Mish's Global Economic Trend Analysis |
- Australia Considers Paperless Passports Based on Fingerprints, Face Recognition, Eye Scans; We Know Who You Are!
- Tracking Manufacturing's Perpetual Overoptimism
- Housing Starts Plunge 11% to 7-Month Low: Single-Family Down 2.4%, Multi-Family Down 25%; Hidden Strength?
| Posted: 18 Nov 2015 03:18 PM PST Australia, New Zealand Consider Paperless Passports In the wake of fake passports and people smuggling in the EU refugee crisis, here's a potential solution from Australia: The Cloud Could Soon Let Aussies Travel Without a Passport. Australians could soon leave their old paper passports at home if a new proposal endorsed by Foreign Affairs Minister Julie Bishop goes ahead.We Know Who You Are! Link if video does not play: Scene from Goodfellas. Cloud Passports Coming Lost passports would become a thing of the past under a cloud system. But do you trust the government or the cloud as a safe-keeper of your personal data? Foreign Minister Julie Bishop admitted security standards would have to be met to store personal information in the cloud, but hopes the idea could go global. Absolute Security? Australians are assured of "Absolute Security" reports SBS News. The risk of impersonation via copy of facial features, fingerprints, and eye data seems remote, but a hacker who modified stored data could cause a traveler to be locked out of returning home. Total Tracking Most importantly, the government will know who you are, where you have been, when you were there, and how much you spent, etc., no matter where you are, once all tracking mechanisms are fully in place. Like it or not, it's pretty clear such systems are coming. Mike "Mish" Shedlock | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Tracking Manufacturing's Perpetual Overoptimism Posted: 18 Nov 2015 11:17 AM PST On Monday, the Fed regional reports kicked off with the Empire State report, a survey of manufacturing conditions in the general New York region. The survey asks manufacturers about activity, new orders, hiring, workweek hours, prices paid, prices received, inventory levels, and overall conditions. For details please see Empire State Manufacturing Negative Fourth Month, Work Week Lowest Since Mid-2011. The survey also asks manufacturers what they think general conditions will look like in six months. Here is the chart presented in the Empire State Survey. Current Business Conditions vs. Expected Conditions Six Month From Now  To see if there is any merit in tracking future projections, I downloaded the data, and shifted the projections ahead by six months to plot current conditions vs. what the manufacturers expected to happen. Current Business Conditions vs. Expected Business Conditions (For Now - Made Six Month Ago)  Perpetual Overoptimism The perpetual overoptimism is impossible to miss. Here are the readings for 2015.
In 167 months, nearly 14 years of data, there were only five months (just under 3% of the time) in which current conditions exceeded projections made six months previous!
Recession History The above pattern should not be hard to spot. Overoptimism only dies at or near recession troughs.  Useless Survey Projections It's amazing how much focus is on totally useless "expectations". Rare pessimism seems to mark bottoms, but the rest of the time the look-ahead projections are only good for those in need of a laugh. By the way, I expect another "Peak" line at the top of the above table sometime reasonably soon. Mike "Mish" Shedlock | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 18 Nov 2015 10:33 AM PST The crowing over last month's rise in multi-family starts is over (or at least it should be over). Here's a September recap, followed by this month's surprise to the downside.
Housing Starts Plunge 11% to 7-Month Low October wiped away all of September's good news and then some with an extremely weak 1.060 million (SAAR Seasonally Adjusted Annualized Rate) coupled with aggregate lower revisions to September data. 1.060 million starts was far below Econoday Consensus Estimate of 1.162 million SAAR and also well below the lowest estimate of 1.125 million. Pulled down by a big drop in multi-family homes, housing starts fell a steep 11.0 percent in October to a 1.060 million annualized rate that is far below Econoday's low estimate. Starts for multi-family homes, which spiked in September following a springtime jump in permits for this component, fell back 25 percent in the month to a 338,000 annualized rate. Single-family starts fell a much less severe 2.4 percent to 722,000.Hidden Strength? Bloomberg points out "important good news". Let's sort out the reality.
Temporary Setback Using similar analysis as Bloomberg, Reuters writer Lucia Mutikani says U.S. Housing Starts Hit Seven-Month Low; Setback Seen as Temporary. U.S. housing starts in October fell to a seven-month low, weighed down by a steep decline in the construction of multi-family homes, but a surge in building permits suggested the housing market remained on solid ground.Labor Shortage? If there is a shortfall in labor, how come it did not affect last month? I suppose one could say last month's surge caused this month's labor shortage, so let's investigate that idea in pictures. Pay particular attention to the third chart below that shows single-family construction below the average in the 1960s! Permits, Thousands of Units  Permits, Percent Change From Year Ago  Single Family Starts, Thousands of Units  Single Family Starts, Percent Change From Year Ago  Questions Am I alone in failure to see the "important good news" as well as the alleged "rapidly rising household formation, mostly driven by young adults leaving their parental homes."? Is Mutikani reading Bloomberg on permits, scripting the NAR on housing shortages and household formations, or did she arrive at those conclusions on her own? Women Not Leaving the Nest For another perspective on nesters not leaving the nest, please see Women Not Leaving the Nest in Record Numbers; Marriage and Kids, Who Can Afford Them? Mike "Mish" Shedlock |
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