Bailout will lower home values, Cramer agrees

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Submitted by temeculaguy on April 5, 2008 - 11:20pm

After reading parts of the bailout bill, I thought it would backfire. Saving the builders and giving them tax advantages to build more and slash prices would be the catalyst for the next chunk downward.

I figured I was wrong because nobody in the media was picking up on this, the main stream media was still talking about saving people from foreclosure but nothig I read in the bill would actually save them and everything would work in the opposite direction. I assumed that my inability to see the entire bill since it is being modified was the reason.

Then I read and watched Cramer's piece on it, someone I usually avoid, but he feels the same way about it. It is going to backfire. Of course he encourages you to call your representative and stop it because it will depress your home's value, knock yourself out, I'm not calling.

http://www.cnbc.com/id/23962144

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Sorry can't do it. I just
Submitted by barnaby33 on April 6, 2008 - 9:11am.

Sorry can't do it. I just can't bring myself to watch Cramer, can you summarize?

Josh

It's worth a few minutes of
Submitted by Ex-SD on April 6, 2008 - 9:48am.

It's worth a few minutes of your time to watch the video.
I normally can't tolerate Cramer for more than 20 seconds or so but he's on a crusade to stop the handout to the homebuilders.

Give him his dues ...it's
Submitted by qwerty007 on April 6, 2008 - 10:03am.

Give him his dues ...it's just theater. Basically, he is complaining that builders were withholding political contributions, because they had been left out of the bail-out or stimulus deal. So Congress awarded them $6 billion. Cramer sees this is as an incentive for builders to plow back more money into building when the market is already over-saturated. Over-supply means depressed prices. He thinks the money should go to home-owners. Couldn't watch all of it, but that's the gist of it. Oh yeah, he believes builders are the problem.

he is probably in cahoot
Submitted by bob007 on April 7, 2008 - 4:03pm.

he is probably in cahoot with financial institutions who depend on propping the inflated real estate values

His whole premise seems
Submitted by noone on April 8, 2008 - 9:55am.

His whole premise seems flawed to me. His premise is that the sole reason that home prices are falling is high supply and low demand. If builders build more homes it will only increase the number of available homes.

Any Pigg knows that that the real reason that home prices are falling is that they are overpriced. There's actually a ton of demand for homes... at the right price! Any home that comes on the market anywhere close to the right price will get multiple offers. This shows that rather than an oversupply of homes, there is actually an under-supply of correctly priced homes.