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"The debate is now about the strength of the recovery, not whether there is a recovery," writes...

"The debate is now about the strength of the recovery, not whether there is a recovery," writes Bill McBride, as the WSJ catches up with his thinking on housing. Housing construction has quietly added to economic growth for 4 consecutive quarters, new home inventories have returned to 2005 levels, and economists are in near-unanimous agreement. Uh-oh.
Comments (13)
  • So if you ignore all the non 'new' homes in the market things are looking up am I right?


    Applying that to employment, if we just ignore all the people looking for work now, college grads of 2012 have a bright future!!!
    11 Jul 2012, 12:44 PM Reply Like
  • But ECRI says we are already in recession...
    11 Jul 2012, 12:46 PM Reply Like
  • Uh oh is right.... I think the last time things had such consensus would've been regarding the safety of sovereign debt and the solvency of banks in 2007.
    11 Jul 2012, 12:52 PM Reply Like
  • The data, not opinions, have been demonstrating that things have been getting better for housing for many months. Of course, data can be ignored in favor of fear, cynicism and punditry, but it doesn't usually work out well for making money.
    11 Jul 2012, 12:55 PM Reply Like
  • Forget it, tack. Obozo is outta here.
    11 Jul 2012, 01:09 PM Reply Like
  • LOL its called a "debate" but only one view point is allowed.
    whats the difference between a bounce and a recovery?
    11 Jul 2012, 01:13 PM Reply Like
  • Housing is but one leg. Retail sales are flat and unemployment growth is faltering. Government spending is falling at the state and local levels.


    The ECRI is correct. Remember that the NBER did not call the 2008-09 recession until after it was over.
    11 Jul 2012, 01:48 PM Reply Like
  • ECRI "guaranteed" we were entering a recession on September 30, 2011 and stated categorically that it would show up in 2012 Q1. They were completely wrong and remain so, as even though growth has slowed in some areas, the U.S. isn't even close to recession. After their announcement at the close on that Friday, the SPX plunged the following Monday to a closing low of 1099. In a rather humorous irony, that was the low since their "can't-miss" prediction.


    Those that jumped out of equities following their insistent lead have seen the market rise 22.2% (not including dividends), as of today, so anybody following ECRI off the cliff made a swell trading decision.


    The data has never indicated impending recession, just proving how hazardous it is to take one's clues from pundits.
    11 Jul 2012, 01:59 PM Reply Like
  • Tack, you are incorrect. Please go back and review their videos.



    If I recall correctly you were telling people in mid-March to be buying. How did that call work out?
    11 Jul 2012, 02:01 PM Reply Like
  • I don't ever tell people "buy, buy, buy." I have a very methodical approach to value investing that has paid off handsomely over the years and continues to do so. I remain up a few percent above the market's performance this year, not including an extra 5% in paid dividends I've harvested, so far. So, personally, it's working out fine.


    The data I quoted is exact, so I'm not sure how I could be wrong. They were so insistent in their recession call that the CNBC interviewer was taken aback and asked him if he was overstating his position. Laks just replied with hubris, which made me post a comment at the time that "pride goeth before the fall." And, so it has been for ECRI.
    11 Jul 2012, 02:16 PM Reply Like
  • You really should read the link I posted.


    Tack, I like some stocks like PG if they fall an additional 10%. To me this market is more of a value trap than a value buy. Most people miss that distinction.
    11 Jul 2012, 02:23 PM Reply Like
  • At least we have this
    11 Jul 2012, 01:49 PM Reply Like
  • Specifically, to answer Montanabark, a bounce is temporary, a recovery has more permanency, that is, bounce is for Short Term Traders, and Recovery is for Longer Term Investors.


    Generically, the bounce and/or recovery is in a sellers market. There are cash rich investors willing to buy for rental now and later sell for capital gains. But owners ( mostly banks &/or lenders) offer limited inventory for sale, thus buyers have to BID upwards for their bid to be accepted. Yet, they still hold huge inventory to be offered later for higher bids. So, at the moment is a bounce that may become a recovery depending on the electoral results, there may be a longer lasting recovery (Primary Trend) or back to the Status Quo Ante.
    11 Jul 2012, 04:41 PM Reply Like
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