FLASH: Bernanke having closed-door meeting with homebuilders who f*cked America. So when does he meet Americans f*cked by the homebuilders?

If Bernanke and the Fed cut rates (when they should be raising) to bail out the hedge funds, banks, housing gamblers and homebuilders who made poor decisions these past few years, then all bets are off, especially when it comes to the US dollar, which will immediately and irreversibly melt down.

If the Fed cuts to bail out the bad decisions of homebuilders, housing gamblers and hedge funds, even after Bernanke expressly ruled this out, the moral hazard implications will be off the charts. Kinda like giving in to hostage takers - it only causes more hostage taking in the future.

What will Ben do? Moment of truth HP'ers.

I think he's a puss, run by the bankers and Bush, and cuts 1/4. He'll say he's cutting because of the downturn in the economy due to the housing crash, and softening of the "official" government inflation reading, but we'll all know he'll be cutting to bail out the builders, hedge funds and banks.

But even a cut, and as the economy melts down there'll be cut after cut after cut (see Japan), it won't matter. Housing prices will continue to fall, demand will continue to shrink, the dollar will plummet, and this Ponzi Scheme will come to its rightful and natural end.

It hath been foretold.

Builders Meet With Fed to Discuss Mortgage Crisis - Industry officials are likely to lobby for an interest-rate cut and assistance for struggling homeowners.

Some of the same builders whose companies created the excess inventory that helped push the housing industry into its current downturn are reportedly meeting today behind closed doors with Federal Reserve chairman Ben Bernanke to discuss what can be done to prevent owners from losing their homes to foreclosure.

The actual agenda of the meeting, however, is not completely clear, as NAHB - which arranged this meeting through its High-Production Homebuilders Council - and spokespeople for several large home builders declined to answer questions about it.

HP calls for an immediate US Justice Department investigation of Ara Hovnanian for attempted price fixing and Sherman Antitrust violations

Folks, it is illegal in America to talk to your competitors in an industry about prices. Yet that is EXACTLY what Ara Hovnanian stupidly did in public the other day, as he addressed his fellow desperate homebuilders at the Southeast Builder Conference in Florida.

I've seen some really dumb things during the housing crash, and this may be the dumbest. "Arrest me" he seems to be shouting. "I'm above the law, I control the universe" perhaps. Mostly though, it's "I'm desperate, and my company is about to go under unless we can illegally conspire together to stop this bleeding"

Yes, I understand the rule of law no longer applies in America, but come on, this is so blatant, so public. Is anyone minding the store?

Here's what Hovnanian had to say to his fellow builders - in public no less!

"Raise prices," he said. "Buyers aren't buying because they think you're going to lower prices again. There's interest but there's fear. Raise prices 3-4 percent. And quit giving discounts.''

For the uninitiated, here's a bit about price fixing:

Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether express or implied

Here's elements of Price Fixing from the DOJ:

Price fixing is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold. It is not necessary that the competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law. Other examples of price-fixing agreements include those to:

Establish or adhere to price discounts.
Hold prices firm.
Eliminate or reduce discounts.
Adopt a standard formula for computing prices.
Maintain certain price differentials between different types, sizes, or quantities of products.
Adhere to a minimum fee or price schedule.
Fix credit terms.
Not advertise prices.

In the United States, price fixing can be prosecuted as a criminal felony offense under section 1 of the Sherman Antitrust Act.

Now, if you'd like your say, forward this on to media contacts, and to the Justice Department's antitrust division here or at antitrust.complaints@usdoj.gov. However, the one problem with this is that as you know our Justice Department is run by corrupt monkeys too.

Unbelievable.

Absolutely unbelievable.

And then the homebuilders started going to jail...

Beazer Accountant Fired in Document Destruction Try

June 27 (Bloomberg) -- Beazer Homes USA Inc., a homebuilder that's under investigation by the FBI for potential fraud, fired its chief accounting officer for violating the company's ethics policy by attempting to destroy documents.

Beazer fired Michael Rand after an internal probe of the company's mortgage origination business, according to a filing today with the U.S. Securities and Exchange Commission. Messages left at Rand's home and with Leslie Kratcoski, a Beazer spokeswoman, were not immediately returned.

The Federal Bureau of Investigation opened an investigation of Beazer after the Charlotte Observer reported on March 25 the company sold homes to low-income buyers who couldn't afford them, using mortgages based on expectations the buyer's income would rise. That practice is prohibited by the Federal Housing Administration, which provides loan guarantees for home buyers.

HousingPANIC Stupid Question of the Day

Who was the most ignorant and irrational market player during the Late Great Housing Ponzi Scheme? In other words, who's gonna be in for the biggest shock of their lives as this all caves in?


1) Homedebtors, who didn't understand P/E ratios, historical norms, interest rates, toxic loan terms, how home prices are achieved or how rampant REIC corruption was

2) Realtors, who didn't understand that it's never different this time, that the good times couldn't last, and that once the crash started, it wouldn't stop until its natural and fitting end

3) Corrupted appraisers, who didn't realize that their fraud will be some of the easiest to trace once the authorities wake up and start doing their jobs

4) The mainstream media, who took NAR press releases and printed them as gospel

5) The federal reserve, who thought blowing a new bubble to replace the NASDAQ bubble was a fine idea

6) China, who thought we would pay back those silly bonds and loans

7) Homebuilders, who wildly overpaid for land, who based their business model on illegal labor, who will be arrested by SEC authorities for cheerleading their stock while dumping it, and who destroyed yet another American industry for short term gain

8) Freespending mortgage brokers, who flamed out as fast as drkoop.com

9) Wall Street Analysts, who must have gotten their degrees at Arizona State, who evidently never read Manias, Panics and Crashes, and who were surprised by the downturn month after month after month after month

10) George W. Bush, who encouraged people to buy homes regardless of the price or fundamentals

Others: CDO holders, hedge funds, David Lereah, Sheeple, Flippers, Congress, illegal immigrants, Harvard JCHS, Brits, home retailers, local and state governments,

CNBC's Diana Olick rips the homebuilder CEOs. HP takes it up a notch from there.

HP has a simple message for the stock-pumping, lying, deceiving, illegal-immigrant-hiring, system-gaming, short-term-thinking, insider-stock-trading homebuilder CEO swindlers whose bloody hands are all over the dead housing industry's corpse.

F@*$ you.

You ruined yet another American industry, you enriched yourselves at the public's expense, you've ruined lives, you've destroyed families, and some of you will now be heading to jail.

Sleep well at night?

Here's excerpts from Diana's latest post. I hope the knives really come out soon (and the cuffs)

Home Builder Sentiment Down: And They’re Mad At Me??

If you happened to read my blog last week, you’ll remember what a warm reception I got from the CEOs of the major public home builders at the JP Morgan Basics and Industrials conference. As they summarily rejected my polite requests for interviews at our live camera, they also made it abundantly clear that it was media hype fueling the negative sentiment among healthy home buyers across the nation.

And then again today I had the joy of reporting yet another negative number for the housing sector. This is a fave of mine, because it’s not about the buyers and the government stats, or the real estate agents and their sales figures--it’s about the builders and their feelings, nothing more than feelings (sorry).

And the number is down again--down to 28, a low not seen since February of 1991.

So despite the fact that all these CEOs were telling me that I’m the only one shouting from the rooftops that the housing market is in trouble, they were busy quietly telling the bean counters at NAHB, that they really kinda felt the same way.

Yes, I know, the CEOs need to pump the stocks and pump up the stockholders’ enthusiasm, but come on

So I’d just like to throw out a big ol’ thank you to all those home builders out there who told their industry representatives that they think there might be some problems still to work out in housing. Forgive me for reporting your number. Didn’t mean to seem too bearish. And do let me know if there’s anything I can do to help.