Stay calm, all is well. - Kevin Bacon, Animal House
The market acts not just calm/well, but absolutely comatose. To measure just how much so, I'm running two charts courtesy of Contrary Investor. If you are a CI sub, make sure you read their Thursday commentary. The charts speak for themselves. VIX, or volatility, is at a decade and a half low. And not a single 2% down day since 2003, get serious, no wonder there is that sense of a Soviet Union style rig on. Yesterday I posted this at Silicon Investor, as I felt purchasing these puts now represented about as close to a "take a free swing at me, I don't even care" Animal House attitude from the put sellers as one will ever get. With the USD taking a hard hit against the Yen on this morning's GDP report, I came across an outstanding and timely review of the carry trade situation from Stephanie Pomboy, don't skip this one.
The Ministry Truth recently rolled out the greatest shill, and carnival barker of all time, Alan "Winston" Greenspan for one of those "senile moments". The Maestro declared that "all is now well" on the housing correction. I thought it might be timely to glean through a variety of very recent (like this week) newspaper accounts from outside the Land of Oz. The price drops now seem to be in waterfall mode, and even the most vivid (or senile?) imaginations could hardly call it stable. The sales slowdown is accelerating as well.
From San Diego County:
The median price last month for newly built houses and condos and condo conversions locally was $413,500, down 17 percent from a year earlier. DataQuick said San Diego County's new-housing total was 885 transactions last month, 37.5 percent lower than in September 2005.
There is very little doubt, that the bursting Bubble is spilling over into big ticket consumption:
For the quarter, new car sales fell 8 percent in total and 12 percent in California, a state that accounts for one-fifth of AutoNation's new vehicle business.
Connecting the dots on this one:
The nationwide car dealer AutoNation Inc. said it expects to slash its orders from the Big Three automakers by 30 percent because of swollen inventories, according to a report published Friday.
From Virginia,
Sales of homes in Virginia slid nearly 27 percent in September, marking the largest percentage drop this year -- and the 13th consecutive month of slower sales. The median price, with half the houses selling for more and half for less, fell 9 percent to $199,975.
From Palm Beach County Florida,
The county's year-over-year median price dropped $34,500 or 9 percent last month to $365,500 from $400,000 in September 2005. Sales fell a whopping 53 percent in September. There were 566 homes sold last month, down from 1,202 a year ago.
From Southwest, Florida:
* Sarasota-Bradenton saw volume collapse 33 percent, to 436 units. Meanwhile, the median sales price dipped to $290,000, down 16 percent from September 2005, and the biggest price adjustment of any Florida metro area.
* Naples, the state's highest-priced residential market, sustained a 37 percent drop in sales, to 236 houses. Median prices dropped 8 percent, to $446,900.
* Sales of 693 units in Fort Myers-Cape Coral were off 36 percent from September last year. The median price of $261,400 represented a 9 percent drop over the same period.
From Arizona, we can see from the two charts, that there was a heavy dependence on the construction employment boom, which has now clearly busted. While you're at it, check out the maladjusted nature of the prior job growth. The September waterfall decline in permits, drops the permit line off the attached chart from 2Q. In my Oct. 7 blog, I discussed this condition, as it related to several other key states.
There were 2,281 new-home permits issued in the Valley in September, off nearly 53 percent from the same month last year and the lowest monthly total since December of 2001.
| 
