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Housing starts a bit shy of forecast

  • May Housing Starts: 1.001K vs. 1.034K expected and 1.071K prior (revised).
  • Permits 991K vs. 1.02M expected and 1.059M prior (revised).
Comments (13)
  • permanent
    , contributor
    Comments (114) | Send Message
     
    Housing is expensive so People rather rent than buy.
    17 Jun, 08:39 AM Reply Like
  • d.chavo
    , contributor
    Comments (38) | Send Message
     
    Who can afford to buy a house with all these new low paying service and temp jobs? With interesting rates going up these numbers will only get worse. Anyway, let bbro tell it and the economy is doing fine and everyone is prospering. LMAO!!
    17 Jun, 08:46 AM Reply Like
  • Rjacobs394
    , contributor
    Comments (2) | Send Message
     
    Rates can not advance very much. The US collects $2.8 Trillion in taxes annually. We spent $3.4T, so we're running a deficit of around $600B annually. This deficit adds to our current national debt of nearly $18T. The interest on that debt is $500B annually. Any major increase in interest rates will blow up the national debt. There are solutions but Americans do not want to sacrifice and politicians do not have the moxie to force corrective measures because their political party would be voted out of office.
    17 Jun, 09:06 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3661) | Send Message
     
    Rates will be below 2.5% for a while, and that is actually very high.
    17 Jun, 09:45 AM Reply Like
  • 10140931
    , contributor
    Comments (4) | Send Message
     
    Not a novice to financing, but I am inclined to believe that past 'conventional wisdom' has been turned on its head and that it can go on for a long long time. The Fed or ECB seem to be able to purchase all the treasuries or any sovereign debt that they want and nothing bad happens. And they seem also to be able to purchase as many bad loans from as many banks as they want and become a depository for all those 'bad loans' and nothing bad happens. That is to say:
    1. interest rates just stay down 2. the money 'printing' does not cause inflation in today's environment. Now I don't want to hear 'conventional wisdom' about 'chickens will come home to roost'. I want a clear eyed explanation of any proof that this money printing is, or will, cause any big problem. Haven't seen it for 6 years and rates keep going down and it seems that deflation, not inflation, is the worry at the Fed and ECB.
    17 Jun, 10:04 AM Reply Like
  • th3decider
    , contributor
    Comments (274) | Send Message
     
    Hi 10140931,

     

    This is a common critique. You are correct nothing bad has happened, YET. The chickens have not yet come home to roost with money printing, but it is easy to explain why one in very simple concept: The US does not have to bare the full consequences of their money printing, other countries do, for now. Currently right now China, Brazil, India (I think), and tons of other countries peg their currency to the US dollar. This means every time we print, they also print. So instead of a country of 300 million having to absorb the full effect of our money printing, we get to export these negative effects of printing and have them absorbed over a few billion people. So you won't see major inflation until these other countries decide that this is no longer worth the costs of doing, and then we are forced to bare the full consequences here at home. Given food riots in some of these countries, China setting up more trade deals in Yuan vs dollars, Russia moving away from dollars, etc I think that day will be approaching us.

     

    But also it is a fallacy to think that because there is no rising price that money printing is having no negative effect, because this excludes the possibility that prices may have fallen in the absence of such printing which would have made consumer goods cheaper and more affordable for people. The electronics industry is a great example. Prices have fallen exponentially since desktop computers first hit the market in the 1970's and 80's. This dramatic price drop has made it so that all of us can afford and own multiple computers and electronic devices, cell phones, tablets, mp3 players, game consoles etc. Yet it reasons that it would have been technically possible for us to have print so much money the last few decades that prices for these items would not have fallen. But that wouldnt have meant there is no inflation, it just means we would've missed out on the deflation for these products which resulted in them becoming so cheap they are now common and accessible to everyone.

     

    Its quite possible and realistic we wouldve seen price drops over the years in airline tickets, healthcare etc, if not for all the money printing. We'll never know though but you can't exclude the possibility that money printing has had a huge affect of not allowing other industries whose productivity gains have been present but slower than electronics, to also experience their products becoming cheaper and more affordable.
    17 Jun, 10:40 AM Reply Like
  • baultar
    , contributor
    Comments (5) | Send Message
     
    the money "printing" does not cause inflation in today's environment is because 95% of the gains from the money printing go to the top 5% who do not change there spending habits because of some extra money if the money went to who it is suppose to benefit the middle class you would have inflation because people would be able to spend more which leads to inflation however when you have a middle class that's being squeezed their not going to spend. Also personally i don't think deflation is a bad thing it benefits the majority of the country i.e. the middle class and hurts the upperclass and businesses which the FED is bought and pain for so they spread the lie's about deflation being bad and inflation good.
    17 Jun, 10:41 AM Reply Like
  • 10140931
    , contributor
    Comments (4) | Send Message
     
    your sentence "....until other countries decide it isn't worth doing...". Not sure what that means. Again, I see no evidence that it could not be at least another 6 years. And if so, should not we continue to be headlong into the market? And the reply below yours that said no inflation "....because only the top 5% are getting the money...." Well, probably true, but with respect to investing in the SP500 that seems no reason to believe the chickens will come home to roost. My point: (and I am not a Fed cheerleader; it all seems upside down to me) But it seems it can go on and on and on if you think about it calmly and not with an agenda in mind.
    17 Jun, 10:50 AM Reply Like
  • baultar
    , contributor
    Comments (5) | Send Message
     
    Oh definitely it can go on and on... that's why that say don't fight the fed. One of the biggest problems from the FED right now is there low rates are keeping Washington from having to act to do anything for the economy especially the middle class because the FED is propping the country up. If rates were anywhere near the long-term average think what would happen to our interest payment on our 17 Trillion debt it would be growing at an unsustainable rate that is one of the biggest reasons for the FED keeping rates artificially low and buying so much Treasuries because if not the poltiicans would have to act and we all know how well that works.
    17 Jun, 11:03 AM Reply Like
  • aeroguy48
    , contributor
    Comments (607) | Send Message
     
    I see it down in the trenches many closed businesses, many closed speculated buildings. And not much opportunities of getting a job other than us old folks pushing out them youngsters for a burger flipper job. Some want to play fast and lose with other peoples money some just want a decent job they can use their learned skills.
    17 Jun, 12:29 PM Reply Like
  • june1234
    , contributor
    Comments (2490) | Send Message
     
    For all the media EUPHORIA over these starts they represent 1/2 the number of starts we saw in 05/06, when they were 7 to 10 million fewer people in this country.

     

    Not enough types of jobs being created needed to afford high rices , credit too tight, investors , largest single block buying homes pulling back, too many first time home buyers shut out = numbers we have. And remember a start is just a permit and a shovel in the ground
    17 Jun, 10:35 AM Reply Like
  • caupachow
    , contributor
    Comments (330) | Send Message
     
    Why buy when one can rent for less and move on to a new location when one wants? Owning handcuffs one in too many ways. Don't want to take another job across the city for too much traffic, or across the state or country. Renting is freedom to move on to bigger and better opportunities. I've owned many of houses and been a landlord too (which sucks), the appreciation we saw 10 years ago is gone for another 10 years. Plus many municipalities have already started the chatter of raising property taxes.
    17 Jun, 12:53 PM Reply Like
  • Michael Clark
    , contributor
    Comments (8323) | Send Message
     
    Caupachow: I agree with much of your sentiment. The great appreciation in housing will be gone until around 2037. Housing appreciates 1.5% a years historically. Reversion to the mean from now on. Then another speculative bubble around 2037, followed by a desperate attempt at disinflation 2037-2046, including housing bubble pretensions to steal as much money as possible before the end of the cycle. 36-year cycles.
    17 Jun, 01:06 PM Reply Like
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