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Existing Home Sales Rebound
The news didn’t move the needle for the broad market, but make no mistake; the existing home sales report is not only impressive, but it’s also (in my mind) a harbinger of things to come. This is based on several factors such as pent-up demand and a greater ability to buy homes when certain parts of The Dodd-Frank Act are removed, including the so-called “ability to pay” rule that’s ostensibly in place to make sure people didn’t buy homes they couldn’t afford; instead, it only limits the dream of home ownership.
(I’ll get to the notion of jettisoning Obama’s regulations in a moment.)
Yesterday, sales of existing homes came in at an annual rate of 5.6 million, the highest since February 2007. It was driven by a 10% surge in condos while single-family homes edged slightly lower.
Several of my favorite names moved on this news, and the potential for the housing market to spring back to life in 2017:
The one-two punch for next year is shedding regulations and making it easier to get home loans as mortgage rates move higher; there is no doubt that would-be buyers, especially young first-time buyers, need all the help they can get.
Key Year- to -Year Trends
‘Home Sweet Home’ could become the renewed American Dream next year, and that would add serious fuel to the underbelly of the economy.
After the close on Wednesday, Bed Bath & beyond (BBBY) missed and gave lower guidance while Micron Tech (MU) beat and posted a strong guidance.
Perhaps more important is the announcement that Wall Street dealmaker Carl Icahn will be a special adviser to President-elect Donald Trump and his transitional team on the matters concerning regulatory reform.
Cutting Those Regulations Down to Size
Even as he spies the exits, President Obama is dropping new regulations and executive orders like carpet bombs, and it’s going to be a major problem for the new administration and the economy. This year, the Obama administration layered up so many new regulations that the total number of pages broke the old record. According to the office of Senator John McCain, Obama’s regulations have cost the economy $350.0 billion.
The only folks that can game the system and find loopholes as well as Washington are the master investors of Wall Street, whose sole goal is to find ways to crack the code and create value. Coupled with Wilbur Ross at Commerce, Carl Icahn will be a boon for taxpayers and a pain for industries doing business with the United States.
Lots of money will be made, but the fat heretofore marbled into the system is about to be pulled out.
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