- Commentary -

November 19, 2009 (FinancialWire) (By Philip Holmes) — A sharp drop in housing starts led the market down on Wednesday. Homebuilders like DR Horton (NYSE: DHI) and Hovnanian (NYSE: HOV) somehow gained (?!?) and BusinessWeek tells us the drop was a big shock.

According to the Commerce Department, new housing starts plunged 10.6% in October versus September, and were down 30.7% year-over-year. This came as shocking news to analysts, but it’s that reaction that should have reasonable people scratching their heads.

BusinessWeek’s Phil Mintz, “The numbers reflect builder uncertainty about the fate of the first-time homebuyer tax credit, which had buoyed the housing market and was due to expire at the end of November.” Really? Or do they reflect builder anxiety about homebuyers’ full stop. After all, employment down, lending down, consumer anxiety up usually isn’t a great formula for homebuilders, right? You don’t need a tax credit if you’re not making money, after all.

BW said that October housing starts had been expected to rise according to a Bloomberg survey of economists.

Well, that tells us all we need to know right there. Economists! That same group who somehow missed the biggest housing bubble in history as it was reaching such gargantuan proportions that it was blotting out views of Saturn and Uranus. Wouldn’t you know it, they expected housing starts in the middle of a “jobless recovery” – and because of a tax credit. Sure, let’s all get ourselves into hundreds of thousands in new debt to save $2,000 at tax season. Makes sense.

[Go to http://www.financialwire.net/?s=philip+holmes to see more commentaries by Philip Holmes.]

The FirstAlert(tm) Economics Calendar lists Initial Jobless Claims (8:30 a.m.), Leading Indicators Index for October (10 a.m.), Philadelphia Fed Index for November (10 a.m.), Treasury announces 2, 5, 7-year note auctions (11 a.m.), Treasury Budget Statement for October (2 p.m.).

The FirstAlert(tm) Events Calendar showcases ASML at Morgan Stanley TMT Conference; CLI at NYU Capital Markets in Real Estate Conference; ERF Investor Presentation; ETH Investor Conference; HPY, AXP, MA, WXS at Janney Montgomery Electronic Scott Payments Summit; IBM at JMP Securities Cloud Computing Conference; MDRX, EVVV at Citi Healthcare Conference; MHS at Sanford C. Bernstein & Biosimilars Conference; NED, COGO, ATV, CBAK at Brean Murray, Carret & Co., Inc China Growth Conference; POWI at Sidoti & Company New York Emerging Growth Institutional Investor Forum; PSE at RBC Energy Conference; RPBC, GIGA, CWST, AWK at Wall Street Analyst Forum; SLF Investor Day; SNDK, OMX, TOL, ATHN at Citi Small/Mid Cap Conference; URS, ES, BKR, FWLT at Keybanc Capital Markets Engineering & Construction Conference; WAG, CAKE, ADM, BJ at Morgan Stanley Global Consumer & Retail Conference; XTEX, XTXI, LINR, PVR at RBC Capital Markets MLP Conference.

FirstAlert(tm) Website of the Day: http://www.greenisuniversal.com

Quote of the Day: “There exists no politician in India daring enough to attempt to explain to the masses that cows can be eaten.” Indira Gandhi

Today is: Flag Day in Brazil, Liberation Da in Mali, Great American Smokeout.

Happy Birthday: George Rogers Clark, Solomon Foot, James A. Garfield, Billy Sunday, Tommy Dorsey, Indira Gandhi, Alan Young, Roy Campanella, Larry King, Dick Cavett, Ted Turner, Calvin Klein, Robert Beltran, Ann Curry, Meg Ryan, Jodie Foster, McCaughey septuplets.

Today in History: Christopher Columbus went ashore in 1493 on San Juan Bautista (later renamed Puerto Rico). The second Canadian railway line, the Montreal and Lachine Railway, was opened in 1847. American Civil War: Union President Abraham Lincoln delivered the Gettysburg Address in 1863 at the military cemetery dedication ceremony in Gettysburg, Pennsylvania. Sammy Davis, Jr., lost his left eye in 1954 in an automobile accident in San Bernardino, California. Rocky and His Friends premiered on ABC in 1959. Ford Motor Company announced in 1959 the discontinuation of the unpopular Edsel. Apollo 12 astronauts Charles Conrad and Alan Bean landed in 1969 at Oceanus Procellarum and become the third and fourth humans to walk on the Moon. Egyptian President Anwar Sadat became in 1977 the first Arab leader to officially visit Israel. In Geneva, US President Ronald Reagan and Soviet Union leader Mikhail Gorbachev met for the first time in 1985.

[FirstAlert(tm) was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend.]

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation for its news, opinions or distributions. Further disclosure is at the FinancialWire(tm) web site  (http://www.financialwire.net/disclosures.php). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

Free annual reports for companies mentioned in the news are available through the Free Annual Reports Service (http://investrend.ar.wilink.com/?level=279).

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.