Retail Sales Are Crashing – Housing Sales Are Next

Flippers are getting stuck with houses they can’t flip for a profit. Hedge funds have stopped buying and have begun selling. Anyone dumb enough to have been lured into this market in the last few years will be underwater in no time. The foreclosure train will be leaving the station shortly. We’ve been here before. It was ten years ago. Some people never learn.  – The Burning Platform

Last week in the stock market featured several “cliff-dive” drops in retail stocks:  Macy’s, Nordstroms, Advance Auto Parts.  The middle class (yes, “middle class” includes the wannabees living beyond their means in million-dollar “mcmansions”) is tapped out of disposable income and has run up against is ability to take on more debt.   The Nordstrom’s report is what has really freaked out economic analysts:  LINK.

The housing market will show the affects of a rapidly deteriorating economy next.   I noticed something had changed in the housing market in mid-summer based on all of the available data I analyze.  Interestingly, the CEO of Redfin agrees with me:  Something We’ve Seen In The Last Month Should Make You Worried About The Housing Market.

I noticed that the number of listings all around Denver began to increase rapidly.  The NAR’s manipulated “months supply” metric is lagged by a few months and does not pick up big increases in listings right away.  I  noticed this especially in the higher-end areas all around Denver.  My observations have been confirmed in San Francisco:   LINK and in New York:   LINK and NYC/Washington DC:  LINK.

The small bump up in home sales that resulted from Fannie Mae and Freddie Mac lowering their down payment requirement from 5% to 3%  has now run its course.  It’s pulled sales forward and coerced a lot of people to overpay for a home – most of them are households that, over the long term, can not afford the monthly cost of homeownership.   Anyone who bought a home within the last 6 months in almost every major city and used a 10% or less down payment is now underwater vs. their mortgage.  Many are now starting to realize this which is part of the reason retail sales are tanking.

The homebuilder stocks are now more overvalued than they were at the peak of the housing bubble – using ANY financial metric.   What’s different is that the Fed is now out artificial fuel to power the next phony housing “recovery.”  The homebuilder stock are set up for a spectacular drop.

My two most recent reports are being offered for a short period of time in a two-report special price.  Each report is $30 or you can buy both reports for $45:    Two Homebuilder Stock Report Special

Note:  If you have purchased either the Low End Homebuilder report or the Red Flag Alert report, please contact me if you are interested in adding the other report for $15.

One more point of note:  DO NOT overlook or underestimate the fact that big homebuilders like Lennar are now offering ZERO-DOWN mortgage financing in many of their new home communities.  Lennar is not the only homebuilder offering mortgage incentives to move homes.  Many homebuilders are now showing a big increase in “mortgages held for sale.”  These are mortgages that can not be off-loaded on to the taxpayer because they are subprime quality.   The homebuilders are stuffed to the gills with inventory right now.  

21 thoughts on “Retail Sales Are Crashing – Housing Sales Are Next

  1. Liquidity has to come from assets in the form of debt-free creation. Something like gold that circulates or its fully, 100% backed derivative, whether it be paper or digital and it amounts to title ownership of reserved gold, denominated by mass (weight), where mass is the unit of account.

    Bullion in circulation will not only support economic activity, it will also allow existing debt (fiat) to be purged.

    Such a model has just emerged this year. Did you think God forgot us ???

  2. Yesterday’s Paris attacks should also put a damper on retail sales. I am inclined to steer clear of large public gatherings. People are generally rude, self-absorbed, and inconsiderate any more. Layer on top of that the potential to be shot or blown-up. Naturally, most oblivious Americans will not consider the potential of being killed by these evil muslims until there is a strike domestically. However, if that were to happen (heaven forbid), look-out. It could make for a good holiday season for Amazon.

    I was at a Macy’s in the midwest a few weeks ago and it was downright depressing. There were nearly as many employees as customers and the merchandise was marked way down. Not sure how they make money. The entire mall was like this. The people you did see were not carrying stuff they had bought either.

    1. If people don´t have any money to spend or it´s impossible for them to go even deeper in to debt it doesn´t matter if the purchase is done in a empty mall or on the internet.
      AMZN has no margins and the thing that has kept the company going besides corrupt Wall Street analyst and “cooking the books” is revenue growth.
      Now that´s gone and their revenues will be shrinking- the pain starts and the scumbag Bezos will land on earth again and face reality.

    2. People ARE rude, self absorbed, and inconsiderate! How true.
      Sad but true. Self gratification is now ingrained into the sheep
      mindset. Icrap has helped it along. People can’t look up from
      their phones long enough to say “excuse me”.

    3. show me a dead body..just one,and i’ll reconsider my analysis that no one died during this obvious false flag drill in was a phonier shoot um up than “Sandy Wagged the Hook” and the Boston Hoaxathon PUT TOGETHER..a bomb supposedly went off in a cafe and what we see are are 2 chairs turned broken windows,or anything else that would have been a sign of a REAL,LIVE FLESH AND BLOOD suicide bomber,AND they showed what cafes/restaurants REALLY look like when a suicide bomber kills himself inside, and its a whole lot different than the Paris cafe BS..then we are given footage taken with a perfectly positioned camera outside thwe theatre side door, as the crisis actors stream out ..OMG!..a fan falls down on the hard concrete and looks… dead! he’s not moving!..not one person even acknowledges this man laying on the ground,perhaps dying,as they walk over him and around him..such typical human behavior..cough cough gag gag..[in a drill anyway with cisis actors with parts to play[do not so much as look at him lying there dying!] b then lo and hehold!.. we see a women hanging from a window[window in same location just above side door] outside the theatre[ where the “Eagles of Death” had been playing,with a lead singer named Satan/the devil..nice name btw]..WITH ONE ARM for at least a minute..[ totally and absolutely physically impossible for anyone not in absolute superb condition and about 2% body fat and even then..hmmm..maybe if they have a perfect fitting handle to grab which there was not..not in a regular window..she was obviously standing on a perpositioned platform[we are watching this BS video from to far away to actually see the planted platform] certainly pre-set up for the camera shot of the women hanging by one arm..yet more silly crisis acting/actors up the was a drill from start to finish..pure kabuki theater..ONE FRENCH AUTHORITY EVEN ADMITTED IT WAS A DRILL GONE LIVE!! a drill that went false flag live just like Sandy and the Hook! pleez man..wake the F up..stop drinking the fluoride..turn your TV off.. immediately, and get rid of’s melting delicate American brain matter,and turning Americans into retarded imbeciles..
      stop watching ALL TV..
      and re-grow your subliminally dead brain cells man..the one you used to think rationally with..maybe..depends on how many poison pig farm-ah vaccines as a child and dead F serious about this
      ..oh yeah.. you can bet the French will get all the miles they can get out of this phony baloney bull ship non-event drill,and it seems the French have already sent French jets into Syria to “get As..ah..ah..I mean to get Isis, based on 2 “magic” magicallky bullship as the magic 9-11 magic hi-jacker’s passports..[the 1st “magic” passport…these “magic” passports turn up everywhere lately ey? don’t they?ed the “magic” fake passportsd that is..they turned out to be FAKE SYRIAN get Assad of course! the terrible,ruthless brutal butcher of Syria w/portable WMD on railcars too i bet JUST LIKE SADDAM!!![no WMD weapons over here either..then hysterical laughter from Zionist and/or AIPAC audience during George Bush’s 1.5 million dead and/or displaced Iraq’s..1.5+ million muirdered women,children,men joke time dinner,all perpetrated by war criminals Colin Powell,Condi Rice,Dick Cheney,Boy George W. Bush,And Donny called in his markers” Rumsfeld,
      and got poison aspartame approved..
      a deadly “sweet poison” that attacks the body and especially the brain, as it turns into formaldehyde and poison ethyl alcohol once in the body..
      aspartame has already maimed and murdered 10’s of millions around the world,and is the main cause of Parkinson’s Disease in older people..

      from a French website and authority[in French, but translated into English]
      “it was amazing good luck indeed..
      ..everyone was in place for the drill when the attack began so all the authorities who were to be involved in the drill…the police..the EMT’s..medical personel and so on.. were already all in place and ready to go when the attack commenced,so we just flipped the planned drill to go live, and it[the drill/false flag] went as smoothly as one could have ever hoped for..amazing indeed!
      as the exact same thing transpired on 7/7 and 9-11,the Boston Hoaxathon, and Sandy Wagged the Hook..they even identified a crisis actor that had been ID’d at Sandy,Boston,Charlie Hebdo,and now the Paris non-attack,false flag..the very same crisis bitch at all 4 drills..she should be immediately arrested,tried, and hanged ,and this chit would finally begin to end,but as long as everyone who F’s up?they get promoted.. bonuses ..and allowed to set up phony donation websites!
      so they will continue”
      -everyone involved in this act of high treason[the drill going live] should go to prison for life or be hanged in the middle of downtown London,right in front of a Rothschild currency counterfeiting manufacturing facility,that loans phony fiat debt paper and digits to the English goyim Christians[ that btw.. refuse and are beyond repulsed to learn that Talmudic Juice Rabbi’s believe in their black, wicked and sickeningly,grotesque and twisted Satanic hearts,that having a nail sex with a 3 year old BABY, is a completely normal sexual attraction,and behavior,and is performed regularly by Talmudic Rabbi’s and other Talmudic juice,and is perfectly legal under Jooish Talmudic law..the Rabbi repeats this sickening insanity.. “a nail sex with a 3 year old baby is an act of true love of the child,and is harming no one,and should be[and is] perfectly legal and applauded in and about Israel[our best friend and ally till the end[coming soon as defined in Revelations..the end that is..
      then there is the despicable Luciferian Zionist filth that controls Israel and the U.S. of America,controlled with their phony debt currency and computer digits and central banks that are destroying the cycle of life, and therefore the world..
      American’s simply can’t figure out how our best buddy,BFF, and ally Israel[the juice who murdered 34 Americans sailors on the USS LIberty..that Israel]…is pulling the Rothschild power levers that keep the world at constant, never ending war,using young, ignorant American service military soldiers to fight their ME wars,over which phony paper they will call “the global reserve currency debt money” with usury tacked on,THAT IS NEVER CREATED! this equals unpayable debt, and a lifetime of economic and monetary slavery by the central banksters…
      as daddy Satan looks on in exorbitant,pounding pleasure as his minions David [Rockefeller],Lloyd [Blankfein] and Lord [Rothschild] the lord of the new world order,hell on earth,doing daddy’s earthly work..

      1. NewfyNew777 ….. It’s been quite the marketing campaign for bullion …. or more specifically, bullion based liquidity, which what’s needed and is totally in the hands of the marketplace in what must be a bottom-up market approach. We must not overlook that all prices, including bullion prices, operate in real-time now, so the rate of change in any shift or morphing becomes critical. These hoax-like circumstances create doubt and confusion which is ideal to temper the rate of change and keep the debt markets, including fiat currencies from crashing.

        A migration toward gold is not about replacing the current order but completing an incomplete “yin-yang” of liquidity where light comes out of darkness in the proper order of creation. Nothing new. We need some yang(asst liquidity) with the existing yin (debt based liquidity).

        God does not want us to perish, IMO. If people don’t take the carrot, however, God will send the stick. It’s very unfortunate.

  3. It is not that humans do not learn, it is that ADDICTS cannot learn, Addicts being those who worship/are-addicted/are-“depressed” whereas those who are aggressing are the ones who create Addicts.

    Like it, believe it, realise it, or not, ALL thinkers/humans are Dual-Natured and a human vacillates between his Feministic/Past or Machoistic/Futuristic Biases in order to elude Insanity, those who are fixed in their Bias being the Insane.

    NO, as in ZERO, human is born with Thought, but once a human has-had acquired Thought, he vacillates between “Aggression”/Discriminating-from-The-Future & “Depression”/Discriminating-from-The-Past in order to avoid being permanently Insane.

    1. Well, the IMF were addicts to aggressing. Now they are adjusting to unseen forces, notably those residing outside the Western bastions of influence.
      And if the IMF is not insane, they are at least adapting to change.

      So what if yuan expands it’s range,
      And IMF had a little change?
      All past indoctrination,
      Of dollar glamourization,
      Will finally leave the exchange.

    2. Vish –
      Don’t forget the enabler. The victim triangle needs three elements to hold itself in balance – a victim, a perpetrator and an enabler who vacillates between enabling the victim and the perpetrator.

  4. Listened to Bill Murphy on silver doctors. When companies’ are not allowed to go bankrupt, but still allowed to sell into the market (Glencore) it’s easy to work out the scam. Macy’s , Glencore they are all insolvent whence bad money destroys good. The fact that insolvent producers are supplying the market guarantees the destruction of capital ie the price of silver. Bill knows this why does’ he not just say it? Not being critical of Bill because I love his work but the problem is really , really obvious. Insolvent Gov, business, banks, , farmers the whole damn lot if they let one go..we’re in the dark ages’ in about a Day..

    1. Physical silver producers aren’t destroying the price of silver – corrupt paper price manipulation is. There’s a supply/demand deficit in both gold and silver that is getting closer to being resolved by market forces. That’s why the U.S. has intensified its manipulation of the metals on the Comex AND it’s why the U.S. trying to foment a global war.

      1. Dave nails it again. All the USG knows how to do is facilitate false information and news to keep their necks above water, to keep them from drowning. They are the ones that truly run our Country (the behind the scene 1%ers) ie. military industrial complex, JPM’s & Goldman Sachs of the world, Corporate POS’s from all walks of life and especially Pharmaceuticals.

        The USGovt. wants you to be distracted and NOT ask questions about the legitimacy of their doctored GDP, employment, CPI, retail sales and real estate lies they continue to spew out without the real Press questioning it’s authenticity.

        It just going to take a stray feather, to upset their finely balanced teeter-totter of lies and distortions to make one end come crashing down, with no real ability to do anything about it except print more worthless paper currency.

  5. No argument here Dave about manipulation, that is absolutely obvious but the real world manipulated prices still have to have supply from somewhere? Which is what I’ve heard Rory, Bill and a lot of guy’s ask, where are they getting the phyz to support these sham prices’ ? Not being disrespectful but just saying.

  6. Can’t remember if it was Andrew Mcguire or maybe Alasdair Mcleod, but somene said there might be truth in the rumour China was supplying cheap silver to the market to arbitrage better gold prices’ and kind of makes’ sense but this whole thing is really starting to pee off a lot of people. I suppose the important thing for people to remember is every ounce purchased takes capital away from these assholes.

    1. Heard Bill Holter say the same thing. The manipulation ends with the first failed delivery of gold to China according to Bill.

  7. 1) Retail – “You can’t get blood from a turnip.” Consumer tapped-out, at least until “Black Friday”. 🙂 BTW, isn’t that racist, or a “micro-agression”, or something? 🙂 There are a plenty of reasons for this. Here are just a few: a) Employment + Household Formation (or the lack of it). Just check “Not in Labor Force.” Millennials living w/ Mom&Dad due to fundamentals of low wage jobs + crushing student loan debt. b) Small & Medium Enterprises (SMEs, aka small businesses) – the (former) engine of job growth collapsing under the onerous burden of gov’t regs. (O’care/ACA, crazy local codes, tax burden, etc.). The current climate is pro big business & big gov’t. Everything else is getting slammed. Since zero-sum game, when public sector grows, private sector shrinks. Free markets please. c) Consumer has been enticed to re-leverage, when the correct action in 2008-9 was to seriously de-leverage. d) High taxes and inflation. Hey, just check the cost of higher ed and healthcare if you think there’s no inflation. Or just visit e) Let’s not forget ZIRP where savers/fixed income get nothing (0), while banksters get free money, and charge 12+% on your credit card. And the Fed wonders where asset bubbles come from? f) (As in TBTF) Expansion economic cycle is over. Stick a fork in it – as weak as it was. It’s done. Get ready for Contraction phase.

    “The Worst U.S. Economic Recovery In Modern Times (Or Ben And Janet’s Clusterfluff … With Bubbles!)”

    “This is the WORST economic recovery in modern times. The Great Recession ended in June 2009, but the US economy keeps on getting worse.”

    [Worst POTUS ever! Thanks Obama!] Hillary = Obama 3.0 🙁

    2) US RRE (aka housing). “Been there, done that.” Clearly in the late stages of Bubble 2.0. See the following article. Nothing more needs to be said. This will work out well, I’m sure. Both the stock market and housing have peaked at about the same time. Double whammy.

    “It’s déjà vu all over again.” – Yogi Berra

    “Those who cannot remember the past are condemned to repeat it,” – George Santayana

    10-28 A Housing Mega-Bubble No Doubt. It’s NOT DIFFERENT THIS TIME no matter how much we all want it to be.

    by Mark on October 29, 2015

    “Backing out the “unorthodox, unfundamental, incremental demand using unorthodox capital” that has driven the lion’s share of house price gains for the past four years, I look at what the fundamental, end-user, shelter buyer can afford using the typical down-payment, mortgage guidelines/terms, and mortgage rates of the period. That’s because at the end of the day, the typical, end-user, shelter buyer must be able to support the market once the unorthodox, transitory capital (institutions, buy to rent, flippers, high/biotech bubble workers, mortgage fraudsters, foreigners with strong foreign dollars, momentum chasers et al), exits the market, which it always does for some reason or another.”

    “House prices, based on “comparable sales” [“comps”], are always worth what the last few houses in the immediate area sold for. As such, when house prices achieve bubble status and sales volume peaks/ebbs – happening now — all that it takes is a narrow and shallow stream of a few dumb money buyers to keep the prices of thousands of houses bubbled out indefinitely. Then one day market suddenly runs out of dumb money buyers, which is the Wile E. Coyote moment.”

    Hey, I’m generally an optimist and so I’m sure this will work out well! 🙂

    “There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises

  8. The France episode will now give Grandma Yellen an “excuse” to call off the fraudulent interest hikes she was threatening of.

    See, see, if wasn’t for all these problems, our economy was going along just fine! It’s all their fault, they, they are responsible for economic problems, so we must keep low interest rates.

    1. So true. I posted something similar a few months ago on a Yahoo page:

      (Fill in the blank)

      “The economy was revving and we were all set to raise interest rates until ________ happened.”

  9. New York Fed chief declares housing economy solid
    The head of the New York Federal Reserve opened his speech at the Economic Club of New York with one caveat: He was not going to address the “normalization” of interest rates.

    Specifically, Dudley is referring to the Zero Interest Rate Policy that governs the cost financial institutions must pay to borrow money from the Federal Government.

    Dudley sits on the Federal Open Market Committee, which regularly meets to discuss moving away from ZIRP and the economic conditions necessary to do so without major upheavals in the financial markets.

    His vote, therefore, either ‘yea’ or ‘nay’ carries much weight.

    “Let me just say that my view will depend on how incoming data, broadly defined, influences my assessment of the prospects for further improvement in the U.S. labor market and my confidence that inflation will return to the FOMC’s 2% objective over the medium term,” he said.

    One sparkling item in the data is the recent performance of the nation’s housing sector, which Dudley declared is solid.

    “Household balance sheets do not appear over-extended,” Dudley added. “The household debt service burden is low, the household saving rate is not low relative to household net worth, and household credit growth has been slow.”
    “Housing fundamentals are solid as well. Decent payroll gains have supported household formation over the past year and mortgage rates remain low. Housing prices are rising and the constraint on growth in residential investment now appears to be more on the supply side, as building contractors struggle to mobilize the resources needed to construct more homes. The National Association of Home Builders’ index rose in October to the highest level since late 2005. While the housing indicators will likely continue to be volatile on a month-to-month basis, I expect the gradual improvement in the housing sector to continue.”
    Here is the summary of his remarks on housing, read the full speech by clicking here:

    1. No worries here…

      The Fed is always right. Unless of course they’re (always) wrong.

      “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.” – Ben Bernanke Mar. 28, 2007

  10. Dave – Any idea on what may happen to the epic real estate bubble in the SF Bay Area? It is getting really insane. Even if the prices drop by 50% it still is un-affordable to most people but it is getting ridiculously getting higher and higher.

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