In its schizophrenic manner, the media lamented the ugly housing-starts number. But for the market to heal, that number should be near zero. In Japan, 20 years after the housing bubble burst, land prices are still declining, and even the Yakuza, who’re heavily invested in the construction trade, are complaining.
The economy is going back to hell, but stock markets are surging. Nothing new. It always ends in tears. But this time, the Fed’s money-printing strategy will make things only worse. Today’s horrid numbers show us why.
Fannie Mae—you already forgot all about it, didn’t you?—well, it just reared its ugly head again with its Q2 earnings report. Here is the most important number:
$5.1 billion in new bailout money from the U.S. Treasury—the eleventh quarter in a row it has received bailout money. That brings the total bailout money it received so far to $104.8 billion, with no end in sight.
Everyone and his dog reported the numbers on housing starts—up 14.6% to a seasonally adjusted annual rate of 629,000, the highest since January, plus or minus 10%. So that’s good, right?