25-9 Economic Snooze Fest: Yellen Mumbled, Market Floundered, More in store
Folks selling homes best do it summer and fall, if rates are prematurely popped by our confused and self delusional Fed mid 2015. When popped, the market will not look at 1/4%, it will discount the entire 2-2.5% pop thereafter--I look for a fifteen to twenty percent correction in equities in about 30 days thereafter rate pop #1. Hurt most? Small business, precious metals, service the national debt, credit card holders. I expect the jitters late XMAS to 2nd QTR 2015, and the market to flatline in anticipation. 1/4 a month would be catastrophic. 1/4 a quarter would be better. This week? New home sales fill in the blank left by existing home owners still under water who'd like to sell but can't, which Fed reads as "recovery". House prices flatline, claims will shrink slightly-more part timers get work.
Will Yellen be forgotten? Stay tuned. It's bubblicious.
Aug 25 10:00 AM New Home Sales Jul - 415K 427K 406K -
Aug 26 8:30 AM Durable Orders Jul - 12.6% 7.0% 1.7% 0.7%
Aug 26 8:30 AM Durable Goods -ex transportation Jul - 1.0% 0.6% 1.9% 0.8%
Aug 26 9:00 AM Case-Shiller 20-city Index Jun - 8.5% 8.3% 9.3% -
Aug 26 9:00 AM FHFA Housing Price Index Jun - NA NA 0.4% -
Aug 26 10:00 AM Consumer Confidence Aug - 88.0 88.3 90.9 -
Aug 27 7:00 AM MBA Mortgage Index 08/23 - NA NA 1.4% -
Aug 27 10:30 AM Crude Inventories 08/23 - NA NA -4.474M -
Aug 28 8:30 AM Initial Claims 08/23 - 315K 302K 298K -
Aug 28 8:30 AM Continuing Claims 08/16 - 2525K 2520K 2500K -
Aug 28 8:30 AM GDP - Second Estimate Q2 - 4.0% 4.0% 4.0% -
Aug 28 8:30 AM GDP Deflator - Second Estimate Q2 - 2.0% 2.0% 2.0% -
Aug 28 10:00 AM Pending Home Sales Jul - 0.5% 0.5% -1.1% -
Aug 28 10:30 AM Natural Gas Inventories 08/23 - NA NA 88 bcf -
Aug 29 8:30 AM Personal Income Jul - 0.2% 0.3% 0.4% -
Aug 29 8:30 AM Personal Spending Jul - 0.1% 0.1% 0.4% -
Aug 29 8:30 AM PCE Prices - Core Jul - 0.1% 0.1% 0.1% -
Aug 29 9:45 AM Chicago PMI Aug - 53.0 54.8 52.6 -
Aug 29 9:55 AM Michigan Sentiment - Final Aug - 80.0 80
Low and behold, new family homes are not keeping up with supply being driven by homebuilders totally misunderstanding that the rush to new home buying this year, hasn't the higher salaried folks left to sustain it next year, when the Fed starts raising interest rates. The glut of supply, meets the indigent in the middle, and we wind up like China, ghost homes across Amurrica.
Is the Fed dumb enough to think they can raise overnight rates? Check out my ode to what Robin Williams might have done with that on Seth Meyers couch if he'd been asked. He'd have rapped stream of consciousness what took me five minutes to write down. Pop a quarter a quarter.....