock,
As you say teh social costs are both very high – high for the person and their family but also for the wider community -and yet these real costs are never, never mentioned especially by those who profit from it all – the bankers.
It all adds up if the purpose is to secure maximum comfort and profit for the banks. They get protected from losses, allowed to ride rough shod over the laws about who can foreclose and what they must be able to prove to do so, can buy their own foreclosed properties via offbook companies sheltered in SPV's and often registerd in Delaware – so as to keep sales figure artificially inflated along with prices and hold whatever CDO the defaulted mortgage forms a part of at whatever mark to model fiction suits them.
No, it makes 'perfect' sense. I really can't understand why you would be confused.
To borrow from Webster, surely WE are constantly surprised, they are astonished?
Chuck,
Ha ha! Quite so.
Golem
Did you read about the peruvian bearing company which had to shut down because of supply problems from Japan, this globalisation stuff is really funny when it falls apart.
Just a query:
If homes valued at 110k are now being sold on for 54k, does this mean that in a bank somewhere there is still a line on a CDO somewhere stating that the property is worth the original amount?
Are these the assets the banks don't want marked to market?
Plus, any update on the robo-signing affairs?
Thrawn pop,
yes that is the fraud of the bankers protecting their paper wealth. And the cruelty of it is that people will be evicted from that home while the bankers will demand those same people be denied any help from the countrymen because the money their countrymen might have spared to help them has been and is being diverted to fill in the hole in the bank where half the value of the house used to be.
THAT is our recovery. THAT is what our austerity is for. THAT is why libraries and hospital wards are closing and THAT is what our politicians lie to us about.
If I knew a curse I would call it down on their heads over and over and over until I my lips bled.
Excellent imagery dude.
I tried a new 100mb/s hack on my camera The Game test video
The MacPuddock,
Perhaps I am the "Fungus in San Diego" you refer to. I am flattered. Anyway I shall give a short note on what is happening on the courthouse steps here:
The loan servicers, mostly banks, set a minimum bid corresponding to the total amount owed on the day of foreclosure. An original loan of $300,000 may have ballooned to $350,000 in delinquent payments plus foreclosure costs. The current market for a home in that area in normal condition may be $200,000 while the typical foreclosure home is trashed and stripped. The combined result is that nobody bids at foreclosure sales anymore. It is merely a formality to transfer legal ownership to the bond holders who then, through the loan servicers, sell the homes in bulk to large investor LLCs, mostly Delaware.
Several large public Real Estate Investment Trusts (REITs) have been formed for the purpose. The REITs I personally checked out were managed by the same guys who managed huge mortgage companies prior to the bust.
This massive extinguishment of home ownership in America is like the dust bowl that drove the original homesteaders from the plains into the big cities like LA, leaving America's farmlands in corporate ownership as it is today. I feel like I am living through and witnessing a new "Grapes of Wrath".
Whole condo complexes and whole subdivisions (housing estates) formerly all owner-occupied are now rentals. It is a boom time for property management companies. Many of my former realtor colleagues who had thriving storefront sales offices like myself, have gone into property management for faceless investors known only through bank referrals.
The banks control everything here. They go from strength to strength and get more arrogant by day. It is palpable in dealing with their employees. I am seriously considering moving back to Ireland – after 34 years. How would that work out do you think? At least there is still a good pint of Guinness there.
In my opinion Obama and Geithner are the enablers of the biggest crime in history. And I voted for Obama! His lust for power has eclipsed even Caesar and Nero.
Whether a popular backlash will come or not I have no idea. All I know is that the economic shift is gigantic where I live in Southern California. People feel as helpless now as Steinbeck described in the 30's.
There is so much going on at the moment….still early days, but the signs are increasing that things may yet unravel for Ruling Elites….
Strauss Khan's arrest on serious sexual assault charges has all the hallmarks of a 'black ops' job.
There's some evidence to suggest that whilst he was no revolutionary, he may be far more independent minded than the Elites would like. In normal times I doubt 'they' would take the risk of a removal job…
He could be guilty of course…but if he isn't, well, that suggests some serious desparation in the billionaire palaces eh?
Looks like Christine Lagarde (French Finance Minister) is being promoted to take over as head of the IMF. Another (bullshit, neo-liberal) 'socialist', she's the equivalent in Global Finance that Tony Blair has proven to be in 'foreign policy', with the same creepily butter-wouldn't-melt PR robot persona. (Very nasty indeed imo)
And maybe 'they' couldn't tolerate someone not 100% 'one-of-us' (to quote the pure evil Thatcher) looking favourite for the upcoming French Presidential election?
I'm no 'conspiracy' nut, but it's very hard to ignore the 'happy convenience' of DSK's timely departure with Greece, Ireland, Portugal (maybe Spain?) all about to blow a circuit?
And on a different tack altogether, but intimately connected as all this 'Geo Political' shit is…
Hamas & Fatah have (apparently) reconciled – with the aid & blessing of Egypt! – and turned out massive citizen border demonstrations for Naqba day (the Palestinian 'holocaust'). All brutally suppressed by the nazi style Israeli regime of course and little reported, de rigeur, by more of Kevin Myers 'kapos' – in the form of 'western' media this time.
The 'events' keep coming…
Great piece mikehall, spot on.
I found the reports that world stock markets rose 1% in response to Bin Laden being killed slightly queasy…
p.s. @ Mike Hall. Strauss-Kahn's arrest may look like a set up, but that does not mean he is not guilty. It has been known for years that he is predatory and pushy with women, butpeople have kept their mouths shut, to protect their own positions, and his position. ( unpursued complaints that he abused his positionw within the IMF dating back some years, etc) The timing of the various revelations ( there are many more in france than reported elsewhere) may be a " black-ops" job, but that doesn't mean that he is innocent of the crime as charged. Perhaps the trap he fell into was of his own devising, not anyone else's….
No matter how cynical I get I just cant keep up-
nora ephron
economists astonished cat http://www.youtube.com/watch?v=VPdv10mPuN4
great post and thread
hi Pat
I got confused with another contributor with an assumed irish background who goes by the name Fungus Fitzjuggler. apologies to both yourself and fungus.
Ok thanks-that more or less coincides with the situation I was told about-the properties nearly all go back to the bank with no bidders.
First of all I should say the property is in good condition. (I have a key and it is protected from vandalism, as it is not in a generally distressed area). we maintained it over the last year as it is part of the condo association and everybody just paid some extra.
i am now getting phone calls from companies who want to 'stop the sale', assert the owners rights and provide some kind of modified loan using government assistance programs which I know little or nothing about. however I assume if private companies can access the procedure for these relief mechanism, so can I.
I am interested in practical ways of spiking the gun of the bank if I can. Is there any way I can do this? Can I intervene on behalf of the owner. The sale is next Thursday so time is short. In effect I would quite like to see the former owner restored. As far as I know she is getting money from a daughter in California to pay rent for another apartment. I cannot see why she can't just have the mortgage paid by the daughter.
Part of the problem is that the owner has 'lost the plot' due to the distress and illness induced by the process of going bankrupt. If you have any suggestions or insights I'd be grateful.
Not sure how you gauge the intelligence of a big bag of pricks.
Catherine Tate's "constantly surprised woman" should be spokesperson for the economists – youtube vid (1:29):
http://www.youtube.com/watch?v=oER9xKbD2T8
The MacPuddock,
First of all there are no government programs compensating lenders for recovery losses. You are probably thinking of various faux government "loan modification" programs for borrowers. They were a fiction created by the Obama people, just as phony as his promises of "change".
As for "spiking the gun of the bank", forget it. The only way to temporarily stop a sale is for an owner/borrower to file Chapter 13 bankruptcy. That puts a temporary "stay" on the foreclosure process while the lender obtains a "Relief of Stay" from the court, usually based on "no equity".
In your case it seems the owner has already pulled the Chapter 13 trick' Nothing can now stop the foreclosure sale.
Rebecca,
Thanks for the invite back to Ireland. Yes, I sometimes wonder if somebody has not spiked the Irish water supply with Valium.
Yes, the dust bowl cleared most of the Mid-West of its original sod-busters. The agricultural land of America transferred to corporations who bought the small farms from banks at pennies on the dollar, exactly as the new urban landlords are buying residential America today.
Hi again all 🙂
I'm not sure where to put this, but I urge you all to visit the link I'm giving, read and inwardly digest…
I think all of you will love this piece I've just read by Nate Hagens:
"The psychological roots of resource overconsumption"
http://feasta.org/documents/fleeing_vesuvius/?p=84
I suspect that many of us here, if not conciously & actively searching for it, are greatly interested in discovering & understanding that which most comprehensively +frames+ the +problem+ – that which, rather like the holy grail of a 'Unified' theory (of everything!) in theoretical physics, shows the ultimate source from whence +all+ true, coherent & encompassing solutions may be confidently derived.
The +problem+ I refer to of course is the impending demise of Humanity (& much of Life on Earth along with it), and it's long, brutally messy & painful path we are now, as a species firmly embarked on. Whose various symptoms, early warnings & breakdowns have been discussed or intimated in the pages of these blogs & accompanying comments.
The piece gets to the very heart of the neuro-psychology of modern Humans & relates this with precision to our predicament – whether that pertains to the 'financial crisis', 'ecological crisis', 'democratic crisis' or any other you care to name.
My brain's 'unexpected reward' 'dopaminergic' system has just maxed out! 😛
That last sentence you will fully understand when you've read Nate's essay 😉
Enjoy!
We start looking at the economics and end up staring Armageddon in the face. Has anyone read Jack Londons extraordinary novel "The Iron Heel" ?
Its about Capitalism as he saw it in the nineteenth century and I remember at age 15 it chilled me to the bone. Well the reality seems to be progressing fast. It would seem that the true troubles are only just beginning, Southern Europe is drifting away from the the north, that America's great Black Hope is a sham and certainly no FDR , the rich are managing to entirely shift the burden to the poor and rewrite the story to boot, that the financial elite have learned nothing but more arrogance… the latest bit of the Narrative…is that only private companies create Wealth…. this is pushed again and again on the media and never questioned. Economic Newspeak reigns and as this totally false idea is rammed in to the public consciousness
The hope as always is in the people themselves seeing through this Mierda so Viva Los Indignados!
The Bread is rising.
Holy cultural anhedonia, Batman!
That is one great essay. Thanks for the link, mikehall.
I've been reading Desmond Morris's 'The Naked Ape' recently and had been wondering how evolutionary biology could shed some light on our predicament. I think Nate Hagens has pretty much nailed it there.
@ Jamie
Yeah, hasn't he just!
I've been viewing, for some time, recent history & it's likely trajectory over the next decades as a major 'evolutionary' crossroads for humanity.
It really doesn't matter whether one overlays some notion of a God (intelligent 'creator'), super-evolved aliens or whatever…or nothing at all. Any of those are possible, but none is essential.
Humans clearly have the opportunity to use properly (& a great deal more!) our higher brain functions to both modify our behaviour appropriately and solve the resource sustainability problem.
There are two possible paths.
In one we must relinquish violence of any kind & build a world that ensures everyone gets a fair opportunity to grow & fulfill themselves. This one still recognises our evolutionary past but fully opens the way to fulfill our higher cortex's true capability.
The other path is one where we deny our higher brain functions, descend into 'lizard brain stem''survival' violence & destroy both billions of ourselves & much of the planet. The Trauma of which will make physical & psychological survival a 'hell' on Earth anyway for hundreds of years or longer.
I believe there will be no middle options, it's up to us, individually & collectively to become sufficiently aware, self aware & co-operative.