{"id":441,"date":"2010-06-16T11:58:00","date_gmt":"2010-06-16T15:58:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=441"},"modified":"2018-08-18T17:48:06","modified_gmt":"2018-08-18T21:48:06","slug":"land-vs-machine","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/06\/16\/land-vs-machine\/","title":{"rendered":"Land vs. machine"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Conflicting economic data have been released today.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">On one hand, we have U.S. Commerce Department data showing that housing starts in May fell 10% to a 593,000 annual rate.\u00a0 This figure compares to an expected rate of 648,000.\u00a0 Clearly this is a big miss relative to expectations.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">On the other hand, we have Federal Reserve industrial production data showing an expansion of 1.2% in May.\u00a0 This compares to April&#8217;s expansion of 0.7%.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">So which data should you focus on?<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Analysis:<\/strong> I feel that overwhelmingly the more important of the two figures, industrial production is the more important.\u00a0 Why?\u00a0 Primarily because heading into the recession everyone and their sister-in-law knew that real estate was massively, massively, massively, massively overbuilt.\u00a0 All of that excess inventory, without <span class=\"goog-spellcheck-word\">eeeeeeasy<\/span> money (mortgages)\u00a0to support it was going to take a long time to be worked through.\u00a0 Despite a an economic depression in real estate for the last two years and big declines in the prices of homes, there still remains a glut of houses.\u00a0 So understandably housing starts are still not doing that well.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Anyone expecting real estate to lead the way into economic expansion is, quite frankly, smoking something.\u00a0 So I am largely unconcerned by the housing starts number.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">By contrast, industrial production long lagged the rest of the economy and now is one of the leaders.\u00a0 This is understandable, too.\u00a0 After all, industry had its depression for a goodly portion of the last two decades.\u00a0 Now there are manufacturing efficiencies\u00a0in U.S. factories that were not present before.\u00a0 So it&#8217;s to be expected that industry would be one of the economic sectors leading us out of a recession.\u00a0 Real estate ought to be the last industry to recover exiting this recession.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Importance grade:<\/strong> 4; neither set of data are particularly important in my opinion.\u00a0 Most important remains consumer confidence.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Conflicting economic data have been released today. On one hand, we have U.S. Commerce Department data showing that housing starts in May fell 10% to a 593,000 annual rate.\u00a0 This figure compares to an expected rate of 648,000.\u00a0 Clearly this is a big miss relative to expectations. On the other hand, we have Federal Reserve [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-441","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=441"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/441\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}