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After a 72% Y/Y rise in the XHB, the housing recovery rates the cover at Barron's. "We're in the...
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Saturday, September 8, 2012, 9:38 AM ETAfter a 72% Y/Y rise in the XHB, the housing recovery rates the cover at Barron's. "We're in the early stages," says Lennar (LEN) President Rick Beckwith. The industry could triple in size to 1.8M housing starts in the next 3-4 years, says Ivy Zelman, who thinks Lennar could earn $5.30/share in FY15 vs. $0.48 last year. A more speculative play is Beazer (BZH), which isn't yet profitable, but has eased short-term liquidity fears with recent capital raises.
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The range in the 1990's was .73% to 1.40%
2012 07 17.016317016317000%
2012 06 21.218961625282200
2012 05 25.427872860635700
2012 04 21.739130434782600
2012 03 12.383177570093500
2012 02 19.592875318066100
2012 01 18.013856812933000
2011 12 21.21212121212120
housing starts......times 1.17% = 1,559,000 housing starts....whoever
wins this election is going to look like an economic genius....that is why political parties are desperate to win this election....
...
I've bought 12 apartments in the last year , and am looking for another 10
I always hear about hidden inventory , but never about "shadow buyers " . Wonder if anyone follows such a number
The problem with the foregoing is that for 85-90% of the population, things are just fine. They have jobs, promotions, raises, houses, new cars, vacations, etc., all the normal aspects of life. Once that group emerges from the harrowing fear that gets engendered by a 2008-like event, then, their behaviors gradually return to normal, and, as they represent the overwhelming majority, they effectively control how the economy does.
So, one has to decide whether one's own personal outlook is aligned with the "losers" or with the "winners." If one adopts the pessimistic outlook, constantly promoted by the media, then, one will likely make poor decisions.
It's that simple.
http://bit.ly/NSSR1M
"The sale of the Fannie Mae foreclosure homes became apparent to data guru Tom Ruff of AZBidder on Wednesday night, when he tracked metro Phoenix's REO inventory -- homes taken back by banks that haven't been resold -- and realized it had dropped by 5 percent.
In the latest sales filings, he discovered that a group called SFR 2012-1 US West LLC, located at 135 N. Los Robles Ave., fourth floor, in Pasadena, Calif., purchased 275 foreclosure homes from Fannie Mae that day. Each deal was individually recorded. Fannie Mae's Dallas office is listed as the seller.
More research shows the buyer is an LLC created by Fannie Mae."
The math is less than inspiring. If housing prices are down about 40% since the five year period beginning 2007, then a 7% increase this year means owners from 2007 are really up only 4.2% since the trough.
What that means to those homeowners is that you are still down 35.75%, a significant amount below your purchase price. This is why the majority of mortgages are still deeply underwater. This has been widely reported in August, but with September's newly announced 7% increase, apparently now everything is okay.
In the meantime, for that 85-90% for whom "things are just fine"... at the current rate of "improvement", they will need over 25 years to break even on the largest investment of their lives.
FAMCO
I miss entirely the rationale of your comment, not to mention noting some faulty arithmetic, but that's less relevant. The important thing is that things are moving up, as in getting better, not worse. That usually leads to positive things happening with the economy and with realty-related share issues. Isn't that the point, as investors?
What's to be gained by constant moaning that things aren't as good as they appear or should be, etc., etc? This constant wallowing in pessimistic thinking is a self-defeating outlook for investors. It's not even working for traders.
Again, you nailed it!
You are the one who used a 85 to 90% number of people who are "just fine" , not me.
The drop in home values at 40% since 2007 is completely accurate.
The rest of my calculations about what a person has really lost in spite of the recent 7% increase are basic math. If you lose 40% of your value in the investment and then it goes up 7%, you are still down 35.25% from your starting point.
I am not relying upon the media. To use your phrase "It's that simple".
FAMCO
Is that question for me? Disappeared in spring? Hardly. Was here advising everybody to stay the course and buy. Ignored by the doom set, as usual.
Believe it or not, I have a life outside SA and investment management. As I posted elsewhere, yesterday I was out restocking the wine supply.
Also, if you have read many of my previous posts on the subject (apparently not), I hardly pay attention to the unemployment/jobs numbers, as I see them as having little to do with the overall economic performance, for same reasons as I just iterated, above. In fact, when employment really gets fired up, it's usually a sign we're approaching an economic and market top. So, as far as I am concerned, it can meander along in a mildly positive manner.
Stay negative. Don't worry. One day you'll be able to celebrate. You just won't be any richer when it arrives.
You are the one that started this not me with snarky statements like this one.
"Stay negative. Don't worry. One day you'll be able to celebrate. You just won't be any richer when it arrives."
You tend to follow myself and others around SA without providing any factual basis for your opinions appearing on up days and disappearing on down days.
I do do seem to notice that many posts follow mine pointing out where I am supposedly wrong yet you offer no facts to back up your statements.
If you understood what it meant to be contrarian it is not being negative to be cool. Part of it is pointing out the inconsistencies between what is being reported/not reported in the press and what is actually happening in reality and how those inconsisencies can be exploited for profit or to take profits.
As for your strategy many here would like to know because nobody has seen an article from you.
Just remember that I was you who dug through my profile not the other way around.
The passive aggressiveness of your comments is really quite insulting to many people here.
I started this? Quote:
"So why did you disappear yesterday when the bad jobs number came out like you did during the Spring selloff?"
Not only sarcastic, but false. Also, it's in your imagination that I run away on down days. And, I was here all spring, virtually every day, too. On the contrary, I am typically here, probably too much, trying to counter the usual SA hysteria, so people don't might avoid ill-conceived investment decisions.
Perhaps, if you placed me on your follow list, you'd have had ample opportunity to understand very specifically what I do, as it's been outlined too many times to count. In summary, as per my profile, I am a high-yield, deep-value investor. I buy out-of-favor issues and sectors, always with a significant yield component. I don't trade or short. I, also, don't write articles. I've also stated for many months that the sectors I presently favor are financials, real estate, energy and select European issues. It's been a pretty good choice, I'd say.
I am here, almost all the time, except when traveling, busy or otherwise involved with family. Your assertion that I disappear on down days is utter nonsense. Go check my post records; try to find my some pattern to my absences.
If you want to make disagreement over economic views a personal matter, feel free, but it doesn't make your opinions hold any more veracity. I stand by my comments on the economy, markets and investment suggestions. It's a free world, so you may differ.
If you wish to debate the economy or markets, I'm open to further discussion, but this is my final comment on the personal assertions.
P.S. Just to show how unfounded your claim is, I checked my post log, and I posted on SA every single day during the May selloff, even weekends and holidays. So much for "disappearing."
You have no explaining to do. Your well reasoned and counter-hysteria, doomsday eminent comments are excellent.
I have found your comments well written, to the point and informative. You and BBRO are able to cut through the SA doom and gloom crowd, and not in a Poliana way.
Keep doing what you are doing.
http://seekingalpha.co...
Go ahead now and wow me with how despite no growth going on anywhere in REAL (not optomistic or pessimistic) terms, everyone has made so much money. Kinda depends a bit, no? Maybe some people got lucky with timing. The buy and hold guy has gone nowhere. The stats back that up. It's not even debatable. This is to no one in particular. I would love to see a response to the macro point and spare me the "if you just bought apple" garbage.
Since I started investing, it always has been a stock picker market, selecting just a handul good companies in which their underlying equities were below the target I appreciated.
We can't just say because the Dow Jones was flat, not one made money....
The indices going nowhere just confirms a long-term technical pattern that goes back around 100 years where the markets move in patterns close to 16 years upwards and then close to 16 years sideways.
Ironically, DB plans were/are no less risky than DC plans because if the managers don't make the returns, the benefits often don't get paid. In fact, it might even be argued that DB plans are even more dangerous, as they promote complacency on the part of recipients that their actual returns and payments are not at risk.
But you do make a good point.
Actually, both. You may have noticed CA recently reworking DB plans.
Same goes for the rest of the country. You are correct that pension plans are in trouble. Many of them are probably re-working them. That will translate to future benefits perhaps being a bit less. But while the private sector has absolutely handed some pensions to the pbgc, the public sector has not suffered the same fate.
Do a Google on "California pensions" and "rework" and you'll see numerous instances of plans being revised and renegotiated. If you think that the public-sector stuff is locked in stone and that the taxpayers are just going to eat it, you are mistaken. Even the payees realize they're in trouble.
I agree they realize they are in trouble. I also believe that since the banks got their bailouts, the government pensions will get theirs as well. The rest of us will all foot the bill. I find your viewpoint on this interesting. If you think the DC plans have troubles as well as DB plans, that seems to indicate the economy as a whole has major problems. Outside of QE etc. etc. what makes you so positive on the economy when your views here seem to contradict that?
Here is a quick google search return: "In our opinion, Brown needs to make pension reform a top political priority if he hopes to have his tax measures pass in November. It's hard to tell the voting public they have to be willing to pay more in taxes if the governor is not willing to go to the mat and wrestle with one of the largest issues facing California's economic future.
It certainly will not be easy. Public employee unions carry a lot of weight, not to mention cash"
Same as it ever was?
On the contrary, the fact that the problem is recognized by all and various negotiations and revisions are in progress is entirely positive and a sign that the system is adjusting to reality. Those that think everything will collapse, no matter what the issue, will be in error once again.
It would seem that if the revisions you speak of actually go through, the people recieving these benefits will have a reduced standard of living. If these types of revisions start taking place across the board (and I agree they need to take place) then you have a hit to GDP and the economy as a whole. The economy would go through a pretty severe recession. That would actually be healthy and hopefully lead to growth. But not until the medicine is actually swallowed. Your unbridled enthusiasmin the face of this is kind of odd. It seems like you are just trying to thumb your nose at some doomsdayers on here instead of looking at reality.
If excess unearned monies aren't paid, then somebody else will benefit, no?
Things get worked out. Life goes on. The only people that pessimists screw are themselves.
Fannie and Freddie back most of the mortgage. FHA gives out loans 3 1/2% down payment, federal reserve buys mortgage-backed securities to the of trillions and the making homes affordable which actually raise the price houses.
And and all the money printing to raise the price of housing is causing some serious inflation. I don't know where they get less 2%. Even the price of clothes is rising. Food gasoline Health care going stratospheric
So if we get hyperinflation Price of houses might actually go up, they won't go up in in terms of gold or Silver oil copper Etc. etc.
These lofty projections are unlikely unless there are new "affordable housing" programs. We all know where those got us in the last ramp up. Just who will be buying these many new homes and with what capital/savings? Rates cannot remain low and teaser rates are yet another caveat to systemic risks. Building costs are also likely to rise significantly.