Why fundamentals don't matter in marketing timing.

Herding action are controlled by the collective mood of the herd and the herd does not know what the numbers are behind its actions.  Monitoring things is for the ranchers, not the herd itself.  It is for this reason that I point out a recent article by Mish on new home sales.  While the media was spinning the new home sales data positively, Mish does not seem impressed.  He wrote, "Bloomberg says "supply is low and rates are low which should continue to encourage builders to enter the market."

That sounds much like "If you build it, people will buy" speculation. Perhaps they will. But at what price? Who is left that wants a house, needs a house, and can afford a house?

Stalling home prices likely provides the answer." .

 

Bloomberg tries to apply its version of fundamentals to the question.  Mish counters with another different set of fundamentals.  But what do you get when you add it all together?  I believe that Bloomberg claims to know but is wrong and Mish does not claim to know but doubts Bloomberg.  So none of this is very helpful to me.  However, since Mish offered a chart, I will provide the only analysis that has any real chance of being correct which is the wave count.

 

Well, time is up for the con men.  Greenspan told us that the economy was massively dependent on real estate sales because they are the major asset in the bank's portfolios.  People don't buy houses; they borrow them into existence.  Each loan that is taken out increases the debt portion of our money supply (which is inflationary).  Without that happening, deflation will grab this country by the neck and shake the crap out of it.

 

Get ready for a good shaking people because HTs move slowly and sideways but 5 waves following them tend to play out most riki-tik.  If you are in the market to sell a house, get the heck on with it.  If you are in the market to buy the patience is likely your friend.