Posted by: jhamon | June 29, 2009

Green Shoots in Housing: Yeah, Right

HOMESTEAD, FL - FEBRUARY 16: Construction work...

From John Hussman, a man I admire greatly, comes this observation of the perceived uptick in housing starts (bottom line: NOT!)



Housing starts are soaring! Up 17% just last month! So trumpeted a perma-bullish financial news anchor last week, hailing the news as the portent of an economic rebound. Guest analysts were quick to talk about turning the corner, and moving through the “bottoming process,” while some even expressed concern that the rebound in housing starts was so strong that it might create inventory pressures by adding to the stock of homes too quickly.

Let’s take a breath. Economic reports – especially growth rates – can be very misleading when they are not placed into context. Below is a chart of U.S. housing starts since 2003 (thousands, monthly data at an annual rate). See that little 78,000 home uptick in the chart in the last data point – the little bit of statistical noise that is smaller than even the typical 119,000 standard deviation of month-to-month fluctuations?  There’s your boom in housing starts.

Green Shoots in Housing?  Yeah, Right!

Green Shoots in Housing? Yeah, Right!

Hussman’s at least as cranky as I am.  I like him!  More here.


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  1. I’ve lost all respect for just about all of the TV economists and financial analysts. If they weren’t able to call out and warn that we were heading for trouble, then they’re nothing but charlatans in a nice suit.

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