by Calculated Risk on 10/26/2005 05:23:00 AM

The Boston Herald reports: Housing prices weaken

...median house and condo sale prices also fell – something not directly affected by seasonal issues.

Additionally, the number of unsold houses and condos on the market rose to 56,016 last month – apparently the highest inventory ever recorded.

John Bitner, chief economist at Eastern Bank, said the latest data "very well may confirm that (the market has) passed the peak."

He said that as housing booms die, prices rise year over year for a time, but fall month over month – exactly what yesterday's report showed.

In Boston, CPI less Shelter has increased 8.7% over the last 12 months. Therefore, in real terms and using the 4% YoY nominal increase reported in the story, house prices have fallen in Massachusetts by almost 5%.

I believe Bitner is correct, the market has passed the peak.

by Calculated Risk on 10/25/2005 10:40:00 AM

UPDATE: Add Graph of Year over Year inventory increase.

Click on graph for larger image.

Inventories were up slightly from August to 2.849 million units. This represents an increase of 19.6% over last September. Usually inventories decline in September after the summer selling season. For comparison, August was up 12.2% Year over year, so seasonally this indicates a significant increase in inventories.

Reuters reports: Sept existing home sales flat

Sales of existing U.S. homes were unchanged in September at a 7.28 million unit pace, as strong post-Katrina sales in the U.S. South helped offset weaker activity elsewhere, a trade group said on Tuesday.

Sales of the previously owned homes were flat compared with August's downwardly revised 7.28 million unit pace, the National Association of Realtors said. That figure includes both single-family homes and condominiums.

Analysts had expected overall sales to decline to a 7.20 million unit pace from the originally reported 7.29 million unit pace in August.

Sales would have been lower in September without the strong purchase activity reported for areas around the hurricane-hit zone, the Realtors' chief economist said. For example, while sales dropped 85 percent in New Orleans, Baton Rouge reported a 150 percent increase, the group said.

Median prices declined to $212K, the lowest since May, probably because of the strong activity in the South. Average prices also decreased to $260K, the lowest since May.

by Calculated Risk on 10/24/2005 09:01:00 PM

Here is my forecast for September petroleum import and exports using the same model (described here).

The ERPP (Energy Related Petroleum Products) trade numbers for September are forecast to be:

Forecast: Total NSA ERPP Imports: $23.0 Billion

Total SA ERPP FORECAST:
Imports SA: $23.1 Billion (seasonal factor estimated at 1.003 for Sept)
Exports SA: $2.0 Billion
SA Balance ERPP: $21.1 Billion

This compares to the record $20.6 Billion SA petroleum trade deficit for August.

I am forecasting a record average price per barrel of $56.47 compared to the August record of $52.65.

Imports SA and NSA will be close to the records set in August. Although unit prices were substantially higher in September, imported quantities were lower. A new record depends on the quantity of refined products imported in September.

by Calculated Risk on 10/24/2005 06:59:00 PM

The National Debt is now $8,009,131,433,464.30.

by Calculated Risk on 10/24/2005 10:47:00 AM

UPDATE3: Also see Dr. Thoma's comments.

Dr. Hamilton praises Bernanke:

He absolutely has a first-rate mind, just as sharp as they come. And he'll need all the gray matter that can be mustered in his new job, I fear, to figure out how to respond to simultaneous threats of recession, inflation, global imbalances, and systemic financial risk.

The WSJ Econoblog quotes several economists / bloggers: Taking Bernanke's Measure

UPDATE2: Bernanke.

Dr. Delong says "a very good choice".

Dr. Kash Mansori (Angry Bear) writes:

"a pretty good choice .... (Full disclosure: he was one of my professors in grad school, so I accept the possibility that I might be biased on this.) Bernanke is a superb macroeconomist, a nice guy, and, despite his current position as chair of the CEA (a position that has historically been filled by highly respected academics with only minor partisan leanings), he is not a sharply partisan or ideological person."

Barry Ritholtz writes:

"Ben Bernanke is a safe, strong choice, sure to be liked by both the Bond and Equity markets."

Original Post:
Dow Jones News Service reports that Bush To Name Greenspan Successor Monday Afternoon. Reuters reports: Bush said eyeing Greenspan successor

President George W. Bush was believed poised on Monday to announce who he wants to replace Federal Reserve Chairman Alan Greenspan, according to sources familiar with the situation.

White House officials had no comment, but other sources said Bush was believed to be ready to make his announcement. The markets were awash in rumors that an announcement was coming.

Greenspan's 18-year tenure at the Fed runs out on January 31. Although he could stay longer if a successor is not in place, the Fed chief has signaled he prefers to leave on time.

Three potential candidates are regularly mentioned for the Fed chairman job: Glenn Hubbard, a past adviser to Bush; Harvard economist Martin Feldstein; and Fed governor-turned White House adviser Ben Bernanke.

Other potential contenders include former Bush economic aide and ex-Federal Reserve Governor Lawrence Lindsey; Fed Governor Donald Kohn; Fed Vice Chairman Roger Ferguson; and ex-Dallas Fed President Robert McTeer.

Most of the candidates are Republicans. But Kohn is a political independent and Ferguson a moderate Democrat.