dano

2 Comments

    • ON: Mon Jan 7th 03:52 AM
      Commented on:
      Concerning the Case Shiller Housing Index
      sorry, I left off the last part above...

      Given all our bad news, and the fact that many will be unable to
      make their reset payments, thus feeding even more into the
      foreclosure and jingle mail mill, I have to wonder...

      are we headed for a feedback loop?

      if so, housing could feed on itself going down just as it went up.

      In the end, Shiller's potential prognosis could be dead on.
      View article »
    • ON: Mon Jan 7th 03:49 AM
      Commented on:
      Concerning the Case Shiller Housing Index
      There's a chart I just keep coming back to, over and over. It's the one that shows the resets of mortgages on a monthly basis over several years starting in January 2007. You can find it at:

      www.recharts.com/repor...

      @chart 42.

      What bothers me about so many forecasters who claim "soft landings" and that real estate will turn up in "08" is their obvious
      lack of this info.

      In the simplest terms, $25B/mo in sub-slime resets every month
      (avge) for over two yrs. Then, we get a break, and for about
      1.5 years roughly $16B/mo in OptionaRMS resets every month.

      At present, we are looking at:

      1) falling home prices
      2) rising rates
      3) RISING CREDIT STANDARDS TO QUALIFY
      4) a far smaller pool of buyers (the 20% that were flippers are gone)
      5) increasing inventory
      6) increasing foreclosures
      7) tapped out consumers
      8) (potentially) slowing economy
      9) reluctant buyers waiting for better prices

      So when one looks around, I have to wonder -- WHO is going
      to turn housing around? WHERE are thebuyers going to come
      from? HOW will they come up with the down payments and
      ability to finance if so many couldn't in the past unless it was
      thrust at them on a silver platter? WHAT can replace all the
      liar loans, ARMS, etc that are disappearing from the option
      pool of financing?

      and most importantly...

      WHY would anyone even think they could predict a turnaround
      in housing so soon in the face of all these opstacles?

      Shiller (and Roubini) have been on the 'bleeding edge' of calling
      for significant bloodletting in housing and the economy. I don't
      see where the optimism to counter them is going to come from.

      NOT from Banks. NOT from the FED (slow to respond). NOT
      from buyers.

      I share that chart with people and ask them, in the face of all
      that is happening, where is the good news? No one knows.
      View article »
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