I would like to see more single family starts in the numbers too. I'm not a real student of recession-recovery trends..., but my spreadsheet of historic housing starts by year, seems to me to be a pretty valid indicator. Would be interesting to see charts of the two overlapped.

As you have pointed out many times..., this is way more than just a cyclical thing..., it is structural in nature and there are many adjustments that are going to need to be addressed. Your son's situation is a good example of folks having to do what they have to, to get by. Sounds like he has got his priorities in order and hope that he is thanking you as well as his lucky stars for the helping hand. Hope there are lots more like the two of you out there..., we are going need all we can get.

Right on partner..., write on.

Housing starts are impacted by the investment decisions of about six large construction firms - Hovnanian, Ryland, and so forth. They got all wrapped up in the expansion up until 2007 and then found themselves with massive amounts of inventory after the crash. Financially, all the profit they made in the housing boom was wiped out the past five years in write-downs, losses from lack of revenue, and costs of downsizing their companies.

Have they learned much? I'm sure they are not going to make those same mistakes so soon, but they can easily get sucked into a mini-bubble building town homes and rental units because they are in demand at the moment. The housing start indicator is a rather squishy one because of this. I prefer to see it augmented by employment data in the construction industry, and secondarily, by revenue increases at the big box hardware stores like Home Depot, Loews, and Menards.

We are getting corroborative data on the employment front, but it is still a bit lackluster. Anecdotal data across the country does confirm that the construction industry is recovering. My son's an electrician and his company has more business than they can handle. However, they are able to stay competitive by lowering their fees and at the same time guarantee both quality work and compliance with building codes so that their work ultimately passes inspection from the city inspectors. Some union guys are willing to do this to survive, but a lot of union workers won't do a job at $60/hour - they are holding out for the traditional $110/hour. As a consequence there are 3,000 union electricians still looking for work in our area. A good chunk of the $110/hour fee goes to pension and health care insurance maintained by the union, so to compete the worker has to take it on the chin in their salary and take-home pay. That's the problem: the market may be rebounding, but skilled labor is not getting paid what they could command in 2007. Two other things are really hurting the professionals here. Non-union labor will work for $30/hour or less, and a lot of homeowners will do their own work for nothing. Second, there are skilled workers who have come up from Florida and California in this market that are looking for work. All told, there is more work, but like everything else in this economy, it just doesn't pay what it used to. My son is in his thirties but his family lives in the basement rent free because he and his wife cannot make enough to survive on their own. Despite the fact he works six days a week and sometimes in the evening, he and his wife are not going out to dinner and I don't think they've been to a real restaurant (as opposed to Denny's) in over a year. Still, he thanks his lucky stars he never got sucked into loans for college and that he is in a trade that will have some low-level demand at all times. Many of his college-educated friends are doing much worse than he is.

@Numerian says:

"When the credit stops flowing, income is hit hard, because most of the growth in income in the economy is produced by debt,"

When credit stops flowing, income is hit hard because ALL of the growth in income in the economy is produced by debt ... and has been since the beginning of the industrial revolution. No debt = no industry!

What we are experiencing are two interrelated phenomena: an energy shortage due to our wonderful economic 'success' over a period of 400 years and the consequences of exponential growth of loans needed to 'buy' this success..

Debt is taken on to capitalize industries and their customers. More debt is taken on later to fill the pockets of the industrialists and roll over the first rounds of debt. Finally, debt is taken on the service the previous rounds and nothing more, the economy is saturated with debt.

The first round of debt gains the industrialist tools to produce goods and provides customers with purchasing power. The second round gives the industrialist his fortune and repays the venture capitalist: during this round fewer tools are gained and less in the way of goods are produced. The third round pays the moneylenders' interest and nothing more, customers and industries are bankrupted by their debts.which are unproductive. Eventually, the moneylenders also fail.

'Moneylenders' here must also include the central banks.

Our economy is in the third stage and has been here for awhile, perhaps since 1980 and the 'Reagan Revolution'.

Added to this is the ongoing shortage of liquid fuels which results in higher prices which must be met with debt. The cost of new fuel rises past what customers can borrow using fuel waste ... as collateral. Waste of the fuel does not provide an organic return so all returns must be borrowed adding to the demand for debt... during a period when productivity of debt is diminished.

We are bankrupt = we are out of gas.

Thought I was registered now..., but got an error message when I tried to log in..., anyway..., this is my response to Mauberly. I tried to link to it in my previous comment..., but it didn't take.

Housing Starts finished the year with a flourish (subject to revision of course). A 954,000 seasonally/annualized adjusted number is the highest monthly figure since June 2008. One thing to keep in mind is the monthly averages for housing starts in 2009, 2010, and 2011 weren’t much more than half that 954 (hundred thousand) figure. That demonstrates how far we have progressed. Another thing to keep in mind is how far we have to go. The worst five year period for housing starts since 1959 was 1989 – 1993. That number was 1,254 (hundred thousand). The next lowest five year period was 1,372 (h-t) from 1966 – 1970. So…, I would have to view housing starts as nothing but good news. They are on a slow but steady roll upward, and the fact that we still have a long way to go to get back to normal numbers…, means there is a whale sized build-up of pent up demand. Demand for affordable houses, that is. If you look at the historic numbers, this Housing Bubble wasn’t so much about the number of housing being built. The ten year period 1970 – 1979 produced 1,768 housing starts. The ten year period from 1997 -2007 was 1,728. So “our’ housing bubble wasn’t even a record for a ten year period. We can claim the five year record if we take the 2002 – 2006 period of 1,875…, but it only wins by a nose to the 1969 – 1973 period, at 1,871. During “our” bubble, the best year was 2,068 in 2005. That takes the prize…, but we had three years of 2,000+ in a row in 1971, 1972 and 1973…, and topped 2,000 once again in 1978. The housing bubble was more about the price of houses. Inflation was a big factor, but also the McMansion (to borrow a phrase from Kunstler) factor. People were building huge houses that drove up property prices that helped fueled the inflation factor. Everyone was speculating…, being ever so gently guided along by the friendly banksteer-broker…, putting no money down with the intent of just paying the interest until they could flip the $500,000 property and pocket a cool 10% profit of $50,000 (or more) in a year (or less). It’s my belief that there are way…, WAY…, more people that deserve to get badly burnt on this deal than there are people that deserve to be bailed out. Anyway…, going forward I would have to say it is looking good for the economy in general because of the improvement in housing starts…, 28 percent increase over last year…, with room to improve and pent up demand. For real estate overall…, there is that question of what whoever really owns some of that high priced real estate is going to do with it? I suppose there will be a lot of folks who are too far in debt to foreclose on…, and they will continue to live rent free for a few more years…, and that may be a good thing for the economy too. They will have money to spend instead of pouring it into an underwater mortgage…, or they may be saving up to build an affordable house. That would be a good thing because it would generate a nearly endless list of the people that it takes to build a house and the jobs that home building supports. The only guy employed in selling an existing home is the real estate agent. So…, real estate overall, house prices, have they hit the “bottom”? I would have to say yes, based on what housing starts are telling us. I think if the current housing prices were broken down into affordable vs high end properties you would likely find that most of the gain is in in the affordable category. If it wasn’t for the super discount on the high end stuff holding the figures down we might see better statistics. I am thinking you could get a pretty nice discount on a high end house now…, but not so much on an affordable home. Of course we could have a meltdown in Japan, or Europe, or China…, well…, the whole world really. But I think the US will weather it as well as anyone. I’ve been only about 10% equities and 90% cash for a long, long time now. Housing Starts are telling me that it might be time to adjust those percentages a little. Been waiting for a market correction to take advantage of…, if we don’t get it on this debt ceiling thing…, I may not want to wait any longer.

 Your point about the HELOC's..., yeah..., folks bought boats and SUV's and RV's and ATV's and Big Screen TV's and it all contributed to the debt build up.  But we have had five years of debt deleveraging now to help work that off.  

About the Fed and their "debt".  I am beginning to think that the MMT guys are right.  How do they say it..., "a soverign country with a fiat currency is NEVER revenue constrained"?  What can I say?  Who is going to be the one to call the bluff and bring everything down?  As my hero Red Green says, "We're all in this together" !!!!

Yeah..., back in 2008 I didn't see how on earth we would ever get to this point in 2013 without a major financial meltdown..., but we have..., and I don't see us in as dire straits now as I did then.  But..., I was wrong back then..., hope I'm not wrong again !!!

Right on partner..., write on.

It's looking good that I've finally got the commenting without registering fixed. Folks, I know registration and logging in is a pain, so I hope to improve that in the future, but please consider it for there will be more features to enable people to track their comments, plus you can now write your own Instapopulist.

Anyone having problems writing comments, especially registered users let me know, by email if necessary.

As always anonymous comments go into a moderation queue. Only registered users can write without moderation.

Beyond showing Keynes works, that's why deficit reduction during a recession and fundamentally not gradual is a disaster. Look at what has happened to Europe. Entire countries thrown into depression with no work to be had.

Corporations that own the media need to make everyone with any kind of income (and a job) to feel that they can spend that cash. Too much PBS, too much ZH, too much EP, any stories of families being destroyed, too much reality would get people pissing in their pants and saving every nickel they collected while possibly demanding real change NOW. Most of the people visiting sites based in reality are those who are smacked with reality every day and look to fellow minds for comfort (e.g., downsized folks, debt-laden kids, people with open eyes and ears that don't buy false political paradigms).
Mass media creates the message, "good times are back," spend spend spend, and look, NYC penthouses are reaching high levels again, so that means Joe Average must be doing well (forgetting the fact lots of foreign corrupt $ buys luxury items and luxury goods never had any bearing on the middle of America).

And if you've got a job, even if you have 1 or 2 or 3 relatives long-term unemployed, their stories of misery and utter woe just bring the party down for many. Sure, the misery has been spreading from steel and autos to white collar and every sector now so no one is immune, age discrimination is rampant, college kids can't find jobs anymore, so the whole Nation is going Third World status. But the people keep creeping back to the dry spot on the Titanic, thinking if only those drowning people would shut up already the Titanic would float. Meanwhile, as long as the band keeps playing, things will hopefully work out. Distractions, distractions, meanwhile the rich folks that call the shots are nice and dry in the lifeboats. But everyone else thinks if they just keep the band playing, they won't drown like every other 99%er. If only they could be distracted and the drowning people would just shut up, all will be well, because everyone with $ and a job deludes themselves into thinking their skills are so unique, so special, their education and work ethic is so fantastic that they are irreplaceable. The ever growing number of drowning passengers respectfully disagree and should give anyone with a brain a moment of serious doubt.

Awesome, because Lance Armstrong destroyed the global economy. The same way steroids in baseball corrupt entire governments and own the feds, EU, etc. Next on the list, big soda - it's evil and Bloomberg doesn't like it one bit. Our taxpayer dollars funding another distraction.

If someone has an IQ over 90, are they presumed overqualified for an Assistant US Attorney position? US Attorney position? AG spot? CEO of an investment bank? If they give a crap, will they be homeless under a bridge in LA or NYC? Blankfein's laughing his lazy, incompetent, puffy ass all the way to his TV that's broadcasting CNN while avoiding anything resembling a bicycle seat as he sits his ass in his newly bought mansion (courtesy of us). Notice how fast the feds jumped on this bike case, but they simply must take years and years to decide they don't want to prosecute banksters and Murdoch and others that pull the strings - hmmm, how odd (just kidding).

Oh sweet mockery of justice, how many FBI Special Agents and Assistant US Attorneys were involved in that Kardashian case of photos being sent that Kim didn't approve of? And welcome to the Banana Republic of the USA. Avoiding the real crime at all costs and only for $70,000 - $225,000/yr. per attorney (pre-bankster defending careers of $1 - $10 million/yr). Transparency International, WTFU, this is corruption, BS criminal cases that don't go after the state-destroying issues. Because when it comes down to lying, doping bike riders vs. big banksters that steal, manipulate, perjure themselves, bribe, break RICO and FCPA laws, cause suicides, launder money for terrorists and criminals, forge documents by the 10s of 1,000s, manipulate stocks and commodities, ruin national governments, etc., we see what's important - bike riders of course!

Check please.

It's amazing, absolutely amazing. Timmy "Turbotax" Geithner, part-and-parcel of idiocracy at the top levels, is moving on to the CFR before his inevitable gig with Government Sachs or Citi or Blackrock. The man can't figure out his own taxes, gets hired to be in charge of our taxes, and then gets another gig before he moves on to making six or seven figures. Hey, fellow Americans, see Tim isn't "overqualified," he's incompent, corrupt, and connected, that's why he gets jobs and we can't.

What a complete mess. Meanwhile, in Greece, Spain, and Italy, people are losing their minds over actual HUNGER, the kind we thought only Africa experienced. Oh, that's right, the same corruption that helps destroy African nations is now in Europe and America courtesy of politicians, kleptocrats, and other players. Can we stop sending our $ through the World Bank and the IMF to other nations (we are the biggest funders of course) and keep it here? Can we maybe keep some $, stop giving it away so nations that hate us get free weapons, and feed and clothe American citizens that went to school, served their Nation, and understand the pledge of allegiance (and no, plutocrats and banksters, it doesn't involve "profit" or "pissing on my fellow Americans"). Because while corrupt officials get rich or build their 1%er resumes working at the World Bank, IMF, CFR, and UN before moving on to Goldman or UBS, we are actually starving right here in the Western world. What a train wreck. I wonder, how long before the National Razor comes back out in Paris? Tick tock, tick tock.