Business and Industry

We'll Have To Cancel Christmas. And the Children Have Been So Good This Year.

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It's time to put Krampus back in Kristmas.

It's a mixed stocking of green shoots this Festivus week. There are positive numbers on industrial production, personal savings, and consumer spending. But Lucy Van Pelt's Christmas gift of choice—real estate—is still in such poor condition that the American economy may need some 5-cent psychiatric help. When the holiday's over, we're going to see an economy still sputtering. And the real estate industry, which spent much of this year declaring that it had hit the bottom of the market, will have to confront a 2010 featuring more bottoms than an evening at Paddles.

The good news:

Industrial production increased 0.8 percent in November, while capacity utilization went up 0.7 percent to 71.3 percent. Both figures are well below historic standards, but they are moving in the right direction, per Federal Reserve statistics.

Commerce Department tracks a November increase in consumer spending, which is below expectations but still positive.

Also lower but still positive is the revised third-quarter GDP figure, which comes in at 2.2 percent (a figure that, per Christina Romer's logic, is fully attributable to stimulus force multipliers).  

Personal income and personal savings [pdf] are both increasing substantially, with the Bureau of Economic Analysis pegging the savings rate at 4.7 percent for both November (new) and October (revised). As I have noted in the past, the increase in personal savings is neither as remarkable nor as linear as the Obama Administration wants you to believe. But it's at least a substantial short-term number.

Finally, Wells Fargo and Citigroup have repaid their TARP loans. Bully for them.

So why does that guy coming down the chimney look more like Krampus than Santa Claus? And oh no, why is he foreclosing on the nativity scene instead of giving out presents?

U.S. Census Bureau has new housing starts and completions up from October to November, but way, way down from the same period in 2008—which you may recall, was not a banner year for U.S. real estate.

More to the point, new home sales are heading back off the cliff, or rather are heading off another cliff after they fell off the original cliff that was, um, higher up the grade, then kept rolling down, even though houses don't have wheels… Anyway, new housing sales are dropping sharply.

Calculated Risk has a chilling tale of the widening ratio of existing to new home sales, and why that ratio is ominous for housing-related economic activity of all kinds.

Meanwhile, real estate is plagued by all the same problems it had yesterday and will continue to have, in even larger portions, tomorrow: collapsing mortgage availability, a shadow inventory approaching 2 million units, the commercial real estate hyperpocalypse, and cockamamie government interventions designed to keep house prices inflated at all costs.

Keep in mind that real estate is supposed to be what's leading this economic recovery we keep hearing about. Maybe in some Keynesian long run this will prove to be true, but people seem to be forgetting something about the shape of real estate busts. Usually house prices don't undergo the kind of rapid shock we've seen over the past few years. Instead they fritter away value slowly, over a period of many years. There are many reasons to believe the slow-frittering phase is just beginning.

So make it a lean Christmas. You're gonna need those Krugerrands.

NEXT: Vox Populi, Vox De-What?, or the Powerful Allure of "If We're In It, We're In It to Win It"

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  1. Used the Social Security and Medicare Funds. You know, the ones us employees and owners pay every day. These are funds that require long term investment. Buy American! While we at it, let’s invest some the Social Security and Medicare $$’s/IOU’s the we hold.

  2. Used the Social Security and Medicare Funds. You know, the ones us employees and owners pay every day. These are funds that require long term investment. Buy American! While we at it, let’s invest some the Social Security and Medicare $$’s/IOU’s the we hold.

  3. >>Krugerrands.

    So Racist…

  4. Merry Christmas, R?homites!

    Greensleeves

    Rudolph the Red Nose Reindeer

    “There’s no need to fear. Underzog is here!”

    1. Full of scheisse! Full of scheisse!

  5. Jesus Christ. Die already, Underzog, you corpulent malformed dildo.

    1. Warty, look, Underzog shows up ever yyear on Christmas to remind us all of how anti-Semitic we are. He’s the Ghost of Holocausts Past.

      1. I pictured him as more of a grumpy Mr Hanky figure.

  6. By the way, Underzog, what’s with the Roehmites shit? I don’t think very many of us are homosexual revolutionary socialists.

    1. In his world view everyone falls into two camps are are two peoples:
      1) People who believe Juden uber Alles,
      2) Nazis.

      In his simple binary view, since most of us don’t blindly support pogroms against Palestinians we are Nzis.

      Ahh, but what type of Nazis? Most Nazis were bloodthirsty and brutal, and Liebrtarians don’t fall into that camp. thus, the only camp left for us to fall into are the hapless, gay, brownshirts.

      In other words, he wants to call us “fags” but is hampered by the fact that his ethnocentric views don’t represent reality very well.
      The Nazis best know for being effete fags are the brownshirts, he wants to accuse us of being fags, and since most of us don’t blindly support pogroms against Palestinians

  7. Warty,

    Chew on this Poisoning Pigeons in the Park

    “There’s no need to fear. Underzog is here!”

    1. Go away, troll.

  8. Why don’t you contribute to the genreal inelliganece and not write anything for a day, Cavanaugh? THat would be a nice Xmas present.

    1. I hope this was sockpuppetry, because this Morris post is textbook joe’z memorial law.

    2. Full of shit! Full of shit!

  9. What? I thought we already had to cancel Christmas because the North Pole melted and all the polar bears are dead?

    1. Fortunately Santa got his sleigh full of goodies out just before it melted.

      But going back home after Christmas is going to be a real pisser.

  10. “which spent much of this year declaring that it had hit the bottom of the market, will have to confront a 2010 featuring more bottoms than an evening at Paddles.”

    I thought you looked familiar, TCav! Anyway, Merry Christmas to all (even the die-hard lefties who are trying to unionize Santa’s elves and the righties trying to get Ol’ Saint Nick to sell the presents and move the workshop to Taipei)!

  11. Recovery?? Dream on!!

    http://www.marketskeptics.com/…..mmies.html

  12. Taxing people for using tanning beds will save us!!!

    wreckingcrew says:

    please..i love to see you progressives attempting to defend this tax. give me a freakin break..taxing people for using tanning beds..seriously now. its my body if i want to use a tanning bed it is my business. telling me i have to pay a tax because it is not good for me is just redonkulous sorry.

    EugeneDebs says:

    I LOVE to see you MORONS acting like you have some dim idea what you are talking about. Its so cute. So they tax me when I drive with a gas tax, when I buy cigarettes, when I eat in a restaurant, when I stay in a motel but there is some reason I SHOULDNT be taxed for using a tanning bed? Are you retarded?

    1. Ahh, my eyes; the goggles do nothing!

  13. Tim, have you considered that one of the reasons that the government wants to keep housing prices inflated is because it maintains tax revenues in localities? If housing prices drop, comparable sales can be used to appeal property tax assessments (one can also use comparable assessments), and this will significantly reduce property tax revenue. Which will cause localities to go running to the states who will go running to the feds.

    The housing boom wasn’t just a gluttonous feast for would-be house-flippers; it massively raised property tax revenue. They dread losing this.

    1. I don’t think you understand how property tax levies work. The assessed values are just used to determine the distribution, not the raw amount the taxing entity takes.

      1. JSR: Not sure where you live JSR, but you have it wrong if you are speaking about CA. Any homeowner can request a reassessment if the price they paid is more than the home is worth. That will bring down the taxes that are collected…which is happening as we speak in CA.

  14. Industrial production increased 0.8 percent in November, while capacity utilization went up 0.7 percent to 71.3 percent. Both figures are well below historic standards, but they are moving in the right direction, per Federal Reserve statistics[…]

    … which are meaningless in and on themselves.

    Maybe it is me . . . But, what the FUCK does it mean when saying “capacity utilization went up 0.8%”? Capacity utilization of what? Nail polish factories? Paint remover factories? Why do people even listen to these stupid statistics? The U.S. is not some sort of homogeneous economic machine – there can be no such thing!

    1. It means that manager types love statistics because how can you run an organization without metrics? How can you decide who the winners and losers are come performance review time without metrics?

      What the metrics actually measure, if anything at all, is not the point.

      You really need to get with the modern way of thinking.

      1. Ebeneezer is correct. Such “metrics” are “useful” for “comparing” “objective reality” with government “predictions” in order to provide “economic news”.

  15. T’was the night before Christmas
    and a hair-sucking Irishman gave me scoliosis.

    1. oh. well it could have been worse.

  16. Keep in mind that real estate is supposed to be what’s leading this economic recovery we keep hearing about.

    And don’t forget that ObamaCare and CarbonTaxes will be what’s following this recovery.

    But I’m sure that our future is brighter than Santa’s.

    1. Remember how Fat Broad used to smack that snake around in the BC comics?

      Where’s that economic recovery? I double-dog dare you to stick your head out!

  17. With all this depressing economic news, we need a cheerful Christmas message.

    How about this, from Thomas Paine’s Age of Reason. While I can’t say I agree with everything in that book, I can certainly get behind the following, at least in its general spirit:

    ‘I believe in one God, and no more; and I hope for happiness beyond this life.

    ‘I believe in the equality of man, and I believe that religious duties consist in doing justice, loving mercy, and endeavoring to make our fellow creatures happy.’

    Merry Christmas, everyone!

  18. With all this depressing economic news, we need a cheerful Christmas message.

    How about this, from Thomas Paine’s Age of Reason. While I can’t say I agree with everything in that book, I can certainly get behind the following, at least in its general spirit:

    ‘I believe in one God, and no more; and I hope for happiness beyond this life.

    ‘I believe in the equality of man, and I believe that religious duties consist in doing justice, loving mercy, and endeavoring to make our fellow creatures happy.’

    Merry Christmas, everyone!

  19. With all this depressing economic news, we need a cheerful Christmas message.

    How about this, from Thomas Paine’s Age of Reason. While I can’t say I agree with everything in that book, I can certainly get behind the following, at least in its general spirit:

    ‘I believe in one God, and no more; and I hope for happiness beyond this life.

    ‘I believe in the equality of man, and I believe that religious duties consist in doing justice, loving mercy, and endeavoring to make our fellow creatures happy.’

    Merry Christmas, everyone!

  20. Oops, didn’t mean to post three times – the server squirrels, unlike Paine, are obviously Trinitarians.

  21. My fav quote from the same book: “The most detestable wickedness, the most horrid cruelties, and the greatest miseries that have afflicted the human race have had their origin in this thing called revelation, or revealed religion. It has been the most dishonorable belief against the character of the Divinity, the most destructive to morality and the peace and happiness of man, that ever was propagated since man began to exist.”

    But, all the same, Merry Christmas to Max and all others here!

    1. You realize, of course, that Paine wrote much of *Age of Reason* while in a Parisian prison during the French Revolution, and only through happenstance did he escape being killed during the Terror. Is that the fault of organized religion? To say nothing of the wickedness, cruelties and misery inflicted by subsequent secular regimes and movements.

      Ho, ho, ho!

  22. Merry Xmas, everybody.

  23. Speaking of green shoots being deep in the weeds, the Greeks are in big trouble. I wonder how much of their troubles can be traced to the wild spending spree which resulted from their “successful” Olympic bid?

  24. OK, so this is a theory I’ve developed recently. Do you guys think that most of the belief in conspiracy theories by adults can be traced back to their childhood experience of finding out that Santa Claus wasn’t real? I mean, you have Google Maps offering live tracking of Santa’s sleigh, drunks dressed in Santa suits at malls having to come up with impromptu explanations, and in general every adult is socially expected to play along with the idea that Santa Claus exists, with significant social repurcussions for violating this expectation. Indeed, even kids who don’t believe in Santa Claus are taunted by believers and looked upon with suspicion by other parents.

    All the hallmarks of a classic conspiracy. And its existence is unquestionable, as (thank god) an inquisitive child can find out by looking him up on Wikipedia.

    1. And indeed, even the Wikipedia page has to be locked due to people trying to edit the article to say Santa is real. The talk page archive is a real hoot.

    2. And NORAD is always involved. Isn’t that pretty much a conspiracy guarantee?

      1. That’s right. Someone needs to FOIA their ass on this.

  25. Its all good! I got a feeling they will get over it! LOL

    Jess
    http://www.Ultimate-Privacy.net

  26. Ned: Well, boys, it looks like we’re gonna have an imagination Christmas this year!

    Rod: Oh boy! I’m getting a race car!

    Todd: I’m getting a pony!

  27. Personal income is up with unemployment up? Makes no sense. Obviously they do not calculate this properly.

  28. 30yr up, http://finance.yahoo.com/q?s=^TYX
    Lots of near-terms due in March – where’s the money coming from to repay?
    ***
    With Xmas on Friday night, when will they notify us of all of the banks they’ve closed this week?

  29. So which is it? Inflation or deflation?

  30. koblog – hyper-[x]

  31. Which kind of statistics are these? Damn lies? I can tell from driving around my area and just looking at the ‘For Sale’ signs that 0.7% of nothing still gives you nothing! We’ve spent a truly historic amount of money, indebted our children, and now we’re left watching AlGore wail on about polar bears. And gun sales are rising. Krugeraands! Nah…know where they’re kept and be prepared to ask nicely for them…

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