On Christmas Eve one would think you could have a nice evening with your family. Little did I know what Timmy Geithner had up his sleeve:
The two companies, the largest sources of mortgage financing in the U.S., are currently under government conservatorship and have caps of $200 billion each on backstop capital from the Treasury. Under the new agreement announced today, these limits can rise as needed to cover net worth losses through 2012.
I see. But I thought housing was getting better? That’s what I heard on CNBS Tuesday when existing home sales came in “above expectations.”
But then Wednesday came around and, well, new homes? They’re just not selling.
Purchases dropped 11 percent to an annual pace of 355,000, lower than the lowest estimate of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. The median sales price decreased 1.9 percent from November 2008.
Wait a second. How come the disparity?
Two reasons, really. The first, which the pumpers cite, is that “the tax credit was maybe going to expire.” Uh huh.
No, folks, that’s not the reason. The reason sales fell is that they’re still falling everywhere. What’s happening in the “existing home” sales numbers is that foreclosure sharks are taking a bite here and there, in many cases generating double counts in the “existing home sale” category, never mind the alleged data source in the first place. But even the NAR acknowledges that 33% of existing home sales were foreclosures, not actual organic “meeting of the minds” transactions. Take those out and existing home sales didn’t rise 7.4%, they instead did their best imitation of a cliff-dive, with organic sales being a mere 4.38 million units (annualized), which is a mid-to-late 1990s print (and then again around the 1978 time frame). MUST READ MORE…
Disclosure: no positions