Fundamentals 9/20: Housing Starts Down, FOMC Preview

Housing Starts
– August Housing Starts were 571,000.
– Previous was 604,000. Consensus was 592,000.
– This is down 5% and a 3-month low.
– Permits were 620,000.
– Previous was 597,000. Consensus was 590,000.
– Full report
– 1,500,000 Housing Starts are required to house the increasing population. Housing Starts well below that have been commonplace since the bubble burst. We produced excess in driving that bubble and sold them to people who could not make the payments.

FOMC
The FOMC meets today and tomorrow (with policy announcement tomorrow 2:15 pm ET) and although it is faced with a near recession and a Presedent who wants to increase taxes despite near zero GDP growth, the fact is that their attention will be turned to supporting banks in Europe and the U.S. when the inevitable debt default occurs. The public simply is not aware of what the Fed does, and the media and politicians do a horrible job of explaining what the Fed does and the objectives of, for example, Eurozone liquidity intervention. The public is still unaware that the liquidity interventions post-Lehman were what saved the American economy from much larger disaster.