Landmark Links September 29th – Mark Up


Lead Story… Short on time this week so I didn’t have a chance to write a lead story.  However, I want to share the housing chart series from the Daily Shot which was fascinating this week and tells the story of aging housing stock and high prices beginning to have a detrimental impact on sales:

1. Let’s begin with the housing market. New home sales were weaker than expected in August, hitting the lowest level of the year. A portion of the decline was due to Hurricane Harvey, which flooded the Houston metropolitan area in the final days of the month.

The pricier homes saw the greatest slowdown.


The supply of unsold homes (measured in terms of months needed to clear the inventory) jumped to the highest level since 2014.

2. A slower rate of household formation this year has been a headwind for home sales.

Source: Piper Jaffray & Co.

Will household formation improve as young adults move out of their parents’ homes?

Source: Goldman Sachs, @joshdigga

3. New residential construction remains tepid. As a result, American homes are aging quickly, boosting the home renovation industry.

Source: Goldman Sachs, @joshdigga

By the way, the above trend, combined with all the hurricane damage, has pushed Home Depot shares higher.

4. Home prices are still climbing by almost 6% per year. Here is the national Case Shiller index showing housing inflation gradually rising.

Housing markets in some metropolitan areas have overheated. For example, below is Seattle’s real estate index rising at 13.4% per year. Of course, folks from Vancouver probably think that Seattle homes are still cheap.

5. Household mortgage leverage (the ratio of mortgage debt to disposable income) is drifting lower. Note that this chart does not include consumer debt such as student loans and credit cards.


Pinch Point: The Trump Administration’s proposals on tax reform are unlikely to happen.  Why? Because 52 Republican Members of the House who represent districts in blue states are unlikely to accept elimination of the ability to deduct state income tax payments.

Squeeze: Citigroup thinks that we are more likely to see an oil supply squeeze in the coming months than a flood of additional supply from OPEC.

Supply, Not Demand: A new paper finds that the declining male workforce participation rate is due to an increasing number of men getting disability benefits, not a weak labor market.


Ghost Town: Elmira, NY could be ground zero of the brick and mortar retail apocalypse.  Here’s why.


Money for Nothing? Lennar is trying to entice Millennial buyers by offering to make a payment to a buyer’s student loans of as much as 3% of the home purchase price, up to $13,000.

Out of Balance: The US housing market is unhealthy and increasingly mismatched with today’s buyers with little entry level product and inventory at mid-1990s levels despite population growth of more than 60 million since then.  See Also: Home prices pick up despite fewer sales.

Invasion: Flippers are swarming Houston looking to buy flooded homes on the cheap and renovate them for a profit.


When History Repeats: How the history of Sears – which started out as a mail order business and grew into brick and mortar retail – predicts nearly everything that Amazon is doing today.

Say What? Crypto fund king Mike Novogratz is starting at $500MM hedge fund to invest in cryptocurrencies yet claims that Bitcoin will be the biggest bubble ever.

You Don’t Say…: Early data indicates that cannabis legalization could be a boom for McDonalds and Taco Bell.


We’re Going to Need a Bigger Toilet: An Alberta town’s waterways are being invaded by giant mutant goldfish that reproduced and grew after people flushed some of the unwanted pets down their toilets.

Working Out Different Muscles: A recent UK study found that Britons spend twice as much time on the toilet as they do working out.  (h/t Steve Sims)

Video of the Week:  Watch a gopher mascot absolutely truck a child in a halftime football game and then put on a somewhat horrifying end zone celebration.  Also, it gave me an excuse to post this video of mascots destroying kids which I consider one of the 10 best Youtube clips of all time.

Gotta Hear Both Sides: A swinger’s party in Michigan ended when a jealous wife who attended the party with her husband attacked him with a mini-van.  Perhaps it’s just me but I never envisioned people going to swinger parties in minivans.  To each their own, I guess.

Measured Response: A woman had an affair with her daughters husband, then tried to run him over with her car after he came clean about the cheating because, Florida.

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