Calculated Risk notes that mortgage purchase applications have declined 35% over the period of the last four weeks to their lowest level since 1997.
If your policies are to time-shift purchases, don’t you think you’d want to time-shift them to minimize the effect on the November elections rather than maximize it? My guess: another subsidy for homebuyers is coming down the pike.
I have had an inordinate amount of airport and airplane time recently, enabling me to catch up on investment news letters, economic reports etc. That statistic caught my eye as well. Further, here is just a sampling of some other observations, with various attributions:
– “fundamantals are too weak to support the chain store sales levels in the first quarter”
– growth in the second half may be 1-1.5% (ECRI)
– A more dour view: the CMI Growth Index (which has tracked the economy quite well for 4 years now) indicates Q3 GDP could be negative
– Q1 GDP growth was revised (BEA) downward – with half of the 3% growth being inventory replenishment. And the inventory component of the ISM number has fallen for two months in a row. Implication: when at equilibrium (now?) no more growth.
– small businesses (historically 65% of job creation) still has not returned to positive job creation. Its all govt and bigger businesses
And so on. The proprietor of this blog (and me) have consistently mused that with the expiration of the major portion of the stimulus package (meager as the results were) and of “pent up demand” from the late 2008 – early 2009 period when the earth stood still, the GDP stats would flatline. Further, I have pointed out repeatedly that the small business community has pulled into its shell, and that we are just a tax increase away from a real drag on growth.
Forecasting is dangerous, but we sure seem to be headed in the wrong direction. Whether late 2010 or 2011, its beginning to look very “L” – like.
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Related question: Will there be an increase in deaths this year as a result of the expiration of the estate tax repeal?
My answer: Yes, but I’m not sure it will be detectable from statistical noise. One method might be to see how the death rate in December of ’10 and January of ’11 compare with prevous years.
PD – ;->