Q1 2014 GDP - +.1%

[JohnyMac]

Well now, a few comments on the news that USofA's GDP grew a whopp'en .1% in Q1 of this year.

Let's take the information reported by the Government as accurate. Many as I do think the number is actually in the negative numbers; However lets use that number. A positive .1% GDP growth means that our economy has stalled. It will be interesting to see what Q2 brings us. I suspect +/- .5%.

As hard as I look I can not find a number for Q1, 2014 for house sales to verify what I have heard. What I have heard was house sales were down 5% nation wide, in the first quarter of this year.

I also heard (can't verify), that mortgage refinancing is up but new home mortgage's are down. Maybe Wellie can comment to the housing market in Q1, 2014.

Jobless unemployment rate jumped for the third week in a row. 

I was at a work fair yesterday that was put on my the drilling industry. When I was there (looking for a job I might add) there was approximately 300 vehicles in the parking lot, one hour after the fair had opened. The venue was packed! You could hardly move and for the most part, you could not approach the tables of companies hiring.

When I left about one hour after I arrived, I asked the lady at the receptionist desk what was the body count so far. She laughed and told me that she has never seen so many people at a job hiring fair. I asked her if there had been 1,000 people through as yet and she said, "double that number at least." Upon arriving back to my truck, I did a quick estimate of vehicles in the parking lot and my WAG (Wild Ass Guess) showed that the number of vehicles really hadn't changed from 300. 

Is this the year we see the collapse?
How secure do you feel in your job? Industry?



 

[Burt Gummer]

Blue Collar here.
My boss told yesterday that I'm being counted on as one of the senior guys, then he went home to get some extra sleep....
I take that as a IDGF sign, and so stable.

But we're talking Fiscal BS here, which is dependent on public perception of the money.

[JohnyMac]

Yup you are right Burt, "But we're talking Fiscal BS here, which is dependent on public perception of the money".

On another note, I just heard on Fox Family & Friends that if the ACA hadn't happened in Q1 and people were forced to buy health insurance, GDP would have been negative.

Oh...Here is an article about it....http://finance.yahoo.com/news/obamacare-boosted-health-care-spending-193300641.html

[Burt Gummer]

GDP is such a flawed gauge of an economy, Whole nations simply build things that nobody wants then just lets them deteriorate, all in order to show off their "better then thou" number off to the rest of the world.
Right now the world economy is hooked on our monopoly money,Main lining that easy credit in unworthy economical areas creating the high "Boom" and then picking away at the corpses of those areas during the shakes "Bust". Only the highs are steadily becoming shorter and it can't last.
Therefore they put out the economic reality TV show called the news, so we waste our time watching it.

Not trying to be a dick...

[JohnyMac]

So Burt, are you saying the economy is good?

[Burt Gummer]

"The Economy" is that complex system of exchanges that determines value and prices on goods and services.
A "Good/Strong" economy is one where in I can buy something from you uninhibited. for what you and I deem is the correct price.
A "Bad/Weak" economy is where I receive less for more at a cost that benefits an other.

[Well-Prepared Witch]

Home sales were down in March (April data should come out later this month).
http://www.census.gov/construction/nrs/pdf/newressales.pdf
http://www.realtor.org/news-releases/2014/04/existing-home-sales-remain-soft-in-march

Please note, though, that although it's well worth considering this information, a few things need to be kept in mind.  1. The mortgage/housing industry is traditionally slow from November to March - it's cold out there and a lot of folks don't want to move in the winter.  2. We had a *really* bad winter all over the country this year.  Extended severe weather has been shown to depress economic activity. 3. Pending home sales (where a house has a signed sales contract) rose by 3.4%. 

http://www.reuters.com/article/2014/04/28/us-usa-economy-housing-idUSBREA3L0WT20140428

Keep an eye on the numbers, but one month or quarter does not a year make.  We'll see - I'm not enthused about the rate of mortgage applications, but neither do I see Yellen & the Fed increasing rates any time soon, which would really tank refi applications and significantly impact purchase applications. From a personal standpoint, my company looked about ready to fold until last month when new clients came on board.  Now we're crazy busy.  Not sure what, if anything, that says about our industry, but it's something to think about.

[JohnyMac]

Thank you Wellie for the info 

Our house is for sale in Rhode Island. We have had two showing's since last July. What is killing our sale is that FEMA will not "grandfather in" flood insurance anymore.

What that means is if you have a waterfront piece of property your yearly flood insurance is X but when you sell your house the new owner will pay 10X what you currently pay. In our case $3,300- a year for MrsMac and I now  but once the house sells FEMA flood insurance will go to $33,000- a year for the new buyer. Of course if they have cash and will not be seeking a mortgage no worries; However, those customers are far and in-between.

Our broker told me that there was some relief just passed by the US Congress and signed by President Obama in that regard but he doesn't know at the moment what it all entails.

With that all said, there are more waterfront homes in Rhode Island by per capita than any other state in the country. So RI residential home sales are weak to say the least.

Up at the cabin MrsMac and I went to a Easter eve diner at a friend of ours who happens to be a real estate broker. She told me that sales are fine for low and high price houses but totally in the dumps for middle of the road homes. She went on to say that the past rolling 12 months (2013 - 2014) overall has been comparable to 2009 - Crappy!

Well lets stay tuned to what is coming down the pike as I don't think it is good.

Thanks again Wellie!   

[Well-Prepared Witch]

Just a little more info that I thought was interesting and pertinent.

Fannie, Freddie post $10.2 billion in profits for 1st quarter
http://www.washingtonpost.com/business/economy/fannie-freddie-post-102-billion-in-profits-for-1st-quarter/2014/05/08/4fc2de06-d6bb-11e3-8a78-8fe50322a72c_story.html

“Our recent level of earnings is not sustainable,” Donald Layton, Freddie’s chief executive, said in a call with reporters Thursday morning.

Fannie Mae, which has been profitable for nine quarters in a row, reported income of $5.3 billion, with $4.1 billion of it from legal settlements in the quarter. Its smaller rival Freddie, which has been profitable for 10 consecutive quarters, announced of a profit of $4.5 billion and attributed $3.4 billion of that to legal settlements.

[JohnyMac]

Interesting. I wonder why they chose now to clean up their books.