Despite its supposed seasonal adjustment, Case-Shiller home price growth in May tumbled for the 3rd year in a row (in fact, with revisions, the 0.23% drop since March is the biggest drop since June 2014). This is the first consecutive home price drop since 2012. The almost unbelievable 'stability' of the 5-ish percent growth in Case-Shiller home prices for the last 2 years is impressive if only for its historical lack of precedence but May's 5.24% YoY rise in the slowest since Sept 2015.
May we suggest the PhDs get back to work on their seasonal adjustments:
Year over Year gains are the slowest since Sept 2015… but 'stable'
This is the biggest 2-month drop in prices since June 2014…
From the report:
Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities over each of the last four months. In May, Portland led the way with a 12.5% year-over-year price increase, followed by Seattle at 10.7%, and Denver with a 9.5% increase. Eight cities reported greater price increases in the year ending May 2016 versus the year ending April 2016.
“Home prices continue to appreciate across the country,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains. The SCE Housing Expectations Survey published by the New York Federal Reserve Bank shows that consumers expect home prices to continue rising, though at a somewhat slower pace."
“Regional patterns seen in home prices are shifting. Over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco and Los Angeles saw more modest increases. The two hottest areas during the housing boom were Florida and the Southwest. Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak. When home prices began to recover, New York and Washington saw steady price growth; now both are among the weakest areas in the country.”
Michelle Obama said Hillary Clinton is the only candidate in this election who she trusts to be president.
(Photo: SAUL LOEB/AFP/Getty Images)
The first lady addressed the Democratic National Convention at the Wells Fargo Center in Philadelphia Monday night.
“Thank you so much,” Michelle said. “It’s hard to believe that it’s been eight years since I first came to this convention. Remember how last time I told you about my husband’s character and conviction? The traits we’ve seen every day in the White House? I also told you about our daughters — how they are the heart of our hearts.”
Obama said she worries about what her children will learn from the next president.
“How do we insist that the hateful language they hear from public figures on tv does not represent the true spirit of this country? How do we explain that when someone is cruel, you don’t stoop to the level of the bully? That when they go low, we go high. With every word we utter, every action we take, we know our kids are watching us.”
“We know our words and actions matter, not just to our girls, but to kids across the country,” she said. “Kids, like the little black boy who looked at my husband with wonder and said, ‘Is my hair like yours?'”
(Photo: ROBYN BECK/AFP/Getty Images)
“In this election, and every election, it’s about who will have the power to shape our children for the next four or eight years of their lives. I am here tonight, because in this election, there is only one person who I trust with that responsibility, only one person who I believe is truly qualified to be President of the United States, and that is our friend Hillary Clinton.”
“See, I trust Hillary to lead this country because I’ve seen her lifelong devotion to this nation’s children — not just her own daughter who she has raised to perfection — but every child who needs a champion.”
“When she didn’t win the election eight years ago, she didn’t get angry or disillusioned. Hillary did not pack up and go home. As a true public servant, Hillary knows this is so much bigger than her own desires and disappointments. So she proudly stepped up to serve our country once again.”
“There were plenty of moments when she could have decided this was too hard. The price of public service too high. But here’s the thing: what I admire most about Hillary is that she never buckles under pressure. She never takes the easy way out. Hillary Clinton has never quit anything in her life.”
“When I think about the kind of president I want for my girls, that’s what I want.”
Then Obama took a shot at Donald Trump, without even saying his name.
“When you have the nuclear codes at you fingertips and military at your command, you can’t make snap decisions,” she said. “You can’t have thin skin or a tendency to lash out. You need to be steady and well-informed. I want a president with a record of public service, someone who’s life work shows our children we don’t chase fame and fortune for ourselves.”
“I want a president who will teach our children that everyone in this country matters.”
(Photo: SAUL LOEB/AFP/Getty Images)
“In this election, I’m with her. Hillary Clinton has the guts and grace to keep coming back to put those cracks in the glass ceiling. That is the story of this country.”
“I wake up every morning in a house that was built by slaves, and I watch my two black daughters playing with their dogs on the White House lawn,” she said. “Because of Hillary, my daughters now take for granted that a woman can be president of the United States.”
“Don’t let someone tell you this country isn’t great — that we need to make it great again. Because, right now, this country is the greatest country on Earth.
“Between now and November, we need to do what we did eight years ago — four years ago — we need to get our there and vote. We need to pour every last ounce of our strength into electing Hillary Clinton president.”
Her face fixed in an expression of apathetic detachment as she took the stage Monday night to raucous cheers and applause, First Lady Michelle Obama reportedly began her address to the Democratic National Convention by exhaling audibly and remarking that she would never get the past eight years of her life back.
“Well, that was a colossal waste of my time,” said Obama with an air of weary irritation before reminding the audience she had been 45 years old at her husband’s inauguration and now she was “fifty-fucking-two.”
“You know, looking back on all of it, I’m not sure there was a single worthwhile moment from the past eight years of my life. Nearly a decade down the drain. Jesus. Whatever, it’s almost over.”
The first lady then reportedly squinted at the prepared statement scrolling on the teleprompter in front of her, let out a fed-up sigh while slowly shaking her head, and walked silently offstage.
Incredible speech by an incredible woman. Couldn't be more proud & our country has been blessed to have her as FLOTUS. I love you, Michelle.
Day One of the Democratic National Convention was an extended, multi-act drama centered on one main question: Will the passionate Bernie Sanders supporters, after coming so hard at the queen, hold their noses and unify behind Hillary Clinton?
Sanders revolutionaries helped chase Democratic National Committee Chair Debbie Wasserman-Shultz away from the podium, made noise at a series of raucous demonstrations throughout Philadelphia, booed their own party’s candidate with much more gusto than anti-Trump Republicans managed in Cleveland, received a tongue-lashing from fellow traveler Sarah Silverman and some heavy sub-tweeting from a captivating Michelle Obama, then finally got the hard sell from the candidate himself.
But lost in the will they/won’t they hubbub was a curious vanishing act. In order to make his peace with the interventionist, nanny-state presumptive nominee, Bernie Sanders had to drop or at least de-emphasize almost everything that made him interesting to at leastsome libertarians.
Here were some words missing from Bernie’s speech last night: “War,” “foreign policy,” “Iraq,” “Libya,” “military,” “defense,” “surveillance,” “Snowden,” and “marijuana.” He did talk about drugs, but only along the lines of “The greed of the drug companies must end.” Turns out when you strip out the only areas in which Sanders is skeptical of government, all you have left is an insatiable desire to change people’s behavior and spend other people’s apparently inexhaustible supply of money.
“We have begun a political revolution to transform America,” Sanders said, “and that revolution – our revolution – continues.”
Sadly, as reinforced both by his speech yesterday and the pet issues of his hardcore supporters in Philadelphia, the beating heart of that revolution was never about the areas where the Vermont senator overlaps with libertarianism. It was about income inequality, a $15 minimum wage, banning fracking, and opposing all trade agreements—remember, Sanders has never endorsed one even in retrospect, believing falsely that international trade is a “race to the bottom.”
Much hay was made at the convention yesterday about how the Democratic platform is the “most progressive” in the party’s history. But almost all of the Berniefication of the platform came in the form of boosting Washington’s role in the economy, not pruning its involvement in wars foreign and domestic.
“We have come together on a proposal that will revolutionize higher education in America,” he crowed last night. “It will guarantee that the children of any family this country with an annual income of $125,000 a year or less–83 percent of our population–will be able to go to a public college or university tuition free. That proposal also substantially reduces student debt.” As a Clinton delegate from California described Bernie fans to me at a bar last night, “They think they can get everything for free!” And now that fabulism is baked right into the party platform.
The grim fact remains that Hillary Clinton has never felt any pressure to tack leftward this season on issues of civil liberties and war. A Democratic Party emboldened on economic meddling and unrestrained in warmaking is a recipe for statism unprecedented in recent history. A Bernie Sanders who’s mum on war and weed is just a prophet for bad ideas.
Related: What we saw at the Democratic presidential debate in Brooklyn.
“We trusted you!” Elizabeth Warren was booed and heckled by supporters of Bernie Sanders at the Democratic National Convention last night. Hillary Clinton’s name was also repeatedly booed at the convention. Even Bernie Sanders was booed earlier in the day after telling a group of his supporters to vote for Clinton over Donald Trump.
Bill Clinton will headline tonight’s festivities at the Democratic National Convention.
Libertarian candidate Gary Johnson “is gaining momentum and only needs two more percentage points in the polls to clinch a spot in the presidential debates.”
Two men claiming affiliation with ISIS killed a priest and took hostages in a church in Normandy, France, before they were shot and killed by French police.
“Turkish President Recep Tayyip Erdogan will have talks with Vladimir Putin in Russia next month amid a rapid warming in relations following the failed military coup in Turkey.”
According to researchers, as many as 1.65 million women in Latin America are at risk of Zika while pregnant.
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Trump presented his dystopian outlook in his closing speech last Thursday at the Republican National Convention (read Reason’s coverage of it here) where he stated that he alone was the solution to the nation’s problems.
But do Democrats and their selected candidate Hillary Clinton offer a viable anti-authoritarian alternative?
Reason TV talked to delegates on day two of the Democratic National Convention in Philadelphia, PA and asked them how Clinton contrasted with Trump on major issues such as free speech, free trade, the sharing economy, gun rights, Citizens United, and foreign policy.
Approximately 5 minutes.
Produced by Zach Weissmueller. Camera by Weissmueller, Alexis Garcia, and Joshua Swain. Graphics by Swain. Music by Podington Bear and Antiqcool.
This year’s Democratic Party platform provides further evidence that Hillary Clinton not only does not value the Second Amendment right to armed self-defense but does not believe it exists. Like the 2004, 2008, and 2012 platforms, the latest version calls for various new gun controls, including extension of the federal background-check requirement to all gun transfers, expansion of the criteria that disqualify people from owning guns, re-enactment of a federal “assault weapon” ban, and repeal of the federal law that protects gun suppliers from civil liability based on criminal use of their products. But unlike those earlier platforms, this year’s does not so much as mention the Second Amendment. It says only that “responsible gun ownership is part of the fabric of many communities” and that “we can respect the rights of responsible gun owners while keeping our communities safe.” The platform is silent on the question of what those rights might be or what their source is. In that respect the party has reverted to the approach it last took in 2000, when many Democrats blamed Al Gore’s defeat on his gun control advocacy. The course reversal is clear when you compare the relevant language from each year:
2000: “A shocking level of gun violence on our streets and in our schools has shown America the need to keep guns away from those who shouldn’t have them—in ways that respect the rights of hunters, sportsmen, and legitimate gun owners.”
2004: “We will protect Americans’ Second Amendment right to own firearms.”
2008: “We recognize that the right to bear arms is an important part of the American tradition, and we will preserve Americans’ Second Amendment right to own and use firearms.”
2012: “We recognize that the individual right to bear arms is an important part of the American tradition, and we will preserve Americans’ Second Amendment right to own and use firearms.”
2016: “While responsible gun ownership is part of the fabric of many communities, too many families in America have suffered from gun violence. We can respect the rights of responsible gun owners while keeping our communities safe.”
Erasing the Second Amendment from the Democratic platform is consistent with the nominee’s opinion that District of Columbia v. Heller, the 2008 case in which the Supreme Court recognized that the Second Amendment protects an individual right to armed self-defense, was “wrongly decided.” If Clinton thinks the Court went too far in overturning a D.C. law that made it impossible for people to legally use guns for self-defense in their homes, it is hard to imagine what law she would deem inconsistent with the Second Amendment. That position, combined with her refusal to say whether the Second Amendment has anything to do with individual rights and the platform’s silence on the question, pretty conclusively demonstrates that the reason Clinton “has never called for the abolition of the 2nd Amendment” (as CNN assures us) is that she does not view it as an impediment to restrictions on guns. If she is elected president, we will have a Supreme Court that agrees.
With WTI now down over 17% from its mid-June highs, and energy stocks just beginning to wake up to the 2015-analog collapse, fears are rising that once again low oil prices are not ‘unequivocally good’ for stocks or the economy. Between record speculative long positioning in futures, the fundamental strength of the dollar and surge in gasoline inventories remain the big overhangs (along with rising storage levels at Cushing as demand begins to fade seasonally).
Sept 16 WTI is now down 17% from its recent highs…
Back to unchanged on the year at 3 month lows…
“It’s the same things that have been driving it for the past few days now, gasoline inventories haven’t declined as much as people thought they were going to,” says Michael Hewson, analyst at CMC Markets.
And Energy stocks are catching down fast…
Tracking last year’s pump-and-dump of hope perfectly.
As demand is set to tumble…
It’s not over yet. Tonight’s API data will likely be the next ccatalyst one way or another.
Today’s podcast is a little different. I speak with Raoul Pal and we cover a number of topics, running from one to another as they crop up. I hope you’ll enjoy it as much as I always enjoy speaking with Raoul.
For those of you who’ve never heard of Raoul – he is first and foremost one of the most congenial, open minded, and thoughtful guys you could ever have the pleasure of discussing the truly mind boggling and fascinating world of global macroeconomics with.
He’s also a world renowned global macro investor, an investment strategist, economic historian, traveler, rum drinker, and co-founder of Real Vision TV, together with Grant Williams who I spoke with some time ago. Here’s some of the topics Raoul and I cover in the podcast:
The end of financialization of the economy. The era of doing nothing and get paid for it is over. Why Raoul thinks that’s a good thing (especially if you’re an entrepreneur) and he also lays out the way to profit from it.
Why markets around the world are so fragile today and why the investment environment is so dangerous, especially for less liquid investments.
Helicopter money – as Raoul said, “We’re getting there, it just depends which format we’re going to get.”
Why debt is like 700 beers (plus Raoul’s take on the possibility of a debt jubilee).
Which chart is showing one of the biggest head and shoulders tops in history.
How Raoul looks at Bitcoin and why he thinks Bitcoin has a huge runway (but with one important caveat)… and why – on the other side – he doesn’t see a lot more runway left in startup investing, or as Raoul calls it, “lottery ticket investing”.
Why venture capital is, in fact, in a “terrifying situation”.
And much more.
Like 6 other investing superstars, Raoul is also bullish on gold. I think it’s one of the easiest and safest bets in today’s macro environment.
I hope you enjoy it. Please share this with all your friends and enemies alike and let me know your thoughts by leaving a comment on the site.
One day after reporting another disappointing global retail sales report, posting 43 consecutive months of declining global sales…
… moments ago CAT reported Q2 earnings, which were modestly better than expected, with adjusted 2Q EPS of $1.09 vs est. 96c, above the highest est. of 99c on revenue of $10.34BN, also above the $10.13BN estimate.
However, the reason why the short squeeze was not triggered today is because in its earnings the company once again cut guidance, and now sees 2016 revenue of $40.0b-$40.5b, with the midpoint coming below the prior forecast of $40b-$42b, on “persistent economic risks.” It also sees 2016 adj. EPS $3.55 excluding costs vs prior forecast $3.70, if still modestly above the consensus est. of $3.52. The reason, according to the company, is that “we’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year.”
The company’s order backlog was $11.8bn at end of 2Q, down $1.3bn from the end of 1Q with two-thirds of decrease in Construciton Industries. Finally, the company now sees 2016 restructuring costs $700m vs prior forecast $550m; as a result of even more laoffs in the second half.
Here is the company’s outlook.
World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve. Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexit outcome and the turmoil in Turkey add to risks, especially in Europe.
The outlook for 2016 that we provided with our first-quarter financial results in April expected sales and revenues in a range of $40 to $42 billion. At the midpoint of that range, profit was expected to be $3.00 per share, or $3.7 per share excluding restructuring costs. Over the past quarter, economic risks have persisted and, as a result, our current expectations for 2016 sales and revenues are closer to the bottom end of that outlook range.
Restructuring costs in 2016, which were expected to be about $550 million, are now forecast to be about $700 million, or about $0.80 per share. Additional workforce reductions expected in the second half of 2016 are the primary reason for the increase in restructuring costs. Sales and revenues for 2016 are expected to be in a range of $40.0 to $40.5 billion, and the profit outlook at the midpoint of the sales and revenues range is about $2.75 per share, or about $3.55 per share excluding restructuring costs. Our revised outlook for both sales and revenues and profit per share excluding restructuring costs is in line with the Thompson First Call analyst consensus.
“Despite a solid second quarter, we’re cautious as we enter the second half of the year. We’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year. We’re continuing significant restructuring plans, which are designed to bring our cost structure more in line with demand while maintaining our capability to quickly serve our customers when our business recovers. Once it does recover, we expect substantial incremental profit improvement, realizing the benefits of the tough actions we’re implementing now coupled with our ongoing investments in products and digital capabilities. Amidst these very challenging market conditions, our balance sheet remains strong, and our employees are delivering better performance on everything from safety, quality and cost management to machine market position. I’m inspired by our people as they’re the primary reason we’re weathering this downturn as successfully as we are,” said Oberhelman.
Still, even with the stock down we expect the BTFD hunters to emerge and to prop it quickly in the green on Oberhelmann’s hopes that a “substantial incremental profit improvement” is just around the corner, and justifies the company’s 22x forward P/E ratio excluding restructuring costs, and 28x if one excludes the $0.80 in forecasts 2016 addbacks.
It turns out that Donald Trump’s proposed border wall is not such a bad idea after all. Though Mexico’s current and former Presidents have both lambasted Trump for implying that a wall would curb immigration, it turns out that Mexicans like the idea.
There is one small caveat, however. Mexicans don’t want to build the wall on the U.S.-Mexico border, but rather, they want to stem the tide of immigration into their own country by building the wall on their southern border with central America:
One of the largest newspapers along Mexico’s border with Texas is calling for a border wall with Central America, similar to the one being promoted by Republican Presidential Candidate Donald J. Trump.
The editorial board of El Mañana, one of the largest newspapers in the border state of Tamaulipas,penned a piece called “Yes to the Border Wall … but in Mexico’s South.” The piece praises the idea of border wall, not on the border with Mexico, but on the border with Central America.
“Along the Mexican border peace and quiet came to an end, Central Americans played a large influence,”El Mañana’s piece claimed.
The Mexican border newspaper provides a controversial view on the Border Wall; which is one of the main topics in Trump’s campaign.
“Mexico’s southeast has two borders; one with Guatemala and one with Belize, that do not provide any benefit, but on the contrary only problems are brought by these crossing points that are being used for the new invasion. The one use by Central American’s looking for a way into the United States. ” El Mañana’s editorial board wrote.
One of the issues mentioned in the editorial piece points not only to the hordes of Guatemalans, Salvadorans and Hondurans that flock to Reynosa in an effort to get to the U.S., but also to the large number of Central Americans that are left in Mexico after deportation.
Eastern European countries are expanding their border fence networks to keep middle east refugees from crossing into their countries, a strategy that has cut illegal immigration by over 90% in those nations.
President Obama made the one in front of the White House even higher and more elaborate.
Prisons tend to build them, too.
The Mexicans want one.
And now even the Democratic National Committee has decided that fences work to keep out the riff-raff. They’ve built an 8 foot high, 4 mile long fence around their convention.
It seems like these days everyone wants to build a wall.
But according to former DHS chief Janet Napolitano, walls don’t work to keep people out and are ineffective immigration policy, so we’re not sure what all the fuss is about.