by Calculated Risk on 8/15/2005 09:53:00 PM

Import traffic at the Port of Long Beach fell 2% compared to June, just below the highs of last fall's heavy shipping season. The Port of Los Angeles will report in the next couple of days.

For Long Beach, the number of loaded inbound containers for July was 289 thousand, down 2% from June and up 2.7% from July 2004. Outbound traffic was up 4% at 107 thousand containers rebounding to the levels of May.

The quantity of containers says nothing about the content value, but provides a rough guide on imports from China and the rest of Asia. With these numbers, I expect imports from China to be off slightly for July, and exports to China to be up.

NOTE: The OffPeak initiative (adds late night hours to port operations) started on July 23rd to handle the expected heavier late summer / fall imports.

by Calculated Risk on 8/15/2005 06:01:00 PM

Earlier I posted excerpts from an economic letter by the Federal Reserve's Glenn D. Rudebusch, Senior Vice President and Associate Director of Research: Monetary Policy and Asset Price Bubbles.

Dr. Thoma directs us to some additional comments by Rudebusch. Also see Professor Thoma's related comments on interest rates and balancing the economy: The Insurance Value of Increasing the Federal Funds Rate.

by Calculated Risk on 8/15/2005 04:28:00 PM

Back in March I wrote (in jest) that they were giving away free money in The OC (Orange County, CA). At that time the median home price in OC was $555,000.

Over the next few months median home prices rose to $603K. That was a total of $48K in FREE MONEY (not really free of course) since local RE Broker Gary Watts' prediction of $70,000 in gains this year for the median home.

Now the OC Register is reporting a slight dip in home prices to $601,000 for July. Still $46K in 6 months is well on its way to Mr. Watts' $70K annual appreciation prediction.

by Calculated Risk on 8/15/2005 12:42:00 PM

Bill Fleckenstein writes the Contrarian Chronicles for MSN Money. This week he touches on housing:

'To get a feeling for the budding inventory problem in many previously hot markets, let's look at a less-hot market (via the following vignette from a reader of this column): A publicly held home-building company (which shall remain nameless) in Columbus, Ohio, has been buying back homes from financially distressed owners and reselling them, at reduced prices, only to folks who are approved for conventional mortgages. As the reader says: "The inventory of homes is growing -- including one cul-de-sac where a staggering 13 of 20 homes, all less than three years old, are already up for sale."'

And on subprime mortgages:

'... a contact in the subprime-lending arena (lenders who specialize in making loans to borrowers with less-than-stellar credit records) suggests to me that it's becoming increasingly difficult for originators of subprime mortgages to sell them at a profit. Unless all of these are booked on the originator's own balance sheet, we'll start to see credit being cut off to the more marginal real-estate speculators -- the driving force, at the margin, behind the real-estate market.'

Fleck concludes:

'...the macro winds have shifted, I believe, and none of those shifts has occurred in a way that is bullish for U.S. assets. Bottom line: It's my opinion that a top is being formed (or is already in place), both in the housing market and the stock market. That spells trouble for an economy built on the unsustainable strategy of trying to speculate our way to prosperity.'

Fleck has been very bearish for a number of years. He was early (but correct) on the NASDAQ. And he has also been early on housing.

The housing market was very strong in the 2nd quarter. However it does appear that inventories are building and, as Fleck suggests, a top may be close.

by Calculated Risk on 8/15/2005 12:38:00 PM

CNN reports:

Single-home price growth over the 12 months ending June 30 was the strongest in history, according to the National Association of Realtors.

In its quarterly survey, NAR found that U.S. home prices rose at an annual rate of 13.6 percent, to a median price of $208,300.

Of the 149 metro areas surveyed, 67 showed gains of more than 10 percent.

David Lereah, NAR's chief economist, called the increases unprecedented. "When you look at appreciation of home prices relative to the overall rate of inflation, these are the strongest increases on record," he said.

See the article for a list of the top 10 markets. Durham, North Carolina is #9?