‘Jim,

Ah, Kirby is rehashing old news.

New home sales report? A positive? Still a contracting number in a negative down trend. New home sales are still contracting 24% year over year. Spin sees the uptick and jumps all over it.

Rumors suggest that banks are withholding inventory to reduce supply. Thus, the month supply (basically inventory per sales rate) showing improvement in June. Spin positions this as the light at the end of the tunnel. Unfortunately, median home prices continue to drop -11.3% YOY in June, roughly -10% smoothed over 12-months. That’s still a train wreck. Yeah, on the margin, so houses have sold, but only a lower sales price moved these homes.

MOPE, spin, data meant to skew opinions of people too lazy to think, whatever. The real estate market is not sound. Retail and auto sales continue to contract -10% and -32% in June, respectively. Spin that fellas. You can’t. Instead you focus on hope. Hope of a housing bottom.

Building permits, however, remind us that the housing market is still ill. Yep, that’s -74% year over year contraction in building permits.

Tons of money will make the stock market "pony" dance regardless of the economic facts.

Have a good night,

CIGA Eric