New Home Sales On Vacation

The Lehmann Letter (SM) Much excitement surrounds the contemporary residential real estate scene due to its recent upsurge. But today’s announcement from the Census Bureau was disappointing: Only 482,000 new homes sold in June. A decline, as you can see from the table. Inconsequential noise in the data? We’ll stay tuned. New Home Sales (Recessions Shaded) Here are the seasonally adjusted data at an annual rate: 2013 January        442,000 February       439,000 March           449,000 April              451,000 May              430,000 June             463,000 July              376,000 August          380,000 September    399,000 October        444,000 November     446,000 December     441,000 2014 January        446,000 February       417,000 March           410,000 April              Continue reading

Three Views on Greece

The Lehmann Letter (SM) See this article by Andrew Higgins, posted today on The New York Times web site, for three perspectives on the Greek crisis – the Greeks’, the IMF’s and Germany’s: “Personalities Clashing Over How to Handle New Greek Bailout” In a nutshell: “To many Greeks, the debt the country has amassed is the evil fruit of austerity policies, imposed from the outside, that asphyxiated its economy and trampled on its sovereignty. “To the International Monetary Fund, the debt of more than 310 billion euros, or almost $339 billion, is more of a mathematical problem. After years Continue reading

Existing-Home Sales Surge

The Lehmann Letter (SM) In its best report since the housing bubble, the National Association of Realtors reported 5.49 million existing-home sales (at a seasonally-adjusted annual rate) for June: You can see the upsurge in the table and chart. We’ll see if it’s the start of a trend. Existing Home Sales (Recessions shaded) Existing home sales in millions: 2013 March           4.96 April              4.99 May              5.15 June             5.16 July              5.38 August          5.33 September    5.26 October        5.13 November     4.83 December     4.87 2014 January        4.62 February       4.60 March           4.59 April              4.75 May              4.90 June             5.01 July              5.07 August          5.00 September    5.10 October        Continue reading

Why Does Europe Use the Euro?

The Lehmann Letter (SM) Here is a logical question: With all the difficulties the Euro has purportedly created, why do the Europeans stay with it? Especially, why are the Germans and Greeks sticking to it? The economists say it’s a bad idea. Yet both the Greeks and Germans recently reaffirmed it. What do they know that the economists don’t know? What does Europe know that the economists don’t know? Questions or comments? Contact Mike Lehmann at (To be fully informed visit © 2015 Michael B. Lehmann  

Is Germany New Jersey?

The Lehmann Letter (SM) Economists have criticized the Euro on various grounds. You will often hear that a common currency was a mistake among nations that conduct their own monetary and fiscal policies. Some have also said that the European Union should have an explicit understanding such as that enjoyed by the United States. That is, rich states like New Jersey expect to transfer funds to poor states such as Mississippi. However, Germany isn’t New Jersey and the Germans no doubt would balk at that. Besides they might say: We have transferred money to poor nations on the periphery in Continue reading

Housing Starts and Building Permits

The Lehmann Letter (SM) This morning the Census Bureau reported 1,174,000 housing starts in June at a seasonally-adjusted annual rate: That – by itself – is not so special. What is special is the accompanying news regarding June building permits: “Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,343,000. This is 7.4 percent (±1.2%) above the revised May rate of 1,250,000 and is 30.0 percent (±2.3%) above the June 2014 estimate of 1,033,000.” Let’s hope starts rise to meet the permitted level in coming months. As you can see from Continue reading

A Year of Price Stability

The Lehmann Letter (SM) Here’s the text of this morning’s announcement on producer (wholesale) prices from the Bureau of Labor Statistics: “The Producer Price Index for final demand advanced 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in May and declined 0.4 percent in April. On an unadjusted basis, the final demand index moved down 0.7 percent for the 12 months ended in June, the fifth straight 12-month decrease.” While prices rose 4.8% in June on a seasonally-adjusted annual basis (0.4% X 12), the last sentence of Continue reading

Iran, the Good and the Ideal

The Lehmann Letter (SM) We’ve heard slogans such as, “No deal is better than a bad deal,” regarding the Iran agreement. But the sloganeers are asking us to suspend reality by assuming that sanctions against Iran would have remained in place had no deal been reached. And those sanctions – supposedly and assumedly – would have – eventually – compelled Iran to bend to the critics’ will. Why? Why would the sanctions have remained in place? It seems more realistic to assume the sanctions would have unraveled, freeing Russia, China, Europe and the UN to go their own ways. And Continue reading

Gunboat Diplomacy

The Lehmann Letter (SM) One hundred years ago and earlier the European powers engaged in gunboat diplomacy. If, for instance, a North African or Middle Eastern nation defaulted on its bonds – almost all held by European creditors – Europe would send its navy to impose harsh terms. A European nation would establish a “sphere of influence” over the deadbeat, seizing its tariff revenues in order to repay the bondholders. That’s what happened over the weekend to Greece. See the article by Suzanne Daley and Liz Alderman, posted yesterday, in this morning’s New York Times: “Premier of Greece, Alexis Tsipras, Continue reading