kevincei

Home Inventories Soaring? Not Exactly

The reality is beyond these numbers. Tom Brown actually had been bullish on the financials and housign a tad too early. Some of the facts known to common man but beyond the grasp of rich traders and hedge fund managers are going to keep housing market down for years to come. Many people are now waiting to put their houses on the market and waiting for higher prices. If prices were to go up for any reason (probably wont happen for two yrs) many people will put their houses on sale.
Today many californians are able to stay in a house for upto two yrs with the help of certain legal help without paying a cent in rent. These are owned by banks and banks are not getting a cent on their mortgage holding. The treand is increasing. Due to the nature of securitization of the mortgage paper there is a legal loop hole now becoming more and more prevalent thoroughout california and the rest of the country. This augments the losses to the banks exponentially and is well known to common people. I have about ten friends (close and persoanal) who are currently doing that. IF you doubt it just do a google search and find out.
With government stepping in housing will be fully regulated. No more hanky panky loans. Remaining banks owning common and preferred shares of FRE and FNM are going to get a big hair cut on those ownerships.
They are also getting a big hair cut on their revenue streams. By keeping the false accounting in books these cash strapped banks will only worsen the country's credit crisis. FDIC can help the situation by closing down all these zombified banks and letting healthy banks take over deposits.
Just like the japanese banking index dropped 90 percent of the bubble high this unwinding will continue. July fifteen low is not the real low. Real low will be about fifty percent below that according to my opinion and the opinons of many who were able to predict the exact downturn. Tom Brown was famous for coming against Whitney Meredith and calling her a liar. I really think Whitney Meredith spoke the truth and is still far more credible than Tom Brown