The Federal Reserve and the Banksters... 2 Peas in a Pod!

I was rudely awakened from my Financial Slumber this evening by our old friend Mish Shedlock. As usual, he has his foot mashed down on the gas pedal, hurling us into the realization that the Federal Reserve does not give a damn about the little guy, as it contends, but rather it watches out for the banksters and their ill gotten gains.
Here is a snippet from an Article by Yves Smith of Naked Capitalism.  Thanks to Yves and Mish for the wake up call...

In other words, readers are supposed to take Yellen’s claims at face value, when the Fed’s policy of saving banks by goosing asset prices and convincing itself that ordinary people would benefit because the “wealth effect” would lead to more consumption. The result has been widening income and wealth disparity and corporate profits at record levels as a percent of GDP, meaning workers are getting less than they’ve ever gotten. Yellen as the head of one of the regional Federal Reserve Banks and member of the FOMC can’t escape from responsibility for these policies. And there’s no evidence of meaningful opposition; unlike some Federal Reserve presidents, like Charles Plosser and Dick Fisher, who have often taken issue with the Fed’s official position in their speeches, Yellen made little use of her bully pulpit at the San Francisco Fed.

Here is the link to the article. Fascinating reading...

http://www.nakedcapitalism.com/2014/07/yellen-tells-whoppers.html

That this grandmotherly appearing woman can be so disingenuous is hard to swallow. But as Bob Campbell often says, these people have never had a real job. They're clueless politicians.

From the National Association of Homebuilders... One of my 5 Key Metrics - Consumer and Homebuilder sentiment. As you can see from the article, homebuilder sentiment is up to 49% positive. Of course that means that 51% are negative, but it is on the rise...

Builder Confidence Rises Four Points in June

June 16, 2014 - Builder confidence in the market for newly built, single-family homes rose four points in to reach a level of 49 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. It remains one point shy of the threshold for what is considered good building conditions.

“After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “However, builders are facing strong headwinds, including the limited availability of labor.” 

“Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase,” said NAHB Chief Economist David Crowe. “Builders are reacting accordingly, and are moving cautiously in adding inventory.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three index components posted gains in June. Most notably, the component gauging current sales conditions increased six points to 54. The component gauging sales expectations in the next six months rose three points to 59 and the component measuring buyer traffic increased by three to 36.

Looking at the three-month moving averages for regional HMI scores, the South and Northeast each edged up one point to 49 and 34, respectively, while the West held steady at 47. The Midwest fell a single point to 46.

Has the Market hit a Wall?

Published: July 2, 2014
Below is a chart showing the run up of new listings in San Diego County over the last month. We will be presenting this and other related inventory, sales and "days on market" charts over the next 30 days. Why are we doing this? Because it is our belief that the market may have hit a wall, with declining demand, increasing days on market, and spiking inventory. Deja vu ala 3rd quarter 2006?

So check out this 1st chart showing New Listings on the San Diego Multiple Listing service. As you can see, on a technical/moving average basis, we should see inventory decline again as it has over the past 4 inventory spikes. However, we believe that inventory may continue high and even spike higher. As a result, due to the law of supply and demand, prices may stall and even decline.