Economic Reports 05/15/07
Summary: WalMart & Home Depot demonstrating John Q and housing pull backs... Excepting a rise in prices received NY Empire Index gettin er done with a rebound....
NAHB Housing Index plunging back to a 16 year low as tightening lending standards choke off the number of overpaying mental midgets that could support still absurd but falling prices.
Thank god for small miracles, now how about a bond market shakeout to raise rates and plunge the real estate demon back into the hell it came from...
TIC Inflows show private foreign investors rescued the bond market, while foreign institutions rescued our government agency debt....
Bad news, despite a lower dollar, foreigners are turning away in droves and if this continues, interest rates will skyrocket.
CPI's little shop o horrors continues... with ragin stagflation as the YTD annualized "advertised number" approaches 7%.
WalMart Q1 reporting +8.3% vs Q4 +9.7% revenue on strong international business despite domestic comp store sales slackening 0.1%.
Drink the kool-aid and repeat the mantra: My name is Benny and inflation is tame... for the number one volume importer of CHINESE goods... Cost of Sales +8.4% quarterly;
must have been all those pay raises to the Seniors scrapin by without bennies... no pun intended...
Q1 Net income $2.83B vs Q4 net income $3.94B for a 28% sequential drop. It better be seasonal...
Home Depot Q1 reporting a 29.5% fall in earnings & 24.3% drop in EPS. Retail sales -4.3% & comp store sales -6.6%.
Q2 forward guidance -4% to -9% EPS due to continuing challenges in a softening housing market. What does Home Depot know that the Fed doesn't?
NY Empire State Index May 8.0 vs prior 3.8 Full Report
Inside the number: Employment up 9.7 vs 5.4; prices paid down to 34.4 vs 40.5; prices received up to 15.6 vs 7.6. Pointing to inflation in the pipeline...
Perhaps a pre summer bounce...New orders up 8.0 vs 3.9; shipments up 14.1 vs 8.7; unfilled orders up to zero vs -8.3; inventories down to zero vs 7.1; delivery times down -4.4 vs 1.2.
Expectations fo Capex spending rather than stock buybacks?? What are these managers stuffin that bong with? Capex spending up 34.4 vs 27.4; Technology spending up 26.7 vs 14.3.
NAHB/WF Housing Index 30 vs prior 33 Full Report
Inside the number: Again hitting a 16 year low amidst tightening lending standards. Present conditions down 31 vs 33; next 6 months down 41 vs 44; traffic down 23 vs 27.
"We’re now projecting that home sales and housing production will not begin improving until late this year, and we’re expecting the early stages of the subsequent recovery to be quite sluggish.
There still are tremendous uncertainties regarding our baseline forecast going forward, owing largely to the subprime crisis that is having widespread effects throughout the mortgage market."
"Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead."
Challenge this.... looking at the HOI Housing Opportunity Index, one can clearly note the 1994-1995 and 1999 bond market bombs as the % of ARMs to fixed loans jumps.
Look at the ARM % grow from 2001 through early 2006, then shrink from early 2006 till now.
Note the "affordability" index is down from 65 to 40% over the same period... the Nattering One muses... and this was PRIOR to the tightening of lending standards, wonder what that will do for "affordability?
TIC Net Foreign Purchases Mar $67.6B vs prior $58.1B - Press Release
Inside the number: Net domestic securities purchased $107.9B vs $77.9B.
Official Foreign Institutions: net $21B vs $12.6B; Treasury Bonds & Notes 4.4 vs 2.5; Gov't Agency Bonds 12.6 vs 4.2. Demonstrating a thirst for Govt agency bonds vs Treasury.
Private Foreign Investors: net 86.9 vs 65.3; Treasury Bonds & Notes 30.7 vs 14.4; Gov't Agency Bonds 2.9 vs -2.2. Demonstrating a thirst for Treasury bonds vs Gov't agency.
12 months through Mar 06 vs Mar 07...
Private party treasury bonds & notes 179.7 vs 177.2, a decline of 1.3% or $2.5 B
Institutional treasury bonds & notes 76.6 vs 57.8, a decline of 24.5% or $18.8 B
Net TIC inflows 957.7 vs 841.1, a decline of 12.1% or $116.6 B
Net Private inflows 832.5 vs 642.7, a decline of 22.7% or $189.8 B Ouch!!
These YTD decreases despite the dollar being debauched severely are not a good sign.
Should the tide of private investors keep rolling out, the bond market might get a slow but thorough enema.
CPI Apr +0.4% vs prior +0.6% Full Report
Inside the number: Core CPI Apr +0.2% vs prior +0.1%; Cleveland Fed Median CPI +0.2%; Real earnings adjusted for inflation -0.5%.
Sequentially: Energy +2.4%; Gasoline +4.7%; Transportation +1.2%; Food +0.4%; Medical Care +0.4%; Shelter +0.3%; Bread +2%; Poultry +1.8%.
Owners equivalent rent +0.2%; +3.9% this year accounting for the bulk of the "mythical core" CPI increase this year.
Remember all these numbers are seasonally adjusted, the unadjusted numbers are far worse.
The CPI-W (Table B) urban & clerical workers numbers show a much grimmer picture than CPI-U.
YTD Q107 annualized: CPI +6.7%; Medical Care +4.2%; Education +4%; Food & Bev. +6.4%; Transportation +19.3%; Energy +45.6%.
Meanwhile, IT hardware & services -15.7%; PC's & peripherals -8.4%. Remember the Nattering One's contra inflationary mantra:
"Dont drive, stay at home surfin the web and don' eat... its just getting better all the time."
NAHB Housing Index plunging back to a 16 year low as tightening lending standards choke off the number of overpaying mental midgets that could support still absurd but falling prices.
Thank god for small miracles, now how about a bond market shakeout to raise rates and plunge the real estate demon back into the hell it came from...
TIC Inflows show private foreign investors rescued the bond market, while foreign institutions rescued our government agency debt....
Bad news, despite a lower dollar, foreigners are turning away in droves and if this continues, interest rates will skyrocket.
CPI's little shop o horrors continues... with ragin stagflation as the YTD annualized "advertised number" approaches 7%.
WalMart Q1 reporting +8.3% vs Q4 +9.7% revenue on strong international business despite domestic comp store sales slackening 0.1%.
Drink the kool-aid and repeat the mantra: My name is Benny and inflation is tame... for the number one volume importer of CHINESE goods... Cost of Sales +8.4% quarterly;
must have been all those pay raises to the Seniors scrapin by without bennies... no pun intended...
Q1 Net income $2.83B vs Q4 net income $3.94B for a 28% sequential drop. It better be seasonal...
Home Depot Q1 reporting a 29.5% fall in earnings & 24.3% drop in EPS. Retail sales -4.3% & comp store sales -6.6%.
Q2 forward guidance -4% to -9% EPS due to continuing challenges in a softening housing market. What does Home Depot know that the Fed doesn't?
NY Empire State Index May 8.0 vs prior 3.8 Full Report
Inside the number: Employment up 9.7 vs 5.4; prices paid down to 34.4 vs 40.5; prices received up to 15.6 vs 7.6. Pointing to inflation in the pipeline...
Perhaps a pre summer bounce...New orders up 8.0 vs 3.9; shipments up 14.1 vs 8.7; unfilled orders up to zero vs -8.3; inventories down to zero vs 7.1; delivery times down -4.4 vs 1.2.
Expectations fo Capex spending rather than stock buybacks?? What are these managers stuffin that bong with? Capex spending up 34.4 vs 27.4; Technology spending up 26.7 vs 14.3.
NAHB/WF Housing Index 30 vs prior 33 Full Report
Inside the number: Again hitting a 16 year low amidst tightening lending standards. Present conditions down 31 vs 33; next 6 months down 41 vs 44; traffic down 23 vs 27.
"We’re now projecting that home sales and housing production will not begin improving until late this year, and we’re expecting the early stages of the subsequent recovery to be quite sluggish.
There still are tremendous uncertainties regarding our baseline forecast going forward, owing largely to the subprime crisis that is having widespread effects throughout the mortgage market."
"Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead."
Challenge this.... looking at the HOI Housing Opportunity Index, one can clearly note the 1994-1995 and 1999 bond market bombs as the % of ARMs to fixed loans jumps.
Look at the ARM % grow from 2001 through early 2006, then shrink from early 2006 till now.
Note the "affordability" index is down from 65 to 40% over the same period... the Nattering One muses... and this was PRIOR to the tightening of lending standards, wonder what that will do for "affordability?
TIC Net Foreign Purchases Mar $67.6B vs prior $58.1B - Press Release
Inside the number: Net domestic securities purchased $107.9B vs $77.9B.
Official Foreign Institutions: net $21B vs $12.6B; Treasury Bonds & Notes 4.4 vs 2.5; Gov't Agency Bonds 12.6 vs 4.2. Demonstrating a thirst for Govt agency bonds vs Treasury.
Private Foreign Investors: net 86.9 vs 65.3; Treasury Bonds & Notes 30.7 vs 14.4; Gov't Agency Bonds 2.9 vs -2.2. Demonstrating a thirst for Treasury bonds vs Gov't agency.
12 months through Mar 06 vs Mar 07...
Private party treasury bonds & notes 179.7 vs 177.2, a decline of 1.3% or $2.5 B
Institutional treasury bonds & notes 76.6 vs 57.8, a decline of 24.5% or $18.8 B
Net TIC inflows 957.7 vs 841.1, a decline of 12.1% or $116.6 B
Net Private inflows 832.5 vs 642.7, a decline of 22.7% or $189.8 B Ouch!!
These YTD decreases despite the dollar being debauched severely are not a good sign.
Should the tide of private investors keep rolling out, the bond market might get a slow but thorough enema.
CPI Apr +0.4% vs prior +0.6% Full Report
Inside the number: Core CPI Apr +0.2% vs prior +0.1%; Cleveland Fed Median CPI +0.2%; Real earnings adjusted for inflation -0.5%.
Sequentially: Energy +2.4%; Gasoline +4.7%; Transportation +1.2%; Food +0.4%; Medical Care +0.4%; Shelter +0.3%; Bread +2%; Poultry +1.8%.
Owners equivalent rent +0.2%; +3.9% this year accounting for the bulk of the "mythical core" CPI increase this year.
Remember all these numbers are seasonally adjusted, the unadjusted numbers are far worse.
The CPI-W (Table B) urban & clerical workers numbers show a much grimmer picture than CPI-U.
YTD Q107 annualized: CPI +6.7%; Medical Care +4.2%; Education +4%; Food & Bev. +6.4%; Transportation +19.3%; Energy +45.6%.
Meanwhile, IT hardware & services -15.7%; PC's & peripherals -8.4%. Remember the Nattering One's contra inflationary mantra:
"Dont drive, stay at home surfin the web and don' eat... its just getting better all the time."
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