The Memo:
To:
Staff
Re:
Le
Royale With CheeseEmployment SituationMushrooms and Beer and Government Notes. PBR ME ASAP
Wells Fargo Presents HMI. By NAHB. Hey aM I doing this right?
Surveyors Surveying Construction
The last 6 Nasdaq Cycles
Today in EFFing Time.
2 49. 2 49. Hut hut hut
Comments:
Welcome back from vacation everyone. I hope you enjoyed Merica’s 249th birthday without injury or incident. For those of you stationed elsewhere, I hope you enjoyed the break from my issuing Memorandums.
Today is the 199th day of 2025, week 29 of 52. 166 days left. It is the 175th week of the EFFing Cycle. Again.
Welcome to Q3 and H2. With goals renewed, a break mid year, it’s time to put the pedal to the metal. In the words of TB12: LFGO!
We’ve been here 15 times before. Let’s go one more time.
End Memo. Thank you for your attention to this matter!
The Report
Le Royale With Cheese Employment Situation
If you recall, I said folks would forget about this situation at the exact time they shouldn’t. Well, we're off to the races. Initial Unemployment Claims on a non seasonsally adjusted basis crossed 260,000 last week. While Continuing Claims broke 2,000,000 again.
It’s no secret that I believe this cylce has more similarities to the GFC than homebuilders. This data set is no different. With a slight lag, meaning, the current (red) spike is the equivelant of the previous (black) in the timeline.
As far as bizarre similarities, we’re tracking the HTTPS: // Dot Com cycle of initial claims quite closely.
All of which is to say that the current situation is basically a Big Mac.
"Two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun"
Yes, but that’s not what I mean.
We get the marketing pitch of what a Big Mac is via news reports:
Then when we open the bag (actual data reports) we’re left with this sad slop:
That’s not mine, and I can’t take credit for the photo, but I find the little cup’s expression (back left) comical. Smirking at that sad pile while everyone is talking about the secret sauce. Which is basically Seasonal Adjustmens: ketchup, mayo, mustard, paprika and relish. Some people just call it Thousand Island Dressing. It’s what you douse your food with when it tastes bad. Or something like that.
Does it taste any better in France?
Rest in Peace to Vincent Vega’s brother: Mr Blonde. AKA Michael Madsen
Mushrooms and Beer and Government Notes. PBR ME ASAP
ALLEGEDY This week, former treasury Secretary Janet Yellen took a shot at current Treasury Secretary Janet Yellen Scott Bessent for “undoing” her work. Janet Scott fired back that the only thing he was aware of Janet’s “agenda” in China was “Eating Mushrooms and drinking beer”.
Why do I say allegedly? Becuase the story ran in the Daily Caller. So take it with a mushroom topped, thousand island dressing covered grain of salt, washed down with a cold National Bohemian (Natty B). All of which is as nauseating as to the 10 year note yield buyers so far as it is to homebuilders and their government employed offspring beggars of lower thine rates. Waiting for one side of the Golden arches to form here.
Wells Fargo Presents HMI. By NAHB. Hey aM I doing this right?
The Natty B National Association of Homebuilders (SPONSORED BY WELLS FARGO, they of the stage coach branded empty HQ building fame) released their Housing Market Index two days ago. As is customary prior to the day the Census Bureau releases permit data. If you recall, last month tied the cycle low in sentiment. This month was “brighter” by 1 point. Which coincidentally (is it really though) identical to the cycle which shall not be named. As seen here:
While overall senitment was slightly better, measurable homebuyer traffic, was not.
Hope isn’t a business plan, but it is helpful.
Here’s the Bank sponsored index key findings:
Maybe of more interest and substance, is the survey results. While I keep hearing that government regulation is the biggest problem to “building more homes”, that reason doesn’t even crack the top ten according to survey WFNAHBHMI respondents.
The two things I find most interesting in the results: 2. and 3.
Rising Inflation vs. Expectations of Prices and Rates to decline.
Prices and cost of money falling isn’t inflation. Innit.
The full survey is available here:
Surveyors Surveying Construction
The US Census Bureau Survey of Construction was released yesterday. If I applied for permit in February, and the municipality just got around to approving it, then that permit getting counted in this months “new permits” isn’t exactly a barometer of how I feel about applying for a permit today is it?
Unfortunately for us all, that’s how the surveryors survey of construction works. There are no sextants here.
Meanwhile, the number of housing units under construction continues to crater along the same lines as late 89/07.
The last 6 Nasdaq Cycles
I’m a couple weeks away from retiring the “GFYSC” cycle here. The Nasdaquian cycle appears to be repeating its 2015-2020 cycle. Despite the differences in real estat this time around.
More money in stonks. Albeith H2 of this year may see the same UP DOWN UP DOWN UP DOWN that ends flat before any more meaningful growth.
To that end, here are the last 6 cycles of Nasdaq compared to the current cycle.
CAVEAT EMPTOR: Past performances are no guarantee of future results
Also CAVEAT EMPTOR: Meme coins.
I see you've got your fist out, say your piece and get out
Yes, I get the gist of it, but it's alright
Sorry that you feel that way, the only thing there is to say
Every silver lining's got a touch of grey
-Jerry Garcia
2 49. 2 49. Hut hut hut
If you think this is bad or as the ignorant say: “doom”
Accepting reality is never the wrong answer. Acknowledging the direction of the situation isn’t bad. Getting smoked 28-3 in the first half doesn’t mean anyone playing the game shouldn’t. We get to choose: put the effort in to win or fold.
If you run a risk model and it shows negative outcomes, that’s a gift. It’s telling you what to fix to avoid a loss. Observe, Orient, Decide and Act.
O.O.D.A. on 3.
LFGO!
Today in EFFing Time it is:
The 16th time we’ve faced the 2nd half.
Blank columns represent cylces that had already ended.