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alstry (34.92)

A Fricken Flock of Foolish Sheep????

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January 26, 2009 – Comments (6)

Is that what the mainstream press thinks we are with headlines like the following:

Existing-home sales stoked

U.S. Dec. home sales stronger than expected

December Existing Home Sales Rise Unexpectedly

NOW SOME FACTS:

Sales in December were DOWN 3.5% from the previous December.

The median sales price fell to $175,400 in December, down a record 15.3% compared with a year earlier.

Hello!!!!  Anyone Home????

Prices are CRASHING!!!!!  At a record pace!!!!!  Volume is going Down not up as the headlines suggest.  Could you imagine the market cheering because stock prices are crashing????

And based on headlines like the above...the sheep make decisions.  But not those who compulsively apply the principals of Alstrynomics.  Focus on the facts and apply them to reasonable conclusions. 

May you score lots and lots of points in upcoming weeks.

6 Comments – Post Your Own

#1) On January 26, 2009 at 10:59 AM, alstry (34.92) wrote:

The price decline is likely the largest since the Great Depression in the 1930s, according to Lawrence Yun, chief economist for the trade group.

About 45% of the transactions in December were considered distress sales, either a short sale or a home in foreclosure. Many foreclosure sales are handled outside the realtors' system and are not reported in this report.

Without distress sales and foreclosures, sales would have been down 50%..........crazy times indeed.

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#2) On January 26, 2009 at 11:15 AM, cubanstockpicker (20.57) wrote:

No matter what happens now, its a catch 22. If the US goes into full modification mode on distressed mortgages, Americans will stop paying their more highly valued homes than their neighbors that are getting a sweeter deal by having their principal readjusted. Or if not, stay at their put away money for ayear by not pyaing their mortgage, then with the money left over, buy a home in foreclouse, a har equity lender will borrow up to 60% NO MATTER WHAT THE CREDIT. On an 80,000 home in Miami I am seeing, I can get up to 52k as a loan. I am putting 28k down and getting into a pretty nice house minus the repairs I have to do. Almost all my future neighbors have purchase prices well above three times what I am paying.

 I didnt lose a home in foreclosure, but alot of people are using this newly opened loophole and taking full advantage of the opportunities it has presented. Sort of like the banks have done the same. I dont blame them, AIG went on vacation on the US's tab, the rest of American will wisen up. Our valueas an economy will fall further.

Onto the short term, there are some dumb bullish sentiments out there and I am taking advantage of that. FAS and FAZ have been retirement account savers.

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#3) On January 26, 2009 at 11:28 AM, devoish (98.56) wrote:

Alstry, it says here that you cannot count. None of these layoffs counted by you or the Bureau of Labor Statistics have actually happened. In fact contrary to Alstrynomics "the U.S. economy is robust and job creation is strong".

I am just a lowly car mechanic and all, but I am sure that my local newspaper having gone from listing 3 columns of Mechanics jobs last year, to 3 jobs this year, confirms something. 

 

 

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#4) On January 26, 2009 at 11:31 AM, snakeyd (< 20) wrote:

It is a scary thing to watch, destruction of assets.  The only upside is that it appears these distressed homes are being snatched up by frugal buyers (ones that will maintain the building and pay the taxes).  Perhaps most of the country will be spared what Detroit is going through?

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#5) On January 26, 2009 at 1:03 PM, cubanstockpicker (20.57) wrote:

Snakeyd, if that happens, which banks wont want to, would mean the banks assets would get devauled by the fact that homeowners refuse to pay and the only ones buying are getting at 30-40 cents on the dollar. Plus Taxes on property would be even further away from being collected. It would absolutely devastate the market.

One other thing, banks are trying to keep the shareholders interested by putting their fingers in the leak.

If they have to resort to massive devaluing the banks holding these loans would get crushed.  Currently thebanks are trying to avoid this, but even the greedy bastards at banks that are "modifying loans" are trying to strecth it out at a lower interest rate, savingpeople on average a whopping 200.00 per month WOW!!!! Now thats a modification!!!

By preventing the lowering of principal they are fictitously trying to prop up their assets.

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#6) On January 26, 2009 at 2:47 PM, socialconscious wrote:

Snakeyed and Cubanstockpicker absolutely.

My friend is thinking about buying a house in Florida. They want $2500 property tax on a now $80,000 house. Most new buyers are going to get a reassesment and gross property taxes are going down.Would not be suprised if Florida adopted a state income tax remembering that Conneticut had no state income tax prior to 1991 

Snakeyed lets hope we do not get a Detroit type situation although I think optimistically Detroit is eventually going back up because of a now bustling downtown. Once they figure out a new industry sort of like PIttsburgh.Of note Detroit's outlining areas and suburbs to the south(Downriver) and especially north have always be decent to great.

IMHO and my nickle...Social C

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