Housing Bubble Bursting?

[moh malekpour]

Moh, do you look for negative articles? You do know that for every negative article there is an opposite view. Do you look for those also, or do specifically look for the sky is fallng articles?

Hank,
I am expecting some one like yourself to put some of those positive articles on here for us to read and enjoy. Why don't you? the field of web is wide open and I would love to read them if you post them. please try. We need some.

 

[Randolph Kinney]

Fed Speak

Brad,

I see that you are a monitor of Fed Speak so as to know exactly what was meant by Bernacke's statement about mortgages and housing. Okay, no problem yet that requires immediate change in Fed policy. That should help, right?

You know that GDP final for 4Q 2006 will be announced on Friday. Any guesses on the growth revision? Most are saying 2.2% like before.

Personally, I believe the growth will be revised downward. Here's why.

Residential investment; non residential structures investment; corporate investment in equipment and software, and inventory are falling.

Q1 2007 so far shows residential investment is still falling at a 20% SAAR rate. The idea that the housing recession was close to bottoming out has altogether collapsed under the weight of every possible recent demand and supply housing indicator.

Non residential investment in structures - that was supposed to hold up the construction sector while residential investment was in a recession - is instead faltering too. Non residential investment was growing at a 20% SAAR rate in Q2 of 2006; then the growth slowed down to 14% in Q3 and then went into negative territory already in Q4.

Capital spending on software and equipment by corporations has been falling since Q4 and now it is falling a much faster rate – about 8% SAAR – in Q1.

Inventory investment has fallen sharply in Q4 and will fall more in Q1.

My conclusion is that we are headed towards a hard landing recession this year. Once the GDP growth goes below 2% for a quarter or two, you will hear another Fed Speak. It may not say " ... worsening subprime ... spreading to other parts ..." or "... housing continues to moderate ... " but you may detect "... the risk of inflation is not the concern it once was ... growth is becoming a concern ...".

Meanwhile, defaults and foreclosure should rise as will unemployment.

 

[moh malekpour]

Bernanke Video

If you want to know what everyone said in the hearing of Bernanke testimony at the front of senate joint committee, watch the video
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vDHg6Rr2fahI.asf

 

[Dee Dee]

Thanks for the link, Moh.

 

[Karl]

Hey Moh I'm here to help!! Want some Positive articles that there are problems Try these:

Feds Investigate Arizona Home Builder Beazer
http://www.fraudproblem.com/updates/2007/3/27/feds-are-investigating-arizona-homebuilder-beazer.html


IRS Targets Downpayment Assistance Programs
http://www.fraudproblem.com/updates...ed-programs-do-not-qualify-as-tax-exempt.html


Layered Transactions Pump Air into Sales Prices
http://www.fraudproblem.com/updates/2007/3/12/layered-transactions-pump-air-into-sales-prices.html

 

[Randolph Kinney]

Will the FED blink?

Source: Bureau of Labor Statistics, Consumer Price Indexes

Source: Bureau of Labor Statistics, Employment Cost Index

[FONT=arial,helvetica,verdana]Source: Moody’s Economy.com[/FONT]

 

[moh malekpour]

U.S. Economy Grew at a 2.5% Annual Rate Last Quarter

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7J_gsRgH6X4&refer=home

Increasing subprime loan defaults and foreclosures threaten to deepen a housing slowdown that last quarter was already the worst in more than 15 years. Coupled with a drop in corporate profits and less business investment, the economy may not be able to attain Federal Reserve Chairman Ben S. Bernanke's forecast of ``moderate'' growth.

The housing slowdown remains one of the biggest concerns this year, economists said. New-home sales unexpectedly fell last month to the lowest level in almost seven years, a government report this week showed. While February housing starts rebounded in February from a nine-year low, building permits, a sign of future construction, declined

 

[moh malekpour]

Home Depot, Wal-Mart May Suffer as Mortgage Woes Hit Customers

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVXFG8f01LHw&refer=home

Delinquencies among subprime borrowers, who tend to have tarnished or limited credit histories, hit a four-year high in the fourth quarter, the Mortgage Bankers Association said March 13. Foreclosures on all types of home loans rose to a record.

Home-improvement stores and retailers selling to people in the subprime-borrowers' income bracket may feel the biggest pinch. ``If you are a subprime borrower and your home is repossessed as thousands have been, you aren't going to be buying at Home Depot,'' said Davidowitz.

Home Depot spokesman Jerry Shields said the company doesn't comment on specific housing industry trends.

 

[moh malekpour]

Housing Slump Erodes Budget Gains From Florida to California

http://www.bloomberg.com/apps/news?pid=20601170&sid=aaxEGhOqB5eg&refer=home

Florida's tax receipts are falling for the first time since 1975 as a slump in construction and home sales dims the economy of the Sunshine State.

States from New Jersey to California are getting pinched, just a year after many enacted the biggest spending increases in almost two decades. They're drawing down $16.6 billion from reserves this year -- 29 percent of their total savings -- even as legislators debate tax cuts and plans to expand programs such as government-subsidized health insurance.

In California, the most populous state with 36 million residents, a balanced budget that Governor Arnold Schwarzenegger forecast for the fiscal year starting July 1 may swing to a deficit as tax revenue trails estimates by $847 million

 

[moh malekpour]

A bizarre lawsuit against New Century

http://www.nypost.com/seven/03292007/business/freddie_fights_back_business_paul_tharp.htm

With an all-but-certain bankruptcy looming and a flood of lawsuits lining up from huge losses in its soured mortgages to poor credit risks, at least one bizarre lawsuit has popped up in the spreading legal wildfire.

A small Texas company with an identical trade name has sued New Century in federal court claiming the company blatantly hijacked its name and even its identical logo - and is trashing its otherwise healthy business in Texas as a commercial banker and mortgage lender to businesses.

The Houston-based company, New Century Financial Inc. - not the New Century Financial Corp. of Irvine, Calif. - is just one of hundreds of perplexed victims of the complex legal entanglements unfolding over the meltdown of the junk mortgage market.

The Texas company, which was formed 12 years before the California firm, said it only discovered the trademark crisis two years ago.

One of its law fims even sent its own confidential legal file in error to the California firm, while headhunters have sent job applicants to wrong addresses of both places. But when the subprime mess exploded, the firm said it had to take legal action to avoid becoming collateral damage.

"This is ruining us, and must be stopped," the firm said in its lawsuit to block the California firm from using New Century