Housing starts surge 22% in Feb. on apartment building

WASHINGTON (MarketWatch) - Boosted by an 82% increase in construction of apartment buildings, U.S. housing starts surged 22% in February to a seasonally adjusted annual rate of 583,000, the Commerce Department estimated Tuesday. It was the first increase in eight months. Construction of new housing units had plunged 38% in the previous three months before February's unexpected jump. Economists had forecast a further drop to 456,000, despite an expected surge in multifamily construction. Building permits, which are less volatile than the starts data, rose 3% in February to a 547,000 annual rate. Permits for single-family units rose 11% to a 373,000 rate, the largest percentage gain in 18 years.

*** My Two Pennies ***

What a good morning!  Great news hit me once I waked up.  That is what I want to hear so desperately since I am in housing business.  But,...  Let me clear my thoughts a little bit more at this early morning.

Look how much a share of Citi increased last week? 

As of March 9, it was $1.  Next business day, news reported a great wonderful news.  It gain big and increased very sharply.  Really there is no lie; it is true: a big jump!

How big it is?  A big Sixty Seven percent increase in one day!  It is a good news everybody want to hear.  Have you heard a day jump of 67% in the history of Citi. 

Never!

Well, form another perspective, let's change the way to ask how much it increased in terms of dollar amount?   Sorry, it is not even qualified as One dollar, it is only 67 cents in fact.   Then, how many times in the past you could find a share of Citi increased more than $1 in a day? 

In those good old days, who is going to scream out "Citi jumps 67 cents!" as a big surprise or glorious rally?   Probably you will say: "what's the big deal for cents?"

As of this morning, March 17, Citi has accumulated 138% increase in 5 business days.  Everyone would drop his mouth if Citi could have this GREAT JUMP percentage when Citi carried $50 a share before October 2008.  That's just 6 months ago, who cares about this stock price up 67 cents or $1.38?

Well, some people are out to orchistrate an aroma of hope spreading optimism on the outlook of our economy as putting a big red lipstick "rising star" on Mao's Communists regime in the early 1950'.  Sure, we need a cheerleader to light us up in a difficult time or when we are down.

Great! we do need that kind of sentiment not only for the stock market but also for housing market.  Now someone is up!  But we have to be very realistic to avoid getting hurt as those Chinese people expecting a good days to come when they put their hope on the so-called "New China."

So get serious and go make a reality check:

How much inventory do we have now in US housing market? 

Isn't it just like we read a report that we have the biggest inventory in history last night? 

Could those huge amount of surplus disappear overnight, i.e. sold in just a few days or weeks? 

Why all the big guys won't release their REO holdings fast enough to list them on the MLS service as the head of RTC suggested? 

(NOTE: No, the new REO infusion to the listing seems idle to me, if not a total halt.  While we have had a big long time increase of foreclosure activity recently, we don't see much new REO listings, except a few banks such as W*** bank who are in normal or aggressive (anxious) mood.   Those old listings remain its price sky up for 6 months without a bit reduction in some areas.  There are something that can't be understood by a capitalist's economic theory of free market.)

Why they allow those REO piled up in their books, i.e. letting those "perishable" goods sit on street in vacant condition with minimum of tender loving care.  They are left alone to be deteriorated and ruined by nature (NOTE: I found some REO properties sit there with no "sale" sign for more than 500 days) or losing their true"market" value day by day. let alone a waste losing value in our national wealth book?  

Why our government authorities loose up their normal regulation on the ratio how much a banker could take in its REO on its book?  Is it a low as our FED interest rate?  That would explain why it has been getting more difficult to do a "short sale" for an agent?

Is there a plot or factor for all of those VIP to work together to stop housing falling and keep pumping air to keep US housing flying in the sky not like Harry Truman said "let the dust rest"?

If you are serious enough, you would laugh out loud at people who are so angering at "AIG's distribution on bonus or compensation."  Why?  they have focused (or been switched) on something cost them just $1 and make their President Obama swear to "block" the loophole (NOTE: Since those money went into cat's pocket and we are ruled by law or contract, how could we expect Obama do something about it legally to get our money back?)   They didn't pay attention on two or three news reports in the past 3 days telling us there is $999 at big risk.  Probably someone don't want us to face the $999 reality and would like keep us shopping for trivia items at a 99 cent store.

If you don't see this mentality of "penny wise; pond stupid," allow me give a hint "CDS" which bites the biggest chunck of AIG payout.   Still can't see it?   Okay, google in the term on internet.  See what it is and what is going on in the near eyesight on LP (the WHOLE LARGER picture.)  Based on what you could find, judge them yourself if the 18 month recession could be over as Fed chief Bernanke said.

No matter what, keep in your mind the saying "Figures don't lie; people figs."