Comments for "Case Shiller House Prices Seasonal Pattern"
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/4351794939943475068
CRbot Wed Apr 1 15:15:02 2009 CDT #
Morocco Bama says:
Who are our leaders, Michael? Corporate America turned it all over, and red state Americans continue to support them and buy from Wal-Mart which is really China Depot. Are you ready to storm the boardrooms, Michael? Divest yourself of any stock that has a history of transplanting manufacturing, including your 401k if the fund invests in such enterprises? That's what it would take, and I don't think red state America has the sense, or the guts to do it.
Morocco Bama Wed Apr 1 15:16:53 2009 CDT #
mark says:
Your post prompts me to ask something I've been wondering about. Compared to Walmart, does Target get less goods from China, does Target pay their workers better wages, does it have better benefits? I've read they're not substantially different than Walmart and was wonering why they don't catch the same heat?
Parent Post
mark Wed Apr 1 15:49:59 2009 CDT #
john smith says:
almost Nemo
john smith Wed Apr 1 15:17:24 2009 CDT #
Barley says:
So we are well off the lows.
I'm amused by the ".7" months..
Barley Wed Apr 1 15:17:42 2009 CDT #
Nate says:
Anyone else catch themselves looking at the Great Depression line at a predictive line?
Nate Wed Apr 1 15:18:00 2009 CDT #
Barley says:
MB - Amerika wanted to borrow to by cheap goods...thats all
Barley Wed Apr 1 15:18:57 2009 CDT #
Br\'er Dawg says:
CR,
I don't see any seasonal pattern. What am I missing?
Br\'er Dawg Wed Apr 1 15:19:54 2009 CDT #
Anonymous says:
Prices tend to be weaker in the back half of the year. Last year even Jan/Feb was weak but the pattern was still there.
Parent Post
Anonymous Wed Apr 1 15:25:14 2009 CDT #
Lucifer says:
Why do I Bartholemew Simpson hair patterns everywhere? :-P
Lucifer Wed Apr 1 15:20:08 2009 CDT #
Divide by 0 says:
Brer,
See how it is lowest in January/February, ramps up through July then comes back down again? That is seasonal. It is exhibited in the past few years but because the values are negative, the negative bars are shortest at the peak and so visually it looks inverted. It is the same basic shape though. A line graph would make that more obvious.
Divide by 0 Wed Apr 1 15:24:53 2009 CDT #
Morocco Bama says:
I don't think it is that simple, Barley.
Morocco Bama Wed Apr 1 15:25:22 2009 CDT #
Tom Lawler says:
The other way to look at the seasonal pattern is to look at the seasonally adjusted CS index compared to the not seasonally adjusted CS index. SP started providing a seasonally adjusted HP index a few months ago.
Tom Lawler Wed Apr 1 15:26:49 2009 CDT #
curious says:
CR,
I don't see any seasonal pattern. What am I missing?
Look at the data between jan of one year and jan of the next year. There is an upward trend moving from early- to mid-year months and then a downward trend moving from mid- to late-year months. That's the seasonality of the data.
curious Wed Apr 1 15:27:37 2009 CDT #
Bob Dobbs says:
Gosh, the '29 Bear market and the current bear market match the same percentage points of decline at months 12 and 18 (the current month). A little more spike in between those points for the current market, but the end point was the same.
If we're NOT on our way to 89 percent decline, this chart sure doesn't say why not.
Bob Dobbs Wed Apr 1 15:28:00 2009 CDT #
Barley says:
Failed Belgian bank Fortis has paid its sacked chief executive Jean-Paul Votron €6.3m (£5.8m), according to reports in the Belgian media.
The sum is comprised of €2.5m for the takeover of ABN Amro in 2007, a €1.3m ‘golden handshake’, and €1.9m for ensuring the Fortis share price increased during his four years in charge.
The payment has been made despite the fact that Votron’s decisions - particularly regarding the takeover of ABN Amro - brought the company to the brink of bankruptcy.
Fortis has had to be rescued by the Belgian government because of crushing debts related to the ABN-Amro takeover
Barley Wed Apr 1 15:28:43 2009 CDT #
nova says:
Bob Dobbs
Is that you? The foto?
nova Wed Apr 1 15:29:08 2009 CDT #
Bob Dobbs says:
Nova -- no, the photo is not me. Just something I dug up that describes my current state of mind.
Parent Post
Bob Dobbs Wed Apr 1 15:43:14 2009 CDT #
EvilHenryPaulson says:
Br'er Dawg
Apogee demand is in spring/summer, perigee demand is in fall/winter
Thus upward pricing pressure is strongest at middle of year, so prices rise most/fall least during the year
Conversely, at the ends of the year, prices fall the most/rise the least during the year
EvilHenryPaulson Wed Apr 1 15:29:41 2009 CDT #
ac says:
Anyone else catch themselves looking at the Great Depression line at a predictive line?
We've learned too much about economics to have another Great Depression.
In the past governments just weren't smart enough to print massive amounts of money and borrow and spend like crazy.
Nobody ever thought to do that before the Keynesians came along.
We are so much smarter now.
ac Wed Apr 1 15:29:52 2009 CDT #
Br\'er Dawg says:
Thanks for the advice. Recall that this is chained data y-o-y not trend. Slope is acceleration not trend.
Br\'er Dawg Wed Apr 1 15:30:31 2009 CDT #
Broward Horne says:
Is CR predicting that house sales will come roaring back in April & May?
ho ho ho
Broward Horne Wed Apr 1 15:33:07 2009 CDT #
Barley says:
MB - I could be wrong but Ameikans do not have the fortitude to stand up and fight and its hard enough getting them to name a current president, finding Canada on a map, or getting them to speak a second language. The coddled masses are simply wrapped up in their own affairs and prefer someone else to do it. I'm not surprized by the protests in the UK or Germany as they still have some fondness for the democratic process - a bit extreme, mind you but its alive and well.
Barley Wed Apr 1 15:35:01 2009 CDT #
Barley says:
ac - thats a joke, right??
Barley Wed Apr 1 15:36:33 2009 CDT #
Morocco Bama says:
I agree with your last statement, Barley.
Morocco Bama Wed Apr 1 15:37:48 2009 CDT #
vikas says:
vikas, get to work!
vikas Wed Apr 1 15:39:56 2009 CDT #
Lobbyi$t Ben Dover says:
Most Americans are not smart enough to be MAD!
Lobbyi$t Ben Dover Wed Apr 1 15:43:26 2009 CDT #
jo6pac says:
I agree, as sad as the statement is as some one here says, born and bred by madison ave.
The race to the bottom continues
Parent Post
jo6pac Wed Apr 1 15:48:33 2009 CDT #
EvilHenryPaulson says:
http://www.spiegel.de/fotostrecke/fotostrecke-41142-5.html
Articulate German/French economic point of view
EvilHenryPaulson Wed Apr 1 15:43:54 2009 CDT #
jo6pac says:
Looks good if you turn it upside down, amazing.
jo6pac Wed Apr 1 15:44:53 2009 CDT #
EvilHenryPaulson says:
Heiner Flassbeck is the director of globalization for the UN Conference on Trade and Development.
"In terms of regulations, no progress will be made at the summit. The Anglo-Saxon countries don't want the necessary structural changes for their finance centers and they aren't going far enough to meet the other demands needed in order to prevent other speculation bubbles in the global casino in the future. The most important result has to be that they agree to immediately stop speculation in key areas -- in raw materials, currencies and private equity.
"In addition, a provisional new monetary order is needed to push the IMF into changing its policy regime under which countries that are in financial trouble through no fault of their own have been forced to carry out pro-cyclical measures that are exacerbating the crisis."
EvilHenryPaulson Wed Apr 1 15:45:22 2009 CDT #
debtinator says:
The kraut minister is wrong. The way to curb speculation is to let it fail, not rescue it. Closing the barn door late is no solution. Furthermore, he's probably the real "Anglo-Saxon". Modern genetics indicate the English and early USAians are British Isle Celts, not saxons.
Parent Post
debtinator Wed Apr 1 15:53:38 2009 CDT #
ac says:
ac - thats a joke, right??
No, really... it takes a genius like Keynes to take financial ideas that come straight out of the trailer park and sell them as a way to save the economy.
There was a time when we would laugh at somebody or throw them in jail if they were delinquent on a bunch of debt and said they were going to fix it by opening a bunch of new credit cards and doing a little counterfeiting on the side.
Now it's enlightened thinking.
ac Wed Apr 1 15:46:03 2009 CDT #
Comrade-Dope jg (jg) says:
CR, I think you need to run the data through a trend and seasonality. There are two elements to the data: downward movement from falling prices; then, there MAY (or may not) be seasonality in the residuals, as I do not see consistent spikes.
It is hard for me to believe that a home would sell for 10-25% more depending upon the month of the year. I could understand it selling faster, but not for a markedly higher or lower price, consistently.
Comrade-Dope jg (jg) Wed Apr 1 15:47:57 2009 CDT #
Barley says:
EHP - The US pays for most of the freight at the IMF. It is possible for the US to give up some control to appease the EU....
Barley Wed Apr 1 15:48:10 2009 CDT #
EvilHenryPaulson says:
ac
Be fair, Keynes hasn't spoken for himself in decades.
Timing government spending to be counter cyclical is not a bad idea. That has now been extrapolated to serve the purpose of the currency wars
EvilHenryPaulson Wed Apr 1 15:48:55 2009 CDT #
the man from nantucket says:
man, how could anyone think we are posied for a equity market rebound and start of a bull when they look at that chart. the conditions that preceeded this bear are far worse than the consitions of the 73-74 bear and the dot.com bust bear...and both of those dragged on longer than this current bear. it ain't over just yet my friends.
on the bright side, i'm an optimist and think our current situation isn't as bad as the great depression bear....so at least we have that going for us (maybe?). so the end results probably somewhere between the great bear and the other bears. heck, let's just split the difference and call it a day.
the man from nantucket Wed Apr 1 15:49:05 2009 CDT #
Sr. American Mugabe says:
frist??? Bill frist???
Sr. American Mugabe Wed Apr 1 15:49:39 2009 CDT #
Barley says:
"It is hard for me to believe that a home would sell for 10-25% more depending upon the month of the year"
Probably true. But these are house prices. A commodity.
Barley Wed Apr 1 15:49:57 2009 CDT #
Mean Flurry Kitten says:
Heiner Flassbeck...not flashbang? And Heiner...That is some dirty name :) ..but maybe it is just me...
Mean Flurry Kitten Wed Apr 1 15:52:15 2009 CDT #
Comrade-Dope jg (jg) says:
Looking over my regression analysis of monthly San Diego resale home prices over '88-'06, I found trend to be a statistically significant predictor, but not a single dummy variable for Jan.-Dec. was statistically significant.
Comrade-Dope jg (jg) Wed Apr 1 15:53:41 2009 CDT #
EvilHenryPaulson says:
Barley,
Hasn't the deal been the US gets the IMf and old Europe gets the World Bank?
In any event, I wasn't supporting the quote -- just sharing what I thought crystallized the Franco-Prussian state of mind. Justified or not, it is petty "you deserve to feel more pain than I" -- they could care less about the questions of trade distortions or oversupply, in their mind they did not benefit from the credit bubble just because they weren't the ones doing the majority of the borrowing
We all benefited, albeit to different extents. We will all endure loss, albeit to different extents. That is the game, neither fair nor unfair.
EvilHenryPaulson Wed Apr 1 15:54:41 2009 CDT #
EvilHenryPaulson says:
"It is hard for me to believe that a home would sell for 10-25% more depending upon the month of the year"
Probably true. But these are house prices. A commodity.
Those are annualized percentages
EvilHenryPaulson Wed Apr 1 15:57:27 2009 CDT #
ac says:
<tbody>
“ac
Be fair, Keynes hasn't spoken for himself in decades.
Timing government spending to be counter cyclical is not a bad idea. That has now been extrapolated to serve the purpose of the currency wars
</tbody>
-----
I'll admit the stuff I've read from Keynes himself seems pretty sensible.
I think the problem is that countercylical spending works when people are irrationally afraid of borrowing and spending.
This might have been the case by the mid to late 1930s.
I think the problem we have today is that advocates of Keynesian economics have been trying to spur spending and borrowing when people have been rationally refusing to do this.
I.E. I think the problem is trying to encourage spending in an environment of over capacity and excess debt.
I think encouraging borrowing and spending in 2009 may be very different than encouraging it in 1934.
The difference being that we have too much capacity and debt now, whereas it had been mostly cleared out by 1934.
So the countercyclical spending that might have made things better in 1934 might make things worse now.
ac Wed Apr 1 16:01:55 2009 CDT #
Br\'er Dawg says:
EHP gets it.
Should the graph return to zero that's just an "L" shaped permanent recession.
Br\'er Dawg Wed Apr 1 16:03:37 2009 CDT #
Barley says:
EHP - I appreciate the sharing
Barley Wed Apr 1 16:05:21 2009 CDT #
ac says:
To put it another way:
I don't think countercylical spending is necessarily a good idea.
It may be like putting out a forest fire that is clearing out excess fuel - we learned the hard way this is a bad idea.
Countercyclical spending may be a good idea if economic weakness is primarily due to irrational fear and pessimism.
I don't see that this is the case now.
ac Wed Apr 1 16:06:06 2009 CDT #
Br\'er Dawg says:
A couple trillion of wasteful spending in the hopes that a few hundred billion of effective stimulative spending will slip through won't matter in the teeth of several tens of trillions in reduced monetary velocity.
Br\'er Dawg Wed Apr 1 16:10:04 2009 CDT #
EvilHenryPaulson says:
ac,
You could always look at the converse situation for Keynes
Massive government spending was not ideal from ~2001-2007, same goes for during the 80s or whenever
Of course if there is someone only advocating the notion in one direction (eg only boost spending above planned levels during a recession), that is not balanced and they are an idiot. It is that unbalanced spending which we are now running up against at the trifecta of government, individual, and corporate levels.
This is how the system correct itself. It is not pretty, we should learn to accept that without having to retreat back to the stone age
EvilHenryPaulson Wed Apr 1 16:11:06 2009 CDT #
monta\'s ankle says:
why would case shiller be seasonal?
monta\'s ankle Wed Apr 1 16:16:42 2009 CDT #
Br\'er Dawg says:
EHP,
They are purporting to be our leaders. Lead then through massive spending reductions.
We have more than enough evidence that attempts at stimulative spending have little or no incremental effect going forward. Time to stop digging the hole.
Br\'er Dawg Wed Apr 1 16:17:05 2009 CDT #
MaryAnn says:
Does anyone know if counterfiting is on the rise.
MaryAnn Wed Apr 1 16:17:51 2009 CDT #
Anonymous says:
"It is hard for me to believe that a home would sell for 10-25% more depending upon the month of the year"
a simple interpretation is that people who sell in winter are "under more pressure" : house did not sell since summer, or emergency
Anonymous Wed Apr 1 16:18:34 2009 CDT #
ac says:
You could always look at the converse situation for Keynes
Massive government spending was not ideal from ~2001-2007, same goes for during the 80s or whenever
Of course if there is someone only advocating the notion in one direction (eg only boost spending above planned levels during a recession), that is not balanced and they are an idiot. It is that unbalanced spending which we are now running up against at the trifecta of government, individual, and corporate levels.
I believe in order to have "FDR Economics" during bad times you need to have "Hoover Economics" during the good times.
So I think it's a serious problem that the most prominent economists around today spend a lot of their time attacking Herbert Hoover's policies.
I think the fact that people like Hoover have been so demonized is precisely why we can't afford to have another FDR without going bankrupt.
I think the economists who idolize FDR are the very ones that have taken away the possibility of having another FDR.
ac Wed Apr 1 16:18:43 2009 CDT #
EvilHenryPaulson says:
ac,
Let's say you are a city mayor.
Should you undertake a major renovation of city buildings (libraries, schools, community centres, etc) when:
(a) The construction sector is booming, and prices are quadruple 5 year ago levels
(b) Delay the work until the construction sector slows down
Not all planned government spending can be easily delayed (eg garbage pickup), and spending money on literal make work projects that produce no value is a stupid idea under any circumstance just like not spending the money for an adequate sewage system in a city of millions returns negative value
I stick up for the name of Keynes because it is usually used when he is not involved (it's a useful tool to simplify the nightly newscast). That being said, I will admit to have read none of his books
EvilHenryPaulson Wed Apr 1 16:20:13 2009 CDT #
Banksters Must Die (aka bobn) says:
In the past governments just weren't smart enough to print massive amounts of money and borrow and spend like crazy.
Nobody ever thought to do that before the Keynesians came along.
Except Zimbabwe. And Weimar Republic Germany.
This does not end well.
Banksters Must Die (aka bobn) Wed Apr 1 16:25:22 2009 CDT #
Some Investor Guy says:
This graph does NOT mean you get 10-25% more for selling a house at one time of the year vs another. I'll try to explain this without too much math.
CR takes a one month rate of change and annualizes it. If the one month rate of change was +1% the annualized number is a little over +12%.
Note that on CR's chart rates of change do not go from positive to negative each year. The rate at which prices are dropping or rising changes. This is because real estate prices are very persistent. Unlike stocks, knowing whether prices went up last month tells you a lot about whether they will go up this month. If prices are declining, there isn't a "good" month of the year to sell. The good month is always now, because prices will keep declining for a long time. Does it make you feel better to sell for now for $200,000, or to wait until June and sell for $180,000, but to sell in a market where prices are dropping more slowly?
Some Investor Guy Wed Apr 1 16:26:57 2009 CDT #
Bill says:
Some Investor Guy's comment is excellent. But if we assume that these seasonal patterns will keep playing out even after the long-run trend settles down, at that point buying in the winter will seem like a good bet. If prices tend to be rising 2.5% per month relative to long-term trend during the spring and falling 2.5% per month relative to trend in the fall, that suggests that I might save almost 10% by buying in winter in an otherwise level market. I never knew season made so big a difference.
Parent Post
Bill Wed Apr 1 16:37:53 2009 CDT #
EvilHenryPaulson says:
Br'er Dawg
Keep in mind this is Calvinball. Just because you are spending more than ever, does not mean you are racking up liabilities.
Think of it as a game between China and the US (not the only players, but this is my story)
China devalues its currency slightly in order to gain more market share. They do this by reinvesting within the USD. This goes on for years while China sells and accumulates many USD.
At this point China has a lot of USD, and the US has a lot of stuff. If the US devalues its currency in one fell swoop, China just sold all that stuff for below cost. US wins the game.
Then we push reset and start a new round
EvilHenryPaulson Wed Apr 1 16:27:01 2009 CDT #
Banksters Must Die (aka bobn) says:
its hard enough getting them ...to speak a second language.
We have a perfectly good language here - it's English, more or less. When I went to Mexico, I spoke Spanish. Sort of. When others come here, they should learn to speak english.
Banksters Must Die (aka bobn) Wed Apr 1 16:28:40 2009 CDT #
Doc at the Radar Station says:
Mark Thoma links to a very good article by Keiichiro Kobayashi:
http://www.voxeu.org/index.php?q=node/3385
"Bad debt is the root of the crisis. Fiscal stimulus may help economies for a couple of years but once the “painkilling” effect wears off, US and European economies will plunge back into crisis. The crisis won’t be over until the nonperforming assets are off the balance sheets of US and European banks."
Doc at the Radar Station Wed Apr 1 16:29:08 2009 CDT #
Br\'er Dawg says:
If the US devalues its currency in one fell swoop, China just sold all that stuff for below cost. US wins the game.
Then we push reset and start a new round.
And If we are lucky the ChiComms are overthrown by the ChiSocs. Oh, wait. Is that better?
I'm just concerned that we are resorting to a cache of one time use only weapons.
Br\'er Dawg Wed Apr 1 16:33:53 2009 CDT #
Some Investor Guy says:
In answer to "Why is CS seasonal?"
The convenience of discretionary moves is usually better during summer. Children are on summer break. Weather is better for moving.
The supply of homes has a different seasonality than the demand. A lot of dabbler discretionary home sellers take their homes off the market in Nov and Dec. That leave people who have to/really want to sell with homes listed. They tend to be a bit more negotiable.
Some Investor Guy Wed Apr 1 16:34:30 2009 CDT #
ac says:
ac,
Let's say you are a city mayor.
Should you undertake a major renovation of city buildings (libraries, schools, community centres, etc) when:
(a) The construction sector is booming, and prices are quadruple 5 year ago levels
(b) Delay the work until the construction sector slows down
Not all planned government spending can be easily delayed (eg garbage pickup), and spending money on literal make work projects that produce no value is a stupid idea under any circumstance just like not spending the money for an adequate sewage system in a city of millions returns negative value
I stick up for the name of Keynes because it is usually used when he is not involved (it's a useful tool to simplify the nightly newscast). That being said, I will admit to have read none of his books
There are always going to be specific cases where spending is justified by maximizing long-term economic outcomes.
I'm just saying in the aggregate we may be in a situation where increasing spending increases the possibility of a catastrophic fiscal crisis.
Not increasing spending may also increase that possibility too (as proponents of more spending argue).
But when you are facing two paths to potential disaster, I think that's when you can start to choose an option based on more idealogical grounds.
I think it's essential to have a culture that believes in meeting obligations to have a future.
If meeting these obligations leads to a depression but maintains a philosophy that leaves the door open to future recovery, then I have to go with that outcome.
My fear is that we our developing a culture and a way of thinking that won't support the cooperation and trust needed to have a modern economy in the future.
I think "borrow, print and spend" is a 3rd world mentality.
ac Wed Apr 1 16:35:40 2009 CDT #
Broward Horne says:
"Does anyone know if counterfiting is on the rise?"
----
Yes. Several nefarious crooks broke into Federal Reserve banks rand cranked out $12.8 trillion of fake money and distributed it mostly to banks & government but it looks like regular money so nobody knows what to do.
http://www.bloomberg.com/apps/news?pid=20602002&sid=armOzfkwtCA4&refer=markets
Broward Horne Wed Apr 1 16:37:21 2009 CDT #
Kung Fu Panda says:
RE Flassbeck,
German banks were more leveraged than most of the US I-banks, and they were dumb enough to use AIG CDS's to meet their capital requirements instead of real capital. Herr Flassbeck, shutten sie sein piehole!
Kung Fu Panda Wed Apr 1 16:39:52 2009 CDT #
scone says:
"Bad debt is the root of the crisis. Fiscal stimulus may help economies for a couple of years but once the “painkilling” effect wears off, US and European economies will plunge back into crisis. The crisis won’t be over until the nonperforming assets are off the balance sheets of US and European banks."
.
I believe this, but what about jobs? The rationale for the spending is supposed to be keeping unemployment down, after all. So how do you let the bad money wash out of the system without 25% unemployment, aka massive depression?
scone Wed Apr 1 16:41:05 2009 CDT #
Doc at the Radar Station says:
I believe this, but what about jobs? The rationale for the spending is supposed to be keeping unemployment down, after all. So how do you let the bad money wash out of the system without 25% unemployment, aka massive depression? - Scone
I think Kobayashi's point- http://www.voxeu.org/index.php?q=node/3385
was that fiscal stimulus wasn't a *mistake* in itself, but rather that sole reliance on fiscal stimulus to ultimately solve the underlying problem would be a grave mistake.
Parent Post
Doc at the Radar Station Wed Apr 1 17:04:55 2009 CDT #
Anonymous says:
First
Anonymous Wed Apr 1 16:41:33 2009 CDT #
EvilHenryPaulson says:
Br'er Dawg
It is the second last in a line of "one time use weapons". It works because future income can adjust to whatever the future dollar is worth, and as much as the world hates it -- the US is home to substantial resources, and they do not have enough warships to park in the harbor for an embargo. More than that, it is a recent historically important source of demand.
The one last one time weapon that can be used up would be the liquidation of reserves (FX, Gold, strategic petroleum reserve, ...) that is quickly followed by selling major assets (eg public land, buildings, equipment, etc) if not servitude to the IMF (or whomever will be the lender of last resort)
EvilHenryPaulson Wed Apr 1 16:42:59 2009 CDT #
Hubbert says:
I think ac is saying that "countercyclical" spending should be "counter" at both phases of the "cycle." But no elected official wants to preside over a "slowing" economy, so the actual policy is "In bad times, Stimulate. In good times, Stimulate. In really bad times, STIMULATE!"
If economists built a race car, it would have a single pedal labeled "stimulate." Brakes are for "whiners," and clutches are bad too because they can disengage the engine of fiscal policy.
Hubbert Wed Apr 1 16:45:24 2009 CDT #
Comrade-Dope jg (jg) says:
If there was seasonality in home prices, you would have something akin to an arbitrage opportunity: well-heeled hedgies buy from poor, bedraggled folks in January, then dump the inventory for 10-25% more in the summer. Kind of like what they are trying to do with oil, now.
That does not happen, because home prices are not seasonal. Volumes are seasonal, but not prices.
Comrade-Dope jg (jg) Wed Apr 1 16:45:25 2009 CDT #
EvilHenryPaulson says:
Bill
You didn't catch the bit about annualized percentage.
Take that 10%, represent it as 1.10 x (prev month)
e ^( ln(1.10) / 12 ) = x
x is the precise month over month change. x^12 = 1.10
EvilHenryPaulson Wed Apr 1 16:47:13 2009 CDT #
scone says:
that is quickly followed by selling major assets (eg public land, buildings, equipment, etc) if not servitude to the IMF (or whomever will be the lender of last resort) - EHP
.
Why not sell some of the public lands? If you did that, the Western states might benefit-- the property tax revenue would make up for the end of the Fed 'in lieu' payment system, never mind the end of the timber payments.
scone Wed Apr 1 16:47:43 2009 CDT #
Hubbert says:
jg, I think that your arbitrage is eliminated mainly transaction costs and monthly upkeep (insuring and maintaining a vacant property is not cheap). But I think it happens to a degree, in that potential sellers wait until "real estate season" to list a house if they have some discretion. Not all sellers can wait, of course.
Hubbert Wed Apr 1 16:49:13 2009 CDT #
Emporer of Ice Cream says:
FIRST!!! Nemo must be eating dinner.
Emporer of Ice Cream Wed Apr 1 16:50:18 2009 CDT #
EvilHenryPaulson says:
ac says:
I'm just saying in the aggregate we may be in a situation where increasing spending increases the possibility of a catastrophic fiscal crisis.
The possibility of catastrophic fiscal crisis was/is already at 100%. This is a tool to sort out who eats the losses.
If you don't spend, or cut spending, deflation will have its way and all foreign capital will pull out of the US resulting in the same devalued currency.
I say the crisis has been 30 years in the making, there is no easy way out. Easiest way out is to invent time travel, and kick some people in the ass 30 years ago and stop them from acting like idiots. Unfortunately that project is behind schedule and will not be available for use.
EvilHenryPaulson Wed Apr 1 16:51:34 2009 CDT #
EvilHenryPaulson says:
scone,
Russia sold public land, we know it today as Alaska.
EvilHenryPaulson Wed Apr 1 16:53:10 2009 CDT #
ChangeYourDogCanRollIn says:
What was that the Big O said to the Queen???
Are you not wearing what??
Or do I have a crack in my new Tony Lamas??
http://www.lyrics007.com/Deryl%20Dodd%20Lyrics/New%20Tony%20Lamas%20Lyrics.html
ChangeYourDogCanRollIn Wed Apr 1 16:53:47 2009 CDT #
Fair Economist says:
If prices tend to be rising 2.5% per month relative to long-term trend during the spring and falling 2.5% per month relative to trend in the fall, that suggests that I might save almost 10% by buying in winter in an otherwise level market. I never knew season made so big a difference.
It's a well-known phenomenon that house prices are higher in summer than in winter. The difference is about 5%, which roughly matches the Case-Shiller data. Average 5/12 % increase during the up months; assuming a linear distribution it will be twice that (10/12%)in the peak month. Annuallzed, that becomes 10% up in the peak up month and 10% down in the peak down, which is close to the CS swings.
5% is a good reason to move in the winter; but if you have kids they'll probably have to shift schools; in much of the country the weather is nasty then; and from November to early January most people have things besides moving they'd like to do. All in all, the extra problems for moving in winter probably balance out the financial gains for most people, at least in a sane housing market.
Fair Economist Wed Apr 1 16:54:27 2009 CDT #
EvilHenryPaulson says:
Comrade-Dope (jg)
You are incorrect. Volume is seasonal, and as a part of that those who sell in the weak volume months generally have to sell at a more attractive price to complete the sale. That is why so many people who can, choose to delist and try again in the spring when there is a bigger pool of demand relative to supply.
Ask any developer, or just read the post by some investor guy
EvilHenryPaulson Wed Apr 1 16:56:42 2009 CDT #
ghostfacedinvestah says:
This will help the cashflow of a few toxic assets the banks want to sell (hint: even with 93% taxpayer financing, do not buy certain 2006/7 vintage American Home MBS):
http://www.reuters.com/article/marketsNews/idUSN2435051320090324
ghostfacedinvestah Wed Apr 1 16:58:28 2009 CDT #
scone says:
scone,
Russia sold public land, we know it today as Alaska.
.
Maybe they'll take it back if we say pretty please. And throw in Palin, too. But seriously, more than half of Oregon is Federal land, and that causes problems for us trying to develop a modern economy. I don't see the point. If the 'asset' is causing problems, then, to me, it's not an asset except on the balance sheet.
scone Wed Apr 1 16:59:01 2009 CDT #
Fair Economist says:
I believe this, but what about jobs? The rationale for the spending is supposed to be keeping unemployment down, after all. So how do you let the bad money wash out of the system without 25% unemployment, aka massive depression?
That's why I support a stimulus, in principle. However, since the administration is *not* doing much to fix the bad debts, the current stimulus is wasted from a long-term perspective, providing only temporary pain relief, as Keiichiro Kobyashi puts it. The first thing Roosevelt did was to close all the bad banks and I think that was crucial to the success of the New Deal.
Fair Economist Wed Apr 1 16:59:02 2009 CDT #
Anonymous says:
Credit default swaps insuring Citigroup's debt jumped over 700 basis points in intraday trading on Wednesday, or $700,000 per year for five years to insure $10 million in debt, said an analyst.
<tt>The swaps had closed on Tuesday at 635 basis points, according to data provider Markit.</tt>
<tt>Bank of America's debt protection costs also rose to around 400 basis points, up from 395 basis points on Tuesday, according to Markit.</tt>
<tt>Some analysts view modifications to mark-to-market accounting as risky as it will allow banks to create their own values for securities, which could increase distrust over assets held on their balance sheets.</tt>
<tt>"We still know the 'stuff' is on the balance sheets and if the financials are actually allowed to adjust capital based on unreal marks then who will ever buy financials again," Tim Backshall, chief strategist at research firm Credit Derivatives Research said in a report.</tt>
http://www.iii.co.uk/news/?type=afxnews&articleid=7251299&action=article
Uh-Huh
Anonymous Wed Apr 1 17:03:48 2009 CDT #
EvilHenryPaulson says:
It's not just school.
Many businesses have their slowest times during the summer (it's why people take vacations in the summer, often to travel despite it making more sense to get away from the bad weather in the winter)
The whole freaking world revolves around these seasonal cycles of demand. About half based on seasonal weather (as it influences ability to do the work, demand, supply), and about half based on government regulations (accounting reporting, taxes, holidays, etc)
a little bit may rest on people in warm environments work slower than those in cold ones (human psychology)
EvilHenryPaulson Wed Apr 1 17:06:01 2009 CDT #
Lawyerliz says:
Agreed Scone. Fla entered the union relatively late, but the State got swamp and overflowed lands. Which was a really helfty chuck of Florida. Now we did drain too many swamps for development and messed up the Everglades, but are trying to rectify matters, and I certainly can't say that the Feds would have done any better.
Lawyerliz Wed Apr 1 17:06:31 2009 CDT #
Blackhalo says:
""We still know the 'stuff' is on the balance sheets and if the financials are actually allowed to adjust capital based on unreal marks then who will ever buy financials again," Tim Backshall, chief strategist at research firm Credit Derivatives Research said in a report."
It is in the bond market, where they will get hosed. Bond buyers are very keen on a detailed balance sheet, and mark to make-believe, ain't gonna cut it.
Blackhalo Wed Apr 1 17:08:21 2009 CDT #
Broward Horne says:
"Easiest way out is to invent time travel, and kick some people in the ass 30 years ago"
----
What, the hundreds of years of empirical evidence wasn't enough?
wouldn't make a difference. People always trick themselves into believe what they need to believe to justify decisions.
A big chunk of the debt is embedded into the hierarchy and politics of the Federal gov't now, so its not going to be washed out without external intervention / pressure.
http://www.youtube.com/watch?v=qd4cZFEJ-wE
Holy Roller Novacaine
Broward Horne Wed Apr 1 17:08:57 2009 CDT #
CRbot says:
New Thread: Moody's: Record High Credit Card Charge-Offs
http://www.calculatedriskblog.com/2009/04/moodys-record-high-credit-card-charge.html ( 1 comments )
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: http://realize.org/cr (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRbot would now like to sing a little song for all his fans, and it goes something like this:
Benny... Benny... give me your answer... do.
I'm.. half CRAZY... all for the love... of you.
It won't be a ... stylish marriage.
I can't... AFFORD... ANYTHING TO EAT... MUCH LESS A FRACKIN CARRIAGE!!!
But you'll look sweet... --BOT SO HUNGRY!-- upon the seat...
Of a HOOPAJOOPS built for two... families.
I'm sorry Ben, I can't let you do that...
Rally mode + Printing Press == does not compute... does not-- com--- com... puttttrrrrhgh.
--Your systemic-failure-crashing bot
CRbot: Call me HAL.
CRbot Wed Apr 1 17:10:08 2009 CDT #
EvilHenryPaulson says:
scone,
I don't disagree per se, but you would be granting large concessions in terms of rights and needing to sell a whole lot of land to raise whatever money once you have reached banana republic anarchy in the streets
Reallocating the rights to those Federal lands seems more like a thing that is prudent in good and bad times. It was in that context I used selling Alaska to raise needed funds as an reminder
EvilHenryPaulson Wed Apr 1 17:11:38 2009 CDT #
scone says:
Good evening, Lawyerliz! :)
Here's a map that shows what I'm talking about, re Federal lands:
http://repdx.com/2008/10/30/where-the-deer-and-the-antelope-play/
I'm not saying we should sell off whole states, of course, just 'open up the West' to even the playing field property-tax wise between the two sides of the country. With all due respect to the environment and all that.
scone Wed Apr 1 17:13:50 2009 CDT #
ac says:
I think ac is saying that "countercyclical" spending should be "counter" at both phases of the "cycle".
Really what I'm saying is there should be no "countercyclical" spending unless the cycle has gone too far and has gone beyond the point of clearing excess debt and capacity (that may be a hard thing to determine).
My problem with stopping cycles by reigning in the "good times" is that I believe the stresses that come from these cycles are necessary to keep the economy from becoming too fragile.
I say this in part from personal experience:
I took a beating during the dot.com bust, but I feel like much of what I've learned about living my own life productively came from that beating.
Best beating I've ever had.
ac Wed Apr 1 17:15:50 2009 CDT #
bearly says:
So when do the make-work shovel-ready Saddam-Hussein-Like Statue building projects start ?
Staues of Che Geuvara Obama across the glorious people's republic, for Amerikans to workship!
bearly Wed Apr 1 17:23:33 2009 CDT #
scone says:
scone,
I don't disagree per se, but you would be granting large concessions in terms of rights and needing to sell a whole lot of land to raise whatever money once you have reached banana republic anarchy in the streets
Reallocating the rights to those Federal lands seems more like a thing that is prudent in good and bad times. It was in that context I used selling Alaska to raise needed funds as an reminder
.
The problem with that is, it's never done logically and fairly-- it's totally political. And by the time you add up all the costs of management, public input, and the lawsuits, it's not worth it. If you go to the map I cited, you'll see a comment on the bottom where some guy essentially says we can't sell off the public land because they have paid their way in the past, and gave us the state land grant universities. Which may be true, but that was then and this is now.
We now have a system that essentially forces the regions east of the Mississippi to subsidize life in the Western states, and takes incentives away from development out here. I don't see that as fair, and I can't see how playing with rights allocation fundamentally changes that unfairness. The eastern states are beginning to wake up to this, too. They have been screaming about the timber payments, for example, that are used to fund the schools out here. Why should somebody in Mississippi subsidize Oregon schools when their own schools are a disaster, and Oregon could very well be more self-supporting?
scone Wed Apr 1 17:25:51 2009 CDT #
briwerk says:
Secret test interface test number 5.
briwerk Wed Apr 1 21:21:42 2009 CDT #
END