Update No. 47 – 17/02/12

I made the first ever sales of some stock over the last week or so, I will go into the sale in a little more depth next week… This week, I attach the external Auditors mid-year asset confirmation.

Regular readers probably expected me to update regarding this earlier (given the data confirms the position I’ve been harping on for about a year), but I thought I’d wait and see how the facts were reported through mainstream media.  The fact is I am pretty sure that gradually MSM are catching up with the idea that the US recovery is much stronger and more sustainable than they have been reporting.  A good example of someone who has been extremely cautious in his outlook is Felix Salmon, who I think is one of the best bloggers on economic matters in the world.  His “Fantastic News on Jobs” post draws attention to the undeniable momentum in US unemployment. August 9.1%, September 9.0%, October 8.9%, November 8.7% & December 8.5% – Notice a pattern?  The last 3 months of 0.2% per month of shrinking unemployment is to my view an ideal rate (though hard to imagine perfectly sustainable), if sustained for the next 12 months, these falls would see the US unemployment in the low 6% range by this time next year.  The graphs in Salmon’s post also show a declining E/P ration, which I discussed a few weeks ago here; this must be addressed to embed the recovery fully. Interestingly, the Australian unemployment rate fell in December, though at only 5.1%, it must be somewhere approaching the ‘natural rate’.

US Housing Starts grew only 1.5% from November (689k to 679k – still less than 1/2 of annual housing formations) to December,  which may cause questions about the strength of the housing recovery, but that figure fell 4.3% from November to December last year (to 529k starts), December is traditionally weak for housing starts.  So building permits are up 8% year on year (YOY), housing starts are up 30% YOY & housing completions are up 7% YOY.  January housing starts hit 699k, so growth continued albeit at a slowing rate.  Over the next 12 months, I expect the housing starts annual growth will slow, but if the housing starts are anywhere near 800k by December 2012, the building industry in the US will be well back on a growth path.  The ‘Wildcard’ as always remains Europe, to me the most likely outcome is a prolonged muddling along in the Euro region, which can be dealt with; a major melt-down still remains quite possible though.  Greece must leave the Euro I think, but the politicians are unlikely to face that need anytime soon – Tony Hansen 17/02/12.

EGP Fund No. 1 Pty Ltd. Up by 4.05%, leading the benchmark by 0.51% since January 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 0.15%, leading the benchmark by 10.42% all-time (April 1^st 2011).