The number of people who applied last week for new unemployment benefits surged to the highest level in a 1 and ½ months, confirming the U.S. labour market is  not healing fast enough to bring down the countries jobless rate. The market confirmed that the economy is deteriorating and completely disconnected from the reality. First, Initial Claims coming at 360K, on expectations of 330K, worst miss in six weeks, virtually unchanged from a year ago at 373K, showing that in one year there has been no progress resulting in the new normal.

The phenomenon of “foreclosure stuffing”, a primary driver of the artificial housing “recovery” has been the surge of hedge funds and asset managers into purchases of rental units courtesy of REO-to-rent federal lending facilities, taking out distressed inventory from the market in hopes of converting it into rental. This has manifested in a surge in multi-family starts which have been the primary driver behind the rise of housing starts in the past several years, even with single-family units barely moving higher. The days of profitability are gone as today we get confirmation that this strategy is done following the collapse in multi-family housing starts which crashed from 376K to 234K in April (the lowest since last summer), a drop of 142K and the worst monthly drop since 2006 when the housing market had once again peaked and was about to undergo a very serious correction.

Reference Zero Hedge (Tyler Durden)                     www.donfilippo.ca

Market Watch – TD Precious Metals Report

Tel: 416-362-1300   Toll free: 1-877-943-6939             Don’t Forggetta About Me!