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MIke NO LONGER posts on Seeking Alpha. Mike Stathis is the Managing Principal of Apex Venture Advisors, a business and investment intelligence firm for the private and public markets, serving the needs of venture firms, corporations and hedge funds. Mike’s work in the private markets includes... More
My company:
AVA Investment Analytics
My blog:
AVA Investment Analytics
My book:
America's Financial Apocalypse: How to Profit from the Next Great Depression
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  • Nurses are Right about the Problem but Wrong about the Solution
     
    Last week, more than 14,000 nurses from Minnesota hospitals staged a 1-day walk-out as a sign of protest over excessive patient loads.   
     
    The nurses are right about staffing shortages and overloaded responsibilities.
     
    However, their solution – hiring more nurses will add further costs pressures to America’s unsustainable healthcare bubble.
     
    Without radical change, this bubble promises to burst, adding yet another dimension to America's healthcare crisis.
     
    Most people already know that America spends far more than every other nation on healthcare by every measure, at 18% of GDP, while failing to provide coverage for over 40 million Americans.
     
    In contrast, all developed nations in the world spend anywhere from 6.8% to 10% of GDP (France is the lone exception, with 11% of GDP on healthcare) for a system of healthcare that delivers better standards of care and provides coverage to every citizen, regardless of employment status, income or age.
     
    Despite the overwhelming myths spread by politicians, pundits and many journalists, the quality of U.S. healthcare is mediocre.
     
     
    Furthermore, the outrageous costs of healthcare in the U.S. have created a unique consequence, unseen elsewhere in the world; that of medical bankruptcies. According to studies by medical researchers at Harvard, medical bankruptcies now account for about 50% of all personal bankruptcies each year in the U.S., at over 1 million.
     
    It would be natural to assume that virtually all of those who have fallen victim to medical bankruptcy lack health insurance.
     
    The shocking reality, according to Harvard researchers is that anywhere from 50% to 75% of those filing for bankruptcy attributed to medical bills or some medical condition actually had full health insurance.
     
    How is this possible?
     
    The fact is that even having full health insurance does not mean you are able to pay your medical bills. If you think a co-payment of 10% or 20% provides you with sufficient medical insurance, you are unaware of the cost of a cancer diagnosis or other chronic disease. In fact, America's crisis in chronic disease is about to spiral out of control. 
     
    Unfortunately, most Americans never learn the realities about the healthcare system until they are on their death bed, many having paid their last dime for medical bills.
     
    The research from Harvard emphasizes two of the most significant problems found within the health insurance industry; lack of price transparency and the unhindered ability of insurers and managed care organizations to raise deductibles, co-pays and add exclusions.
     
    The problems plaguing the U.S. healthcare system are numerous – fraud, overutilization, underutilization, medical errors, profiteering, lack of competition, poor and inadequate regulation.
     
    None of these problems have been resolved by Obama’s healthcare bill. Instead, this disastrous bill was shoved down the throat of Americans to ensure higher tax revenues, less choice, less coverage and higher costs.
     
    ObamaCare adds to the growing list of unconstitutional laws passed in just a few short years (Patriot Act, Homegrown Terrorist Act, and TARP). It should be clear that America has been seized by a fascist regime.
     
    Recall that Obama transformed healthcare reform into health insurance reform, all without bothering to reform the health insurance industry.
     
    Understand that, according to Washington's highly inaccurate inflationary data for 2009 (CPI -0.4%), health insurance premiums soared by 7% to 8%, outpacing general inflation by about 2000%. Thus, any discussion of hyperinflation must include healthcare. 
     
    Ask yourself how many times you have seen so-called experts use the words "healthcare" and "hyperinflation" in the same sentence?   
     
    The answer to this question should serve to point out hidden agendas by those you rely upon for unbiased and accurate insights.
     
    If you think the massive annual inflation in health insurance is bad now, just wait until ObamaCare kicks in full force. You should expect soaring deductibles, less coverage and soaring premiums.
     
    Obama's Healthcare reform act, if not revoked or radically revised, is likely to become the worst in law passed in U.S. history, second only to the Federal Reserve Banking Act. Ironically, both bills involved a significant amount of bribes and illegal activity. 
     
    I find it particularly odd how we have heard very little from Washington or the media since ObamaCare was signed into law. Normally, a bill of such magnitude would dominate the headlines for months if not years, unless it has been intentionally shielded by Washington and the media. This is precisely what has happened. 
     
    The topic of Obama's new healthcare law will only resurface as a means to leverage support for republican candidates in the upcoming election. Understand that both political parties have been bought off by the healthcare industry. Despite the protest from republican candidates, their solution does nothing to reform healthcare. Either way, Americans lose.
     
    Meanwhile, talking heads in the media continue to brainwash the American people by criticism of the current administration, only as a means to stack the odds in favor of the republican party. In reality, both parties are the essentially the same when it comes to issues that matter most to Americans.
     
    This is specifically why Washington continues to expand upon its highly unfair system of free trade, which continues to shuttle millions of good jobs overseas for the benefit of corporate profits. It is also why there will never be any significant healthcare reform as long as lobbyists run the show.  This is something most Americans fail to realize.
     
    I addressed these issues at length in America’s Financial Apocalypse. Those in control of the game do not want Americans to realize the truth. This is why I have been banned.
     
    It also explains why the media monopoly focuses its content on distractions, such as Paris Hilton, Octomom and other senseless trivia, all while encouraging impulsive activities that prevent people from thinking such as texting and twittering. The criminal psychology underlying these tactics is an entirely different topic of discussion.
     
    As I have stated in the past, Obama used healthcare reform as a distraction to allow his staff to negotiate what will end up being another failed reform for Wall Street. 
     
    Obama loves distractions because it offers him something he promised the people but has failed to deliver; hope. Distractions offer the faintest amount of hope that he can erase his numerous failures for a shot at another term.
     
    Here are just a few of Obama's broken promises:
     
    (1) Immediate removal of troops from Iraq
    (2) Restructure free trade policy
    (3) Provide universal healthcare (this was a lie from the beginning since his plan never included universal healthcare)
    (4) Those responsible for the financial crisis would be held accountable
    (5) No signing statements
    (6) Wall Street reform
     
    In his latest distraction, the BP oil spill has been positioned by Obama's strategists as an attempt to boost his horrendous approval ratings.
     
    At no time has the media monopoly dared to criticize his political strategy of distracting from failed reforms and the lack of any real improvements to the economy. The reason for this silence is because the media is in on the game as well.
     
    It's shocking how most Americans still fail to realize the fact that the mass media is their enemy, for if they truly understood how the media has played an even larger role in their demise than Wall Street, they would ban this malignant device of mind-control.
     
    The only way to fight the destructive nature of the media is to turn off the tube and stop reading. If done in mass, the industry would be forced into bankruptcy. Otherwise, Americans will continue to fall victim to endless lies and scams indefinitely. In the end, you are to blame if you chose to empower the media with your patronage.
     
    Don’t let the occasional criticisms of Obama fool you. If the media was truly being critical, journalists, pundits and so-called political opponents of Obama would ask why he has yet to indict any of the banking executives for securities fraud.
     
    Instead, the media has used Bernie Madoff to distract Americans from focusing on the massive wave of fraud by Wall Street banks, credit-rating agencies, banking regulators, the U.S. Treasury and the Federal Reserve.
     
    Recall, we witnessed the same thing after the dotcom collapse, whereby not one single perpetrator of this charade went to prison. Instead, the media used Enron and WorldCom - two companies that had absolutely nothing to do with the dotcom bubble - to distract from the real criminals who caused the loss of trillions of dollars from everyday investors.
     
    History only repeats because people have short memories and do not learn from the past. 
     
    The same will be the case for healthcare.
     
    Just a few years ago, lobbyists engaged in a variety of unethical and in some cases criminal activities to ensure that Medicare Part D was passed. We now see how disastrous this law has been, unless you are a drug company. Unfortunately, Obama's healthcare reform will be far worse than Medicare Part D. 
     
    While the medical-industrial complex will bear some of the burden for increased medical costs, it will be consumers who ultimately share the brunt. Make no mistake, health insurers, drug makers and employers who sponsor health insurance for employees will escape higher costs. They will pass all taxes and price hikes onto workers, causing a reduction in net wages. Others will add to the worrisome trend of sending more jobs overseas.
     
    In the end, the profits from medical-industrial complex will continue to shine, much as they have in the past. This is great news for healthcare investors but terrible news for Americans.
     
    I knew this reality long ago, which is why I have maintained my investment stance on the industry ever since releasing America's Financial Apocalypse in 2006.
     
    I reiterated my investment posture in my first online publication, Stay Clear of U.S. Assets, and many times thereafter.
     
    What else would you expect with 2100 healthcare lobbyists all with very deep pockets, other than continued control over U.S. healthcare policy?
     
    It is shocking how Americans have not demanded an end to all lobbyist activities. Doing so would represent the single largest step towards restoring the strength and equity in the U.S. economy. A nation without corporate lobbyists would also restore the vote of the people.
     
    Let me be clear, as long as lobbyists remain in business, Americans will have no vote. And they will continue to be held hostage to the price demands and collusive activities of the oil, financial and healthcare industries.
     
    If not defused carefully utilizing a long-term sustainable strategy, America’s healthcare bubble will share the same fate as all other asset bubbles. However, the consequences of the implosion of this bubble will play out differently ad persist for decades.
     
    Once America’s healthcare bubble pops, hospitals, nursing homes and other care facilities will shut their doors. Waiting lines will be ramped. Healthcare premiums will soar. Benefits will be slashed. This will add to the forces which have already propelled America into the Second Great Depression, as I first predicted a few years ago.
     
    Recently, I released the solution to America’s healthcare crisis in a book, titled America’s Healthcare Solution
     
    As someone who has worked in the private healthcare investment industry, I feel qualified to address the problems and detail the solutions to America’s healthcare crisis. I do so in an unbiased manner. My only goal in writing this book is to present an analysis and solution absent of political agendas because this is the only real path to a solution for the people.
     
    Do not allow yourself to be swayed by healthcare lies and myths preached by talking heads with absolutely no expertise in healthcare. What they do have are political and financial agendas.
     
    Do not allow yourself to be swayed by healthcare lies and myths preached by politicians. They too have political and financial agendas.
     
    If you want to understand the problems and solutions to America’s healthcare crisis, I would like to invite you to read America’s Healthcare Solution.
     
    The solution I provide offers the opportunity to create free-market healthcare, which despite the myth, does not currently exist. 
     
    The solution I have engineered is based primary on technology. However, healthcare policy must also be restructured and investment capital must be provided to encourage the vital participation of corporations and entrepreneurs.
     
    The investment required for real healthcare reform will build equity, rather than serve as temporary subsidies for the medical-industrial complex.
     
    Where will the funds come from?
     
    Investment in a national healthcare IT network will be quickly recouped once administrative bureaucracy, fraud and waste have been curtailed through a modernized healthcare system, designed for the twenty-first century.
     
    Understand that U.S. taxpayers already pay sufficient funds for universal healthcare, at 60% of total annual healthcare expenditures, amounting to 10% of GDP. Thus, there is a huge amount of waste in the current system.
     
    If executed according to the requirements I lay forth, America’s healthcare solution promises to reduce fraud, medical errors, waste, improve outcomes and increase accountability. Best of all, it repositions healthcare delivery into the hands where it belongs – caregivers and consumers.
     
    Consumers will know the costs of illness as well as the savings they can earn for healthy lifestyles.
     
    Physicians and nurses will be able to treat more patients more effectively.
     
    Choice, transparency, competition and accountability will be essential features of America’s healthcare solution.
     
    In 2006, I released what I argue to be the most accurate and comprehensive book predicting the collapse of the economy in my book America’s Financial Apocalypse. However, I was banned by the media because they desired to protect the agendas of their sponsors (Wall Street, corporate America and Washington).
     
    Instead, America's media monopoly opted for less credible sources, all with agendas and bias, many of which continue to spread myths, scare tactics and other rhetoric which will ultimately lead Americans to side with Wall Street once these outlandish predictions fail to materialize. This has been a very cleverly orchestrated strategy very few recognize.
     
    Regardless, one cannot change what has been previously published. Accordingly, America's Financial Apocalypse will continue to serve as a crystal ball for many years to come.
     
    Today, America faces similar dangers within its healthcare system. I first discussed these issues in my 2006 book. I have expanded upon this discussion in America’s Healthcare Solution.
     
    If you live in the United States, you owe it to yourself to find out the full unbiased truth about healthcare; something the media and Washington refuse to tell you.
     
    If you are an investor, you will discover amazing investment opportunities already being seized upon by a variety of high-tech firms. 
     
    Microsoft, Google, Cisco, Oracle, Qualcomm, AT&T, Verizon, Hewlett-Packard, Dell, Intel, AMD, Agilent, Medtronic, Boston Scientific, UnitedHealth, Humana, Healthways, and hundreds of other companies, both large and small are looking to seize a slice a of America's $2.3 trillion healthcare market.
     
     
     
     
     

    Disclosure: disclosure: BSX and HWAY



     
    Jun 15 2:49 AM | Link | Comment!
  • ObamaCare: Soon to be the Worst Bill Passed in U.S. History
    With Obama’s healthcare bill ready to sign, democrats are celebrating. Meanwhile, (supposedly) enraged republicans insist payback will come in November. This is part of the typical back-and-forth theatrics staged to galvanize voter support for each party. Please do not allow yourself to be fooled by these games. As the facts show, both parties are essentially the same when it comes to issues that matter most to working-class Americans; free trade and healthcare, as first detailed in America’s Financial Apocalypse.
     
    As you shall soon see, President Obama's healthcare reform bill falls way short of what is needed as a part of America’s economic revitalization. In fact, it is likely to create more long-term problems for consumers, all while boosting industry profits. Regardless what you may hear and read from America’s tightly-controlled media monopoly, the healthcare industry will continue its string of excessive profits at the expense of consumers and taxpayers. This is how things have always been ever since the medical-industrial complex took hold of healthcare after the Second World War.
     
    The end-result expected from ObamaCare should be obvious. It certainly was obvious to investors. After the bill passed the House Sunday night, healthcare stocks led the market rally the next day. The outcome was clear to the most sophisticated investors long before negotiations began. Less sophisticated investors only realized what would come of Obama’s healthcare reform by late 2009. As a result, HMO stocks have been rising since November 2009, significantly outperforming the S&P 500 Index. 

     
     
    None of this is any surprise to me. You might recall that I have been advising investors to stay out of traditional U.S. asset classes since May 2008, with the exception of healthcare and oil.  In fact, I stated the same thing in America’s Financial Apocalypse, which was released in late 2006.
     
    Although many of the details of this 2400-page bill have not been made final, by now even unsophisticated investors should realize that ObamaCare will end up favoring the industry. Rather than structuring real price controls and real competition into the most sweeping healthcare legislature since Medicare, Washington seems more determined to furnish health insurers with even more taxpayer subsidies along side of millions of uninsured Americans who will be required to purchase insurance. Meanwhile, drug and device makers will simply raise prices to pay for any new taxes. There will never be real change from an industry backed by one of the strongest, largest, and wealthiest lobbyist groups in Washington handing out billions of dollars.
     
    As the facts show, Obama has flip-flopped on every promise he made to Americans, from restructuring free trade, pulling out of Iraq, promising to avoid the use of signing statements,  financial reform, bringing accountability to those responsible for the economic collapse,  and many other campaign promises. As a result, healthcare reform remains as his last source of “change.” 
     
    So as you can imagine, the only thing important for Obama is that some kind of healthcare bill is passed. If he is unable to get healthcare reform passed, his advisers know that his chances for reelection will sink to even lower levels. Thus, Obama has been desperate to get the bill passed at any cost. Rather than a source of change, healthcare reform came to represent nothing more than a political maneuver for Obama’s advisers.
     
    Making sure healthcare reform is passed at any cost might even provide Obama’s ace “in the hole” because it will help voters forget about his numerous flip-flops. His PR team will take care of the rest of the details. Once healthcare reform is passed, Obama will proclaim he has brought change, and his brainwashed, celebrity-stricken supporters will believe it. Thus, it will breathe new life into Obama’s reelection hopes, with the help of White House propaganda.
     
    As a desperate attempt to get any bill passed, Obama allowed the industry to slice and dice the original bill. For instance, in exchange for the payoffs and promises from healthcare lobbyists, Medicare will (continue to) be prohibited from negotiating drug prices, there will be no substantial cuts to hospitals serving Medicare patients (these cuts are delayed until 2014), taxes to drug and device makers have been slashed (and they do not go into effect until 2014). Finally, there is no government insurance option; something absolutely required to ensure real industry competition.
     
    Health insurers insist that the 32 million new customers expected to be drawn in by mandated health insurance will be insufficient to offset the added costs resulting from changes to the system, such as a ban on denying insurance due to pre-existing medical conditions.
     
    Don’t be fooled so easily. Insurers know Obama’s watered down healthcare bill represents another gravy train for the industry. They know this because their lobbyists have been busy cutting deals with Washington for over a year. Nothing in the bill will prevent insurers from pricing high-risk consumers and those with pre-existing conditions out of the market because they are still free to raise prices with no real limits. While there are some clauses that address these issues, you shouldn't expect them to last. And if they do, I’ll guarantee you insurers will get around them somehow. They always do.
     
    Spokespersons and other industry advocates claim that state officials have the ability to oversee premium hikes. Yes, they have the ability, but will they be committed to act responsibly?
     
    I’m willing to bet anyone any amount of money they will abandon their responsibilities, as they have for many years. Healthcare lobbyists have even more control over state politicians than those in Washington. That’s precisely why the industry favors state regulation. It’s much easier to get away with fraud when your industry falls under state regulation because transparency is even lower than with federal regulation.
     
    The government insurance option was supposed to help boost industry competition. But when push came to shove, Obama backed off of this vital component because the most important thing for him was to get a healthcare bill passed - any bill, just so long as it passed. And there is no way the powerful health insurance industry would let anything stand in its way. It appears as if the industry will continue with its collusive and anti-competitive activities.
     
    It’s sad that the American people have become so blinded by the media to not realize this. Instead, they believe scare tactics pumped out by desperate politicians and brainless talking heads. The main problem is that these scare tactics don’t even address the real problems with healthcare; massive inflation, medical inefficiency, fraud and no accountability. Thus, those who are against ObamaCare don’t even realize they are against it for the wrong reasons. This ensures America’s healthcare mess will never be cleaned up.

    Going forward, Americans will have no one else to blame for their misery other than themselves, because they continue to be fooled over and over again by the media. History repeats because people never learn from the past. It happened with Wall Street and now it’s happening with healthcare. 
     
    It’s shocking how easy it is to control a population. You constantly distract them with trash TV, all connected to the pop culture, then flood them with media disguised as responsible journalism. Instead of researching things for themselves or asking journalists and talk show hosts why they only interview people with agendas or refuse to interview experts who oppose their views, most Americans accept what they are fed and move on to more important things, like watching trash TV and sporting events.
     
    While ObamaCare is expected to close much of the doughnut hole, Americans must understand this is yet another tax subsidy to drug companies. Medicare still won’t have the ability to negotiate drug prices. The problem with drug costs cannot be fixed by forcing taxpayers to subsidize costs for seniors. It can only be fixed by allowing Medicare to negotiate drug prices, just as every nation in the world does.
     
    Americans pay much higher prices for prescription drugs than everyone else in the world despite using more prescription drugs per capita. Therefore, they should benefit from volume discounts. They should actually be paying less for prescription drugs than everyone else in the world. However, due to the legalized drug monopoly established by Washington, Americans actually subsidize the costs of prescription drugs for every person outside of the United States. I’m sure foreigners would like to thank each American for paying part of the cost of their Viagra and Prozac.
     
    Rather than providing a means by which to make mandated insurance affordable to low-income Americans, Obama has taken the same path as President Bush by providing tax deductions. Tax deductions don’t help people afford healthcare if they have very little income to begin with, especially when insurers are free to raise prices as they wish.
     
    By my estimates, there are approximately 40 million Americans on food stamps and around 30 million Americans without jobs or marginally employed in some manner. And the economy is showing no real signs of improvement. In fact, it is likely to get worse. Regardless, for many Americans there will be no recovery whatsoever
     
    Do you really think tax deductions will help Americans who cannot find a decent job afford health insurance? Tax deductions simply create more tax dollars to be shuttled into the industry. Year after year, Washington keeps sending more tax dollars into the healthcare industry, helping to satisfy industry profit and compensation targets. In the process, Washington keeps fueling the healthcare inflation fire that will eventually bankrupt the nation if radical changes are not made.
     
    What’s truly needed are caps on drug prices and insurance premiums. Costs must come down dramatically without reducing benefits. The healthcare system must be made more efficient.
     
    Part 2 can be found here. http://www.avaresearch.com/article_details-488.html


    The real solution to America’s broken healthcare system will only come from a radical restructuring of the system based on technology and reforms to healthcare policy. In my new book, America’s Healthcare Solution, I have chosen to focus on a solution that creates real free market healthcare.

    Another article that took me 12 hours to write.

    Of course, Seeking Alpha refused to publish this piece because it wasn't  a "feel-good" article. Folks, you are seeing justone of millions of examples of MASS CENSORSHIP withing America's tightly controlled media monopoly.

    Rather than publish unique and insightful original content by experts, Seeking Alpha would rather pump out useless, repetitive trash by amateurs, all of watch CNBC and play off it in their pieces so as to gain a larger audience. Make no mistake. Seeking Alpha is no better than CNBC. In fact, they have established partnerships with this criminal network.  

    I can guarantee you that you will never wake up by reading Seeking Alpha.  I reccommend you stay away.  I will be writing an article in the future demonstrating how Seeking Alpha discriminates based on religion, as well as controlling which articles are viewed. I will also discuss how Seeking Alpha has censored me using blatant as well as less obvious methods. 

    In case you were not aware, Seeking Alpha is based in Israel. You know America is finished when Americans get censored by Israel despite the fact that the content is primarily intended for US publications. That alone gives you a small hint at who runs America. Just examine who runs and works in the media, Wall Street, the Federal Reserve and who runs Washington. 



    Disclosure: Long HWAY & BSX
    Mar 23 2:12 PM | Link | Comment!
  • Real Estate Confusion, or Lies?
    Do you ever become confused over daily economic data?
    If not, then you probably aren’t paying close attention.
     
    But that’s not necessarily a bad thing.
     
    If you don’t pay real close attention and spend a good deal of time analyzing what’s really going on, you’re probably better off not paying any attention to the data at all because it is designed to confuse you; to manipulate the truth.
     
    Most often, government officials, Wall Street and industry hacks intentionally lie to you as a way to build confidence. 
     
    After all, most of these “analysts, chief economists and investment strategists” you hear about are really in the business of sales and marketing, NOT research. 
     
    And the Fed Chairman?  Merely another cheerleader/politician, whose purpose is to permit extortion and fraud by the shareholders of the Federal Reserve.
     
    In the best of scenarios, these so-called experts are late to the party, most likely only after having drawn upon the research of real experts, who made accurate forecasts long before.
     
    The most recent example of such confusion occurred just before Christmas, on December 22, 2009, when the following headline was blasted all over the newswires...“November Home Sales Soar 7.4%.”
     
    As you can imagine, the moronic financial reporters attributed the day’s gains in the stock market to this bit of news; as if they know what moves the market.
     
    As I’ve discussed previously, these claims of this and that driving the market higher or lower are wrong more often than they are right.
     
    The point is that you had to read the report to know that the data was for home resales, not new home sales.
     
    The article also quoted numbers from the real estate shill organization, the National Association of Realtors. According to this fraudulent organization, about 2 million homebuyers took advantage of the $8000 first-time homebuyers tax credit.
     
    Despite this (unconfirmed) data, according to the article, the inventory of unsold homes on the market fell in November by 1% to 3.5 million. This number is wrong because it does not count homes in the closing process, nor does it count homes in the foreclosure process. As you can imagine, each of these processes typically last 2-4 months.
     
    Furthermore, this number (unsold home inventory) says nothing about the millions of homes that homeowners want to sell but have not put on the market because they are waiting for a better real estate environment.
     
    As mentioned in the past, I have estimated the total number of single-family homes for sale and vacant apartment units to be around 12 to 13 million.
     
    Apparently, home builders have finally figured out the reality, as shown by the most recent data on new housing starts below (although it took them a very long time to wake up).
     

    Home sales hit a bottom in January of 2009. And it has only been through government subsidies (your tax dollars) and special programs by Fannie and Freddie (which has created more risk to tax payers) that have helped sales rebound from this low.
     
    Despite all of these special incentives and risky maneuvers, more than one-half of the homes bought over the past two years have been foreclosures.
     
    [Click here to refresh your memory about Fannie and Freddie.]
     
    Adding to the confusion, the next day (December 23rd) the newswires reported that November homes sales plunged by 11%. 
     
    If you took the time to read both releases, you would have eliminated the confusion.
     
    But very few people take the time to do that. They act impulsively.
     
    This type of behavior can lead to a dangerous day-trading mentality. And that is precisely the media's intention. Along with creating the illusion of an improved real estate market, the media likes to generate trading activity for one of their biggest clients, Wall Street. 
     
    The point I’m trying to make is that at best, these news releases are designed to make investors behave impulsively so that they don’t take the time to sit down and examine what’s really going on.
     
    At worst, these news releases are designed to create the illusion of a strengthening recovery.
     
    The report was startling considering the fact that the tax credit for first-time homebuyers was extended through April 2010. And a $6000 tax credit was added for homebuyers who relocated.
     
    At the end of November, there were 235,000 new homes for sale; the lowest inventory level in nearly 40 years (since 1971). However, based on previous home sales data, that tiny amount still represents nearly 8 months of supply.
     
    Furthermore, the home resale data was for contracts signed over the summer, while new home sales data was for contracts signed in November.
     
    But who would expect new home sales to rise with millions of homes in foreclosure?
     
    Why pay a premium when you can get a better price in the foreclosure market?
     
    When you look at the big picture, things look a bit different.
     
    As I have discussed for nearly two years now, the big foreclosure avalanche begins in 2010 and will last through 2011, as most of the ARM and Alt-A loans reset during that period.
     
     
     
     
    This serves as a fairly good indicator of where interest rates are headed. You shouldn’t expect short-term rates to move appreciably higher until at least Spring of 2010. 
     
    Short-term rates may not rise above 1% until after 2010.
     
    Despite what most of the experts (cheerleaders) say, an improving real estate market is not the key to a recovery. That’s the type of argument used by the guys in Washington who specialize in creating a Ponzi scheme economy.
     
    The tail can’t wag the dog. An improving real estate market isn’t the driver of the economy.
     
    A healthy economy drives real estate because people have jobs; they have incomes to pay for mortgages.
     
    Thoughts of a bottom in real estate would boost consumer confidence, which would create more buyers. This would boost housing prices, which would further boost consumer confidence. Combined, this would boost the stock market—it’s a chain reaction within an endless loop.
     
    This explains why Washington and Wall Street are trying desperately to generate a recovery picture.
     
    Meanwhile, they continue to contradict their upbeat message by acting in opposition.
     
    For instance, the recent removal of the previous $400 billion funding ceiling for Fannie and Freddie should raise some major concerns. This is a huge deal because it now means that these losers get a blank check.
     
    Furthermore, the U.S. Treasury passed this monumental funding commitment without the approval of the Senate Finance Committee and other members of Congress (not that it would have made much of a difference, other than for these guys to showboat on C-SPAN to gain political points).
     
    Understand that when people speak of a “bottoming” in real estate, they usually don’t specify their definition.
     
    For some, bottoming means a pick up in housing starts; for others it means increased sales.
     
    To me, it means real estate prices.
     
    Now why would I choose pricing as the best definition of a recovery in real estate? 
     
    Because housing pricing is one of the key determinants for homebuyers.  And remember that consumers determine around 67% of the economy, so doesn't it make sense that if you want to discuss a recovery in the real estate market as it pertains to the health of the economy, you should focus on what matters to consumers? 
     
    Don't expect most economists to figure this out. Most are completely useless.
     
    As such, I stand by my original forecast made three years ago for a median real estate price decline of 35% (upper end).
     
    If I turn out to be correct, we probably reached the bottom in prices a few months ago. However, the bottoming process will take many months, perhaps a year. Thereafter, it will be a slow climb up.
     
    In fact, some of the bottoming-out process will be dependent on how the Fed handles interest rates. It is possible that the bottoming out process could hover up and down in a range, taking several years before making a definitive and sustainable (although slow) move upward.
     
    You should also be aware of the fact that with most Americans in the red for their homes, it’s not only difficult to refinance, but it’s also virtually impossible for most that might be out of work to relocate for job opportunities. The relocation tax credit is essentially useless and serves only as a tax break for well-off homeowners or those who have owned their home for many, many years.
     
    You can’t sell your house if you owe more than its worth unless you have the cash to pay the bank the difference.
     
    I would not expect there to be many unemployed homeowners who have the cash to pay off a mortgage deficit. 
     
    For several months, Fannie Mae has been offering refis at 125% of value as another desperate attempt to rescue the living dead who are being gouged by crooked banks that issued what I feel should be banned—ARMS and option-ARMS.
     
    Apparently, the idiots in Washington have finally realized what’s in store for real estate in 2010 and 2011, as evidenced by the Federal Reserve’s $1.25 trillion purchase of toxic MBS, the recent removal of the $400 billion ceiling of government funds for Fannie and Freddie, the extension of the first-time homebuyer tax credit and expansion of a $6000 tax credit for homeowners who want to relocate.
     
    In particular, the removal of the U.S. Treasury’s $400 billion loan cap to Fannie and Freddie is very odd because Fannie and Freddie have thus far used only $111 billion.
     
    Moreover, the government has estimated that the losses from the GSEs are not expected to exceed $170 billion over the next ten years!
     
    This estimate, made by the U.S. Treasury is a complete JOKE
     
    You might note an article I wrote last year stating that the $700 TARP would be lucky to cover the losses from AIG, Fannie and Freddie. I stand firm with that forecast.
     
    I stand firm with my 2008 forecast that Fannie and Freddie will cost taxpayers more than $500 billion in losses before this mess has been cleaned up. In fact, this is the low end of my estimates; the absolute best-case scenario.
     
    What is my upper-end estimate? $1.5 trillion.
     
    All of this, and Fannie and Freddie have hired new clowns offering them up to $6 million. This adds another joke to the comical nature of the United States of America; a nation with characteristics of a banana republic.
     
    At best, America is run by crony capitalism.
     
    At worst, it has become a fascist dictatorship, run by a group of elitists.
     
    Call it what you like, but it’s certainly not the nation of the past.
     
    And the future does not look too bright from where I am standing.
     
    Fannie’s new CEO, Michael Williams is just as clueless as his predecessors. 
     
    The same can be said of Freddie’s new CEO, Charles Haldeman, former CEO of Putnam investments; a mutual fund company! 
     
    Median residential home prices have already declined as low as 33% from the 2006 peak. With the big loan resets approaching, it appears as if my upper limit of 35% might be exceeded. 
     
    If you live in the U.S., Canada or the UK, when the topic of real estate pops up, it’s likely that all you hear about is how bad the market is.
     
    Whether you are reading about the defaults, foreclosures, the collapse in house prices, or the problems faced by Fannie Mae or Freddie Mac, one would think that the global real estate market is suffering, but that would be an inaccurate assumption.
     
    As you might imagine, with the economies in Asia and Latin America booming, these real estate markets are quite healthy.
     
     
     
     
    As for America, you shouldn’t expect things to improve anytime soon.
     
    Despite what you have heard from the real estate hacks, government officials, and their friends in the media, the real estate market is not in the process of recovering because it has not yet bottomed out. The same is generally true of the economy.
     
    The rest of this article may be viewed here.



    Of course, Seeking Alpha refused to publish this piece because it wasn't  a "feel-good" article. Folks, you are seeing justone of millions of examples of MASS CENSORSHIP withing America's tightly controlled media monopoly. Rather than publish unique and insightful original content by experts, Seeking Alpha would rather pump out useless, repetitive trash by amateurs, all of watch CNBC and play off it in their pieces so as to gain a larger audience. Make no mistake. Seeking Alpha is no better than CNBC. In fact, they have established partnerships with this criminal network.   I can guarantee you that you will never wake up by reading Seeking Alpha.  I reccommend you stay away.  I will be writing an article in the future demonstrating how Seeking Alpha discriminates based on religion, as well as controlling which articles are viewed. I will also discuss how Seeking Alpha has censored me using blatant as well as less obvious methods. 

    In case you were not aware, Seeking Alpha is based in Israel. You know America is finished when Americans get censored by Israel despite the fact that the content is primarily intended for US publications. That alone gives you a small hint at who runs America. Just examine who runs and works in the media, Wall Street, the Federal Reserve and who runs Washington. 


    I wont waste anymore time on this useless censorship site that pumps hacks and idiots who themselves pump CNBC. 

    What I will do is dedicate the rest of my life to exposing the media (including Internet media) as the lying criminals they are.


    Disclosure: No positions
    Mar 23 2:12 AM | Link | Comment!
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