Housing Bubble Bursting?

[Randolph Kinney]

Housing bubble still deflating and more to come

Despite all the current inflation concerns surrounding the weakening dollar, high
energy prices, and commodity prices, we believe that the ongoing deflation in the
$23 trillion housing market exerts the most influence on the US inflation picture.

Part of the justification Merrill Lynch is using for lowering the FED funds rate. I think this goes along with:

MxV = PxQ = GDP

 

[Cigar]

Randolph:

Do you know of any evidence that NAHB (National Association of Home Builders) money was instrumental in creating the financial instruments which supplied the monies to unqualified borrowers to create their (former) market?

 

[Randolph Kinney]

Randolph:

Do you know of any evidence that NAHB (National Association of Home Builders) money was instrumental in creating the financial instruments which supplied the monies to unqualified borrowers to create their (former) market?

I don't believe they (NAHB ) were involved with financing borrowers. NAHB is a trade organization of home builders and I don't believe they have a finance subsidiary. However, most all major home builders have their own financing subsidiary, for example, Beazer Homes which is under investigation about their sales and financing.

 

[Randolph Kinney]

Slashed prices fail to lift US housing market

Confidence among US homebuilders remained at record low levels this month, as a report warned that slashed prices and incentives offered to buyers appeared to have had little impact on the housing market, currently scraping the bottom of a two-year recession.


The Wells Fargo/National Association of Home Builders’ index of builders’ sentiment remained at a reading of 19, the same as in October, and the lowest since the survey began in 1985. The index last showed a positive outlook, indicated by a reading of 50 or more, in April last year.
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[Randolph Kinney]

Fannie & Freddie vulnerable to rising defaults

Fannie, Freddie drop on report citing vulnerability

SAN FRANCISCO (MarketWatch) -- Shares of Fannie Mae and Freddie Mac fell sharply Monday following a report that the mortgage finance companies are more vulnerable than expected to anxiety about rising mortgage defaults.

The Wall Street Journal reported that some observers expect the companies' earnings to fall due to the continuing decline in the housing market.

 

[moh malekpour]

A bad day for the stock market

DJIA down –1.66%
NASDAQ down –1.66%
S&P 500 down –1.75%

IMB share price $9.25, down –8.14%
CFC share price $10.57, down –12.43%
WAMU share price $18.49, down –7.27%

 

[Riick]

A bad day for the stock market
IMB share price $9.25, down –8.14%
CFC share price $10.57, down –12.43%

And the race to $1.50 (or $Zero) continues -- with Indy gaining a little distance over Countrywide. :laugh:

 

[MARK JOLLIFF]

A bad day for the stock market

DJIA down –1.66%
NASDAQ down –1.66%
S&P 500 down –1.75%

IMB share price $9.25, down –8.14%
CFC share price $10.57, down –12.43%
WAMU share price $18.49, down –7.27%

But a good day for me!!! SDS,DXD,QID all short positions. Todays total: up $964.32. Yippeeeeee!!

 

[Cigar]

Mark:

My total for the day: (18,844)

 

[moh malekpour]

But a good day for me!!! SDS,DXD,QID all short positions. Todays total: up $964.32. Yippeeeeee!!

Good for you. these are interesting contrarian ETF stocks for this declining market. Did you ever tried them when market was on the upturn?

If S&P 500 goes down –1%, You get +2% on SDS which function opposite to S&P 500. Today S&P 500 went down –1.75%, you got +3.50% on your SDS but if the market was going up, your return should have been –3.5%.

I neither do individual stocks nor ETF which are basically index funds but function like indidual stocks. I just buy index funds for saving myself management and transaction costs and capital gain taxes.