Monday, April 29, 2013

Pending Home Sales Index

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October

 The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 4.3 percent to 101.7 in December from 106.3 in November

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 4.5 percent to 105.9 in January from a downwardly revised 101.3 in December

 The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 0.4 percent to 104.8 in February from a downwardly revised 105.2 in January

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 1.5 percent to 105.7 in March from a downwardly revised 104.1 in February


How to lie with statistics as only the NAR can.  

Sunday, April 28, 2013

Short Currencies Game

Sorry for the ugly post. Waiting on breakfast in Anaheim of all places.  iPod posts don't lend to clever tables or alluring graphics.

Anyway I was reviewing the state of Europe and wondered about ETF sector performance and more importantly relative performance.  Here's a table of currency ETFs:

A couple things pop out when you pair them. 
YTD: double short Euro, Euro, double long Euro.
+1.63%,  -3.50%,  -3.00%

Currency exchange ETFs are obviously run by would be mortgage brokers who couldn't pass the ethics test.  

Saturday, April 27, 2013

Preservation of Principle


7.50000% 11/15/2024



Coupon 7.500
Maturity Date 11/15/2024
Moody's Rating AAA
S&P Rating --
Call Protection YES
Bond Type Treasury
Interest Accrual Date 08/15/1994

Original Issuance



Issue Date 08/11/1994
Dated Date 08/15/1994
First Coupon Date 11/15/1994
Next Coupon --
Last Coupon 05/15/2024
Workout Date 11/15/2024
Issue Price --

Coupon Features

Coupon Type FIXED
Current Rate Effective Date 08/11/1994

Wow.  1994 wasn't all that long ago.  This 30 year bond would have cost you 100 then.  Now, with only 11 years left in the term you would have to pay 158.  So you'll get 11 payments of 7.5 and then 100 back in the year 2024.  No thanks.

Anyway, the lesson?  What goes up can come down.  USTs are not preservation of principal.  

 Yes, the correct usage is principal and the title of this post uses principle.  Think about the principles of any investment advisor recommending "safe as treasuries." 

Fourteen Year Old Tease

Okay now that I have your attention,  ;)

The "tease" is indeed 14 years old having been built in 1999 and the acreage is indeed rolling terrain but the price... oh my, the price.  

 The house in question is 5471 Locarno in Wrightwood. 

And why the "tease?"  Because it isn't an honest listing and the agent is completely lacking in ethics.  Here's the listing history:

Apr 24, 2013    Price Changed $299,900   

Mar 07, 2013    Price Changed $285,000   

Nov 15, 2012    Listed (Active) $299,999   

Jun 07, 2007    Sold (Public Records) $402,500

It should be noted that for the market it is nicely staged.  Homey and settled in.  The house is asking 50% more per square foot than the market supports.  For some reason they increased the price despite claiming it is a regular listing.  They spent 4 months at the original price, 4 weeks at the lower price and now are almost back to the price that sat for four months. 

Rent Is Too Damn High

Too funny not to link. 

Friday, April 26, 2013

The More they Stay the Same

Nigel from June 2007:

The "Goldilocks" economy is showing no signs of leaving and stock market bears and housing bears are getting sick of waiting outside.

Housing numbers are proving to be challenging for sure. This is no record breaking year, but no collapse either. Meanwhile the equities markets are breaking new records almost everyday. That big drop-off that occurred at the end of February has recovered and then some!

Jobs are good with unemployment near record lows and inflation is only pushing a little. Fuel prices have jumped through the roof, but it doesn't seem to be making that much of an impact. The bond markets are seeing yields increase which is pushing up mortgage rates to the highest they've been for several years. All this mixed economic data, but we're still, for the most part, doing well.

Welcome to the Goldilocks economy where despite economic numbers being scattered all over the place, most people are doing just fine.

I don't mean to be all "Pollyanna" in this post. There are some scary scenarios forming that could harm the economy and our way of life. Think about the last time this country was in an unpopular military situation, with an unpopular President, record high gas prices and rapidly increasing mortgage rates. Yes folks, it could be 1979 all over again.

Or we could be on to something new and different. The world is much different now politically, economically and technologically than in 1979 and burgeoning economies in China, India and Eastern Europe make 2007 a much different place and opportunity than that of 28 years ago.

Yes, we could be sitting on the eve of destruction with bears ready to pounce, or we may have Goldilocks with us for quite some time. I'd prefer the latter. How about you?


Plus ça change, plus c'est la même chose.

Way to Sell It Agent

Mein Gott!  You have a decent property listing and you have a fat commission on the line.  Is this the image you want to present to the world?

This is not right on so many levels.

Spring '13

I moment to appreciate the beauty around us. 

Thoughts on GDP

First a recommendation.  For those who haven't yet Comerica has a free email distribution with some of the best and most spin free macroeconomic analysis available.  They also have a blog

First quarter 2013 GDP came in at 2.5%.  Decent sounding headline number until...  Until you look at where it came from.  Fully 1% was merely rebuilding inventory from Q4 '12 and the Sandy effects.  Yup, a weather event last November accounted for 40% of GDP improvement.  Then the rest; consumer spending despite a steep downdraft in disposable income.  And recall; that drop in disposable income does not include the 2% FICA restoration.

By now hopefully you've visited Comerica and read their take.  One notable comment:

...there is also the clear drag from fiscal tightening. The parts
in the first quarter GDP report are indicative of an economy that remains hobbled and is not well poised to
accelerate into mid‐year. In the current second quarter growth in consumer spending will be cooler. We will
likely see another, but smaller, gain from inventories. Government spending will continue to contract.

There's the trap.  Government spending$2 billion more per day than they collect instead of the previous $3 billion more per day is a "bad" thing for GDP measures.

Observations anyone? 

Thursday, April 25, 2013

Realogoy, Under the radar

Insiders know the name but most people have little idea about this major real estate player. Maybe this graphic will help:
 It is even a public company; RLGY And why should you care? Lots of reasons. not least if You have a Sotheby's agent and you are buying a CB (Coldwell Banker) property it is an in-house transaction and you may never know it. And recent news is interesting. They just refinanced themselve. Why? Because they were paying 11.5%. The new notes are $500 million aggregate principal amount of 3.375% senior notes due 2016. Thanks Ben!
Now the light bulb goes on. 

FD:  No position as of posting.