Housing Snapshot

By DataAnalytics

Admits the arm-waving and ramped up rhetoric being shouted by the msm/real estate/banking and finance industry, we would like to remind the stuffed-suits that housing is not improving, not recovering and will remain depressed for a long time to come.

Out of approximately 45 Million residential mortgage holders in the U.S. there are roughly 18 Million outstanding mortgages that are in negative equity territory. Previously, it was thought and published that there were 12 Million underwater mortgages, but as it happens, the two main firms who collect that data were incorrect. Turns out, that nearly 40% of all outstanding residential mortgages are actually  ‘underwater’

Counting all housing inventory; existing, new and both disclosed and undisclosed shadow assets (to the best of independent analysis), there is approximately 7.5-/+ Million homes available. That equates to a total absorption rate of approximately 24 months and that figure could be as high as
60 months

Housing is still unaffordable, despite the fact that overall, prices have fallen about 35%. In order for median prices to be on par with median incomes in the U.S. the median house price needs to be at approximately $144,000. Currently, the median price is about $164,000, which is +12% or +$20,000
too high. Forget affordability, forget the ‘talking-points’ that the real estate and banking industry perpetrate, they are grossly incorrect and deceptive.

The FACT is, that there is little to no borrowing and purchasing power.
One of the main causes is due to the extremely high unemployment rate of approximately 12% (U3). While the total underemployment/unemployment (U6) is about 23%. Wages are flat, credit risk remains elevated and household debt is increasing. The debt-to-income ratios for the majority of would-be buyers is above 35%- which places many potential mortgage borrowers at a high risk of defaulting.

The facts are indisputable, even though the real estate and banking muppets claim otherwise. Of course, all of their arm-chair analysis is predicated upon a paper foundation that crumbles under the weight of truth. Truth will always trump lies and deception, eventually the truth gets out. The truth triumphs.

The main take-aways here to remember: Diminished Borrowing/Purchasing Power AND Years worth of Inventory. An equation that nets very little market absorption. Plus, a myriad of ancillary factors; Including, but not limited to massive unemployment, elevated levels of household debt and
an eroding economy.

Consumer Inflation (Food & Fuel)

By DataAnalytics

A brief report on the latest purported inflation figures.

As if under some giant slumber, the ‘public’ was given the standard
rhetorical tripe on monthly inflation figures today from the BLS.

Amazingly, CPI-U barley rose a half a percent, in fact it ‘printed’ at
0.4%! Now considering more than half the population are most likely
‘asleep at the wheel’ this report deserves a double-take, even from the
most inept, reality-TV, stupor-induced American.

If you buy groceries and drive a vehicle, you must realize
(at least we hope so) that it is costing you much, much more to
feed you and your family and fill up the old gas tank.

How much more? Well for gasoline, the national average per gallon
is now at $3.83, up from $3.54 a year ago. That’s an 8.1% Rise.
How about from last month? Prices from February are up a hefty 12%.
But yet, the BLS proclaims that the ‘official’ measure of inflation has
only risen 0.4%. How can that be? Simple, one word. Deception.

gas price chart

How about food prices? Well let’s take a closer look at the cost of food
commodities from January 2012 back to January 2011. Meat, Poultry,
Fish and eggs are up on a weighted basis of 7.21% from a year ago.
Dairy and related dairy (cheeses, yogurts, etc) have increased 9% since
last year, while Cereal and Bakery products are up 5.25% from January ’11.

cereal meat eggs

Can’t live without that morning cup of home brewed Coffee? (me neither)
Well, roasted coffee prices have soared a whopping 16.85% from January 2011.
The only ‘good’ news, is that Fruits and Vegetables have actually
dropped about a half a percent, 06% to be exact.

coffee & veg

So while the government and B-B-B- Benny and Fed tout virtually no
to little inflation, there are some of us, who understand that this simply
is NOT true. The government is playing a game, a dangerous game at that.
Manipulating, doctoring and fabricating numbers and figures in order to
‘show’ that Central Bank intervention is working. (which we know is a failure)

The BLS has truly become a Ministry of Propaganda for the government.
No longer an agency of credibility and non-partisan reporting. Engaged
in a campaign of utter and sheer deceit on jobs data and inflation.
Making a mockery of the Statistical arm of academics and public trust.

The Engineered Market and the Doctored Unemployment Rate

Friday, March 2nd, 2012

Short interview with Mark Leibovit of VRGoldletter.com, who speaks with
NBR’s Tom Hudson about the Fed’s manipulations, the engineered stock
market and the Doctored Unemployment Rate.

Video segment is from NBR with Tom Hudson. Full Transcript.

 

 

” My sense is not as optimistic. I don’t believe the figures
that we’ve been getting from the government.”

“There’s a lot of talk about the employment numbers, we know those
have been doctored up…”

Ron Paul Grills Bernanke at the Financial Services Hearing

Financial Services Hearing Highlights February 29, 2012

Congressman Ron Paul ‘asks’ Fed Reserve Chairman Ben Bernanke a series
of rapid questions about Fiat Currency, Silver and Inflation.

Quote of the highlight is;
…”that’s why they (the American people) Lose trust in government.”
Referring to the BS Inflation rate of 2%-3%. This portion of the clip is priceless.

 

A Planned Economy for the 1%

From   on Feb 25, 2012

Michael Hudson: All economies have a certain amount of planning,
the question is, for whom?

 

Preliminary February Unemployment Rate

By DataAnalytics

U3 rate jumps back up to 9%

Gallup’s latest report suggests the BLS will “likely report on the first
Friday of March that its seasonally adjusted unemployment
rate increased in February.”

Gallup Chart

Gallup’s mid-month unemployment rate analysis is a preliminary
estimate of the BLS government report. Data now suggests that the
Bureau of Labor Statistics will likely report on March 2nd that its
“Seasonally Adjusted” U3 unemployment rate will indeed actually
INCREASE 
in February.

Meanwhile, the U6 rate (underemployment/unemployment) has also
spiked up to 19%, from the purported S.A. 15.7%  rate. The take away
here is that the labor market is worsening as we have suggested.

The non-seasonally adjusted data can be a more effective gauge of
the labor markets overall health. That, and the “Mean Duration” of
unemployment, which is near 41 weeks, accompanied by the all
alarming statistic of 43% of those who are unemployed are in that
Long-Term Unemployment category.

Labor Force Participation Rate is the key to deciphering and analyzing
the realistic unemployment rates. From approximately 2000 to 2009,
the LFPR had been about 67% +/-. But in the past 2+ years the LFPR
has been falling and now stands at approximately 64%+/-.

The reality is that the true total underemployment/unemployment
rate could be as high as 36%. Though it is difficult to pin down exact
numbers without having access to payroll income tax data.

But it is safe to state, that the total unemployment rate is roughly
between 25% and 36%. That is One Quarter to One Third of ALL
available would-be workers out of full-time work or out of work all together.

What this latest batch of data suggests, proves, is that the false claims
and bell-ringing of an economic recovery are worthless. The “Hopium”
that is being passed around in the “progressive pipe” has burned a hole
in the brains of those who are buying-in to the massive propaganda
war being waged by the government and the corporate owned media.

The economy is tanking day by day. All of the meaningful economic
indicators are either flat or negative. We have gone over them time and
time again in the last year, but it doesn’t seem to sink in.

Real Retail Sales were 0.0% in December. Preliminary figures
for January were 0.4%,  which will be revised downward again.
Most big name retailers are in serious trouble.

Profit margins in 2011 were down for almost every major retailer.
Many are now in bankruptcy, due to the massive price slashing
efforts in order to gain the foot traffic in the last quarter of 2011.

Auto sales were misleading as well, as the bulk of orders were not
for customers, but rather dealership inventories.

Crude oil and gasoline are spiraling out of control and have seen
double-digit percentage increases over last year at this time. These
rising fuel commodities show no signs of slowing down or reducing
which is further jeopardizing the economy.

Food prices are up and slightly rising as well and are expected to
remain at elevated levels in 2012. Another cold harsh reality is that
Food & Fuel inflation is up approximately 30%+/- from a year ago.

Housing market remains depressed with median prices still falling,
due in part to the huge inventory of distressed properties. With more
foreclosures due to hit the market all throughout 2012, prices will
continue to slide. This will negatively affect existing homes and
mortgage holders who are already underwater.

Debt, both personal and corporate were up in 2011 and will not
abate anytime soon.

GDP for Q4 2011, was 2.8%. Now, strip out the stockpiled inventories
which accounted for 1.9%, then remove autos, 0.6% and ta-da!
Q4 GDP was a Whopping 0.3%! Zero point three of a percent.

There you have it, 5 major indicators of economic activity are flat to
negative and are nowhere near improving because of one simple word:
Jobs. The labor market is the crux of our economic engine, period.

It’s not the stock market or any other insignificant indicator the media
and shill economists tout. Without sufficient labor levels and wages, the
all important Purchasing Power is diminished or completely eliminated.
Which tends to halt almost all economic activity (except necessities)
in our +/-67 percent  “consumption-driven” economy.
(is the light bulb coming on yet?)

Household Inflation & Commodity Prices

By DataAnalytics

So, how far is your dollar stretching these days? We know, not very far.
It seems that almost everything costs more today than it did last year at
this time. Well, in fact almost everything does cost more. But wait, the
BLS states that consumer inflation has increased only 3.4%. Really?

Well, you can forget the mostly impractical CPI-U Index published by
the government. What matters abundantly and has a significant
impact to the average consumer is Household Inflation.

Those household ‘commodities’ are the everyday items we all use and mostly
need with a few basic ‘wants’ in the mix as well. Such as; Food, Fuel, Apparel,
household Appliances and Electronics.

According to the “Basket of Goods” utilized in the governments CPI-U index,
inflation is approximately, +3.4% (NSA). The simple fact is that this ‘measure’ of
inflation is not relevant or indicative of real-world household/consumer price inflation.

The fact is that aggregate household-commodity inflation on nominal prices
from one year ago in October- (y-o-y comparative analysis ) for these items-
(Food, Fuel, Apparel, Appliances and Electronics) has risen +35.30%. (cumulative)
(For a breakdown of commodities and price-levels, see the graphs below)

What this really means is that the purchasing power of the average U.S. consumer
has greatly decreased, approximately 35% for these basic staples from 2010.

So what exactly has been the causation of the rapid acceleration in food, fuel,
clothing and electronics then? It”s certainly not Demand-Pull inflation. ‘Demand’
for most household commodities and gasoline has been less than last year and
personal consumption has dropped a whopping 24% from Q2 to Q3.

Could a portion of commodity inflation be tied to a Cost-Push? Perhaps,
but it would be a minor amount of the overall aggregate price rises.

Well on the food side, we know that the prices of cornmeal, sugar, rice and wheat
have been driven up by a variety of factors- first, is the slight drop off in crop
yields and second, is speculation as well as the effects of monetary supply
and wage stagnation.

inflation cereal rice pasta eggs

inflation cereal rice pasta meat eggs

Total Rise of Cereal, Rice, Pasta, Cornmeal, Meat, Poultry, Fish, Eggs: 20.82%

inflation milk fruits bread

Total Rise of Milk, Fruits, Vegetables, Bread: 24.39%
(Total Aggregate Rise of Staple Food Commodities: 22.60%)

Examining Apparel, Appliances and Electronics, specifically, home video
and audio, we see only a moderate increase in price levels from Oct. 2010.

tv clothes appls

Total Rise of Apparel, Appliances and Electronics: 5.54%

On the fuel side, it is down to OPEC and to some extent, futures trading. We know that
OPEC will no longer sell crude for less than $90-$95 per barrel for any length of time.
This ‘built-in’ price floor sets the stage for the loosely monitored, but undeniable
‘fixed-pricing’ basis on crude. Mix in speculative trading and the market is able to
some extent, manipulate the cost per barrel.

avg gas prices

Total Rise of Regular Gasoline Per Gallon Nationally: 7.15%

Given the fragile state of the U.S. economy and the unprecedented
unemployment/underemployment rate of 22%-23%, how much more
price inflation can the average household absorb?

An ideal economy retains price-stability, which at the moment we have
none of. So what does our inflation analysis reveal? Well, the obvious is that
most household commodities are costing over 35% more than they did in 2010.

Secondly, price-inflation seems to be somewhat fragmented and without argument,
some of these price rises are transitory, with a historic trend of being somewhat
predictable. But that has not been the case as of late.

Yes, most household food commodities have been shifting downward since
the beginning of 2011, with retail gasoline following suit, while the rise in rents are
averaging only about 5% nationally. On the other side of the coin, housing asset
prices have declined and continue to fall, with auto prices remaining fairly stable.

So as we close out 2011 the U.S. economy remains in a state of flux with most
tangible assets deflating, while commodities are still above 2010 price levels and
could easily rise again. The bigger question looming is what will this ‘push-pull’ yield
going into 2012? Much of it depends on the broader macro-picture, the all important
labor market, the presidential election and the Eurozone crisis will all play a role in the
macro economic picture.

The bottom line is that the variables involved, both domestically and abroad are
unknown in terms of predictability and performance. The U.S. as well as Europe
and parts of Asia could remain in this unstable economic environment for a couple
of more years or perhaps even longer. But here at home, the dollar can only be
stretched so far, before it eventually breaks.

 

For analysis purposes the following methods were implemented
*price averages reflect the retail mean.

*each commodity group was weighted.
*food commodities combined. (previous correction)
*apparel, appliances, electronics combined
Partial data derived from IndexMundi, IBD and consumer surveys