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  1. #1
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    Calculated Risk: Economy is looking good for 2013

    It's popular for GOP ostriches to console themselves for royally screwing up the last election by smirking that the nation will live to regret re-electing Obama 'cause he's going to drive the economy deeper and deeper into the crapper. But given the recent track record of conservative predictions, you have to wonder whether their economic models are any less delusional than their "unskewed polling" models.

    Bill McBride, aka CalculatedRisk, has a pretty good track record on economic predictions since he started his blog seven years ago. Here's his outlook:

    "I hate to say it, but this is the most optimistic Ive been since the 90s. Im not a roaring bull, but looking forward, this is the best shape weve been in since 97 or something. ... Looking forward, this is the best weve been since then. We have plenty of problems to work through, but gosh, housing is going to be a tailwind for some time."
    Anything that doesn't take years of your life and drive you to suicide hardly seems worth doing. ---- Cormac McCarthy

    A man can get disouraged many times, but he is not a failure until he begins to blame somebody else and stops trying --- John Burroughs

  2. #2
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    Quote Originally Posted by Fredke View Post
    It's popular for GOP ostriches to console themselves for royally screwing up the last election by smirking that the nation will live to regret re-electing Obama 'cause he's going to drive the economy deeper and deeper into the crapper. But given the recent track record of conservative predictions, you have to wonder whether their economic models are any less delusional than their "unskewed polling" models.

    Bill McBride, aka CalculatedRisk, has a pretty good track record on economic predictions since he started his blog seven years ago. Here's his outlook:

    "I hate to say it, but this is the most optimistic Ive been since the 90s. Im not a roaring bull, but looking forward, this is the best shape weve been in since 97 or something. ... Looking forward, this is the best weve been since then. We have plenty of problems to work through, but gosh, housing is going to be a tailwind for some time."
    And to think that an African American could have been so "articulate" as to pull this one off. Yes, the country is roaring back from economic collapse. Yes, it took a Democrat to do it. Yes, Obama is going to be remembered in history as the best President since Washington. Yes, I'm proud to have switched from Republican and cast my vote for the Bro!

  3. #3
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    Quote Originally Posted by Fredke View Post
    It's popular for GOP ostriches to console themselves for royally screwing up the last election by smirking that the nation will live to regret re-electing Obama 'cause he's going to drive the economy deeper and deeper into the crapper. But given the recent track record of conservative predictions, you have to wonder whether their economic models are any less delusional than their "unskewed polling" models.

    Bill McBride, aka CalculatedRisk, has a pretty good track record on economic predictions since he started his blog seven years ago. Here's his outlook:

    "I hate to say it, but this is the most optimistic Ive been since the 90s. Im not a roaring bull, but looking forward, this is the best shape weve been in since 97 or something. ... Looking forward, this is the best weve been since then. We have plenty of problems to work through, but gosh, housing is going to be a tailwind for some time."

    I hope he is right. But saying
    housing is going to be a tailwind for some time
    does not inspire confidence. I do think housing has a lot of room to grow but the extent that the single family and mulitfamily markets are propped up by Freddie and Fannie is scary.

  4. #4
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    Housing is the vehicle by which easy money is injected into the economy. If no housing recovery then no economic recovery. He argues that based on his observations of the housing market in Temecula CA and extrapolating across the US that 2013 will be better than 2012 (but no predictions and that really isn't saying much as the growth rate so far for 2012 is ~ 2%). Time will tell.

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    Quote Originally Posted by AM999 View Post
    Housing is the vehicle by which easy money is injected into the economy. If no housing recovery then no economic recovery. He argues that based on his observations of the housing market in Temecula CA and extrapolating across the US that 2013 will be better than 2012 (but no predictions and that really isn't saying much as the growth rate so far for 2012 is ~ 2%). Time will tell.
    I hope housing goes up. But you have to remember how much the cheap financing is propping it up now. If rates go up, or the agencies are told to pull back it will be very bad. For multifamily cap rates are very low now. But all the financing is agency. Not a stable situation in my opinion.

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    Quote Originally Posted by AM999 View Post
    Housing is the vehicle by which easy money is injected into the economy. If no housing recovery then no economic recovery. He argues that based on his observations of the housing market in Temecula CA and extrapolating across the US that 2013 will be better than 2012 (but no predictions and that really isn't saying much as the growth rate so far for 2012 is ~ 2%). Time will tell.
    You are correct that one community does not provide enough information, so here's what is happening in Superior California where the majority of housing is.

    Southern California Housing Median Price Oct. 2011 to Oct. 2012 % Change


    Los Angeles Co. - 13.70%

    Orange Co. - 12.30%

    Riverside Co. - 17.60%

    San Bernardino Co. - 13.30%

    San Diego Co. - 11.10%

    Ventura Co. - 7.50%
    Last edited by troutmd; 11-23-2012 at 06:30 AM.
    If you don't get an answer to your question it doesn't necessary mean you made one or that you deserve one.

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    Quote Originally Posted by Matsushita View Post
    And to think that an African American could have been so "articulate" as to pull this one off. Yes, the country is roaring back from economic collapse. Yes, it took a Democrat to do it. Yes, Obama is going to be remembered in history as the best President since Washington. Yes, I'm proud to have switched from Republican and cast my vote for the Bro!
    "economy roaring back..." I would hardly call it a roar, more like dragging one foot, while the other is suffering from a bad case of tendonitis. The fiscal cliff still needs to be dealt with, tax reform is also needed. If these issues, overall govt spending placed under control, and trade does not begin to uptick, this "little recovery" could be set in reverse. I think you are a bit over optimistic, but considering the holiday, I can see why.

  8. #8
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    Quote Originally Posted by AM999 View Post
    Housing is the vehicle by which easy money is injected into the economy. If no housing recovery then no economic recovery.
    "this is how things have happened in the past" does not mean "this is the only way tihngs can happen". Especially when you reverse causation like that
    Quote Originally Posted by AM999 View Post
    He argues that based on his observations of the housing market in Temecula CA and extrapolating across the US
    I can't actually find where he does this

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    Quote Originally Posted by NJBiker72 View Post
    If rates go up, or the agencies are told to pull back it will be very bad.
    Why would either of these things happen?

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    If the House (the branch that controls the federal purse strings) forces fiscal responsibility, things could get better during BO's last 4. Not likely to see a big upturn in housing in 2013 with so many foreclosures yet to be sold.

    Clearly, housing prices are likely to see rapid and major escalation at some point since replacement costs far exceed current market values. The source of cheap (bank owned) building sites is about to dry up as well.

    Quote Originally Posted by Fredke View Post
    It's popular for GOP ostriches to console themselves for royally screwing up the last election by smirking that the nation will live to regret re-electing Obama 'cause he's going to drive the economy deeper and deeper into the crapper. But given the recent track record of conservative predictions, you have to wonder whether their economic models are any less delusional than their "unskewed polling" models.

    Bill McBride, aka CalculatedRisk, has a pretty good track record on economic predictions since he started his blog seven years ago. Here's his outlook:

    "I hate to say it, but this is the most optimistic Ive been since the 90s. Im not a roaring bull, but looking forward, this is the best shape weve been in since 97 or something. ... Looking forward, this is the best weve been since then. We have plenty of problems to work through, but gosh, housing is going to be a tailwind for some time."

  11. #11
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    Quote Originally Posted by Matsushita View Post
    And to think that an African American could have been so "articulate" as to pull this one off.
    *laugh*

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    Quote Originally Posted by NJBiker72 View Post
    I hope housing goes up. But you have to remember how much the cheap financing is propping it up now. If rates go up, or the agencies are told to pull back it will be very bad. For multifamily cap rates are very low now. But all the financing is agency. Not a stable situation in my opinion.
    Agreed - I was attempting a bit of satire. Plus there is still a lot of lost equity and surplus houses out there. Hopefull these Temeculeans who are snapping up the foreclosures are putting 20% down.

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    Quote Originally Posted by troutmd View Post
    You are correct that one community does not provide enough information, so here's what is happening in Superior California where the majority of housing is.

    Southern California Housing Median Price Oct. 2011 to Oct. 2012 % Change


    Los Angeles Co. - 13.70%

    Orange Co. - 12.30%

    Riverside Co. - 17.60%

    San Bernardino Co. - 13.30%

    San Diego Co. - 11.10%

    Ventura Co. - 7.50%
    What were the rates of changes from Jan 2008 to this October ??

  14. #14
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    Quote Originally Posted by AM999 View Post
    What were the rates of changes from Jan 2008 to this October ??
    Who cares? Comparing to an overinflated peak years past doesn't tell you anything about the current trend

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    Quote Originally Posted by coreyb View Post
    Who cares? Comparing to an overinflated peak years past doesn't tell you anything about the current trend
    Good point but that market which drove the delayed 2001 recovery after the Fed lowered rates to 1% coupled with lax lending standards is what created the inflated prices and supply, i.e. bubble. This surplus is what has been inhibiting the housing driven recovery to the 2008 recession. The Fed is now at Zero and mortgage rates are very low - I've seen some 15 year fixed at less than 3%. IMO people are "bunkering in" and doing more saving than spending due to their lack of confidence that the economy is heading in the right direction. Until people regain confidence, economic growth will continue to lag behind typical recovery performance.

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    Quote Originally Posted by AM999 View Post
    This surplus is what has been inhibiting the housing driven recovery to the 2008 recession.
    That and tight money
    Quote Originally Posted by AM999 View Post
    IMO people are "bunkering in" and doing more saving than spending due to their lack of confidence that the economy is heading in the right direction. Until people regain confidence, economic growth will continue to lag behind typical recovery performance.
    So wait, it isn't housing but consumer confidence that is holding things up? (we might then question the goals of one side consistently hammering on the message of how terrible things are...)

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    Quote Originally Posted by coreyb View Post
    "this is how things have happened in the past" does not mean "this is the only way tihngs can happen". Especially when you reverse causation like that
    But that has been the pattern in 12 out of the 14 "recessions" since 1929. What do you think will finally drive the recovery from the 2008 recession into high gear.

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    Quote Originally Posted by coreyb View Post
    That and tight money
    So wait, it isn't housing but consumer confidence that is holding things up? (we might then question the goals of one side consistently hammering on the message of how terrible things are...)
    There is plenty of money sitting in the banks and corporate war chests.

    Or the inability of the Obama administration to inspire confidence ?? I guess you would call this then the PUB "War on Confidence" ??

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    Quote Originally Posted by AM999 View Post
    But that has been the pattern in 12 out of the 14 "recessions" since 1929.
    So let's say I grant this claim. that means in 14% of cases housing isn't the way out.
    Quote Originally Posted by AM999 View Post
    What do you think will finally drive the recovery from the 2008 recession into high gear.
    Better monetary policy

  20. #20
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    Quote Originally Posted by AM999 View Post
    There is plenty of money sitting in the banks and corporate war chests.
    Doesn't matter
    Quote Originally Posted by AM999 View Post
    Or the inability of the Obama administration to inspire confidence ?? I guess you would call this then the PUB "War on Confidence" ??
    Pretty much. The emphasis on what the president does toward confience is just plain stupid. And even if for some inane reason people do think that the president plays some massive role in inspiring confidence, its completely ridiculous to exclude the role that conservatives have played in striking against that.

  21. #21
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    I'm optimistic and also feel California will set the example. The passing of Prop 30 will help California's economy, and ripples will spread beyond its borders.
    Beam me up, baby.

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    Quote Originally Posted by coreyb View Post
    Why would either of these things happen?
    1. Rates are not normally this low. At some point they will go up.
    2. Freddie and Fannie are using taxpayer dollars and have become wholly public entities in a for profit business model. The original receivership idea was to not have them as permanent government wards. Also, they are supposed to control their balance sheet, what they have on their books.

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    Quote Originally Posted by NJBiker72 View Post
    1. Rates are not normally this low. At some point they will go up.
    Yes, when the economy picks up there will be greater demand for credit, pushing rates upward. So this doesn't seem like much of a problem.
    Quote Originally Posted by NJBiker72 View Post
    2. Freddie and Fannie are using taxpayer dollars and have become wholly public entities in a for profit business model. The original receivership idea was to not have them as permanent government wards. Also, they are supposed to control their balance sheet, what they have on their books.
    And you think somebody is going to raise a fuss before the economy is back to normal?

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    Quote Originally Posted by coreyb View Post
    Yes, when the economy picks up there will be greater demand for credit, pushing rates upward. So this doesn't seem like much of a problem.
    And you think somebody is going to raise a fuss before the economy is back to normal?
    I am not sure the economy will get back to normal this way. And if we do unwind it, it will be incredibly painful. At best we have been kicking the can down the road.

  25. #25
    jaded bitter joy crusher
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    Quote Originally Posted by NJBiker72 View Post
    1. Rates are not normally this low. At some point they will go up.
    At some point the sun will expand and incinerate the earth.
    Anything that doesn't take years of your life and drive you to suicide hardly seems worth doing. ---- Cormac McCarthy

    A man can get disouraged many times, but he is not a failure until he begins to blame somebody else and stops trying --- John Burroughs

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