The Ongoing Case-Shiller Fallacy/Shadow Inventory

[scaredyclassic]

while there’s no contradiction necessarily between saying “the worst is over” but “there’s anothe r leg coming down”, it oes kind of smack of having omnipotent knowledge. Just liek it’s very hard to call lows and highs in any investment area, it’s kinda hard to know when the worst is over until it is, and generaly spekaing, people are wrong about timing. if more losses are coming it’s difficult to quantify them, Also, i dont know the numbers but losses going forward from here might have a devastating effect on the market, since the farther down we go, the greater the pool of homeowners who suddenly become underwater. they may have been able to say to themselves previously, well, those were the pretend gains that were lost, but as or if 2001, 2000, 1999 homeowners fall into breakeven territory, could the feedback loop that tends to infect markets, and causes irrational behavior to the upside, maybe swing in to the downside. i dont think it’ contradictory to say the worst is over while more pain is coming…just…well…impossible to know…

[Arraya]

Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing. Foreclosures and Distress Properties Clogging the System.

The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.

The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:

Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.

[Arraya]

Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing. Foreclosures and Distress Properties Clogging the System.

The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.

The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:

Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.

[Arraya]

Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing. Foreclosures and Distress Properties Clogging the System.

The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.

The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:

Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.

[Arraya]

Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing. Foreclosures and Distress Properties Clogging the System.

The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.

The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:

Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.

[Arraya]

Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing. Foreclosures and Distress Properties Clogging the System.

The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.

The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:

Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.

[greekfire]

[quote=temeculaguy][quote=jameswenn]the 1.2, 1.5, and 217k, aren’t part of the inventory yet. So maybe they dind’t mention what’s actually in REO yet.[/quote]

Or you can get a tin foil hat and hang out with Micheal Jackson, but Santa Claus isn’t coming and neither is the Shadow Inventory.

The guys that put together the case/shiller charts have never been discredited to my knowlege, unlike the mr mortgages and peter schiffs of the world, until they screw up, their charts are legal tender in these parts.[/quote]

Temeculaguy – is this the same discredited Peter Schiff that you speak of?: http://www.youtube.com/watch?v=2I0QN-FYkpw

I have long enjoyed your posts here on Piggington over the years, but I think your recent posts on this thread make you sound more like Mike Norman or Ben Stein.

[greekfire]

[quote=temeculaguy][quote=jameswenn]the 1.2, 1.5, and 217k, aren’t part of the inventory yet. So maybe they dind’t mention what’s actually in REO yet.[/quote]

Or you can get a tin foil hat and hang out with Micheal Jackson, but Santa Claus isn’t coming and neither is the Shadow Inventory.

The guys that put together the case/shiller charts have never been discredited to my knowlege, unlike the mr mortgages and peter schiffs of the world, until they screw up, their charts are legal tender in these parts.[/quote]

Temeculaguy – is this the same discredited Peter Schiff that you speak of?: http://www.youtube.com/watch?v=2I0QN-FYkpw

I have long enjoyed your posts here on Piggington over the years, but I think your recent posts on this thread make you sound more like Mike Norman or Ben Stein.

[greekfire]

[quote=temeculaguy][quote=jameswenn]the 1.2, 1.5, and 217k, aren’t part of the inventory yet. So maybe they dind’t mention what’s actually in REO yet.[/quote]

Or you can get a tin foil hat and hang out with Micheal Jackson, but Santa Claus isn’t coming and neither is the Shadow Inventory.

The guys that put together the case/shiller charts have never been discredited to my knowlege, unlike the mr mortgages and peter schiffs of the world, until they screw up, their charts are legal tender in these parts.[/quote]

Temeculaguy – is this the same discredited Peter Schiff that you speak of?: http://www.youtube.com/watch?v=2I0QN-FYkpw

I have long enjoyed your posts here on Piggington over the years, but I think your recent posts on this thread make you sound more like Mike Norman or Ben Stein.

[greekfire]

[quote=temeculaguy][quote=jameswenn]the 1.2, 1.5, and 217k, aren’t part of the inventory yet. So maybe they dind’t mention what’s actually in REO yet.[/quote]

Or you can get a tin foil hat and hang out with Micheal Jackson, but Santa Claus isn’t coming and neither is the Shadow Inventory.

The guys that put together the case/shiller charts have never been discredited to my knowlege, unlike the mr mortgages and peter schiffs of the world, until they screw up, their charts are legal tender in these parts.[/quote]

Temeculaguy – is this the same discredited Peter Schiff that you speak of?: http://www.youtube.com/watch?v=2I0QN-FYkpw

I have long enjoyed your posts here on Piggington over the years, but I think your recent posts on this thread make you sound more like Mike Norman or Ben Stein.

[greekfire]

[quote=temeculaguy][quote=jameswenn]the 1.2, 1.5, and 217k, aren’t part of the inventory yet. So maybe they dind’t mention what’s actually in REO yet.[/quote]

Or you can get a tin foil hat and hang out with Micheal Jackson, but Santa Claus isn’t coming and neither is the Shadow Inventory.

The guys that put together the case/shiller charts have never been discredited to my knowlege, unlike the mr mortgages and peter schiffs of the world, until they screw up, their charts are legal tender in these parts.[/quote]

Temeculaguy – is this the same discredited Peter Schiff that you speak of?: http://www.youtube.com/watch?v=2I0QN-FYkpw

I have long enjoyed your posts here on Piggington over the years, but I think your recent posts on this thread make you sound more like Mike Norman or Ben Stein.

[temeculaguy]

I never said Schiff wasn’t correct with some of his predictions, and that video is a collection of his correct ones. Obviously they chose not to include his incorrect predictions, the ones that lost people money. Actually I am better than him, I’ve never been wrong in any of my predictions, but I’ve only made a few, six stocks and a zip code housing bottom, that is the grand total. TG vs schiff, I am not in this industry and my record can pound the crap out of him prediction wise, so what does that tell you.

Schiff was right on some things, he told you where to put your money instead and he was wrong, not just his greatest hits clips, but his actual advice about decoupling would have lost you money or made you very little. Roubini and Shiller still have a higher batting average for predictions. I am not the only one who thinks Schiff is not nostradamus, take a poll, calling a kettle black doesn’t make me Ben Stein, Bueller…anyone….Bueller?

http://www.ritholtz.com/blog/2009/01/peter-schiff-was-wrong/

http://www.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing.html

http://www.marketoracle.co.uk/Article8468.html

here’s his dow 2000 and nasdaq 500 prediction

http://www.bloggingstocks.com/2009/05/11/peter-schiff-was-wrong-about-everything-for-a-long-time/?icid=sphere_wsj_teaser

I can go on and on, when you place a few hundred bets at the racetrack, you will be right and you will be wrong, but you are not given vince lombardi status for being right half of the time.

[temeculaguy]

I never said Schiff wasn’t correct with some of his predictions, and that video is a collection of his correct ones. Obviously they chose not to include his incorrect predictions, the ones that lost people money. Actually I am better than him, I’ve never been wrong in any of my predictions, but I’ve only made a few, six stocks and a zip code housing bottom, that is the grand total. TG vs schiff, I am not in this industry and my record can pound the crap out of him prediction wise, so what does that tell you.

Schiff was right on some things, he told you where to put your money instead and he was wrong, not just his greatest hits clips, but his actual advice about decoupling would have lost you money or made you very little. Roubini and Shiller still have a higher batting average for predictions. I am not the only one who thinks Schiff is not nostradamus, take a poll, calling a kettle black doesn’t make me Ben Stein, Bueller…anyone….Bueller?

http://www.ritholtz.com/blog/2009/01/peter-schiff-was-wrong/

http://www.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing.html

http://www.marketoracle.co.uk/Article8468.html

here’s his dow 2000 and nasdaq 500 prediction

http://www.bloggingstocks.com/2009/05/11/peter-schiff-was-wrong-about-everything-for-a-long-time/?icid=sphere_wsj_teaser

I can go on and on, when you place a few hundred bets at the racetrack, you will be right and you will be wrong, but you are not given vince lombardi status for being right half of the time.

[temeculaguy]

I never said Schiff wasn’t correct with some of his predictions, and that video is a collection of his correct ones. Obviously they chose not to include his incorrect predictions, the ones that lost people money. Actually I am better than him, I’ve never been wrong in any of my predictions, but I’ve only made a few, six stocks and a zip code housing bottom, that is the grand total. TG vs schiff, I am not in this industry and my record can pound the crap out of him prediction wise, so what does that tell you.

Schiff was right on some things, he told you where to put your money instead and he was wrong, not just his greatest hits clips, but his actual advice about decoupling would have lost you money or made you very little. Roubini and Shiller still have a higher batting average for predictions. I am not the only one who thinks Schiff is not nostradamus, take a poll, calling a kettle black doesn’t make me Ben Stein, Bueller…anyone….Bueller?

http://www.ritholtz.com/blog/2009/01/peter-schiff-was-wrong/

http://www.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing.html

http://www.marketoracle.co.uk/Article8468.html

here’s his dow 2000 and nasdaq 500 prediction

http://www.bloggingstocks.com/2009/05/11/peter-schiff-was-wrong-about-everything-for-a-long-time/?icid=sphere_wsj_teaser

I can go on and on, when you place a few hundred bets at the racetrack, you will be right and you will be wrong, but you are not given vince lombardi status for being right half of the time.

[temeculaguy]

I never said Schiff wasn’t correct with some of his predictions, and that video is a collection of his correct ones. Obviously they chose not to include his incorrect predictions, the ones that lost people money. Actually I am better than him, I’ve never been wrong in any of my predictions, but I’ve only made a few, six stocks and a zip code housing bottom, that is the grand total. TG vs schiff, I am not in this industry and my record can pound the crap out of him prediction wise, so what does that tell you.

Schiff was right on some things, he told you where to put your money instead and he was wrong, not just his greatest hits clips, but his actual advice about decoupling would have lost you money or made you very little. Roubini and Shiller still have a higher batting average for predictions. I am not the only one who thinks Schiff is not nostradamus, take a poll, calling a kettle black doesn’t make me Ben Stein, Bueller…anyone….Bueller?

http://www.ritholtz.com/blog/2009/01/peter-schiff-was-wrong/

http://www.usnews.com/money/blogs/the-ticker/2009/01/26/peter-schiff-right-on-the-crisis-wrong-on-investing.html

http://www.marketoracle.co.uk/Article8468.html

here’s his dow 2000 and nasdaq 500 prediction

http://www.bloggingstocks.com/2009/05/11/peter-schiff-was-wrong-about-everything-for-a-long-time/?icid=sphere_wsj_teaser

I can go on and on, when you place a few hundred bets at the racetrack, you will be right and you will be wrong, but you are not given vince lombardi status for being right half of the time.

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