March 25, 2008
– Comments (14)
this is the only chart uglier than my recent CAPS score.
And think, just yesterday the commission hounds at the NAR were pumping a "housing is back" story. Tar & Feathers needed.
Is there any way to play on the CS index? We can probably place a bet somehwere in Vegas, but any future we can short or something?
I think you can get it in Chicago, if you have the right connections.
I can't believe my eyes. The proud fundamentalist TMFBent is studying charts and talking TA gobbledygook :)
A couple points:
1) Although I agree that we haven't reached bottom, I would like to point out the sharp reversal, on that very same chart, in 1991. And, of the short timeframe visible on that chart, the '89-'91 decline is the only decline of similar slope and proportion to the current decline. So a smooth bottom isn't necessarily a given.
2) I don't know why, but I find the "digital crayon" colored markups strangely hilarious. Thanks for the laugh!
and 3) The ugliness of my recent CAPS score puts both you and Case-Shiller to shame! Can't touch this.
Just called my broker. I can't even trade futures at all. Kinda sucks.
Just recently started following TMF Bent's writings. This is hilarious stuff. Right on as usual, but the use of the handwriting on the charts- just made me crack up too. Hopefully, more to come like this.
FYI, I just underperformed several homebuilders, really in no particular fashion, just based on how ridiculous they jumped on highly spun news.
Figures don't lie, liars figure! But here's my question. They said falling prices was "good news". Ahem, that would mean that more of these excotic derivates are underwater, no? And that would mean more write downs. More bank lines of credit with no collateralizing value. What am I missing?
Prices may be falling, but credit is not easy at all. YOU now need to have a real, still high paying job. Next to perfect credit, a Kidney donor tradeup program ( for the not so perfect borrowers) and an indentured servant clause.
Oh declining markets( markets that are going down, have a 5% off the LTV even if you qualify for a higher LTV.
Markets are going down, but they will be forced to go lower because I dont know that many people making 90K a year working as a Supermarket stock boy.
They said falling prices was "good news".
Believe it or not, falling prices are good news. The housing market will not recover until people in their late 20s/early 30s can afford again to buy a starter home. At that point, people who have kinda outgrown their starter home can move up. Then empty nesters can start looking for their retirement place.
Affordability of starter homes is key to the housing market recovery.
@nuf2bdangrus: Falling prices are good news for those with cash waiting to buy.
Falling prices in RE is a good news, mostly because RE prices HAVE TO fall, and the sooner/faster the better. If the Fed/gov would just let the excess of hot air flow outside the bubble, let fail those who needs to fail (wheter they are individuals afiling on their mortgages or large banks failing on their creditors is irrelevant), the whole "crisis" would be over within 12-18 months.
On the other hand, if the fed/gov keep trying to bail everyone out, this shitty situation could keep going for ages (see recent japan history for a prediction of what could happen in US).
CRAYON! That's sophisticate Tablet PC inking. Actually, it does look like crap, mostly because the image had to be scaled back so caps would show it without cropping. Bigger, the writing looks more like 5th grade stuff than 2nd.
Yes, it looks like the bottom to me. The uglier the chart the better the future.
A house is affordable again.
Now I have a dilemma choosing between equities and real estate.
By what measure? Houses were "affordable" at the peak of pricing in 2005 because the loan terms were so generous (up front.) Houses rose some 150-300% in some of these areas, and they've corrected only 10-30%.
They may be "cheaper," but consumers have lost half their buying power with tighter credit and rising mortgage rates. That's why sales are tracking 24% lower than they were last year. And the lack of equity, the coming bubble in Liar-loan adjustments, will put more inventory on the market.
If you think they're affordable now, wait a year and buy two!