johnnybigspenda

Housing Is Moving Towards Disaster

if the .gov has their way, the 'dumb money' (ie. people who we are calling dumb for buying a house in 2009 ) will be rewarded, while those with cash reserves and prudent planning will be penalized... the .gov's policy of bailouts (to relieve the short term pain to some extent) will eventually (relentlessly) lead to inflation... I'm afraid they won't stop until we hit a couple years of double digit inflation.... all that debt magically disappears and TA DA! their taxpayers all all wealthy again! I love this game! (now go and be a good taxpayer and buy a house!)

Housing Slump Erased $3.4 Trillion of Wealth in 2008

logarithmic scale would help a bit.

Seasonal Effects in Housing Cloud Market Status

The FED's plan: $8K tax credit now + inflation later = life goes on as per usual

Now: cushion the fall by stealing future demand by offering as much as it takes in tax credits to prop up home prices

Mid term: print lots of money, buy their own debt, spend money, make it 100% clear to everyone that they will do anything to prop the economy up....anything to avoid a deflationary spiral

Longer term: inflation (dollar devaluation?) causes home prices to inflate, debt becomes worth less

Wait a minute... don't we need WAGE inflation for this plan to work?

Not sure how that is going to happen? Has anyone read an hypotheses on this?


On Sep 25 02:18 PM a fat panda wrote:

> John, Increasing the tax credit will do just what the original tax
> credit did : push demand forward. This isn't increasing demand. You
> are simply seeing sales moved from 2010 into 2009.
>
> I see that you saw some of your data on CNBC. I am leery of lumping
> houses together across price and region to make any conclusions.
> Here is what I am seeing in my zipcode. Houses For Sale Vs Under
> Contract. Under 250K it is 3 to 1. Under 450K it is 6 to 1. Under
> 800K it is 8 to 1. Between 800 and up the ratio is 42 to 1.
>
> If you are comforted by the 8 to 1 in the 450-800K pocket, the majority
> of these homes are new, many of which are not listed on MLS. It gets
> better. There are partially built neighborhoods where the property
> is committed to building another luxury home that no one wants. This
> pocket also has a lot of rentals of homes which were previously for
> sale but could not clear the market.

Could There Actually Be Another Reason Why Oil Prices Are Falling?

the Fed has accomplished (at least in part) what it set out to do (with out actually doing anything... (yet?)).

just by introducing the possibility that energy futures could become regulated, they have introduced 'risk' that any current or potential investor must take into account before placing their bet.

this will serve to dampen the speculation by eliminating some number of investors. speculators will look to other unregulated trades instead.

This Rally Is for Real

its pretty tough to be a big buyer right now. for those lucky(?) enough to have bought in late Feb the real question is: when is the bird in hand big enough? We thought we'd never see a green day again in Feb and now many of us are deep in double digit gains... I've moved 1/2 off the table now to cash. I may miss some, but I sleep better.

Home Prices Still Dropping - Just Not as Fast

CS is also delayed by a month... with the March run-up on the DOW i would expect an even slower rate of decline (if not positive increase) in March.

I personally don't think that prices today are sustainable yet, but I wouldn't expect it to be as simple as straight down or straight up... there will also be a bumpy period.

Sentiment Overview for Week Ending March 20

bulls and bears are both broken clocks... wait long enough and they will be right. I like that the bulls are adjusting their clocks... could be a sign that reality (and thus valuations) are setting in? If so, we may have reason to be optimistic.

The Truth Behind New Home Sales

this article is not negative enough to be published on SA. you forgot to add the part about the impending doom of our nation. :-P

seriously though, thanks for pointing that out. I wish common sense like yours had a voice as loud as the doom and gloomers.

Reich's Reasons for a New Fiscal Stimulus Bill

I agree with several commenters that sending a check directly to Consumers in order to increase C is a useless idea... more of the same thing that got us here in the first place. That is basically the same thing as the government becoming a Consumer when they should be Investors. (Its sad to think that the government doesn't even realize the value of 'investing' in tomorrow vs. 'spending' today.)

What if, as a result of Government Spending, we as a country emerged as a more efficient, higher productivity, more environmentally friendly country? This is possible. If the government was to substantially increase spending/investment in infrastructure such as GREEN technologies (solar, wind, nuclear, water purification, mass transportation, cleaning up environmentally impacted areas, modernization / retrofitting of older brown technologies ect ect) we could emerge with an infrastructure that will supply businesses with lower cost power, better transportation and a lower cost structure over all.

This would supply people with JOBS today. This would increase C. This would rebuild America's competitive advantage. This would create a greener world and a better tomorrow.


And I'm not even a tree hugger... I think this makes sense from $ and cents perspective.

Wall Street's New Realities

headline: "too large to BAIL?"

How Much Further Will Housing Fall?

House prices (like stock prices) are about future expectations. For example, if you knew that an investment would provide 15% growth for in perpetuity, you would leverage yourself to the max (up until the point where your cost of capital becomes more than 15%).

House prices were bid up with this type of expectation in mind...combined with very cheap capital.

Expectations have changed. (obviously) People now expect a house that is purchased today will fall in value 10, 15, 25% depending on who you talk to. Even a house purchased 'below market value' somehow falls into this expectation.... so the tide will sink all ships.

But wait, there's hope. As buyers (and we know there are lots of them waiting for the right time... pent up demand) expectations change... even to an expectation of 'flat / no growth' for the next couple of years, it will be enough to start the process of restoring confidence that a house is not a place where you lose $50K just by signing on.

The trick would be, are you lucky enough to time the market? ie. buy when people expect declines, just before the expectation turns to 'flat / no growth'. The *deals* are during the negative growth expectation phase.

All of this depends on financing availability. If the cost of capital increases, the sum of the cash flows = less NPV . Lets hope the banks can find a way to start lending money again in the near future.

Where Are the Bank Failures in This Financial Crisis?

the chicken littles are going to be so disappointed... guess they can keep renting and maybe the next one will supply them with the $25,000 house of their dreams.

Fannie / Freddie Reality Check: Here Comes the Big Bailout?

these guys are cleaning their closets... get it all out asap so that they can begin to announce 'less negative' quarters asap and eventually the situation will appear to be improving which is the main point... healthy is as healthy appears.

The Credit Crunch Is Far From Over

all of this is known... its priced in and accounted for... the pros knew this a year ago.

What Went Wrong at GE?

Wondering if GE is just doing their 'spring cleaning' here? If they have dribs and drabs of crappy quarterly numbers, or even some boat anchors in their closet, maybe now is the time to get it all out?

Could be clear sailing from here on.... tough to say how deep their problems are.

My guess is that if they were truly significant they would have alerted. I think they just cleaned house because its en vogue right now.