MARCH 22, 2024 – Every once in awhile I see something not typically on your radar. This time it is Wheat futures.
In March 2022, the December 2024 futures peaked at about 1425. The same futures bottomed in early March at about 565. Assuming this is the Bear Market bottom, Wheat declined 60% in two years.
I expect Wheat prices to increase significantly over the next 12 months. I will revisit this at yearend to see how things turn out.
As an aside, no need to rush out and store up on bread:)
Shalom,
The Mann
Category Archives: Mann Overboard
After a 2-year hiatus, the Mann Overboard blog is back. This blog will cover anything and everything that comes to mind. There will be market forecasts. Suggestions regarding interesting web sites, books, or topics I think readers should check out. My continual diatribe on the real estate appraisal industry and all of its wrongs. My support for a new real property valuation profession, adopting Mortgage Lending Value in America, creating Real Property Risk Ratings in America, and introducing readers to the concept of Socionomics. Other topics will surely arise.
Feedback will be limited to approved site visitors. This is not to limit disagreement – different ideas are needed for us to advance any concept we discuss. I just want to keep the content professional. Replies whining about old subjects like AMCs and what banks have done to the industry and such don’t get us anywhere. And simpl
TO REITERATE – MORTGAGE RATES ARE NOT AN ISSUE
MARCH 22, 2024 – The following is from an article by Gabriella Cruz-Martinez of Yahoo Finance on March 21st:
“Sales of previously occupied US homes gained momentum in February as buyers accepted the new normal of higher mortgage rates.
Existing home sales surged 9.5% in February from the month before to an annualized rate of 4.38 million, the National Association of Realtors (NAR) reported Thursday. That was almost 6% higher than a year earlier and marked the largest monthly increase in a year.
Sales picked up last month, even as mortgage rates flirted with 7%.”
My June 15, 2023 post titled “CAN PEOPLE AFFORD 7% MORTGAGE RATES?” appears to have been accurate and played out as I predicted. I will simply show a few quotes here. You can revisit the post if you want to read it in its entirety.
A side note, the S&P HomeBuilders Index is at all-time highs. It is up almost 75% since the October low. Even with the supply of new homes soaring, the market has no worries of a housing bust occurring this year.
Shalom,
The Mann
Excerpts from my June 15, 2023 post:
JUNE 15, 2023 – YES! The simple answer is, of course!
I saw a survey this week where people said they needed mortgage rates to drop to about 4% for them to afford a new house. As my friend The Red-Shoe Economist, KC Conway, would say ‘I call BBQ-Sauce!’
People can afford a 7% mortgage rate. They can afford a 10% mortgage rate! Us old-timers remember when a rate below 10% was a bargain.
By this time next year when the world realizes the day of artificially low interest rates is history and will not return, they will simply adjust to living with 7%-8%+ mortgage rates and supply and demand analyses will work the same as they did before. People adjust. They always have. It’s just easier to complain before facing reality and adjusting the way they do things. Human nature.
“Sales of previously occupied US homes gained momentum in February as buyers accepted the new normal of higher mortgage rates.
Existing home sales surged 9.5% in February from the month before to an annualized rate of 4.38 million, the National Association of Realtors (NAR) reported Thursday. That was almost 6% higher than a year earlier and marked the largest monthly increase in a year.
Sales picked up last month, even as mortgage rates flirted with 7%.”
My June 15, 2023 post titled “CAN PEOPLE AFFORD 7% MORTGAGE RATES?” appears to have been accurate and played out as I predicted. I will simply show a few quotes here. You can revisit the post if you want to read it in its entirety.
A side note, the S&P HomeBuilders Index is at all-time highs. It is up almost 75% since the October low. Even with the supply of new homes soaring, the market has no worries of a housing bust occurring this year.
Shalom,
The Mann
Excerpts from my June 15, 2023 post:
JUNE 15, 2023 – YES! The simple answer is, of course!
I saw a survey this week where people said they needed mortgage rates to drop to about 4% for them to afford a new house. As my friend The Red-Shoe Economist, KC Conway, would say ‘I call BBQ-Sauce!’
People can afford a 7% mortgage rate. They can afford a 10% mortgage rate! Us old-timers remember when a rate below 10% was a bargain.
By this time next year when the world realizes the day of artificially low interest rates is history and will not return, they will simply adjust to living with 7%-8%+ mortgage rates and supply and demand analyses will work the same as they did before. People adjust. They always have. It’s just easier to complain before facing reality and adjusting the way they do things. Human nature.
R.I.P. (MIS)LEADING ECONOMIC INDICATOR
FEBRUARY 21, 2024 – On Tuesday, The Conference Board said its Leading Economic Indicator (LEI) is no longer signaling recession. The indicator has been calling for a recession for 23-straight months. The record is 24 months back in The Great Recession.
I brought this to your attention last September. This is one of many indicators that have been wrong about a recession.
I have mentioned a few times why this was going to occur. I am going to write a detailed post explaining the situation one of these days. It will take some work, so I will need to wait a bit before sitting down to do such.
I have adopted the copyrighted term Rotating Reversion to the Mean (RRM) for what has occurred over the past 18 months. I look forward to introducing it to you soon.
In the interim, you can bury the LEI for now. It will be right again one day. It just had no chance this time around.
Shalom,
The Mann
I brought this to your attention last September. This is one of many indicators that have been wrong about a recession.
I have mentioned a few times why this was going to occur. I am going to write a detailed post explaining the situation one of these days. It will take some work, so I will need to wait a bit before sitting down to do such.
I have adopted the copyrighted term Rotating Reversion to the Mean (RRM) for what has occurred over the past 18 months. I look forward to introducing it to you soon.
In the interim, you can bury the LEI for now. It will be right again one day. It just had no chance this time around.
Shalom,
The Mann
INFLATION AND ECONOMY UPDATES
FEBRUARY 12, 2024 – The January report came in at 3.1%, just below my forecast of 3.2%-3.3%. and above the consensus estimate of 2.9%.
The 3-month annualized inflation rate is 1.0%. The 6-month annualized inflation rate is 1.8%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.6% and 2.7% next month. Like last month, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.0%-3.1% for next month’s figure.
ECONOMY – We have had 6 straight quarters of above 2% GDP growth since the recession in the first half of 2022 ended. The last two quarters have been above 3% (!) and some forecasts expect another 3%+ figure for the First Quarter of 2024. With annual population growth around 0.7%, any GDP growth above that amount is exceptional. The chance of a recession occurring this year remains slim to nil. It certainly won’t occur in the first half of this year.
STOCKS – The Dow 30 continues its march towards 40,000. I never did see anyone else predict 40,000 this year. I suspect there are a few others like me out there somewhere. As they saay, never count your chickens before they hatch. 38k+ is not 40k. But, the stock market is saying the economy this Summer should be extremely strong.
The recession mongers couldn’t have been more wrong for the past 20 months. They will continue to be wrong into the foreseeable future.
Shalom,
The Mann
The 3-month annualized inflation rate is 1.0%. The 6-month annualized inflation rate is 1.8%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.6% and 2.7% next month. Like last month, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.0%-3.1% for next month’s figure.
ECONOMY – We have had 6 straight quarters of above 2% GDP growth since the recession in the first half of 2022 ended. The last two quarters have been above 3% (!) and some forecasts expect another 3%+ figure for the First Quarter of 2024. With annual population growth around 0.7%, any GDP growth above that amount is exceptional. The chance of a recession occurring this year remains slim to nil. It certainly won’t occur in the first half of this year.
STOCKS – The Dow 30 continues its march towards 40,000. I never did see anyone else predict 40,000 this year. I suspect there are a few others like me out there somewhere. As they saay, never count your chickens before they hatch. 38k+ is not 40k. But, the stock market is saying the economy this Summer should be extremely strong.
The recession mongers couldn’t have been more wrong for the past 20 months. They will continue to be wrong into the foreseeable future.
Shalom,
The Mann
VARIOUS FORECASTS FOR 2024
JANUARY 13, 2024 – No one took me up on my offer to ask me to forecast something…anything. However, I have found a web site that holds forecasting contests on an ongoing basis. The main contest for this year has 36 questions. I won’t bore you with all of them. But, I will list my initial forecasts for a few questions you might find pertinent. I will likely change my %’s weekly or monthly. Here goes….The percentage after the question is my forecast.
Will the S&P 500 Index go up over 2024? 90%
Will annual US Core Inflation be above 3% in December 2024? 32%
Will the Fed Funds Rate on December 31, 2024 be below 4%? 4%
Will the US unemployment rate be above 4% in November 2024? 54%…this one is a tossup. A key word is ABOVE 4%. If it included 4%, I would be much higher on my %.
There are several questions Re Trump and the Election and other political issues. I will just stick with economic questions here.
We shall see how I do. It is nice to finally be measured on how accurate my forecasts will be. I will let you know the results when the contest is over – I believe that will be early next year.
Shalom,
The Mann
Will the S&P 500 Index go up over 2024? 90%
Will annual US Core Inflation be above 3% in December 2024? 32%
Will the Fed Funds Rate on December 31, 2024 be below 4%? 4%
Will the US unemployment rate be above 4% in November 2024? 54%…this one is a tossup. A key word is ABOVE 4%. If it included 4%, I would be much higher on my %.
There are several questions Re Trump and the Election and other political issues. I will just stick with economic questions here.
We shall see how I do. It is nice to finally be measured on how accurate my forecasts will be. I will let you know the results when the contest is over – I believe that will be early next year.
Shalom,
The Mann
DOW 2024 FORECAST
JANUARY 8, 2024 – Precisely forecasting the stock market is obviously futile. That said, I am posting this forecast so I can keep track of it and how it plays out. There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
Please let me know if you have seen anyone forecast the Dow going to these levels this year. There is a chance the top may not occur til early 2025. I am not interested in timing re the above forecasts. Only prices.
What would make me have to totally reconsider everything? A Dow close below 34,590 would likely erase any chances of the above occurring. So, as a gambler, you are looking at a bet with a potential upside of 5,000-9,000 points and downside of about 3,000 points. A decent bet to take.
I got lucky back in early 2018 when I forecast the Dow would have a small correction, followed by a move to new highs, followed by a larger correction below the last low, then back to even a higher new high, followed by the largest correction to lows below 22,000 – this occurred in the lockdown in 2020 with a low around 18,000 which at the time I forecast within 100 points. One of my better longer-term forecasts ever.
Right now, I am 15+ months into this Bull Market forecast and I suspect it has at least 6 more months to play out if not 9-15 more months. Or I will be wrong this time around:)
As I usually say, we shall see.
Shalom,
The Mann
BAN AND BOYCOTT EVs!!!
JANUARY 8, 2024 – I am providing a link to an automotive expert that has obviously been around the industry for ages. It is good to see more facts about how EVs are destroying this planet. I would ask for us to seek a ban on them. But, I know that is unrealistic and anti-free market. It is good to see the consumer not support this woke movement that is hurting the environment, increasing costs for the common person that cannot afford higher and higher car prices, and lining the pockets of the rich. One more movement that robs the poor to give to the rich. And people fall for it again and again. Truly sad. I will now get in my 2003 Diesel 2500 truck and just ride around for an hour doing nothing but feeding CO2 to the area trees:) Someone has to help the environment! Viva La Petro!
https://fee.org/articles/why-the-ev-market-is-sputtering/?utm_source=email&utm_medium=email&utm_campaign=2020_FEEDaily
Amazon has switched back to diesel and now Hertz back to gas cars. Bravo to them!
SUPPLY AND DEMAND FOR HOUSING
DECEMBER 27, 2023 – As I posted last February, on a percentage basis, population growth is 75% lower than it was in the 1980’s (Baby Boomers). Last week, I saw a stat showing the demand for houses by Millennials in the prime age group of 25 to 44 years old is over 80% lower than when Baby Boomers were at the same age.
Combine this with the fact that spec activity on the part of homebuilders is 1/3 higher than before 2020 and has only been exceeded by the years 2005 thru 2008!!!!
Please explain to me how we have a housing shortage when we have almost no demand for new houses and an insane number of new houses being built at the same time. Not to mention the 10 million or so vacant houses we have in the country.
You have to hand it to NAR and NAHB on perpetuating the false rhetoric that we need more housing. Need more affordable housing. And so on. I guess we can adapt that old joke to NAR and NAHB as to when you know they are lying…
Here’s to a great 2024 for everyone!
Shalom,
The Mann
RECESSION PREDICTORS THAT HAVE FAILED
UPDATE JANUARY 11, 2024 – The latest Bloomberg survey of economists shows 50% of them expect a recession this year. Based on the stock market being at all-time highs, it is saying there is zero chance of a recession in the next 6 months. I won’t use 0% in my forecasts. But, as part of my goal to provide precise measurable forecasts, I will say there is a 1% chance of a recession (Two consecutive negative GDP quarters) occurring in the first half of 2024. As the odds of the 2nd Quarter being negative are low, I place a chance of a recession starting by the end of the 3rd Quarter (would require negative GDP in 2nd and 3rd Quarters) at 5%. I just as well place a percentage on a recession occurring in 2024 as a whole. My estimate is that is only about 10% at this time. There is no doubt GDP growth in 2024 will be lower than 2023. But, that does not mean we will have a recession. We have had very strong economic growth for 6 quarters since the early 2022 recession ended. I will update these percentages as new information warrants such.
DECEMBER 19, 2023 – With so many recession indicators being wrong over the past 2 years, I thought it would be good to compile a list. Although they have failed, this doesn’t mean that in 20 years we won’t look back and say this indicator has predicted 4 of the last 5 recessions. But, for now, these indicators have simply been wrong. I will continue to update this list as I encounter such (erroneous) indicators. Many of these I have never followed or heard of. But, as I am made aware of them predicting a recession that hasn’t, and isn’t, going to occur, I will add them to this list.
1. The (Mis)Leading Economic Indicator turned negative in early 2022 and been consistently forecasting a recession for over 18+ months.
2. M-2 Money Supply is the most negative it has been since The Great Depression.
3. Inverted Yield Curve – The yield curve turned negative in July 2022. It forecasts a recession 11-13 months from that event – which was June to August 2023. This indicator had been a perfect 8-for-8 since WWII. Make that 8 out of 9 now.
4. Empire State Manufacturing Backlogs – The last two readings have been -23.2% and -24%. The only two times this has occurred was in 2001 and The Great Recession. It is doubtful the current decline will coincide with a recession.
5. The University of Michigan’s Consumer Sentiment Index has been below 75 for 29 consecutive months. That has surpassed the prior record from February 2008 to May 2010.
6. The National Association of Credit Management’s (NACM) Credit Manager’s Index (CMI) registered 54.6 and 54.2 in the 3rd and 4th Quarters of 2023, respectively. It did not fall below 55 during the 2010’s expansion and the last time it fell below 55 for two consecutive quarters was in 2008 (this excludes the spike low in the pandemic).
7. The American Institute of Architects Architecture Billings Index (ABI) has dropped to 44.8. Previous drops below 45 signaled a recession in 2001’s first quarter and 2008’s first quarter. HOWEVER, Architects have a lead time of 9-12 months on commercial building activity. Thus, this indicator might be signaling a recession at the very end of 2024 and into 2025 – which I have mentioned in prior posts as a possibility. Especially, since that occurs after the Presidential Election. So, I might move this indicator from this list to the small list of indicators that are still accurate in predicting recessions. But, I wanted to place it here in the interim so you could be aware of what it is saying.
8. Wholesale Sales excluding Autos and Oil turned negative (-2.8% YOY) in 2023. Besides the Pandemic, this indicator coincided with recessions in 2001 and 2007-2009. It also was negative in 2015-2016, which was termed an industrial recession.
9. Banks Reporting Stronger Demand for C&I Loans bottomed at around -60% at the end of the recessions in 2001 and 2007-2009. It bottomed at -54.5% in the 2nd Quarter of 2023 (one year after the recession I say occurred in the first half of 2022). At any rate, no recession occurred in 2023 and one is highly unlikely in 2024. The index has rebounded to -23.7% in the First Quarter of 2024. Still weak. But, improving.
MORE GREAT NEWS FOR PLANTS
DECEMBER 19, 2023 – It doesn’t get any better than this for plants in America. The USA is now producing more oil than any country in history!!! Congrats to us for overcoming the leftist climate change hoaxers! It would be nice if one of these days they simply admitted defeat and went away to be quiet forever. You would think when you have been soundly defeated you would shut the heck up. We can only hope.
Those who don’t fall for ESG, climate change lies, et al, enjoy this wonderful article.
https://www.aol.com/finance/united-states-producing-more-oil-220032456.html
Happy Holidays and Shalom,
The Mann
Those who don’t fall for ESG, climate change lies, et al, enjoy this wonderful article.
https://www.aol.com/finance/united-states-producing-more-oil-220032456.html
Happy Holidays and Shalom,
The Mann