Tag Archives: The Mann

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.

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

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

INFLATION UPDATE

JANUARY 12, 2024 – The December report came in at 3.4%, below my forecast of 3.6%. and above the consensus estimate of 3.2%. Annual inflation of 3.4% was well below the double-digits many people were predicting at the beginning of the year and about double what I had forecast it would be.
The 3-month annualized inflation rate is -1.4%. The 6-month annualized inflation rate is 1.1%. These figures are lower than the annualized rate (3.4%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.4% and 2.7% next month. However, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.2%-3.3% for next month’s figure.
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

YOUR CHANCE TO GIVE ME A CHALLENGE:)

DECEMBER 29, 2023 – I am reading an excellent book titled “Superforecasting.” I wish it had been published 40 years ago.
Basically, it calls out all the pundits for being vague in their statements and forecasts. The very complaint I have had my whole life. He calls those people hedgehogs and explains why the Fake News Media and general public love these so-called ‘forecasters.’
The other end of the spectrum is us foxes. To be more specific, foxes with dragonfly eyes. We are willing to put specifics in our forecasts. Willing to change our predictions as we find out new information. And, best of all, willing to say we are wrong.
I won’t bore you with more details. You can read the book, if interested. My goal is to improve my forecasts by being more concrete in what I say. This doesn’t mean that I say something like there will be an 8.7 magnitude earthquake in St. Louis at 4:08 AM on July 5, 2024. That isn’t reasonable. But, also, I don’t use words like could and might and possibly and leave the forecast general with no timeframe, etc. The specificity comes in providing a percentage of probability of a clearly stated event occurring. e.g. There is only a 5% chance in 2024 that the average 30-year residential mortgage will exceed 8% nationwide. That is specific enough to determine if I am right or wrong. Yes, the 5% is a bit gray. But, it has provided a specific number versus unmeasurable wording like ‘it is unlikely.’
So, here is your challenge, again if interested. Email me (GeorgeRMann@Aol.Com) something you want me to forecast. Preferably in 2024 so we don’t have to wait til 2030 to see if I was right or wrong. If I get a lot of suggestions, I might need to just pick a few. Don’t be offended if I don’t pick yours:)
The topic can be anything. This originated with Enrico Fermi asking his class to estimate the number of piano tuners in Chicago. At the time, they did not have the internet to help with research. So, some things you might ask me…these are made up off the top of my head just to give you some examples to help with your suggestion. What is the probability that Iran will test its first nuclear bomb in 2024? Will the number of American bank failures exceed 20 in 2024? Will we meet the official definition of a recession and have 2 consecutive quarters of negative GDP in 2024? Will Venezuela have a new leader by the end of 2024? Hopefully, those give you some idea. As needed, I will edit the wording to be sure it is specific and there is no ‘out’ for my forecast because of some gray, general words. Please do not ask me to state the closing price of the DOW 30 on June 20, 2024. That is just a guess with zero chance of being exactly correct. Better wording would be, will the DOW 30 exceed 40,000 by June 20, 2024. Lastly, I am mulling over stating my exact thinking as I come up with my forecast. I think that will help people see how to forecast better themselves.
I look forward to your emails. Even just 2 or 3 will be good for me to start this process of improving my forecasting ability. Thanks in advance for your emails.
Happy New Year!
Shalom,
The Mann

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

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

R.I.P. RECESSION PREDICTORS – YOU WERE DEAD WRONG!

DECEMBER 15, 2023 – First off, happy birthday to my dear wife.
Back in April and June, I mentioned that the wave theory I follow showed a strong rally ahead. It would require us breaking through the all-time highs by a wide margin. This week the Dow 30 achieved new highs and is above 37,000 for the first time ever. 40k and possibly 44k in 2024 are on the table. They have been for over 6 months.
With the information below it is time to 100% emphatically declare anyone that has forecast a recession for the past 18 months and into 2024 dead wrong. Their analysis is totally in error. Just fess up and admit with hat in hand you have no clue what you were talking about. You will feel better:) On to where the data stands and what it is telling us.
BANKS – To date, we have had two bank closures that I am aware of. One was strange as it was not FDIC-insured. We will be ending the year much closer to my forecast of 0-10 closures than the 176-200 closures forecast by many people. I think we will be able to say the same next December.
As for CRE loan defaults, I have dealt with about 5 bad loans. There has been no consistency as to why the loans went south. I am seeing nothing that indicates a lot of foreclosures nor anything specific to a property type.
Amazingly, the Regional Bank Index (KRE) is up 58% from its yearly low and is back above where it was before the SVB/SBNY closings. Remember, buy when there is blood in the streets. It worked again.
To reiterate, the market is saying that it does not believe there will be a CRE loan debacle for banks. Either not many CRE loans will default and/or banks are well prepared and capitalized to handle the defaults.
HOUSING – Home prices have been up all year and the rate of appreciation is increasing. It isn’t much. That is a good sign as it can be sustained into 2024.
The Homebuilders Stock Index was up over 5% one day this week and is now up an incredible 62% (!)from last year’s lows. On top of that, this is an all-time high.
Those who forecast a crash in the housing market continue to be way off the mark. As I said all along, 7% interest rates are nothing to worry about.
INTEREST RATES – Bonds bottomed on October 23rd. A strong rally has dropped rates by about 100bp already. A minor correction should start soon. Then after the new year, we will continue the decline in interest rates. The target is about 25-125bp lower than we are today.
INFLATION – The December report came in at 3.1%, well below my forecast of 3.6%. The 3-month annualized inflation rate is 0.0%. The 6-month annualized inflation rate is 1.9%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower. However, continue reading.
Based on the data, my prediction for next month’s figure is 3.5%-3.6%. The January report should show annual CPI for 2023 to be around 3.5%. Then from the February report on into the Summer, the CPI should crumble towards 2%.
SUMMARY – With the Dow 30, bank, and housing stocks at their highs, the markets are saying all should be well through the first half of 2024. The economy is supposed to be looking good in an Election Year. That looks to be the case again.
I will reprint this statement from a post a few months ago: I put this hidden little sentence out there to refer back to in 12-18 months – The chance of a recession occurring looks to be 4th Quarter 2024 into 2025. The first year of the president cycle often sees an economic downturn. I suspect that a year from now the broken-clock recession mongers will have given up and admitted the economy is strong, et al. Just in time to be wrong again:)
Happy Hannukah, Merry Christmas, and Happy New Year!
Shalom,
The Mann

INFLATION UPDATE & WHAT SHOULD HAPPEN INTO THE SPRING

NOVEMBER 25, 2023 – The November report came in at 3.2%, well below my forecast of 3.6%. The 3-month annualized inflation rate is 2.6%. The 6-month annualized inflation rate is 2.8%. These figures are lower than the annualized rate (3.6%) and thus indicate the annual CPI could drift lower. However, continue reading.
Based on the data, my prediction for next month’s figure is 3.6%. The December and January reports should show annual CPI for 2023 to be just below 4%. Then from the February report on into the Summer, the CPI should be very steady at about 3% (say 2.8%-3.2%).
Shalom and Prayers to my Brothers and Sisters in Israel.
The Mann