Meredith Whitney: “No Doubt We Have Entered A Double-Dip For Housing”

[Arraya]

http://www.zerohedge.com/article/meredith-whitney-no-doubt-we-have-entered-double-dip-housing
Highlights from an interview by Meredith Whitney currently on CNBC (full interview to be posted later):

A double dip in housing is a certainty
State economies are plunging, and are $200 billion underwater, will lead to 2 million in state-level layoffs leading to a low-end impact; raising taxes at state level will impact the top-end
Retail sales have been stronger only due to consumers not paying mortgages, retail sales have already topped as is
Q2 bank results will finally catch up with accelerated mortgage foreclosures; charge-offs and delinquencies in credit cards are better due to mortgage non-payment cash flow going to other obligations, and this will soon top as well
Structural employment issues in the US won’t get better any time soon
5

[jpinpb]

While stopping short of predicting a full-blown double dip in the broad economy, Whitney said one is certainly in store for the housing market.

“People doubt there’s a double-dip in housing,” she said. “It’s amazing.”

As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.

[jpinpb]

While stopping short of predicting a full-blown double dip in the broad economy, Whitney said one is certainly in store for the housing market.

“People doubt there’s a double-dip in housing,” she said. “It’s amazing.”

As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.

[jpinpb]

While stopping short of predicting a full-blown double dip in the broad economy, Whitney said one is certainly in store for the housing market.

“People doubt there’s a double-dip in housing,” she said. “It’s amazing.”

As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.

[jpinpb]

While stopping short of predicting a full-blown double dip in the broad economy, Whitney said one is certainly in store for the housing market.

“People doubt there’s a double-dip in housing,” she said. “It’s amazing.”

As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.

[jpinpb]

While stopping short of predicting a full-blown double dip in the broad economy, Whitney said one is certainly in store for the housing market.

“People doubt there’s a double-dip in housing,” she said. “It’s amazing.”

As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.

[eavesdropper]

Don’t always agree with her, but leaning in the direction of her observations and predictions here. The business sector, the government officials, and the population in general just keep looking for signs that the economy has reversed course, and they’re basing those hopes on the model that prevailed in the late 90s and the early and mid-oughts. I rarely see anyone offering comprehensive analysis of the dire situation we’re in, and taking a broad-based look at all of the contributing factors. People are seizing on what might be interpreted as a positive sign in one sector, and basing predictions of a full and permanent recovery on it.

The economy tanked because there were problems with the basic business model being utilized by the financial institutions. Continuing to use a broken model, while blaming the meltdown on any one of a variety of contributing factors (depending on your political outlook), will not result in recovery. It will almost assuredly delay it, and make it a more painful and difficult process.

[eavesdropper]

Don’t always agree with her, but leaning in the direction of her observations and predictions here. The business sector, the government officials, and the population in general just keep looking for signs that the economy has reversed course, and they’re basing those hopes on the model that prevailed in the late 90s and the early and mid-oughts. I rarely see anyone offering comprehensive analysis of the dire situation we’re in, and taking a broad-based look at all of the contributing factors. People are seizing on what might be interpreted as a positive sign in one sector, and basing predictions of a full and permanent recovery on it.

The economy tanked because there were problems with the basic business model being utilized by the financial institutions. Continuing to use a broken model, while blaming the meltdown on any one of a variety of contributing factors (depending on your political outlook), will not result in recovery. It will almost assuredly delay it, and make it a more painful and difficult process.

[eavesdropper]

Don’t always agree with her, but leaning in the direction of her observations and predictions here. The business sector, the government officials, and the population in general just keep looking for signs that the economy has reversed course, and they’re basing those hopes on the model that prevailed in the late 90s and the early and mid-oughts. I rarely see anyone offering comprehensive analysis of the dire situation we’re in, and taking a broad-based look at all of the contributing factors. People are seizing on what might be interpreted as a positive sign in one sector, and basing predictions of a full and permanent recovery on it.

The economy tanked because there were problems with the basic business model being utilized by the financial institutions. Continuing to use a broken model, while blaming the meltdown on any one of a variety of contributing factors (depending on your political outlook), will not result in recovery. It will almost assuredly delay it, and make it a more painful and difficult process.

[eavesdropper]

Don’t always agree with her, but leaning in the direction of her observations and predictions here. The business sector, the government officials, and the population in general just keep looking for signs that the economy has reversed course, and they’re basing those hopes on the model that prevailed in the late 90s and the early and mid-oughts. I rarely see anyone offering comprehensive analysis of the dire situation we’re in, and taking a broad-based look at all of the contributing factors. People are seizing on what might be interpreted as a positive sign in one sector, and basing predictions of a full and permanent recovery on it.

The economy tanked because there were problems with the basic business model being utilized by the financial institutions. Continuing to use a broken model, while blaming the meltdown on any one of a variety of contributing factors (depending on your political outlook), will not result in recovery. It will almost assuredly delay it, and make it a more painful and difficult process.

[eavesdropper]

Don’t always agree with her, but leaning in the direction of her observations and predictions here. The business sector, the government officials, and the population in general just keep looking for signs that the economy has reversed course, and they’re basing those hopes on the model that prevailed in the late 90s and the early and mid-oughts. I rarely see anyone offering comprehensive analysis of the dire situation we’re in, and taking a broad-based look at all of the contributing factors. People are seizing on what might be interpreted as a positive sign in one sector, and basing predictions of a full and permanent recovery on it.

The economy tanked because there were problems with the basic business model being utilized by the financial institutions. Continuing to use a broken model, while blaming the meltdown on any one of a variety of contributing factors (depending on your political outlook), will not result in recovery. It will almost assuredly delay it, and make it a more painful and difficult process.

[eavesdropper]

[quote=jpinpb] As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.[/quote]

That’s a salient observation, jp. Even people who aren’t being affected, either by being in a comfortable financial position, or having purchased a house at a greatly reduced price courtesy of the meltdown, are going to find significant reductions in their disposable income levels. Property tax rates are rising rapidly, as states and municipalities try to compensate for the loss in Federal aid, and reductions in their own tax revenues resulting from foreclosures and lowered property values in their areas.

A side observation: I can’t imagine that the banks are going to allow this “free living” situation to go on much longer without imposing harsh penalties on their mortgagors. Any thoughts on this?

[eavesdropper]

[quote=jpinpb] As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.[/quote]

That’s a salient observation, jp. Even people who aren’t being affected, either by being in a comfortable financial position, or having purchased a house at a greatly reduced price courtesy of the meltdown, are going to find significant reductions in their disposable income levels. Property tax rates are rising rapidly, as states and municipalities try to compensate for the loss in Federal aid, and reductions in their own tax revenues resulting from foreclosures and lowered property values in their areas.

A side observation: I can’t imagine that the banks are going to allow this “free living” situation to go on much longer without imposing harsh penalties on their mortgagors. Any thoughts on this?

[eavesdropper]

[quote=jpinpb] As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.[/quote]

That’s a salient observation, jp. Even people who aren’t being affected, either by being in a comfortable financial position, or having purchased a house at a greatly reduced price courtesy of the meltdown, are going to find significant reductions in their disposable income levels. Property tax rates are rising rapidly, as states and municipalities try to compensate for the loss in Federal aid, and reductions in their own tax revenues resulting from foreclosures and lowered property values in their areas.

A side observation: I can’t imagine that the banks are going to allow this “free living” situation to go on much longer without imposing harsh penalties on their mortgagors. Any thoughts on this?

[eavesdropper]

[quote=jpinpb] As far as consumer spending, we’ve discussed this. One of the greatest expenses is housing. If that is factored out, you have extra money, discretionary spending. That is one of the biggest reasons our economy is doing as well as it is.

Should be interesting to see what’s going to happen when people are forced out of their free-living situation and have to start digging in their pockets for housing again.

Even if they manage to get loan mods, that’ll mean less money eating out and/or shopping.[/quote]

That’s a salient observation, jp. Even people who aren’t being affected, either by being in a comfortable financial position, or having purchased a house at a greatly reduced price courtesy of the meltdown, are going to find significant reductions in their disposable income levels. Property tax rates are rising rapidly, as states and municipalities try to compensate for the loss in Federal aid, and reductions in their own tax revenues resulting from foreclosures and lowered property values in their areas.

A side observation: I can’t imagine that the banks are going to allow this “free living” situation to go on much longer without imposing harsh penalties on their mortgagors. Any thoughts on this?

[Author]

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