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U.S. housing recovery "is a myth"
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TOPIC: U.S. housing recovery "is a myth"
U.S. housing recovery "is a myth" 2 Years ago Karma: 278
I know: "not an original title" -- since you've seen me writing this for YEARS. However, what's different about this is that someone ELSE is now writing the same thing. To the credit of the author, he has come across some "unadjusted" data to use in his article which I had not previously seen.

And as we all know, what "unadjusted" means is "before the Lies are added".

Here are a couple of numbers which caught my eye:

-- the ADJUSTED number for "new home starts" in the U.S. in December was 950,000
-- the UNADJUSTED number for "new home starts" in December was 61,000

Now that is what I can an "adjustment" -- i.e. a really big lie.

The Housing Market "Recovery" Is A Complete Myth

I primarily focus on the precious metals/mining stock sector. But since the mid-2000's, when the nature of the housing bubble was as obvious as was the internet/tech stock bubble that preceded it, the housing market has been a source of irritation that has inspired me to make it a secondary research/intellectual focus. When you analyze the critical variables underlying the housing market, it leaves no doubt that the market is still fundamentally damaged and overvalued, with a very high probability that market has another serious decline ahead of it. Furthermore, housing stocks have completely dislocated from market fundamentals and investors who hold them risk a significant loss of capital once the equity market discounts the underlying fundamentals outlined below.

The housing market recovery that is perceived by investors and the public at large is a product of deceptively reported housing statistics and hyperbolic media reporting. The entities that report housing market data (Government agencies and housing market associations) take a lot of liberties with adjusting the data, often utilizing data massaging techniques such as "seasonal adjustments." The following example illustrates this point with the Government's housing start report from January 17, 2013.

The headline reported 954,000 housing starts for December on a "seasonally adjusted annualized" basis, a 36.9% increase over December 2011. That 36.9% increase is embedded with a plethora of statistical errors. If you look at the non-seasonally adjusted number of starts for the month of December, it came in at 61,500. It turns out that was the lowest monthly non-adjusted number since March 2012. Here's the link for these numbers: Census Bureau Housing Starts.

Here are a couple of charts prepared by Zerohedge which graphically portray my point that the actual data, when stripped away from the statistical adjustments, show an entirely different picture: Unadjusted Housing Starts...
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Re: U.S. housing recovery "is a myth" 2 Years ago Karma: 238

US home builder confidence dips from a 6½ year high

US home builder confidence slips as measures of current sales and customer traffic decline
Associated PressBy Alex Veiga

LOS ANGELES (AP) -- Confidence among U.S. homebuilders slipped this month from the 6½ year high it reached in January, with many builders reporting less traffic by prospective customers before the critical spring home-buying season.

The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday dipped to 46 from 47 in January. It was the first monthly decline in the index since April.

Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006, when it was 51. It began trending higher in October 2011, when it was 17.

The latest index, based on responses from 402 builders, comes as the U.S. housing market is strengthening after stagnating for roughly five years after the housing boom collapsed.

Steady job gains and near-record-low mortgage rates have encouraged more people to buy homes. Prices have been rising. In part, that's because the supply of previously occupied homes for sale has thinned to the lowest level in more than a decade. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis.

The trends have led homebuilders to increase construction. Last year, builders broke ground on the most new homes in four years.

All told, sales of new homes jumped nearly 20 percent last year to 367,000, the most since 2009. Still, many economists don't foresee a full housing recovery before 2015 at the earliest.

"The index remains near its highest level since May of 2006, and we expect homebuilding to continue on a modest rising trajectory this year," said David Crowe, the NAHB's chief economist.

Even so, builders remain concerned about the sturdiness of the U.S. economy and unemployment, which ticked up to 7.9 percent last month from 7.8 percent in December.

Many builders are facing higher costs for building materials and having trouble obtaining financing for construction. Some also are facing a shortage of workers in markets where residential construction has picked up sharply, such as Texas and Arizona.

An index that measures current sales conditions fell one point to 51. And a gauge of traffic by prospective buyers declined four points to 32 from 36 in January.

But builders' outlook for sales in the next six months improved one point to 50.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.
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Re: U.S. housing recovery "is a myth" 2 Years ago Karma: 278
Sorry Earl, but there are no "reference points" to relate this back to the real world. How could HOME-builder confidence have risen to a 6-year high when they aren't building any homes??? The fact that this CONfidence measurement fell slightly to some totally fictional level doesn't get us anywhere.

If U.S. "home-builders" are building anything all, then (as I've written before) it must be more CELLS for all the private prisons/"detention center".

At this point, only SALES numbers have some connection to reality. The only factoid here which does require comment is the off-hand remark about "rising house prices."

Yes, if you believe U.S. "inflation" is under 2%, then U.S. house prices are "rising". However, for any residents of the Planet Earth out there (who know that U.S. inflation is over 10%); then for those people U.S. house prices are FALLING at a faster rate than they fell during the Great Depression.

Any talk of a U.S. "housing recovery" is a non sequitur: like "warm ice" or "intelligent mainstream analysis"...

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Re: U.S. housing recovery "is a myth" 2 Years ago Karma: 238

The National Association of Home Builders, (or at the local level) The Home Builders and Contractors Association (HBCA), are EVIL.

In Florida, the much "revered" Mr. Flagler- Henry Morrison Flagler (January 2, 1830 – May 20, 1913) was an American industrialist and a founder of Standard Oil. He was also a key figure in the development of the eastern coast of Florida along the Atlantic Ocean and was founder of what became the Florida East Coast Railway. He is known as the father of Miami, Florida and also founded Palm Beach, Florida.

The Rockefeller, Andrews & Flagler partnership was formed with Flagler in control.The partnership eventually grew into the Standard Oil Corporation.

When looking back at Flagler's life after his death on May 20, 1913, George W. Perkins, of J.P. Morgan & Co., reflected, "But that any man could have the genius to see of what this wilderness of waterless sand and underbrush was capable and then have the nerve to build a railroad here, is more marvelous than similar development anywhere else in the world."

Hard Labor and Hard Time fills a significant gap in the literature on southern prisons and punishment by presenting a history of Florida’s state prison system between the 1910s and late 1950s, specifically the state prison farm at Raiford (the third largest prison farm in the South at this time) and the chain gangs and road prisons scattered around the state.

This thoroughly researched volume offers a social history of the prisoners, superintendents, guards, and other personnel. It examines the different types of agricultural, industrial, and construction work undertaken by prisoners; the impact of race, gender, age, and sectionalism on the treatment of inmates; and the methods of discipline and punishment used to maintain labor productivity and institutional control. The book also explores various strategies of accommodation and resistance utilized by inmates, including promotion to trusty, escape, labor strikes, and self-mutilation.

Questions Emerge as Florida Plans Massive Prison Privatization
By Joey Kavanagh, JPI Summer Intern

Despite growing concerns by major newspapers and advocates throughout Florida, the state’s legislature is planning to sell 30 of Florida’s prisons to the highest bidder by January of 2012. The state’s rationale is that the purportedly cheaper private management will trim Florida’s bloated corrections budget. What the legislature missed is the fact that the compensation of soon-to-be estranged state employees will not only offset the intended (though unreliable) savings but actually cost the state money. This deal ignores Florida’s rocky history with private prisons, their oft-contested savings motto and research showing cost-effective, community-based options proven successful in reducing recidivism while limiting the number of people who come in contact with the justice system—thereby actually reducing corrections spending. But, above all, the deal raises questions as to the extent that private prison companies influence legislation.

The “savings” of private prisons

Private prisons are mandated by state law to have an operating cost of 7% less than a similar state facility. All told, the planned 18-county privatization is supposed to save Florida (and by extension, Floridians) $20 million. But, again by way of state law, private prisons are only allowed to house individuals convicted of less-serious offenses. Therefore, there are no truly similar state and private facilities by which the 7% in savings can be measured. Coupled with a history of limited state oversight and overbilling, the championed savings offered by private prisons is still a matter of debate. Yet, the Florida legislature is aware of this uncertainty and still opted to authorize the largest state privatization deal ever in order to, according to Senator J.D. Alexander (FL-17), “more definitely answer the question of whether there is a cost savings.” Apparently the privatization of 30 of Florida’s prisons is just an empirically challenged social experiment. Unfortunately, lobbying records suggest that may not be the case.

Lobbying in Florida

JPI’s June 2011 report, Gaming the System: How the Political Strategies of Private Prisons Promote Ineffective Incarceration Policies, offers an in-depth look at the extent to which private prison companies (specifically CCA and GEO group—the two largest) influence legislation that ultimately seeks to increase the number of people held in their facilities. In Florida alone (the second largest “market” to Texas) CCA and GEO have spent millions of dollars in lobbying and campaign contributions since 2003. Since October of last year GEO Group—who also happens to be based in Florida—donated $822,415 combined to both parties and paid several lobbying firms a total of $360,000 to influence legislation. It stands to reason then that GEO Group is the heavy favorite to win the contract from its home state, though Nashville-based CCA is not going quietly. From 2003 to 2010, CCA donated $300,000 in Florida campaign contributions.

It follows that the unprecedented contract in Florida speaks to the success of GEO’s and CCA’s lobbying efforts as they have effectively quelled a history of questionable conditions and savings concerns—not to mention, they sold a savings deal that actually costs the state money.

The bottom line

Amidst the contested savings, an FBI investigation, the apparent influence of big lobbying dollars and the history of poor conditions, one thing reigns supreme: the bottom line. Private prison companies are, by nature, defined by profit. Essentially, a private prison company is like a sleazy hotel conglomerate. But where Hilton looks to build more hotels and return residents through good service and clean rooms, GEO Group or CCA has a profit-motive to return residents through the exact opposite: poor programmatic services and cheaper room conditions. But that’s good business: cut costs, increase profits. For instance, CCA boasts a nearly 16% net income increase since Q2 2010 which CEO Damon Hininger attributes to “cost-containment initiatives.”

Sure enough, Florida has already seen the fallout from private prison companies’ cost-cutting initiatives. In 2004, inmates at a Palm Beach private facility—The Florida Institute for Girls, a juvenile center—rioted in reaction to the facility’s cost cutting measures. These measures included increased lockdowns, cuts to physical and outdoor activities, staff reductions, cancellation of educational programs, therapy sessions, volunteer programs and other special activities.

This speaks to the central problem with private prisons; good business for them is bad news for communities. So long as states solicit for-profit prisons, individuals and disproportionally affected communities will continue to be encumbered by the United States’ over-reliance on incarceration.

General Development Corporation, also known as GDC, was the largest land development company in Florida.

As each community started the developer built the roads, sewer and water plants, golf courses, marinas, other basic amenities and even operated landfills. These new communities had the feel of "company towns." When North Port was incorporated GDC employees even made up the first City Council.

In the 1960s GDC's board of directors hired Charles H. Kellstadt, retired Chairman of Sears as President and Chairman. This was just after the GDC board voted to split with the founding Mackle Brothers. The Mackle's went on to develop Marco Island and other prominent communities.

Kelstadt, it was said, implemented a money back guarantee on homes and lots, similar to what Sears offered. This was a powerful sales tool, and combined with the ability to swap remote lots for lots in the developed areas, this allowed GDC to achieve tremendous sales success, selling several thousand lots each month and several hundred homes.

In 1974, GDC was a publicly traded company. It was purchased and taken private by City Investing, George T. Scharffenberger, Chairman.

Then, in the mid 1980s City Investing took the company public again.

In the late 1980s GDC's management team was accused of fraudulent home sales: this led to criminal indictments of the company leadership, and bankruptcy of GDC in 1991. Functional assets held by GDC in various cities were turned over to their respective governments thereafter.

Subsequent to the indictments and convictions of senior management, the 11th Circuit Court of Appeals exonerated the men, reversing their convictions and directing that all charges against them be dismissed (see US v. Brown, 79 F.3rd 1550 (1996), for a complete discussion of the case and a general exoneration of General Development Corporation.

A history of EVIL-
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Re: U.S. housing recovery "is a myth" 2 Years ago Karma: 278
Lol Earl!

As a Florida resident, it's easy to see why you would have an especial level of hostility toward both the "real estate industry" and the (grotesque) "private prison" system. Along with the states of California and Nevada; these were the principal rape-victims of the made-in-Wall-Street housing bubble. And all Americans should be terrified and/or outraged by the "private prison" phenomenon.

The MYTHOLOGY (lapped-up by all the right-wing idiot-ideologues) is that simply by slapping the label "private sector" on anything that immediately any service can not only be provided CHEAPER, but the private sector "entrepreneurs" can still take a HUGE cut of "profits" for themselves.

The problem is there has NEVER been any empirical evidence to support this proposition. There is nothing magical about the words "private sector". What are some of the things which make government "inefficient" at providing prison services?

1) (Relatively) "humane" treatment/living conditions; although U.S. prison standards are so appalling that use of the term "humane" is perhaps inappropriate.

2) Decent/adequate food.

3) Fair WAGES for prison system employees.

4) Proper training for guards/staff.

5) And passing REGULAR inspections to ensure the (low) standards are met.

Then we have the "black holes" (i.e. private prisons). No standards. No inspections. It takes neither "brains" nor the "private sector" label to be "efficient" under those conditions.

Brutalize prisoners (even more) and not only do you save money, but there's an added "pay-off". Ironically, the WORSE you treat convicts the higher the recidivism rate -- ensuring those private-prisons will ALWAYS be full, and generating PROFITS for the Oligarchs. Meanwhile these private prisons will produce "graduates" who are even more HARDENED CRIMINALS than the already hopelessly dysfunctional U.S. penal system.


Prison inmates lose. Prison workers lose. Society loses. A handful of Oligarchs (and their shareholders) win. That doesn't count.
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