This is just blown up to look like a crisis to give the Fed cover, cover from raising rates. Mark my words PPI and CPI are going thru the roof. Fed will use this manufactured crisis as cover from raising rates. Granted their is some weakness in this sector, but when you look at the overall picture its miniscule. On average housing is just fine, I repeat on average.
Agree. I think the thing the Fed is most worried about is how this might/could spread to other areas, like credit card debt, household spending etc... But, hey, isn't it great for them that between jawboning and housing, their job is largley done fighting inflation.
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=1855&accnt=64847 42% year over year increase in foreclosures in the country
15% of home sales in California are foreclosures now. The only people in trouble are the sub-prime, Alt-A, and ones with the creative loans. That totals 50% of 2006 loans, but I'm sure its a much lower percentage overall. Still, for those people, its ugly.
Please don't spread FUD. that 42% is just from that company's listing traffic - they have 42% more listings over last year. What does this tell us? They've done a better job marketing.
I'm one of those. I have an interest-only 7yr ARM and bought in Nov 05. Knock on wood, I'm doing fine...
This is the outcome from an artificial market, they more than likely should never have been qualified for the loan, this is the fallout. IMO we are back to square one, right back were we started. The folks who should never have got a house no longer have it. It was all politics folks plain and simple, " make it look pretty"
Here is the main issue IMO. Corporate earnings will be fine and dandy, the Fed had better watch out metals, ags, energy, are all headed higher. Let hope these corporations who deal in commodities are hedged. I think I will start a new business offering a hedging service to smaller companies who deal in commodities to help them make it thru this new commodity boom. Most just rolled along in the supply and demand cycles, but that has changed forever just watch and see.
Me oh shoot im just a HS drop out with a Bloomberg, I have no real formal education, just been watching the markets for over a decade tick by tick. But! I know business men with degrees, and deep pockets who have been taking some of my advise and have made quite a bit of money from my analisys. I just like studying charts, and see alot higher prices in store for commodities. Small companies need help to smooth out their margins due to higher commodity prices, or they can just pass on the costs which causes more inflation.