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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: booyaka who wrote (56829)3/25/2006 2:58:13 PM
From: russwinter  Read Replies (1) of 110194
 
"discretionary" sellers who would sell if they could get their price end up not selling.>

That would be very negative for the economy then, as most real estate sales now are still windfalls for the seller even with off the peak prices, and thus generate more credit creation. If activity slows because of stubborn sellers failing to hit a clearing price to monetize their gains, then credit growth will slow or halt. I've been using the non-M1 component of M-2 to measure this. Think this will be highly correlated to sales activity measured by the weekly indicators like the MBAA purchase index, which is really dropping off in the last two months.

Take the mid-point of each month to gauge the trend, if it goes flat, then houses aren't moving enough to expand credit:
research.stlouisfed.org

2006-01-16 5364.7
2006-02-13 5380.1
2006-03-13 5395.7
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