Carpe Diem

Graphs and Chart of the Day

1. There’s a pretty strong consensus among economists and analysts that U.S. home prices bottomed in 2011 and have been gradually rising in 2012 as the housing market entered a new period of recovery this year. The chart above summarizes eight key home price indicators, which are all showing strong, positive increases in home prices (or asking prices) through either September or October on a year-over-year basis.   

 

2. Lumber prices (spot prices for framing lumber and CME lumber futures) continue on an upward trend since reaching a cyclical low in early 2009, and are now at their highest levels since 2006 (except for a brief spike in spot prices in early 2010, see chart above).  The rising prices for lumber could be related to the rebound in home building – housing starts reached a four-year high in October.  

 

3. For the second month in a row, Texas oil output surpassed 2 million barrels per day in September surging to the highest level of production since March 1988, more than 23 years ago (see chart above).  September’s output of Texas oil was 34% above a year ago, and oil output in the Lone Star State has almost doubled in just the last three years

 

4. Texas oil output for the month of September, at 2.05 million barrels per day, was just slightly lower than all of the oil imports from the Persian Gulf countries (Saudi Arabia, Iraq, Kuwait and Qatar) at 2.07 million. The last time Texas oil output matched Persian Gulf oil imports was back in 1996 (see chart).

8 thoughts on “Graphs and Chart of the Day

  1. There’s a pretty strong consensus among economists and analysts that…

    LOL…There was a pretty strong consensus among economists and analysts that the housing market was strong in 2005. There was a pretty strong consensus among economists and analysts that the damage from a declining market was contained in 2006. Yet the consensus was wrong. In fact, it was not a consensus at all as the majority of Austrian School economists were screaming about the housing bubble and the damage that the GSEs were doing. But they were ignored in favour of the ‘consensus’ that did not want to hear their opinion.

    3. For the second month in a row, Texas oil output surpassed 2 million barrels per day in September surging to the highest level of production since March 1988, more than 23 years ago (see chart above). September’s output of Texas oil was 34% above a year ago, and oil output in the Lone Star State has almost doubled in just the last three years.

    What is lost is the point that Texas was producing around 3.5 mbpd in 1970. It took a huge amount of capital investment to get Texas production to increase but the problem is that the wells that are being drilled cannot generate enough cash flow to pay for their drilling costs.

    Get back to us when you have actually looked at the funding gaps, negative cash flows, and massive debt explosions before you try to project an unsustainable trend into the future.

    • “In fact, it was not a consensus at all as the majority of Austrian School economists were screaming about the housing bubble and the damage that the GSEs were doing”

      What utter rubbish!! Is that how you try to make yourself sound intelligent? Tell us what “Austrian School Economists” were “screaming about” the GSEs.

      Maybe they were Pomeranians instead! :)

      • What utter rubbish!! Is that how you try to make yourself sound intelligent? Tell us what “Austrian School Economists” were “screaming about” the GSEs.

        Maybe they were Pomeranians instead! :)

        The people that you would be most familiar with are Faber, Schiff, and Dr. Paul. All explained how the ABC Theory could be used to show that the Fed’s loose money policies were creating a housing bubble. But anyone who was paying attention to Walter Block, Mark Thorton, Frank Shostak, Lew Rockwell, Thomas Woods, and many others, is familiar with the fact that the Austrian School Economists saw it coming.

        http://mises.org/daily/1463

        http://www.lewrockwell.com/thornton/thornton11.html

        http://www.mises.org/daily/1533

        http://www.mises.org/freemarket_detail.aspx?control=450

        http://mises.org/daily/1177

        There are many other examples. Compare that to the ‘analysis’ from the Fed, which could see no bubble.

        http://papers.ssrn.com/sol3/papers.cfm?abstract_id=634265

        Compare the Fed’s cheerleading to someone who actually understands ABC Theory and can use it to predict what will happen.

        • All these theories would make sense if:

          1) The GSE’s market share had not already plummeted, and was supplanted by subprime. In fact, had this NOT happened in this time frame, and the SEC hadn’t given its blessing to 40 to 1 leverage, the 2005-2007 spike- which the radioactive part of the housing bubble as evidenced by both Case Schiller and the Moody’s Commercial Property Price Index- the market would have corrected itself.

          2) The “Austrians” still can’t explain (or some of them do but they don’t apply it to commercial real estate) that Fed policy didn’t just affect residential real estate. Once again: and I will type this slowly so everyone can understand: that means the GSEs are off the hook on the bubble to a large extent.

          No one puts a gun to anyone’s head to buy a home. These are the free markets you claim to want. If the GSEs didn’t exist, SOME ENTITY would be there to buy and securitize the paper. Greenspan’s Randian attitude about markets, about the banks, and regulation itself did more than anything Fannie and Freddie did to create the pump and dump market.

          • All these theories would make sense if:…</b.

            Ahhhh, I notice that the pea has been moved yet again. You were skeptical of the claim that the Austrian School had predicted the bubble and explained why it would pop. You were given evidence that the claims were made and that the housing bubble did burst. And history has shown that the GSEs cost the taxpayer around $140 billion and counting. Now you can come up with any narrative that you want and misrepresent selective data in any way you choose. But since you and the people you seem to pay attention to failed to see the problem coming I would argue that you have no idea what it is that you are talking about.

      • Of course we are near peak oil. The production of light sweet peaked more than half a decade ago. While a huge amount of money has been thrown into unconventional sources the results have been poor because the increased levels of production are not economic. If you look at the journals you see water cut rates exploding and very little in the way of extra production even though capital investment is exploding. Maugeri is not a very credible voice because he has ignored the data in the past and remains unwilling to discuss the real issues. He was one of the voices backing CERA and the EIA during the depletion debate. When the dust settled the critics were right as the depletion rate was found to be 50% higher than the stated depletion prior to the investigation.

        We have been saved from seeing exploding prices by a weak real economy that has caused production to fall, not a new sustained source of production. And while I invest in Iraq and West Africa I am under no illusion that the political regimes are going to permit much in the way of production without trying to steal billions from investors. That will cause a significant problem going forward that cannot be resolved by wishing and hoping.

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