RTA Live: December 1, 2015



CoreLogic HPI | Why, When, What

Takeaway: October HPI trends - which showed a 3rd month of acceleration - remain a moderate tailwind for the housing complex.

Our Hedgeye Housing Compendium table (below) aspires to present the state of the housing market in a visually-friendly format that takes about 30 seconds to consume. 


CoreLogic HPI | Why, When, What - Compendium 120115


Today's Focus: October CoreLogic Home Price Report


WHY: Historically, the 2nd derivative trend in home price growth has shown a strong direct relationship with equity performance across the housing complex and across builders in particular.  A primary reason is that accelerating price growth effectively gets captured in land values, raising the value of lots in inventory with that margin capture dropping through the P&L and augmenting profitability.  


WHEN: After peaking in early 2014, price growth decelerated discretely through 2014 year-end. Along with the tail impact of rising rates (2013 Taper Tantrum) and the Peak in regulatory tightening (QM implementation, Jan 1014), negative price growth trends drove significant underperformance in housing equities through the first 3-quarters of 2014.  Price growth subsequently stabilized and accelerated modestly in 1Q 2015 which, along with positive seasonality and easy volume comps, drove marked outperformance for the group. 


WHAT: As the 1st chart below illustrates, price growth across all three primary HPI series is again showing modest acceleration the last couple/few months – a largely unsurprising development given the ongoing, crawling improvement in demand, continued supply tightness, and prices' lagged relationship with demand.   


From here, it’s more likely we see some stabilization in price trends rather than another iteration of the large-scale inflections (i.e. +/- 15% YoY) that have characterized the post-crisis period to-date but, as it stands, HPI trends remain a moderate tailwind supporting the complex.  


CoreLogic HPI | Why, When, What - HPI 3 Series 2


CoreLogic HPI | Why, When, What - CoreLogic ExDistressed


CoreLogic HPI | Why, When, What - HPI vs ITB



About CoreLogic:

CoreLogic HPI incorporates more than 30 years worth of repeat sales transactions, representing more than 55 million observations sourced from CoreLogic's property information database. The CoreLogic HPI provides a multi-tier market evaluation based on price, time between sales, property type, loan type (conforming vs. nonconforming), and distressed sales. The CoreLogic HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same homes over time, which provides a more accurate constant-quality view of pricing trends than basing analysis on all home sales. The CoreLogic HPI covers 6,208 ZIP codes (58 percent of total U.S. population), 572 Core Based Statistical Areas (85 percent of total U.S. population) and 1,027 counties (82 percent of total U.S. population) located in all 50 states and the District of Columbia."


Joshua Steiner, CFA


Christian B. Drake


Please join us on Thursday, December 3rd at 11:00AM EST, for our Thought Leader call with Rick Berman. 



Toll Free:


Confirmation Number: 13625958


On the call we will be discussing a number of important topics facing the restaurant industry, from labor issues, to the potential for increased restrictions on alcohol consumption at restaurants.  In addition, Rick will talk about the Center for Consumer Freedom and the number of issues they have with Chipotle.  The Center for Consumer Freedom has been very critical of Chipotle's advertising message among other issues.


The topics we will discuss on the call will include the following:

  1. A view “inside the beltway” on minimum wage and the risks facing the restaurant industry?
  2. Potential new restriction on the sale of alcohol and what can be done to mitigate the impacts increased regulation?
  3. What Chipotle’s protein “standards” are versus other restaurant companies (beef, pork and chicken).
  4. A discussion about the use of antibiotics in the food supply and the difference between USA vs International standards.
  5. Dispelling the myths around antibiotics in meat.
  6. Did CMG changed its standards around antibiotic in the meat its serves?
  7. How is CMG’s advertising a form of fear mongering.
  8. What is the real meaning of cage-free/free range?  Does this definition matter?
  9. How prevalent is non-gmo feed?



Rick Berman Bio

Rick Berman is President of Berman and Company, a Washington, DC-based public affairs firm specializing in research, communications, and creative advertising.


Berman has founded several leading nonprofit organizations known for their fact-based research and their aggressive communications campaigns.

A long-time consumer advocate, Rick champions individual responsibility and common sense policy. He believes that democracies require an informed public on all sides.


Berman was previously employed as Executive Vice President of Public Affairs at the Pillsbury Restaurant Group, where he was responsible for the government relations programs of all restaurant operations. He was also a labor lawyer at the United States Chamber of Commerce, the Dana Corporation, and the Bethlehem Steel Corporation.


Rick Berman has testified on numerous occasions before committees of the various state legislatures, the U.S. Senate and the U.S. House of Representatives. The Hill, a popular Washington, DC newspaper has named him a “Star Rainmaker” on Capitol Hill. Rick has appeared on all the major broadcast and cable television networks, and has organized national coalitions to address a wide variety of issues.


Here is the link to the center for Consumer Freedom web site -


In addition, here is a link to the Chubby Chipotle web site -


Please call or e-mail with any questions.


Howard Penney

Managing Director


Shayne Laidlaw





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REPLAY: Healthcare Analyst Tom Tobin in the Studio | $ATHN $AHS $ILMN $MD

Headgeye's Healthcare team hosted a live Q&A session today at 1:00pm ET to discuss Illumina (ILMN), MEDNAX (MD), AMN Healthcare (AHS) and athenahealth ATHN.





  • Key takeaways from our recent conversation with the Chief Medical Officer of Genomics and Pathology Services at top U.S. academic medical center
  • Maternity Tracker Update through November and latest thoughts on MD
  • Callouts heading into ATHN's Investor Day and preview of our institutional update call next week on 12/8

in case you missed the replay below



The Macro Show Replay | December 1, 2015


CHART OF THE DAY: The Great Unwind [Inside the Commodity Price Super-Cycle]


CHART OF THE DAY: The Great Unwind [Inside the Commodity Price Super-Cycle] - 12.01.15 EL chart


Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to subscribe.


"... As you can see in today’s Chart of The Day (slide 41 in our current Global Macro Themes deck), inflation expectations hit an all-time high in 2011-2012 as Ben Bernanke devalued the US Dollar to a 40-year low.


That, you see, was the key to Bernanke’s storytelling – not creating real, sustainable growth – but creating the illusion of growth (commonly called inflation). With that expectation in hand, the world’s asset inflation chasers built massive oversupply.


Priced in devalued Dollars, 2 of the top “asset classes” one would chase if expecting perpetual inflation are:


  1. Commodities that settle in US Dollars
  2. Leverage (Debt) linked to inflation expectations

That’s why our recommended asset allocation to both Commodities and Junk Debt has been right around 0% for the last 18 months."   

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