Tuesday, June 21, 2011
Existing Home Sales
FOMC meeting begins today and ends tomorrow. Very little movement on treasury yields over the last few days. Every time I look at this year's progression on the 3/5 years I feel dizzy.
The really bad economic news today is that predictions for the monsoon in India, which was supposed to have been good this year, have now been revised to below normal. Even the negative revision calls for near-normal precipitation, so the effect may not be that great. But you hate to see negative revisions this close to the crucial weeks with the predicted pressure on global food supplies still very high.
Looking at Chinese stats for building prices, it does seem as if their property bubble is over. In particular I am basing that on second-hand sales, which are averaging too far below the inflation rate not to cause caution for lenders. In many cities the YoY sales price gains of newly constructed residential buildings are now below the inflation rate YoY, and once that sort of percolates through the system demand will fall to the number of people who want to buy to live in a home.