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dpilling

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  • Auto Sales Point to Ongoing Recovery [View article]
    "With employment, incomes, and confidence rising, I see no reason why this can't continue for the foreseeable future.Apparently recent history has just become a predictor of the future."

    Hm? By that logic, the housing price bubble should never have burst and house prices should be off the charts high by now. Cause after all, recent history is a "great" predictor of the future.

    Btw, consumer confidence is not rising. Not sure where you are getting your facts.
    Oct 2 02:43 PM | 3 Likes Like |Link to Comment
  • Consumer Metrics Institute: Consumer Demand Still Contracting [View article]
    Doug, I checked out the individual components of the index and all, except for Financial (which tracks consumer interest in financial investments) appear to be trending down from levels earlier in Sept.

    Despite that, the composite index was increasing in recent weeks, although it may be turning over again. Any point of view on this?
    Sep 29 11:25 PM | Likes Like |Link to Comment
  • The Architecture Billing Index Improves in August [View article]
    You say: "This upward trend is evidence of a gradual and steady improvement in billings, and a signal of future improvements in construction activity."

    That is patently wrong. The "upward trend" is a sign that billings are falling at a slower rate than previously. Not until the index exceeds 50 will it be correct to say that billings are improving (ie increasing).
    Sep 22 07:42 PM | 2 Likes Like |Link to Comment
  • Good News for Housing: 30-Year Fixed Rate Mortgages at Their Lowest Point in History [View article]
    C'mon Scott. This post is just total hogwash. You can't say that the absence of bad news is good news when the bad news you think is absent is in plain sight.

    So, let me make this really simple: HOUSE PRICES ARE FALLING; AGAIN!

    www.fhfa.gov/webfiles/...

    Even the shills over at CNBC have figured this out.

    www.cnbc.com/id/39308602
    Sep 22 03:20 PM | 7 Likes Like |Link to Comment
  • Housing and the Great Recession [View article]
    The problem is that nobody is a good credit risk at 133% LTV. Just look at the default rates on mortgages that are underwater. So you are simply trading one problem for another. Btw, what makes you think that someone who is a default risk on a $200k mortgage could afford a $400k mortgage?

    Even if it were a good idea, practically speaking, what you propose is a non-starter given that most of the problem mortgages have been securitized with broad-based ownership; no one bank owns a mortgage anymore to even begin thinking about facilitating the transaction you contemplate.

    And more fundamentally, why on earth would you want to manufacture purchase activity to prop up prices? This is what got us into this mess. Wait a minute, you are a real-estate professional... got it!
    Sep 11 05:48 PM | 2 Likes Like |Link to Comment
  • Housing and the Great Recession [View article]
    Have a friend who is in the market to purchase a home. He's made three offers in the past two weeks in a high-end neighborhood ($750k+ homes) in one of the metro markets least affected by the housing crash. Despite offering a market price, none of the homeowners could work with his offer because they owe more than market value. He's 3 for 3.

    My guess is that prices are dropping right now, although the published stats won't show it until October. When the stats come out, you can bet consumer spending will retrench again as any faint hope of a recovery in housing prices is decimated.
    Sep 10 11:35 AM | 6 Likes Like |Link to Comment
  • What MasterCard and Visa Show About Market Disconnects [View article]
    Search on Dodd-Frank, debit, impact. The "consumer protection" debit card regulations are embedded in Dodd-Frank, a portion of which seeks to regulate what is called "interchange", the fees that Visa and MasterCard set for processing credit and debit card transactions.

    Not clear how the rules will play out as they go through the Fed, but the fear is that this will impact transactional economics and/or force banks to pass along additional debit-card usage fees, thereby retarding consumer usage of debit cards.

    Btw, Visa and MasterCard tend to do well in a difficult economy, b/c they get paid on the tran. and because people buy more small ticket items and forgo big ticket purchases. More transactions at a lower total $ value is good for them. Also, consumers switch from credit cards to debit cards, again where Visa and MasterCard have higher per tran. margins.
    Sep 9 07:09 PM | 5 Likes Like |Link to Comment
  • What MasterCard and Visa Show About Market Disconnects [View article]
    Certainly some of the valuation pressure here is from contraction in consumer revolving credit. But Visa and MasterCard are also under siege from a regulatory and competitive point of view right now. For example, regulations in the debit card area threaten to dramatically cut the margins these two see in the debit segment of their business which has been growing nicely and is more profitable on a transaction basis than their credit segment.

    I'm inclined to believe that most of the pricing pressure here is from the micro of what is going on with Visa and MasterCard than the macro of what is going on in the economy.
    Sep 9 06:12 PM | 15 Likes Like |Link to Comment
  • Jobless Claims Drop Sharply - If You Believe the Numbers [View article]
    Did I say we were going into a recession? Didn't think so. But if you want to have fun with statistics:

    Average private job openings in the three months prior to the start of the recession ( inclusive of Dec. 2007): 3.3 million

    Average private job openings in the three months following the start of the recession (post Dec. 2007): 3.2 million

    Average private job openings in the three months ending July 2010: 2.4 million.

    So yes, job openings have increased the past several months, but are well below the level they were at when we entered this recession in the first place.

    Frankly, the meme that we're not going into another recession because "things are improving" is mute, when the base level of all of the economic statistics clearly shows a stagnant economy.

    And oh by the way, I don't believe we ever came out of the recession in the first place and the statistics show it (e.g. New job openings that are lower than when the recession started).
    Sep 9 01:25 PM | 3 Likes Like |Link to Comment
  • Jobless Claims Drop Sharply - If You Believe the Numbers [View article]
    Right, and the difference between 464k and 470k is 1.3%, meaning that the difference between the actual reported and expected is not statistically significant. Particularly not when the BLS upward revises 90% of the time: www.zerohedge.com/arti.... Oh and did you notice that three of the five states with the largest drops in initial claims from last week were CA, MI and IL; all large employment states for which claims were estimated this week.

    In any event, whatever the final number is, this whole debate misses the point; with this series range-bound between 450k and 500k, employment in this country is going nowhere.
    Sep 9 11:53 AM | 8 Likes Like |Link to Comment
  • Housing: The News Is Not Bad, And That's Good [View article]
    The complete disregard for the laws of supply and demand in this post is hard to believe. Mortgage applications don't have to continue to fall for housing prices to continue to drop. Said differently, stabilization in purchase activity does not equate to stabilization in housing prices. With purchase activity flat-lining near 50-year lows and months of supply in double digits, housing prices will drop.

    So not only is this "not much to go on" Scott; its patently wrong.
    Sep 8 11:29 AM | 12 Likes Like |Link to Comment
  • More Evidence That Housing Has Stabilized [View article]
    Actually, Case-Shiller does not suffer from that flaw as it uses only "pair" data, where it compares the price at which a home was recently sold to a recent prior sale.

    That said, the index is a lagging indicator as the most recent number is a three-month moving average for the period ended June 30. Not "flawed", but definitely outdated, so it needs to be put in the context of what was happening at the time - home-buyer tax credits. Context here:

    www.calculatedriskblog...
    Aug 31 02:43 PM | 8 Likes Like |Link to Comment
  • More Evidence That Housing Has Stabilized [View article]
    Right, Case-Shiller doesn't know how home prices responded post tax credit. But the fact that Case-Shiller is outdated does not mean that the laws of supply and demand were suspended in July and August. Other groups have more recent data, RadarLogic being one of them. They, as well as Case and Shiller (as individuals) are afraid of what they see in July and August.

    www.radarlogic.com/res...

    You should be too. Either your optimism has blinded you or you are willfully ignorant. Home prices are going down, again. No if, ands or buts about it. Your optimism will be proven unwarranted very soon. I for one am looking forward to your reaction when it happens.
    Aug 31 01:57 PM | 24 Likes Like |Link to Comment
  • Why the Stock-Bond Disconnect? [View article]
    I don't get it. In this post you rationalize away the disconnect btw corporate bonds and stocks by saying that it can be attributed to tightening corporate spreads. Ignore the fact that Treasuries are rallying you say, its all about decreasing corporate spreads.

    In your subsequent post today (seekingalpha.com/artic...), you go out of your way to make the point that recent INCREASING SPREADS can safely be ignored because they are not increasing nearly as much as they did during the dark days of 2009.

    So which is it? Amazing to me that you can use the same facts to make polar opposite arguments in the span of only hours.
    Aug 25 04:25 PM | Likes Like |Link to Comment
  • Why July's Weak Capital Goods Orders Were Possibly Misleading [View article]
    Again I see the same data you see but draw a different conclusion. Yes, machinery and Computers were down dramatically in July. But the prior months of growth in Machinery was actually in new orders, not shipments. Unfortunately, the growth in machinery new orders didn't translate into shipments growth in June and July and in any event, new machinery orders clearly retrenched in July, meaning Q3 is off to a softer start than where we ended Q2.

    As for the machinery backlog (unfilled orders), yes, the total number increased in July at a 0.0% rate. Statistically, I don't see that as an "increase". Inventories on the other hand did increase; not a good sign in a slowing economy as this will put pressure on pricing and margins.

    None of this detracts from the fact that the lift (albeit meager) in this report is entirely attributable to non-defense aircraft, which is inherently unpredictable and lumpy and should be excluded for analytical purposes.

    That said, I'm glad to see you are not jumping on the CPB bandwagon on this one and attributing this dismal report to a "bad seasonal adjustment".
    Aug 25 03:04 PM | 2 Likes Like |Link to Comment
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74 Comments
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