tag:blogger.com,1999:blog-6492542366661862113.post3714240405193472727..comments2023-10-31T01:32:09.169-07:00Comments on The Housing Time Bomb: Bill Gross/Foreclosures/Consumer confidenceJeffhttp://www.blogger.com/profile/04450070920047311928noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6492542366661862113.post-62206555566804407432008-04-30T14:43:00.000-07:002008-04-30T14:43:00.000-07:00anonI love that chart. I agree. The reversal in ...anon<BR/><BR/>I love that chart. I agree. The reversal in the stock market was what I kinda expected might happen.<BR/><BR/>Working on a post right now. The Fed really screwed up today. The dollar shot down big time after the statement.<BR/><BR/>No catalysts now to take socks higher. Just lousy news. Its going to be a long summer.Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-19670155484615363812008-04-30T10:31:00.000-07:002008-04-30T10:31:00.000-07:00Anyone that thinks we may be reaching a bottom in ...Anyone that thinks we may be reaching a bottom in the housing market needs to take a look at this graph: <BR/><BR/>http://consumerist.com/340334/<BR/><BR/>Right now we are at the end of that first little dip. This summer and into the fall are going to be a nightmare. The future? See the two large tan peaks out there in a couple years - these are the ARMs in which peoples' current payments do not even cover the interest and the unpaid interest is tagged onto the mortgage principle. Not so good when the value of your house is plunging.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-1966007300113645282008-04-29T20:59:00.000-07:002008-04-29T20:59:00.000-07:00MintonThanks for the kind words. I appreciate you...Minton<BR/><BR/>Thanks for the kind words. I appreciate you spreading the word. I get more and more hits everyday. People are realizing that things are really bad out there economically.<BR/><BR/>I agree with you, the reset of housing prices will be painful, but it will be healthy in the long run.<BR/><BR/>Like you said, young home buyers will be able finally be able to afford something.<BR/><BR/>Investors will start to realize that the banks are nothing but lying thieves right now because they are so badly damaged and desperate.<BR/><BR/>When this realization happens, their stock prices will be evaluated based on earnings and fundamentals. Meredith Whitney values Citi at $9/share. <BR/><BR/>Once these banks are valued at book values, they are going to free fall!Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-91640661860174656322008-04-29T16:10:00.000-07:002008-04-29T16:10:00.000-07:00A great financial summary of the day. My thoughts:...A great financial summary of the day. <BR/><BR/>My thoughts:<BR/><BR/>1. You hit the nail on the banks. They're in a vicious cycle and using spin to short-circuit an inevitable crash. The great thing about leveraging is that it makes great profits when you're right. And when you're wrong, it destroys you.<BR/><BR/>2. The problem with "showing no sympathy" is two-fold:<BR/><BR/>- Many of the people who got into this mess did so at the behest of financial organizations that enabled it to happen. The moral hazard issue is still valid. If you let these people crash and burn, the downstream impact on the whole economy will be devastating. Having said that, I realize you can't keep their house prices at unrealistic levels, as noted in your excellent post yesterday, but what should we do?<BR/><BR/>- Ultimately, "showing no sympathy" means that these people walk from their homes and the system picks up the cost through foreclosures. Which causes more foreclosures. I can't help feeling that this is a rare time that when a little intervention could work... maybe.<BR/><BR/>Btw, I keep seeing seminars (the last one was in Hong Kong) to foreign investors advertising "a great time to buy". But I think we're in a classic asset bubble problem where, because the valuation is all wrong, it will continue in the spiral you describe.<BR/><BR/>Finally, in one (and only one) respect I'm glad. The housing boom had made housing out-of-reach for many young, respectable folk who just want a family and 1500 sq ft somewhere. When this all shakes out it should help these guys, presuming the lenders then don't forget why they lend in the first place.<BR/><BR/>I keep sending your blog to everyone I know - seriously this the best one out there. Every the WSJ isn't doing as good a job as you.James Bhttps://www.blogger.com/profile/13052914767131527583noreply@blogger.com