Home price upswing: Seasonal or not?
Posted on September 29, 2009 at 2:25 pmWell, that depends on who’s dissecting the new Case-Shiller numbers: Hedge fund manager Tom Brown says the housing bears need a new excuse.
…[S]equential monthly improvement in the index usually deteriorates seasonally in July. This month, though, the change in the rate of change rose by 18 bps. So instead of a seasonally monthly slowing, we’re seeing month-on-month acceleration.
CNBC’s Diana Olick says the numbers are a lot closer to reality when they’re seasonally adjusted.
whether we’re in a housing boom or bust, home prices always rise in the spring/summer months, due to the type of buyer largely in the market. Families, i.e. move-up home buyers, looking to close and move over the summer so as not to disrupt school, dominate the market in the spring and summer.
They are, for the most part, buying larger, more expensive homes, and they therefore skew the median home price in their market higher. In the fall and winter, you tend to see more first-time buyers as well as more single buyers who want smaller, lower-priced homes.
Stephen Stanley of RBS says focusing on seasonality doesn’t matter too much; the improvements are simply a case of the market coming off the absolute bottom of early this year.
…[I]n retrospect, a rebound of some magnitude was likely as demand recovered from non-existent to merely weak.
Making the case for Synovus
Posted on September 23, 2009 at 7:13 amHedge fund manager Tom Brown says the parent of The Bank of Nashville is just his kind of stock, especially after the recent capital raise.
But the company’s outlook isn’t nearly as bleak as the market seems to think. In the runup to an equity offering last week (about more of which in a minute) the company made it pretty clear that it’s in the process of getting its credit issues under control, and that its underlying profitability is strong. In particular Synovus says that its ongoing program of aggressive problem loan disposition is on track, and that the run-rate on new non-performers continues to improve. Meanwhile, pre-tax, pre-credit cost earnings continue to rise.
Shares of Synovus (Ticker: SNV) have traded either side of $4 for most of the past two months.
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Keeping a little perspective
Posted on February 10, 2009 at 9:43 pmTom Brown doesn’t like the latest political fad of talking down the economy.
For the record, the recession so far isn’t even as bad as the one that occurred in 1981, let alone as bad as the Great Depression. Yet the President flatly states that unless Congress passes his vast stew of a bill, the country will enter a period of permanent economic decline.
And for those folks cavalierly tossing around the word ‘depression,’ here’s a stat: Unemployment in the United States was still at 15 percent in 1940.
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Unconventional banking wisdom
Posted on January 14, 2009 at 7:31 amGary Townsend says the Fed’s numbers show that, contrary to popular and political opinion, banks are in fact still lending money. Outstanding loan balances have grown in almost every category since the recession began in December 2007.
Also, the Fed’s recent Consumer Credit Report (January 8, 2009) suggests that commercial banks are taking market share from finance companies, savings institutions, and especially securitized asset pool, which continue to contract materially. Until confidence is restored, closed securitization market will inhibit improved residential mortgage and consumer credit availability.
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