The Great Redoubt: Case-Shiller HPI

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Showing posts with label Case-Shiller HPI. Show all posts

Tuesday, December 28, 2010

French GDP, Swiss Consumption, and the Case-Shiller HPI

Leaving Japan behind, we cast our eyes westward towards Europe and the United States. France reported its final revision for Q3 GDP, showing that it softened slightly in the third quarter (growing only 0.3%), with year over year growth remaining unchanged at 1.7%. UBS released its (Swiss) Consumption Index, showing growth in consumer spending decreasing 9 bps from October's 1.72% to November's 1.63%.

Also from Europe, Yves Mersch is now on record as saying that "the recent European proposals for reform of the economic governance of the euro area go in the right direction, but are not ambitious enough to ensure a healthy and efficient functioning of monetary union." He would like to see faster responses to excessive deficits, with automatic sanctions applied early. And why should anyone care what Yves Mersch says? Because he's on the Governing council of the European Central Bank, making him a voice that will be heard as debate about the future of the euro and the European Union continues.

Arriving in the howling arctic wastes that were once the eastern seaboard of the United States of America, the S&P/Case-Shiller Home Price Index is out. The 10-City Composite increased (barely) 0.2% while the 20-City Composite fell 0.8%, and home prices fell in all 20 metropolitan areas covered by the index.

Also in US news, the winter of our (fiscal) discontent is not made glorious summer by this son of Chicago. Not only do we not have a 2011 federal budget[1], now it has been announced that delivery of a FY 2012 budget will be delayed until around February 21. Mostly because the confirmation of the President's budget director wasn't finalized until November 18, and it takes a while to put a budget together.

Next up? Consumer confidence, in about half an hour.

[1] Blame for that can go to the Congress, though.

Tuesday, November 30, 2010

S&P Case-Shiller HPI

After the revelations of the DPRK's mad plan to breed an army of giant radioactive mushroom men to conquer the free world [1], the S&P Case-Shiller HPI will be both slightly boring and a welcome return to humdrum sanity.

The S&P Case-Shiller Home Price Indices are, of course, a series of indices tracking changes in home prices nationally (the US National Index), in a 20-city region (the 20-city composite index), a 10-city region (the 10-city composite index), and then twenty individual metro area indices. It is normalized to have a value of 100 in Q1 2000. Data is released with a two month lag.

While the Street is interested this index, most analysts don't really spend any time trying to predict the results. Still, they like to see rising home values because this tends to spur new home construction. And, as we know, new home construction spurs GDP-enhancing economic activity. Also, since the single most valuable investment most everyone in the US has is their home, improving home values are seen as a signal of increasing personal wealth.

Speaking of results, you can read the press release right here. The highlights are:
* The US National Index has declined 2.0% from Q2 to Q3 2010, and is down 1.5% from Q3 2009 to Q3 2010, with the Q3 2010 level coming in at 135.48.
*The Composite-20 index is down 0.7% from August to September, but is up 0.6% from September 2009 to September 2010. The Level comes in at 147.49.
* The Composite-10 is down 0.5% from August to September, but is up 1.6% from September 2009 to September 2010. The Level comes in at 161.25.

Obviously, the results really aren't that good. Sure, the Composite-20 and Composite-10 look good, but almost all of the positive numbers come out of California. Everywhere else is either barely improving (Boston) or is watching their home values hurl themselves from a cliff like a mob of lemmings [2]. It is possible that some market analysts will declare the results positive (off the strength of the Composite-20 and Composite-10), but those analysts will most likely reside in California.

[1] You have to read between the lines, but why else would the DPRK announce both a uranium enrichment plant and new mushroom cultivation technologies on the same day?
[2] A mob of lemmings stampeded towards a cliff by filmmakers from the Walt Disney Corporation, that is. Lemmings don't actually hurl themselves from cliffs as a general rule. They have to be very depressed first.