http://www.youtube.com/watch?v=t997hlTqepw 27% decrease in CA median home price in 11 months and inventory is up to 4.25 year and increaseing while sales are decreasing DESPITE falling prices. How do you reconcile this with the seemingly head in the clouds valuations sported by equities. One thing that I have noted is that RE agents have been hiding a lot of bank sales or short sales for what they are but that has started to change as they get desperate and start to use the fact that a property is a short sale or bank sale to get buyers interested. The complacency in the market in the face of these crushing numbers is amazing and you have to love the Hutzpah, but I'm afraid those who think the nightmare is over and more dawn is about to break are still asleep and dreaming.
Dow up 160 poitns today. Nasdaq up 50. Seems the only ones who care about housing are the bears. The big funds and money guys that move wallstreet have been ignoring housing for the past three years.
Whats the maximum risk to the stock market? Test March lows once again? Been there done that. Where else would that go from there but up? There is so much to cowardice and madness and anger in a wasted crowd. Federal Government will be all over these tightly controlled markets, rig them with manipulative bombs everywhere that will shoot markets back to 1400 and they can play this game till the end of time.
On a daily basis, who cares what the mkt does? What is the trend? Stock and Day you two could figure out a way to say even though the markets are down for the year the trend is up, but anyone who deals realistically with these issues knows what the score is...By all means though, you two keep making each other feel good though! Friday was nothing but a bounce on a summer friday, we may even go higher next week, but does that change the trend?
Home Equity fell by $879B in the past year and it shows no signs of having finished dropping yet. From what I read most banks are so backed up with properties that they are having a hard time keeping up with them all and bringing them to market. The ones that are coming to market are not selling and get monthly haircuts by the banks trying to find a bid. They are hiring more people so the rate at which bank owned properties come to market should increase (the effects are alreday starting to be seen) http://www.cepr.net/index.php/data-bytes/housing-market-monitor/house-price-decline-accelerates/ So, we are coming up on a $6Trillion loss of wealth in this country (GDP of $14 trillion) and things are basically fine, just another bump in the figurative economic yellow brick road? Eyes wide shut anyone? http://www.cepr.net/index.php/data-...-rate-hits-new-record-price-plunge-continues/
There is a point where the housing mrkts and bank stocks will be oversold and oil overbought, when is anyone's guess
The point is that housing and the financials exist less in a vacuum now than at any other time in our financial history. To have such devastation wrought in two significant segments of the economy at a time when oil and food prices are also at record levels and long rates are rising it is simply unbelievable that the rest of the economy is so unaffected, especially when all this is taking place in the context of an unwinding credit bubble. You know the saying about things that are too good to be true... http://www.youtube.com/watch?v=kJOJYUJi4n8 Can the Fed really afford to just take all the toxic crap out of circulation and sit on it until it is worth something again? No. At some point markets are going to have to be made again and price discovery will ensue and it will be ugly. If the primary market is non functional or held hostage secondary markets will spring up just like they did when Hedge funds stopped allowing redemtions.
Yesterday was another Hindenburg Omen, the second of such in the past 6 weeks. http://clearstation.etrade.com/cgi-bin/bbs?post_id=8711290
The reason why the housing and imaginary credit crunch is not a big deal is because we're in a global economic boom. Weakness in the housing and finance sectors are offset by huge strength in technology and industrials.
Weeks like this, just short something. Anything'll do. Even the sacred cow POT had a pullback. 7th bar on the 3-min chart (or 5th on the five) shouted "short!" and here I was convinced that there was no way POT could drop...