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REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.

MSM Grapples with Home Sales Plunge

On August 25, 2010, in Housing, by Tim

The non-financial mainstream media is really having a hard time dealing with recent revelations that what they thought was a leveling out in the nation’s housing market was simply a sugar-high from the homebuyer tax credit that has recently expired.

In places like near Arizona where massive bubbles burst in recent years (and where the video above originated), the population is probably convinced that they’ve seen the bottom, but with so many houses yet to hit the market, they are likely in for a big surprise.

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America’s Millionaires Feeling More Bearish

On August 25, 2010, in Economy, Our Culture, by Tim

U.S. investors with assets in seven or more figures are not feeling nearly as chipper about the domestic state of affairs as they were over the last year or so, that is, when stock prices were generally rising. Reuters reports on how their mood has soured.

The Spectrem millionaire investor confidence index fell to its lowest level in more than a year in August as wealthy U.S. investors worried about politics and unemployment, according to Spectrem Group.

The Spectrem Millionaire Investor Confidence Index fell 11 points in August to -18, its lowest level since June 2009, when it fell a record 18 points to -20 shortly after the S&P 500 index hit a 12-year low.

The move returns the index to mildly bearish territory after 12 straight months in neutral.

The Chicago-based consulting firm, which specializes in affluent and retirement markets, defines neutral as between -10 and +10 in the index, which ranges from -100 to +100.

“The millionaires’ decline is particularly troubling since it suggests millionaires, typically more sophisticated than the broader affluent population, are reverting to a bearish frame of mind,” said George Walper, president of Spectrem Group.

As you might expect, it’s not the high unemployment rate and the increasingly slim chance that the lives of their children will be better than their own that is increasingly bothering the well heeled-crowd. It’s more the double whammy of a stock market slide about to extend into its fifth month and the prospect of paying higher taxes in the years ahead that have combined to lower their expectations of the future.

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New Home Sales Reach New Record Lows

On August 25, 2010, in Housing, by Tim

Three months after the end of the homebuyer tax credit, housing market conditions look worse than ever, the Commerce Department reporting(.pdf) new home sales reached new record lows in July, slightly worse than the previous record low in May immediately after the U.S. government stopped “paying people to buy houses” as Robert Shiller recently quipped.

Sales of new homes fell 12.7 percent, from a downwardly revised annual rate of 315,000 in June to 276,000 in July, and, on a year-over-year basis, sales are now down 32.4 percent.

The inventory of unsold homes was unchanged at 210,000, however, due to the slower sales pace, the months of supply metric rose from 8.0 months to 9.1 months and it now takes almost a full year on average to sell a newly constructed home.

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Ron Paul Wants to Audit U.S. Gold Reserves

On August 25, 2010, in Commodities, by Tim

In an interview with Kitco News, Rep. Ron Paul (R-TX) said that he plans to introduce legislation next year that will allow for the auditing of U.S. gold reserves, said reserves believed to exist (though it’s not clear how much has been leased out and when it’s due back) but not properly counted in some time (since the Eisenhower Administration).

Paul dropped the news in the interview, indicating that the bill still does not have an official name yet but will be unveiled at the start of the new U.S. Congress.

“If there was no question about the gold being there, you think they would be anxious to prove gold is there,” he said of the Federal Reserve.

This is not the first time the congressman has made his pitch. “In the early 1980s when I was on the gold commission, I asked them to recommend to the Congress that they audit the gold reserves – we had 17 members of the commission and 15 voted no to the audit,” said Paul. “I think there was only one decent audit done 50 years ago,” he said.

Though Paul did not say whether there is any truth to claims that there is no gold in Fort Knox or the New York Federal Reserve, he said, “I think it is a possibility.”

“If we ever get around to deciding we should use gold in relationship to our currency we ought to know how much is there,” said Paul. “Our Federal Reserve admits to nothing and they should prove all the gold is there. There is a reason to be suspicious and even if you are not suspicious why wouldn’t you have an audit?” he said.

Paul also offers a few thoughts on the Federal Reserve (abolish it), the use of gold and silver as legal tender (he’s for it), which new regulations he’d get rid of (all of them), and the U.S. economy (no double-dip recession, just one big single-dip).

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INSIDE JOB

On August 25, 2010, in Banks, Economy, Our Culture, by Tim

Here’s what looks to be one of the better films about the financial crisis – INSIDE JOB – from Academy Award nominated filmmaker Charles Ferguson, narrated by Matt Damon.

Favorite line: “These people are risk takers, they’re impulsive. You see a lot of cocaine use, prostitution” and don’t miss another smackdown of Hubris Incarnate with a Fatter Wallet (Frederic Mishkin) at about the 1:35 mark.

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Wednesday Morning Links

On August 25, 2010, in Uncategorized, by Tim

MUST READS
Ireland stung by S&P credit rating cut – Reuters
Why America stopped buying homes – Financial Post
Plunging home sales could sink recovery – CNN/Money
Ron Paul Calls for Audit of US Gold Reserves – Kitco News
Housing Market Plunged in July, Fueling Anxiety – NY Times
Hey bloggers! Philly wants you to buy a license – CNN/Money
Two dangerous myths about the stimulus – MarketWatch
Mr. Gross Goes to Washington – Gross, Pimco
The China Syndrome – newgeography

MARKETS/INVESTING
Oil rises slightly as economic data tempers gains – AP
Safe-haven buying lifts gold to 8-week highs – Reuters
Japan keeps intervention option open to curb yen – Reuters
Bond Market Bulls Thumb Noses at Pimco’s Gross – Bloomberg
Japanese stocks back in bear market as yen hits 15-year high – LA Times
Asset Bubble Addicts Just Can’t Shake the Habit – Baum, Bloomberg
India leads global gold surge – Commodity Online

ECONOMY/WORLD/HOUSING/BANKING
July durable orders up less-than-expected 0.3% – MarketWatch
Economy Caught in Depression, Not Recession: Rosenberg – CNBC
Stimulus boosted U.S. GDP by up to 4.5 percent in 2Q 2010 – Reuters
Threat of Inflation Underestimated in China: Strategist – CNBC
German Business Confidence Unexpectedly Increases – Bloomberg
60% of Delinquent Mortgages Not in Loss Mitigation – Housing Wire
The best moves for home buyers and sellers – CNN/Money
Loan Mod Profiles: Fed Up, Giving Up – ProPublica
Fed’s Evans says double-dip risk has risen – Reuters
Bernanke’s helicopter could move to new altitude – MarketWatch

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