File this under very very very strange things indeed. Perhaps we add "Wall Street Analysts and Bankers" to our list of Real Estate Industrial Complex participants?
There's been good talk here at HP in the past few weeks about how dangerous it is to short stocks, and homebuilder stocks. Short term that couldn't be more true. Manipulation and insider games will kill the small investor. But long term I can't see a way out for the major builders.
Especially odd today is Merrill Lynch housing analyst Lorraine Maikis (who can be reached at 212-449-1157) coming out with a positive recommendation on the homebuilders she follows (perhaps a bit too closely if you know what I mean), when David Rosenberg, Chief North American Economist for the very same Merrill Lynch (and a MAJOR and VOCAL housing bear), recently said:
“A lot of the economy’s fortunes hinge on the housing market, and yet it doesn’t look like it’s all that stable to me,” Rosenberg said. “The last leg has been fueled by a mountain of leverage and a lot of speculation"
"The demographic story behind the housing market boom, as we always thought, was a giant hoax"
"The Fed is in some sense caught in a box,'' said Rosenberg, who estimates 60 percent of the U.S. is experiencing a housing-price bubble.
Do Mr. Rosenberg and Ms. Maikis ever talk? Any way you slice it, Merrill has (another) big stench around it today. I'd encourage the media reading this blog to dig a bit at the investment banking relationships of Merrill and the likes of Toll, Pulte, Lennar, etc. A Merrill analyst popping the stocks of these companies, whose insiders have been dumping like crazy, frankly stinks.
Here's today's action:
Shares of big homebuilders jumped on Monday after a batch of positive analyst reports painted an optimistic outlook for the housing sector in 2006, reassuring investors that the nation's homebuilders may have more room to rally after nearly five years of frenzied growth.
"Long-term housing demand remains strong, (with) housing starts over the next decade to be in a range of 1.8 to 2 million per year," Merrill Lynch analyst Lorraine Maikis wrote in a report dated Jan. 9.
Merrill's bright forecast for the industry coincided with bullish reports issued by other investment banks on Monday.
January 10, 2006
Analyst corruption (again)? Merrill housing analyst Lorraine Maikis goes directly against Merrill Chief Economist David Rosenberg
Posted by blogger at 1/10/2006