The market was only marginally down today despite terrible macro data and a Fed statement about as optimistic as Nouriel Roubini at a funeral (the funeral of course would be for the US economy). New home sales dropped 33% to a record low as once again, and for all of you keeping score at home, THE GOVERNMENT TAX CREDIT EXPIRED (caps and exasperation intentional). According to the New York Times, analysts guessed home sales would drop to 400k from April's previously reported 504k, while according to CNBC, analysts guessed home sales would drop to 410k, and finally according to the WSJ analysts guessed home sales would drop to 430k, so no matter what news source you used, analyst guesses were still fuck awful and worse than Manute Bol's skin. On average, analysts predicted a ~19% drop in new home sales but the number being reported is a drop to 300k, so analysts' guesses of a 19% drop were off by ~25%. Wow. Money McBags wonders if their regression models suffer from colinearity, heteroskedasticty, or just stupid fucking dependent variables. To be that wrong about something and yet still be called professionals stretches the definition of the word "credibility" in ways that would make even Noah Webster's dictionary flaccid. And as usual, making the numbers seem slightly better is that last month's new home sales number was manipulated (Money Mcbags means readjusted) downward to 446k from 504k. So the drop being reported is 33%, or 446k to the all-time record low measurement of 300k when in actuality, the number fell 40% from 504k (which was the reported fucking number last month) to 300k. Readjusting the number downward before the awful report left 7% of "down" out of the reaction of investors who weren't paying attention and instead were busy trying to figure out who they have to fuck to get a job at CNN (And now we finally have a delightful answer to that). Making matters worse is that the supply of homes on the market was up 47% leaving an 8.5 month inventory (though the denominator in that equation, which Money McBags believes is the current annualized sales rate, is creeping towards zero which means we are getting closer to an undefined supply of homes on the market at which point Money McBags believes they should all logically be free and thus homelessness in this country will cease to exist, so perhaps that is the admirable goal of all of this). The point is, home sales/employment/Heidi Montag were all manipulated up over the past few months by tax breaks, stimulus plans, and plastic surgeons, but now that that is over, they are starting to turn back down and that could be worse than eating a shit sandwich with extra E. coli.
In addition to the drop in new home sales, the Fed came out today with their statement from their June meeting which was about as uplifting as the Diary of Anne Frank or nut cancer. According to the statement:
1. Housing starts remain at a depressed level
2. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad
3. Bank lending has continued to contract in recent months
4. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit
5. Investment in nonresidential structures continues to be weak
6. Employers remain reluctant to add to payrolls
7. Hanna Hilton remains retired from porn
Honestly, all of that was taken verbatim from the Fed's statement (well, except for maybe the last one, but they were all thiking it). The Fed's statement paints a bleaker picture of the US economy than what Picasso would have done in his blue period. The Fed then went on to say the rates would stay between 0 bps and 25 bps for an extended period and at least we're not fucking Greece, yet. Money Mcbags doesn't see how anyone can get excited about the markets after reading that, but then again, he can't understand how anyone can get excited over soccer, so what does he know? But as an aside, congrats to the US soccer team for beating a country with 1/10th of the population of the US on a last minute goal. Truly impressive. For their next feat, Money McBags hears the US soccer team will challenge Michael J. Fox to a game of Jenga.In Europe, data..READ ALOT MORE...ANALYSIS OF KIRK...
Disclosure: No Positions