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Dave Kranzler

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  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    Do I understand? I wrote in my article that they were FCF positive not including inventory build-out. If you re-read carefully, I make the argument that they should use that cash to pay down debt. They have plenty of existing inventory they can sell.

    A four-year deal that has to price at 440 basis points over the equivalent duration Treasury is the market telling us: "this company is probably a dead man walking, but we need to buy anything that has yield on it." They probably could have gotten a secured bank debt deal at around 2%, but that assumes banks were willing to lend on their inventory.
    Apr 12 09:22 PM | 1 Like Like |Link to Comment
  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    Mtg purchase apps bounced after dropping like a stone for several weeks in a row - down to the level of apps in mid-1995. In other words, the last time purchase apps were this low was 19 years ago. They were due to bounce and they were still down a staggering 14% from the same week last year, with mortgage rates about the same level.

    You don't build wealth by piling more debt on at the top of the market.
    Apr 12 09:18 PM | 1 Like Like |Link to Comment
  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    My point is that the market has topped and is going to topple over. Builders always are the most optimistic at the top of the market. Look at the builder sentiment back in mid-2005. All-time high - right at the top. Same thing just happened a few months ago - builder sentiment hit the same high level that it hit at the top in 2005. Wash - rinse - repeat - don't forget to set the spin cycle to "heavy spin."
    Apr 12 09:14 PM | 1 Like Like |Link to Comment
  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    Lol. Uhh, ok. I've been following and trading this sector for about 25 years and it's always the same cycle. The builders go bankrupt, they reorganize, the market gets better, they borrow as much money as they can to build up land and inventory right at the top of the market. Wash, rinse, repeat.

    HOV and BZH didn't go bankrupt because the about $4 trillion in Fed and Govt stimulus bailed them out. Now they're taking OPM (other people's money) and building inventory when they should be taking steps to improve their balance sheet.
    Apr 12 09:12 PM | 1 Like Like |Link to Comment
  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    Lol. You seriously believe that? California has inventory and its weather has been warmer than normal all year and home sales are falling off a cliff there.

    Read thru some of my recent articles because I show definitively with data that the weather "narrative" was false. Inventory has been climbing as well in most markets
    Apr 12 09:09 PM | 1 Like Like |Link to Comment
  • Beazer Home's Debt Deal Reflects Deteriorating Homebuilder Fundamentals [View article]
    Huh? My whole point is that the housing market is heading south again. Just because you "build it," it doesn't mean "they will come."

    If you read thru my previous articles you will see that I have exhaustively supported my position with data. The market rebounded because of massive Fed/Govt stimulus and because large investment buyers needed to find ways to try and generate returns on capital so they engaged in buying up massive portfolios of homes that they are some a modicum of success renting out. They are now no longer buying and some are looking to sell.

    Who's going to buy homes now that anyone capable of fogging a mirror and wanted to buy home has now taken advantage of easy FHA money and bought?
    Apr 12 09:07 PM | 1 Like Like |Link to Comment
  • March Auto Sales: Headline Numbers Conceal Fundamental Weakness [View article]
    The "bad weather" narrative is complete nonsense. In fact, the bad weather in Chicago boosted sales of Chrysler's Jeep Cherokee. That comes direct from a dealer I know there.
    Apr 3 02:00 PM | Likes Like |Link to Comment
  • Another Debt-Fueled Spending Spree? [View article]
    "Strong" sales were expected, so far with GM still to report (a computer glitch - ha ha, yeah right - is delaying its report till after the stock market closes) month to month sales have been tepid, with slight growth. GM was likely negative.

    "Cold weather" has been shown ad nauseum to not have been a factor in poor economic reports. Take Jan auto sales, for instance. Dealer reports from Chicago suggest a banner month in January, especially for Chysler. Yet, Chicago had some of the most brutal weather in the country during January.

    As spring months unfold, the weather narrative will be proven to have been the call of King Canute as the tide flows out.
    Apr 1 01:12 PM | Likes Like |Link to Comment
  • U.S. Real Estate - All The News Is Bad [View article]
    Amazing there's another housing market bear on SA besides me. I disagree with your comment about rising prices being the sign of a healthy market. I discuss this idea in here: http://seekingalpha.co...

    Rising prices are nothing more than reflection of the massive investment fund demand that occurred over the last two years. That is going away. Case-Shiller is not a good index to measure prices because it has primarily picked up on the affect of flippers buying a home for $200k, putting in $25k and selling it for $250k. Voila, a 25% increase in prices. C-S only tracks existing home resales. Even Robert Shiller has said it's not a great index of prices. It's also only for the 20 largest MSAs.

    The housing market is getting ready to collapse again, and this goes for apartment rental rates as well. I know in Denver that the inventory of new apt units is going to bubble up over the next few months. This comes from someone in the apt leasing business plus I can see many new buildings in central Denver that are now offering move-in incentives.

    I'm also starting to see a jump in the number of homes being offered for rent - many of them previously were for sale but removed from MLS.
    Mar 31 11:09 AM | 3 Likes Like |Link to Comment
  • The Housing Market Is Starting To Get Hammered [View article]
    Bill Miller's fund was annihilated in 2008-2009 for the very same reasons he says housing market bears are wrong.

    And where are you getting your information on household formation? Here's the facts: http://bit.ly/1myD8V4

    And even if "households" are forming, they aren't buying homes because they can't afford homes. Anyone who can afford a home has largely bought one either in the first bubble or the this last bubble.

    Inventory? The NAR inventory is a load of garbage. There's 14 million vacant homes in this country according the Census Bureau, of which only 5 million are classified as vacation homes.

    The GSEs and the banks are sitting on loads of REO. I've posted research source links on that in previous articles. Then there's the cohort of underwater homeowners that would love to sell but can't or their credit gets annihilated because it would be a short sale.

    The shadow inventory in this country is massive.

    But all that does't matter because inventory could be zero but if there's not any demand, then it doesn't matter what inventory is.
    Mar 28 02:17 PM | 6 Likes Like |Link to Comment
  • The Housing Market Is Starting To Get Hammered [View article]
    Historically 40% of the housing market is comprised of 1st time buyers. By the latest count from the NAR, it was down to something like 27%. Your kids are lucky to have little debt and jobs that pay them enough to buy a home. I never said every single person under 30 can't buy a home. But the trend is troubling and the factors driving the trend are getting worse, not better.

    Until someone can present me with the definitive reasons for how and why the economy in this country is capable of real growth - as opposed to the make believe manipulated numbers spit out by the Government - I believe I'm correct in forecasting that the most brutal economic depression in the history of this country is going to hit. That ain't gonna be good for housing.
    Mar 28 01:28 PM | 3 Likes Like |Link to Comment
  • The Housing Market Is Starting To Get Hammered [View article]
    The point of the analysis that the main source of demand, institutional investor buying, is done. That fact is now being reported all over the place. Even Marketwatch had an article about it today. The second point is that the primary "organic" component of home buying demand - the first time buyer - is dying on a vine because of student loan/credit card debt and lack of jobs that pay enough to support a home.

    Even the NAR admitted that the first time buyer is having problems affording a home because of debt.

    So, for things to "heat up," as you say, from where is the demand going to come? Mars?

    I havent' even touched on the fact that the GSE's + FHA have made it more onerous to get a mortgage. And I haven 't discussed the "zombie" homeowner recently. But guess what? Foreclosures are starting spike higher again and as prices decline, which they are already, many people who got back to even or might even have a small amount of equity will be underwater again.
    Mar 28 11:58 AM | 6 Likes Like |Link to Comment
  • The Housing Market Is Starting To Get Hammered [View article]
    SRS
    Mar 28 11:53 AM | 1 Like Like |Link to Comment
  • February Existing Home Sales Data Shows Accelerating Housing Market Contraction [View article]
    Wrong once again: "Grant" = options expiration, "disposition" = selling shares. It's not the nasdaq per se, it's the SEC filiings, as in ACTUAL SEC Form 4 filings. You can pull each one up and examine the details. You clearly have not done that and instead have relied on some b.s. site, which is showing big "dispositions" anyway.

    Every single homebuilder executive at every single public homebuilder company has been unloading shares for the last year. It's consistent with insider selling in general on NYSE.
    Mar 25 08:47 PM | 1 Like Like |Link to Comment
  • February Existing Home Sales Data Shows Accelerating Housing Market Contraction [View article]
    It's popping now. Big investment buyers are done and first time buyers are diminishing. Even would-be first-time buyers can't buy because they either have too much student loan/credit card debt or can't collect a big enough down payment to get them out of mom and dad's basement. Even the NAR acknowledged that factor. It's most truthful I've EVER seen the NAR.

    Who's left to buy? Mexican immigrants? The upper 1% already have enough homes.

    The bottom is falling out of the demand side of the equation just in time for supply to start ramping up again.
    Mar 25 01:12 PM | 1 Like Like |Link to Comment
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