Pomp And Circumstance – Dave Kranzler

by Dave Kranzler, Investment Research Dynamics The economy is starting to really fall out of bed. I know who someone who has been selling steel buildings for the last 12 months who told me that his company is 20% below its projected business plan this month. Both the NAR and the Census Bureau released their existing/new home sales reports for December. The NAR claims a small bounce in sales occurred during December. The Government would have us believe in a large bounce in new home sales. BOTH reports are heavily contradicted by supporting data reports (like mortgage purchase applications. I have not had time to thoroughly sift through those two reports or the most recent homebuilder earnings reports (DR Horton and Pulte). I’ll have a lot more to say on those matters sometime this weekend and IRD reiterates its “look out below” forecast. Today the NAR released its Pending Home Sales index for December and it showed an unexpected plunge of 3.7% (.5% gain was expected) from November. It was the second biggest monthly plunge since May 2010. Pending home sales (and note, the report is an “index” based on estimates from data samples) are based on contract signings. New homebuilders are experiencing roughly low-mid 20% in cancelled contracts. Surprisingly, despite the move higher in the Dow Jones Home Construction Index (DJUSHB) this week, several readers bought my homebuilder short reports. One of my short-sell picks is down over 24% since I published it on July 30th. This is despite the S&P 500 rising 2.6% in the same time period. At some point soon, I am going to update my current reports with the respective companies’ latest earnings and news. But I am also going to raise the price by $5 as I re-publish the updated reports (anyone who has already purchased the reports can email me for a complimentary copy of the updates).

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