Ok, Thursday and Friday was extreme busy here in the office due to the official launch of my new advisory company, but that’s only good.
Just to return briefly on Mr. Bernanke and the US housing data as promised. As expected is a rate hike not even on the drawing board yet. Fed says that it pledge to keep rates “exceptionally low” for an “extended period”. The discussion about a possible rate hike at a future data among some economists seems very theoretical to me. No need to focus on this right now.
The US housing data from November showed the expected month on month rebound, exactly back to 574k in new home constructions (the drop in October was due to bad weather conditions). I watch the housing for a couple of reasons. For several years back when I started to be bearish on US and later the world, the main reason was the beginning weakness in the US housing market. It will be where I look for economic health signs as first signs of a rebound. A stable to positive housing market is extremely essential for the comfort and wealth feeling among private consumers.
So far I regard the recovery in the US housing as sign of life, the world is alive but not rebounding. My view is still that the global economy is finding a new level of activity but much lower than before the crisis. The above housing data confirms the same, alive but not a cheerful activity level.
Why is this so important ? In my opinion the global equity market has priced in a pretty steep rebound for the coming year – one year too early.

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