| Here We Go Again - Builders Hold Lotteries for Right to Buy a House Posted: 30 Apr 2013 01:00 PM PDT Here's that "froth" thing again: Builders hold lotteries for eager new homebuyers. O'Brien Homes started holding a monthly housing lottery for its 228-unit development called Fusion in Sunnyvale, Calf., after seeing throngs of prospective buyers camp out at the openings of other new condo complexes in the area.
Each month, as new sections of the development came under construction, roughly 50 buyers would show up at O'Brien Homes' sales office hoping to be picked for one of the 10 or so sites available. The participants were already pre-qualified for a mortgage and had their down payment in place. After being assigned a number, they crossed their fingers and waited for each bingo ball to be plucked from the tumbler.
"Some people would come back month after month," said Frimel. "It got very frustrating for them."
Adding to that frustration was that home prices rose virtually every time a new group of homes went on sale. The two-, three- and four-bedroom homes started out between $420,000 and $620,000. The last grouping went for $555,000 to $815,000, a 32% increase.
Even with the price hikes, buyers kept returning. O'Brien started issuing returnees an extra bingo ball. If they lost for four straight months, they would get five chances the next time. Here's my Greenspan imitation: "Don't worry, it's only some sections of the country. Besides it's well supported by the fundamentals. And as we all know, home prices never drop." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| 33 Months of Falling Retail Sales in Spain; Austerity the Wrong Way Posted: 30 Apr 2013 10:21 AM PDT Guru's blog in Spanish highlights the dramatic retail spending situation in Spain. Here is a Mish-modified translation. Last month I discussed the retail drama in Spain.
March data is more of the same. Sales have fallen 33 consecutive months coupled with 56 months of job destruction.
This month overall sales fell by 10.9%. Accounting for seasonal effects, sales are down 8.9%. Single location business sales fell 14.1% (10.9% accounting for seasonal effects). Small business sales are down 12.7% (9.2% seasonally adjusted).
Spain is in a national emergency with no consumer spending, no credit, and no job creation, coupled with strongly rising unemployment. Austerity the Wrong Way This is what happens when you implement austerity the wrong way, by raising taxes instead of cutting needless bureaucrats. Addendum: Couple of typos were corrected by reader Bran. Here are the revised sentences: " Single location business sales fell 14.1% (10.9% accounting for seasonal effects). Small business sales are down 12.7% (9.2% seasonally adjusted)." The percentages did not change but I had the word "spending" instead of "sales". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Is the US Spending Enough on Education? Posted: 30 Apr 2013 12:33 AM PDT Given the constant chatter from the Obama administration and from teachers' unions on the need to spend more for public education, let's address the question "Is the US spending enough on education?" I propose we look at the stats in graphical form starting with charts of population and total spending, culminating with education spending per child. click on any chart for sharper image 1. Population vs Civilian Employees  Data is from the US Census Bureau Population Clock 2. Budget Per Civilian Employee  Data is from White House OMB Historical Tables 3. US Population and Children Population  Data is from Childstats.Gov and the US Census Bureau Population Clock 4. Education Spending in Constant Dollars  Data is from National Center for Education Statistics The above charts are from reader Tim Wallace who writes ... Hello Mish
Last week I saw a comment on one of your blogs regarding there would soon be one non-worker for every worker in the country. Here are some charts I put together that highlight the current trends.
1. Total Population vs. Civilian Workers - Ratio Right Axis -- This is a chart of our country's population by year, with the number of people employed in March of that year, starting in 1950. You can see that there is a significant growth in the ratio of people to workers early on, up until the mid 1960's. This is mostly because of an explosion in the number of children in the USA in that time period, starting at 47.3 million in 1950 and surging to 69.7 million in 1964. The child population then flat lined for several years, decreasing as a percentage of the overall population. The ratio since the 1980's mostly seems to be affected by recessions periods with increases in the early '90's and '00's. There has been a slight drop in the ratio the past two years, but nowhere near the number necessary to return us to the levels of the alleged "balanced budget" time period in the late '90's.
2. Budget Per Civilian Employed In Constant 2009/2010 Dollars -- This chart shows the federal budget divided by the number of people employed, how many dollars it ends up being per person employed. Obviously a lot of tax dollars come from other sources, but it is still illuminating to see the huge increases under the current administration on a per worker basis. From $20,000 per worker in 2007 to around $28,000 now, an increase of $8,000 per, or about 40%. I don't recall getting a raise that large. Yet somehow we cannot afford a measly 2-3% budget cut.
3. US Total Population and Children Population - Pct. Right Axis -- The chart shows children as a percentage of the population plummeting from 1964 - where they peaked at over 36% to today where they are just 24% of the population. The number of children in '64 was about 69.7 million, today up to 76.7 million, a growth of 7 million while the overall population grew 123.7 million! The real problem here is that a growing economy is always dependent on the growth of the upcoming population. We are in deep trouble here.
4. Number of Children and Per Child Spending On Education in Constant 2009-10 Dollars -- I cannot understand how this spending, so absurdly high, is continually pointed out as too little to spend on education! In constant dollars we are spending 7 times the amount on education as the 1950's - the generation of students that put the man on the moon, invented computers, the list goes on and on. At 1/7th the cost!
Hope these are informative.
Tim Where Did the Money Go? Where the money went should be intuitively obvious: Teachers' salaries, teachers' pensions, administration salaries, administration pensions, sports programs, sports staff, union maintenance crews, etc. Please keep these charts in mind the next time someone says we need higher taxes " for the kids". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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