February Mortgages

The INE has released February Spanish residential mortgage numbers. They are best described as 'stagnant'. 12-month averages of the three series - number of mortgages, total loaned and average loaned - are very slightly positive in the first two cases and very slightly negative in the last.

Of general interest to those wishing to find some indication of the fate of housing prices from these statistics, it is worth noting that the average amount loaned is currently at 78% of cycle peaks, whilst the number of mortgages is at 38% and total loaned at 48%. Taking it is as a given that few are the cases in which more than 80% of assessed value is loaned the 22% drop in the average loaned leads us to believe that reports of the limited effect on prices from the serious downturn attested to by the other two measures are not far off the mark.

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Contagion (Part 3)

Still searching for market reactions to compare with the howl rising from some sectors of the blog-o-sphere in response to the Greek mess, we've compared our own very simple measure of weekly price volatility against its own 4-year average, for a variety of markets.

Could it possibly be that, after two years of predicting all manner of apocalyptic outcomes to no avail (after having missed the Big One, by the way), no one is paying attention to that lot anymore?




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Contagion (Part 2)

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The Case for Contagion

The first chart on the left shows, in basis points, the difference between temporary maximum and minimum yields of the Greek 10-year bond - compared to those on December 4, 2009, the last Friday before the current panic began.


The second chart shows the same for Italy, Spain, Portugal and Germany. Specifically, Portuguese bond yields continue to make new highs, Spanish are higher but not as much as they were in January and Germany may end up being able to fund a Greek bailout with interest charges saved as the yield continues to decrease.

All figures are based on Friday closes and are not actual minima or maxima.

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Hello?

Aside from there having been nearly nothing interesting to write about over the last while, circumstances themselves have played their part in keeping us from the keyboard.

One, as a direct or tangential result of the terrific amount of rainfall that fell over these parts this winter, we find ourselves desperately trying to catch up on work in the olive groves that should have been done much earlier. That means a regular diet of 10 or 11 hours out of the house every day. Not particularly conducive to reflection - and no end in sight for at least a couple more weeks.


Second, a recent visit to a local doctor complaining of chronic listlessness turned up a serious surfeit of red blood cells circulating about the writer's plumbing. Doubtful as we were of the quack's assessment that this condition might be related to our three pack a day Ducado habit, we nonetheless gave him the benefit of the doubt and (mostly nearly almost maybe) gave up smoking, putting an end to an excellent run of 44 years. Among the discoveries attendant on this change of custom was that we were suddenly less prone to darkly ruminate on, well, whatever and everything related to that. Reminds us of the comment made a long time ago by someone who had attended a reading by Lou Reed - that since he'd stopped being a junkie Reed had kind of 'lost his edge'.

Today, though, our employees and their boss decided to cut the day at a normal length instead of putting in that extra two hours that has been the recent regime - giving the writer the opportunity to wake up from a siesta for the first time since who knows when, turn on his computer and find that the INE has released February's house sale statistics. The results are in the charts on the left.

Fully aware that sales remain at a very low level of volume, it is nonetheless interesting to note that transactions involving new homes are at their highest since September of 2008 and used and total sales since October of that year. The rolling 12-month sum of new home sales shows its first month-on-month increment since April of 2008.

The point we've been making at Ibex Salad since it seems like forever is that a collapse of the housing boom would not result in a similar fate for prices. Note that sales dropped 65% from January, 2007 to April of 2009. Think what one might of house price statistics that indicate a mere 10 or 15% drop over the period, this has not played out the way the Anglo pundits called it - by any stretch.

New readers interested in knowing why we are on the verge of declaring victory on this one might spend some time going through the appropriate blog category. It's called 'Real Estate Economy'.

An Aside

Last Thursday, we closed our most recent punt at a small loss. It was not behaving the way it was intended and we have no free time to deal with errant offspring at the moment.

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A Brief Moratorium

We apologize for our recent absence - real life has intervened. But we hope that this won't last too long. Out of sheer inertia, however, we'll continue to post things like the mortgage approval chart on the left and the Euro bond pictures in the sidebar. Originally published to provide a counterpoint to the endless predictions of apocalyptic doom to which readers were subjected for such a long time, they're a little stale now that no one seems to left touting that horse, or any of its offspring. That lineage seems (thankfully) to have ended with recent death-of-the-European-Union predictions related to the Greek fiscal morasse.

On the other hand, perhaps the unacceptable behaviour of our most recent trade (seen also in the sidebar) gives us a better idea of what to expect for the time being. It's showing all the trending behaviour of a two-cylinder internal combustion engine.

Regular service will, we believe, resume shortly.

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