May 16, 2007

What is that smell? Could it be panic?

Panic amongst the homebuilders as new permits drop to 17 year lows, confidence rating hits low

Builders' confidence falls in latest survey, view of current market at lowest level since 1991.
The survey by the National Association of Home Builders saw the confidence index sink to 30 in May from 33 in April, matching the September reading that had been a 15-year low at that time.

Panic at retailers as sales drop and drop some more

Home Depot earnings worse than expected
Wall Street was braced for bad news from Home Depot but not this bad.

Panic in Spain (and England) about the Spanish property crash underway

Spain risks crisis over vanishing reserves.
Spain's foreign reserves have plummeted to wafer-thin levels, leaving the country exposed to a possible banking crisis if the property market swings from boom to bust. "Where this gets serious is if there is a property collapse in Spain and the banks get into trouble," said Prof Tim Congdon, an expert on monetary policy.

Panic for Desperate Homedebtors who can no longer afford their debt-traps

Foreclosures rise 62 percent in April, compared with year earlier
Mortgage lenders in April foreclosed on 62 percent more U.S. homes than a year ago as borrowers failed to keep up with loan payments, an industry research firm said Tuesday. RealtyTrac Inc. said foreclosures in April spiked to 147,708, compared with 91,168 in 2006, as lenders repossessed one out of every 783 homes.

Panic at the White House, Fed, NAHB and CNBC that nobody is buying their soft-landing BS anymore

Homebuilders Rebound? April Fools!
Housing starts edged up in April, but permits, a better indicator of housing market health, plunged to the lowest pace in nearly a decade

Panic at the NAR that nobody is buying their bulls*it anymore

CBS' 60 Minutes Story Almost Appears Unbiased
It's deja vu all over again. Like the Department of Justice's leak to the Wall Street Journal that allowed reporter James Haggerty to break the news that the DOJ was filing a lawsuit against the NAR on the opening day of the NAR's annual Mid-year conference two years ago, CBS' airing of the nearly undetectably biased 60 Minutes piece "Chipping Away At Realtors' Six Percent" allowed reporter Lesley Stahl to report "How Realtors' Commission Fees Are Under Assault" just in time to embarrass the NAR once again on the eve of its Mid-year conference.


ecobuilder said...

We're moving into severe depression. Housing panic it's just small part of it.

Last business cycle housing prices fell when economy was in recession. Now we approached the recession/depression from another side: it's gonna be a perfect storm.


keith said...

Got liquid?

Mort said...

Here comes the train, right on time.

Anonymous said...


Anonymous said...

ecobuilder said...
We're moving into severe depression. Housing panic it's just small part of it.

Yes, we probably are. But the rats who built this house of cards have many tricks up their sleeves, and there will be enormous, bloody brawls in the financial markets as the house of cards collapses. This is going to be like nothing ever witnessed on planet Earth.

Please, dear folks, TRY not to be among those who continue to get their wealth confiscated from them.

Anonymous said...

Homebuilder sentiment to recession lag time is about 1 year. Everyone was saying it would turn around in the fall of 07. Yet the historical lag said that is when we would be in the recession. Sentiment is back down, other indicators are pointing toward slowdown in the recession range so that by the endof the year we would be in recession, by definition 2 back to back negative growth quarters.

Now everone is saying housing turn around will be in early 08, but with the historically low homebuilder sentiment index still dancing a the bottom now that means we'll still be in recession this time next year.

Rent & work for the government. If you're an overextended FB?HD right now slash & burn out of shear financial self preservation. Once recession hits, hiring will go down the tubes, layoffs & cuts will be the norm and you're toxic loan will be resetting. The iceberg has been on the horizon for awhile, it will be barreling down on you in 6 months. Now is you're clear last chance to get out of its way. Put you're petty greed to the side and take the short term loss for the long term gain. DO it Do it now, do it decisively. Otherwise I do not want to hear you're whining when the iceberg crushes you.

honica jewinski said...

That's great news! Maybe home prices will finally start to come down in my neck of the woods (or at least quit going up). I'm ready to buy again......... cash. This renting shit sucks.

Anonymous said...

I see signs of large-scale tremors in the world financial markets.

PANIC, yes.

The critically ill housing market is very much in the headlines, and the big ugly buzzard of reality is sitting on his perch, grinning, licking his beak, ready to feast on dead and dying flesh.

If you are middle class, which most of us are, take comfort in the fact that many rich people, and people who merely appear rich, are in the process of losing their fortunes, or will be losing them shortly.

Shortly, I say.

Try to stay out of the way of the freight train, kind folks.

Anonymous said...

...we'll still be in recession this time next year...

I've got news for you. This recession is just barely getting started. What is about to unfold will rock the world to the extent that the world's governments and power brokers will tremble. Things are going to be rocked to their foundations.

Buckle up.

Anonymous said...

I think August 07 numbers will report the biggest drop in median prices because FBs will throw in the towel in July and lower asking prices to more realistic amounts.

I also see an investment opportunity for anyone willing to work with FBs. Most FBs don't won't to move from there home. They just can't afford the debt they borrowed.

FBs could be turned into renters of there own property if an investor came in with an offer which could be supported by renting to the FB for and amount which would cover the mortgage, taxes and insurance.

Sure the FB looses there home but at least they don't have to move. In addition, FB would have to get lender to accept lower sale price. And, FB would have to report cancellation of indebtedness income for all that excess money they borrowed and can't repay.

Investor ends up with an rental property purchased at a realtistic price with rent to cover the mortgage, taxes & insurance. While FB gets to stay in there house with no debt and a rent they can afford.

Anonymous said...

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Whirlpool Falls on Weaker Shipments
Wednesday May 16, 2:05 pm ET
Whirlpool Shares Down Following Report of Falling April Home-Appliance Shipments

NEW YORK (AP) -- Shares of home-appliance maker Whirlpool Corp. declined Wednesday following an industry report that indicated shipments of major home appliances sank in April.
Whirlpool shares gave up 11 cents to $111.14 in afternoon trading.


According to a monthly industry report from the Association of Home Appliance Manufacturers, shipments of select major appliances, or the "AHAM six," fell 3.1 percent in April.

The category is the most closely watched by investors and includes dishwashers, freezers, refrigerators, cooking ranges, dryers and washing machines. Year-to-date, shipments in the category are down 7.6 percent.

Citigroup analyst Jeffrey T. Sprague in a client note said Whirlpool forecast for a slower, 5 percent industrywide slip in the first half of the year.

Sprague reiterated a "Hold" rating and $107 target price on shares of Whirlpool.

"We remain concerned that North American appliance volumes could slow abruptly in 2007, reflecting a combination of weaker housing fundamentals and a payback from accelerated replacement demand," the analyst wrote.

Anonymous said...

"We have the worst deficit in our history and worse than any other country in the western world. It has not yet become a 'street concern', but I can assure you that it is of great concern to us economists. This will turn bad over the next 18 months," he said.

This blog is going to have to make up its mind. Either the EU countries are great places to put your money (in currency) or the US is not as bad as you think it is. Plus - we don't have the muslim rioting/sharia law problem either...

You can't have both.

Marky Mark

Anonymous said...

hmmm and yet prices are still not falling...back to the basement apartment renters

Anonymous said...

I worked for a builder, up until yesterday. He has the best idea of all: quit the construction business! Rode that elevator up and getting right off. (well, he went down a few floors, but not too bad.)

Anonymous said...

Anonymous said...
hmmm and yet prices are still not falling...back to the basement apartment renters

May 16, 2007 8:30 PM
See you in the Fall of 07!!!

Anonymous said...

Yeah, what a crash!

and the markets are up another hundred today..



honica jewinski said...

Well said anon 8:42,
This housing boom was very, very good to ol' Honica. Ya just gotta know when to pull your chips off the table. Be flexible HP'ers, maybe pick up that book "who moved my cheese", think about what's going on in this jewed economy, and try to stay one step ahead of the herd. Take risks though, most folks have to to get ahead.

Anonymous said...

honica jewinski said...
That's great news! Maybe home prices will finally start to come down in my neck of the woods (or at least quit going up). I'm ready to buy again......... cash. This renting shit sucks.

HUH? All I read from you tools is how glorious renting is. Now all of a suddent it sucks? What about the freedom to move? Or not doing yard work? Or living in the city next to 1000 restaurants? What happeed to all that great stuff?

Anonymous said...

The spanish story is actually VERY interesting! Especially if you also follow the related links.

Anonymous said...

Anonymous said...

Yeah, what a crash!

and the markets are up another hundred today..



May 16, 2007 9:09 PM
Yeah Let's party like its 1928!!

borkafatty said...

The real estate market is crashing faster than anyone had anticipated. Housing prices have fallen in 17 of 20 of the nation's largest cities and the trend lines indicate that the worst is yet to come. March sales of new homes plummeted by a record 23.5% (year over year) removing all hope for a quick rebound. Problems in the subprime and Alt-A loans are mushrooming in previously "hot markets" resulting in an unprecedented number of foreclosures. The defaults have slowed demand for new homes and increased the glut of houses already on the market. This is putting additional downward pressure on prices and profits. More and more builders are struggling just to keep their heads above water. This isn't your typical 1980s-type "correction"; it's a full-blown real estate cyclone smashing everything in its path.

Tremors from the real estate earthquake won't be limited to housing--they will rumble through all areas of the economy including the stock market, financial sector and currency trading. There is simply no way to minimize the effects of a bursting $4.5 trillion equity bubble.

The next shoe to drop will be the stock market which is still flying-high from increases in the money supply. The Federal Reserve has printed up enough fiat-cash to keep overpriced equities jumping for joy for a few months longer. But it won't last. Wall Street's credit bubble is even bigger than the housing bubble---a monstrous, lumbering dirigible that's headed for a crash-landing. The Dow is like a drunk atop a 13,000 ft cliff; inebriated on the Fed's cheap "low-interest" liquor. One wrong step and he'll plunge headlong into the Abyss.

serindippity said...

The real estate market is crashing faster than anyone had anticipated

You mean, except for the CME futures on the Case-Shiller housing indices?

C-S indices are the ones which account for changes in home size/quality etc, and are certainly the most honest and reliable. Only problem is that because they are difficult to compute they are slower to report than medians.

Yup. Same Robert Schiller who created the "roller coaster" ride plot of real home values with the ginormous bubble from 2000-2005.

See this from the fantastic Pigginton San Diego site:

Median vs Case Schiller (San Diego)

medians are up and down. Case-Schiller? Just plain down.

Anonymous said...

stock market up huge this year. Will go higher as all the housing bubble sitters pour money into stock market because 5%in ing direct, emigrant sucks. So the market will run up until p/e get crazy like 1999 then crash. Alot of people have huge cash,cd, etc to put in stocks and ride out housing down turn that has barely started. At least 2 years plus. In most cities values have increased 3x. I sold a house in LA in 03 for 410,000 which i bought 99 for 195,000 which was overpriced. Would sell in 07 for 700,000.Way out of line. Rents have increased dramatically in LA despite what Keith says. Rents are through the roof.

Anonymous said...

my aren't we glad they took housing prices out of the inflation calculation numbers, and substituted hamburger instead of steak, and omitted energy and fuel and taxes, so we could screw the savers and people who live within their means and buy just what they can afford, shows the power of bought govt and .....

Anonymous said...

What's that smell?

Teen spirit baby!