Wednesday, February 28, 2018

2008 Deja Vu: Buried By Trusted Psychopaths

Unfortunately, the Idiocracy doesn't trust anyone who can be trusted...

We live in a society run by and for industry-captured whores who lie incessantly. Our politicians are merely an extension of industry. A corrupt society doesn't know corruption when it sees it. It's the Idiocracy incarnate:

The real estate industry blames every housing problem on a lack of supply. Both the realtor cartel and the construction cartel are in league to ensure that no housing problem can't be solved with more supply. Throughout this global real estate money laundering scheme afflicting New York, Seattle, London, Sydney, Vancouver, Toronto, San Francisco, stop me any time... The solution to global money laundering via real estate was ever-more supply. All of that free-flowing global money merely fueled speculation in homes that are now largely standing empty. Meaning there is more than ample supply, but it's tied up for speculation. Ready to come back onto the market in human history's largest glut.

In the U.S. now, we hear that rising interest rates and lack of wage income are not what is causing the housing sales collapse, it's lack of supply. We just need to pump more homes onto the market. I submit that if this was a supply problem then homebuilder stocks would not be getting shellacked:

Needless to say, conflating a supply problem with a demand problem is a disaster wanting to happen, deja vu of 2008. Because the last thing any weakening market needs is more supply when demand is imploding. But try telling that to the National Real Estate Association or the Builder's Association. They seem to enjoy serial bankruptcy for their clients and members.

Yesterday's new homes sales implosion focused ominously on the demand side of the equation:

"It seems that the jump in mortgage rates in January had an immediate impact on contract signings"

But then today's pending homes sales collapse is blamed on lack of supply:

"Pending home sales fell 4.7% to 104.6 in January, the National Association of Realtors said Wednesday. That’s the lowest reading since October 2014"

NAR called the lack of housing-market inventory a “crisis”

"Contract signings precede sales by approximately 45 to 60 days, so the January figures don’t bode well for February sales data, nor the overall economy"

Here is the problem with this narrative, the supply of homes available for sale, as of January, is now at the highest level since 2014:

"The months' supply is the ratio of houses for sale to houses sold. This statistic provides an indication of the size of the for-sale inventory in relation to the number of houses currently being sold. The months' supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built."

Meanwhile, home improvement stocks are also getting demolished:

Last week Walmart imploded:

Before that, it was Ford:

The entire "reflation" trade is systematically getting pole axed - from housing, to autos, transports, miners/resources, energy, and retail. 

The only part of the fake reflation trade that is still working is banks. Due to the relentless rise in bond yields.

And yet even the banks are starting to roll over as bond yields begin to price in recession over Fed bullshit:

In other words, the exit to the casino is getting narrower and narrower with each passing lie that's believed...

As long as the profitless retailer never rolls over, this will all be fine...