DC Housing Bear

14 Comments

    • It Did Happen! - Cramer's Mad Money (9/29/08) [view article]
      When you speculate, you get burned. I have to agree with Freemarketeer, except I wouldn't even buy mutual funds. Put together a broad based portfolio of ETFs with the lowest fees you can find and rebalance annually. Then set aside a few bux to gamble if you so choose. It's not possible to predict the direction of an individual stock over time absent inside information. Sep 30 06:15 PM
    • It Did Happen! - Cramer's Mad Money (9/29/08) [view article]
      When you speculate, you get burned. I have to agree with Freemarketeer, except I wouldn't even buy mutual funds. Put together a broad based portfolio of ETFs with the lowest fees you can find and rebalance annually. Then set aside a few bux to gamble if you so choose. It's not possible to predict the direction of an individual stock over time absent inside information. Sep 30 06:13 PM
    • Options Trader: Tough-Decisions Tuesday [view article]
      I don't think so. This country can use a little dose of fiscal discipline. I think I speak for a lot of people when I say home prices should be allowed to find the bottom without government intervention, the stock market should be allowed to drop to a more reasonable valuation, insolvent banks and companies should be allowed to fail and irresponsible borrowers should just declare bankruptcy or walk away from their homes and rent LIKE ME. There will be several years of economic dislocation, but those who have savings and live frugally will be rewarded with lower asset prices all around, a healthier economy and more sustainable economic growth going forward. The government needs to reduce the federal deficit by slashing entitlements, eliminating wasteful subsidies and getting rid of useless government programs. Fannie and Freddie should be dismembered and privatized so as to not be able to hurt anyone ever again. Oh, and we should abolish the Fed. Finally, people just need to be able to live without their McMansions and SUVs. Is that so terrible?

      Enough with the government bailouts, the only road that leads to is the mother of all bailouts that will finally sink the entire system, in fact, maybe we're already there. We cannot continue to privatize profits and socialize losses. It's time for this country to take its medicine and I don't see any better time to do it than now.

      So I guess what I'm trying to say Phil is, STOP YOUR WHINING. The government is not there to guaranty that you make money trading options.       Sep 16 12:46 PM
    • How Low Before Housing Blows? [view article]
      You're flat out wrong about about housing just like you were flat out wrong in your August 17, 2007 post "Fear in the Market" where you were telling everyone to BUY BUY BUY at the peak. We are in a deflationary death spiral which will not end until the mountain of debt that has fueled years of phony profits is unwound. It will be very unpleasant and there is nothing that perma-bulls like yourself can say to stop it. Aug 20 01:14 PM
    • Will a 7% Mortgage Threat Doom Fannie and Freddie? [view article]
      What exactly is so wrong with getting rid of the GSEs? I find the Journal's coverage compelling. Housing is already one of the most subsidized commodities in this country, is it a wonder why housing gets overbuilt? Why do the GSEs need to exist at all? If we need to rescue them because they are to big to fail, then maybe the real solution is for them not to be so big, or better yet, not to exist at all.

      I have yet to read a cogent, logical argument as to why we need the GSEs.

      As for Bill Miller, I agree with the last comment. What a joker, even if your post made any sense, you lost all credibility with that last sentence. If this bear market has taught us anything it's that most "successful" fund managers or gurus are not as smart or savvy as the media wants us to think. They simply employed a strategy that worked until it stopped working. Don't be fooled by randomness.       Aug 20 12:29 PM
    • Mortgage Rates Fly Higher [view article]
      The two posts above are right. But add on top of that higher risk premiums. It's not about "wanting" rates to go down or "hoping" for the housing crash to end. The housing crash will end when home prices return to the fundamentals. Interest rates are one factor, but they are still at historic lows. The issue isn't that interest rates are too high, the issue is that homes are still way too expensive. They won't stop dropping until regular people can afford them at interest rates much higher than 6.25%. Let's not pretend there's anything anyone can do to stop that. Let's ask ourselves what we can do to mitigate the fall out and remind ourselves that millions of renters and first-time home-buyers will BENEFIT from lower home prices. Jun 16 01:28 PM
    • Get Ready to Short Homebuilders [view article]
      John, maybe the fact that you haven't been able to make any money from speculating means that the market is actually MORE efficient than you think! But maybe that was your point.

      I won't touch these stocks anymore either, really hard to tell where they go from here. Speculators could push them higher on BAD news that's not as bad as expected. Go figure.       May 15 05:29 PM
    • A Simpler Explanation For Bill Miller's Losing Streak [view article]
      So I take it you've made millions shorting home building stocks is that right No DooDahs? People are entitled to guess at what ever they want, making money from it is what we're talking about here. What the fuck is your point? May 15 05:23 PM
    • A Simpler Explanation For Bill Miller's Losing Streak [view article]
      I have an even simpler explanation. Bill Miller's strategies worked until they didn't!

      Try reading A Random Walk Down Wall Street by Burton G. Malkiel and Fooled by Randomness by Nicholas Taleb for starters. Only idiots buy mutual funds and anyone here who thinks they can really beat the market over any extended period of time is delusional. Try Vegas why don't you.       May 14 01:16 PM
    • Tuesday's Action: Sign of a Bottom? [view article]
      Ditto. Perma-bulls are never able to talk fundamentals simply because the fundamentals are terrible. Grasping at straws. This is another dead cat bounce. Can we talk about the profits that financials need to support their current valuations? Apr 01 04:46 PM
    • The End of U.S. Investing as We Know It? [view article]
      We are only part way through the greatest deleveraging this country has ever seen. This is classic perma-bull spin, now that everything the bears have said has come true, the only left for perma-bulls to cling to is to say hey, don't worry, it's not going to be that bad. The reason the stock market is plunging and the financial markets are imploding is because it REALLY IS THAT BAD OUT THERE ON A FUNDAMENTAL BASIS.

      Americans need to come to grips with the fact that you can't borrow your way to prosperity. The past six years was make believe and the only way we can move forward is to give it all back and start over.       Mar 18 05:34 PM
    • Thinking About the Bear Stearns Bailout [view article]
      Wow, what an idiot! Where is Purl Gurl now?!? Mar 17 07:14 PM
    • House-Price Momentum: The Good News [view article]
      This is another situation where housing bulls are grasping at straws. I've commented about this before, if you look closely at the arguments made by housing bulls, they always try their best to avoid talking about the fundamentals. The problem is, and we've seen this time and time again, while the US economy is pretty efficient, you can still have bubbles in the short term. In the long run though, you always have to revert back to the fundamentals, it's just a matter of time.

      There are several very powerful mechanisms that are going to cause home prices nationally, and in bubble markets in particular, to continue to fall:

      1. Debt service ratios for home ownership must revert to historic levels. Homeowners simply can't continue to spend upwards of 40-50% of their gross income on their mortgage, this is particularly true in California.

      2. Mortgage rates will continue to rise. Long-term mortgage rates are still historically low, sooner or later, these need to adjust upward to reflect a more realistic risk premium and increased inflation expectations.

      3. The cost differential between renting v. owning must come closer to parity. Certainly there should be an ownership premium, but in most markets, again, California is a prime example, the monthly outlay per month can be 2-3 times the rent for a comparable property. As consumers get squeezed through higher commodity prices and record debt levels, renting is suddenly looking much better than owning.

      So the bottom line is this: home prices will continue to decline until these ratios are normalized, PERIOD. In some markets this will be quicker, in others, we're going to see a housing depression like we've never seen. Anything else people say until then is just noise.       Feb 26 04:21 PM
    • What the Housing 'Apocalypse' Prophets Aren't Revealing [view article]
      This post and the comments that follow once again highlight how desperate housing bulls are these days. The reason why bears have better arguments is because it really is that bad out there and many people have been seeing this coming for years. The bulls always seem to be grasping at straws, even back when they were arguing that this real estate bull market was going to last forever, they're at it again with posts like this.

      FACT: for 6 solid years, we experienced the most dramatic housing run-up in US history.

      FACT: reversion to the mean is a very powerful statistical phenomenon.

      FACT: most people with negative equity in their homes will walk away.

      FACT: in many bubble markets, it still costs half as much money to rent than to own.

      FACT: the value of residential real estate is tied to both interest rates AND personal income, at some point it doesn't matter how low rates if prices are too high.

      FACT: there is a limit to how much debt the American public can take on.

      FACT: a recession will force home prices even lower.

      This is all common sense, it's the beginning of the great debt unwinding, if it wasn't subprime mortgages it would have been something else.       Feb 06 02:00 AM
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