IF YOU DON’T OWN GOLD, YOU KNOW NEITHER HISTORY NOR ECONOMICS. – Ray Dalio, Bridgewater Associates (one of the largest hedge funds in the world beside the Fed)
I’ll have LOT more on the matter of existing home sales sometime in the next 24-36 hours. But suffice to say that the stock market bubble bulls were looking for April existing home sales to come in at an SAAR “seasonally adjusted, annualized rate” of 5.22 million. Not only did it miss that number badly, being reported at 5.04 million, but it was a 3.3% drop from March.
This just in: folks, existing home sales should be rising from March to April, not declining. Especially with the wide proliferation of Government-sponsored 0-3% down payment mortgage financing at near-record low interest rates. AND, that type of financing is now available down to a 580 credit score. A 580 credit score is the equivalent of C-rated junk bond – i.e. about a 40-50% chance of default.
This report is a complete disaster, because it’s a “seasonally adjusted, annualized” rate. The actual number for April was likely shockingly low. I have not had a chance to read the details, but I can guarantee that the National Association of Realtor “wizard,” Larry Yun, will blame the drop on “low inventory.” I don’t know about the rest of the country, but inventory in Denver is starting to pile up like dogs under a cat on a hot tin roof – especially at the $800k and over segment.
I will have more later, including a shocking report about some homebuilder insiders who are dumping their company’s shares at the same rate as they were in 2005. It’s one of the companies I cover in my Homebuilder Research Reports, all of which make some of the best short-sell plays in the market. Any money manager who owns homebuilders and does not consider the information in my reports is violating its fiduciary duty to its investors.
The U.S. Macro index has never dropped this quickly in its history (source: Zerohedge, edits are mine – click to enlarge):
While we know that the Fed/US Treasury (PPT) is holding this pig up, at some point either the U.S. Macro metric has to start rising and converge back into correlation with the stock market, OR the stock market crashes. At some point, unless the Fed goes “Weimar,” the stock market is going to crash. That money coming out will FLOOD into the gold and silver – physical gold and silver.
The April Chicago Fed National Activity Index literally plunged to -.15 from the expected .10. It’s hard to move the needle on this index. While the reading was slightly higher than for March, industrial production was -.16 and the consumption/housing component was barely above zero.
The Philly Fed index for May dropped to 6.7, missing Wall Street’s brain trust consensus estimate of 8.0 and declining from the 7.5 reported for April.
U.S. PMI Manufacturing “flash” index for May dropped from April and missed consensus. It tumbled to its lowest level in 16 months and new orders plunged.
As I have written earlier this week, the U.S. economy is crashing. The only variable not crashing is the perception of a healthy system being conveyed by a stock market which has been imposed upon by perhaps the greatest Central Bank market intervention in history – at least in terms of sheer effort and dollar volume. This is not going to end well for anyone.