Edge and Odds

The enemy of knowledge is not ignorance, it’s the illusion of knowledge (Stephen Hawking)

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so (Mark Twain)

Edge and Odds

Invest with smart knowledge and objective odds

NEW$ & VIEW$ (30 DECEMBER 2015)

U.S. Home Price Growth Strengthened in October

The S&P/Case-Shiller Home Price Index covering the entire nation rose 5.2% in the 12 months ended in October, stronger than a 4.9% increase in September. (…)

All 20 cities were up month-over-month, seasonally adjusted. After seasonal adjustment the national index was up 0.9%. The 10-city and 20-city composite were up 0.8% over the month. (…)

Saudi Arabia Won’t Change Oil Production

Top oil exporter Saudi Arabia won’t change its current reliable production policy and is ready to meet any additional demand from its customers, the kingdom’s oil minister Ali al-Naimi said Wednesday.

“It is a reliable policy and we won’t change it,” Mr. Naimi told reporters on the sidelines of an event in Riyadh.

“We will satisfy the demand of our customers. We no longer limit production. If there is demand, we will respond. We have the capacity to respond to demand,” he said. (…)

(…) By raising gasoline prices by half, from a negligible $0.16 (U.S.) a litre to a merely cheap $0.24 a litre, Saudi Arabia’s new rulers showed willing to make some tough decisions in their quest to enact sweeping economic reforms for an era of low oil revenue.

The financial viability of the world’s top oil exporter and its ruling Al Saud family hinges on its stomach to sustain such extensive changes in a country that has no elections and where political legitimacy rests on distribution of oil revenue. (…)

The government has pledged to reduce growth in the public payroll of 450 billion riyals ($166-billion Canadian), for example, but has given little information of how it will do so in a country where the majority of working Saudis are employed by the state.

The Al Saud, nervous of inciting unrest, has often fought shy of reforms that may anger normal Saudis, but with oil prices seemingly locked in at low levels, the administration of King Salman, who took power in January, is pushing big changes. (…)

NEW$ & VIEW$ (29 DECEMBER 2015)

U.S. holiday retail sales grow a ‘solid’ 7.9 percent: MasterCard | Video
The Return of the Affordable Starter Home

(…) Following the success this year of D.R. Horton Inc.’s low-cost Express brand, national firms including Tri Pointe, Taylor Morrison Home Corp. and Meritage Homes Corp. are testing cheaper offerings in markets from Colorado to Florida to California. (…)

The median size of a new single-family home was 2,445 square feet (227 square meters) in the third quarter, little changed from a year earlier, after rising 17 percent over six years from a low in 2008, according to an analysis of U.S. Census Bureau data by Robert Dietz, an economist with the National Association of Home Builders. (…)

D.R. Horton, the nation’s largest builder, now collects 14 percent of its revenue from its Express brand, which it started last year and plans to expand in 2016 to most of its 79 markets. LGI Homes Inc., a Texas-based builder of entry-level houses that became a public company two years ago, has been the best-performing homebuilder stock this year. It reported an 88 percent increase in revenue in the third quarter from a year earlier. (…)

Saudis unveil radical austerity programme Attempt to tackle yawning deficit caused by falling oil price

(…) But this year’s deficit ballooned to 367bn Saudi riyals ($97.9bn,) or 15 per cent of gross domestic product, as oil revenues fell 23 per cent to Sr444.5bn. (…)

Riyadh would revise energy, water and electricity prices “gradually over the next five years” to optimise efficiency while minimising “negative effects on low and mid-income citizens and the competitiveness of the business sector,” it added.

The first reforms will be effective from Tuesday, including an increase in gasoline prices, a rise in electricity tariffs for the wealthiest consumers, a modest increase in water costs for all, and changes to all energy prices for industrial users.

The government will also seek to implement a plan for the introduction of a sales tax across the six Arab Gulf states. (…)

Real gross domestic product this year is expected to rise by 3.35 per cent, with the private sector growing at 3.74 per cent. (…)