The Ongoing Case-Shiller Fallacy/Shadow Inventory

[Rt.66]

Its a good thing we have realtors to rely on when it comes to the direction of the market, otherwise we’d have to look at sources like the Washington Post.

A Look Ahead To the Great Resetting

About 10 percent of all mortgages in this country are scheduled to adjust in the next few years, with the numbers peaking in mid- to late 2011, according to First American CoreLogic. Those loans are worth about $1 trillion, and nearly 20 percent of the borrowers who have them are already seriously behind on their monthly payments…………..

The most vulnerable borrowers will be those with “option” ARMs, which tend to be concentrated in places, like California, where home prices soared then plunged precipitously.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/01/AR2009100105443.html?referrer=emailarticle&ref=patrick.net

It’s all fun and games when you can “pick-a-pay” your way to a nice affordable payment, but when they want all that stuff like principal and full interest somebody always gets hurt.

[Rt.66]

David Rosenberg

“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”

“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.

[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.

———-

Meredith Whitney:

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

[..] more than 32% of U.S. homes are worth less than their mortgages.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.

[Rt.66]

David Rosenberg

“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”

“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.

[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.

———-

Meredith Whitney:

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

[..] more than 32% of U.S. homes are worth less than their mortgages.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.

[Rt.66]

David Rosenberg

“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”

“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.

[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.

———-

Meredith Whitney:

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

[..] more than 32% of U.S. homes are worth less than their mortgages.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.

[Rt.66]

David Rosenberg

“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”

“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.

[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.

———-

Meredith Whitney:

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

[..] more than 32% of U.S. homes are worth less than their mortgages.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.

[Rt.66]

David Rosenberg

“We are certainly in a deflationary state,” said David Rosenberg, chief economist and strategist with Gluskin Sheff and Associates in Toronto. “Of that, there’s no doubt.”

“I think people still have no clue as to just how weak the economy is,” Mr. Rosenberg said. Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill. The U.S. economy faces a decade of stagnation, he said.

[..]”deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away” Mr. Rosenberg said.

———-

Meredith Whitney:

Anyone counting on a meaningful economic recovery will be greatly disappointed. How do I know? I follow credit, and credit is contracting. Access to credit is being denied at an accelerating pace. Large, well-capitalized companies have no problem finding credit. Small businesses, on the other hand, have never had a harder time getting a loan.

Small business loans are hard to find, and credit-card lines (a critical funding source to small businesses) have been cut by 25% since last year.

[..] more than 32% of U.S. homes are worth less than their mortgages.

Small businesses primarily fund themselves through credit cards and loans from local lenders. In the past two years, credit-card lines have been cut by over $1.25 trillion. During the same time, 10% of all credit-card accounts have been cancelled.

[Rt.66]

We’ve just interviewed Janet Tavakoli for our first episode of The Keiser Report. If you don’t know her, you should. She wrote a fantastic book, Dear Mr. Buffett. Max and I are on our second read of it. You really must get this book if you want to understand derivatives from one of the foremost experts on it who writes in plain English about how these financial tools became instruments for widespread fraud that then led to financial crisis. She also gives loads of positive advice and insight.

Here is a summary she provided for MaxKeiser.com on where she thinks we are today two years since the crisis began:

“Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay.”

http://globaleconomicanalysis.blogspot.com/

[Rt.66]

We’ve just interviewed Janet Tavakoli for our first episode of The Keiser Report. If you don’t know her, you should. She wrote a fantastic book, Dear Mr. Buffett. Max and I are on our second read of it. You really must get this book if you want to understand derivatives from one of the foremost experts on it who writes in plain English about how these financial tools became instruments for widespread fraud that then led to financial crisis. She also gives loads of positive advice and insight.

Here is a summary she provided for MaxKeiser.com on where she thinks we are today two years since the crisis began:

“Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay.”

http://globaleconomicanalysis.blogspot.com/

[Rt.66]

We’ve just interviewed Janet Tavakoli for our first episode of The Keiser Report. If you don’t know her, you should. She wrote a fantastic book, Dear Mr. Buffett. Max and I are on our second read of it. You really must get this book if you want to understand derivatives from one of the foremost experts on it who writes in plain English about how these financial tools became instruments for widespread fraud that then led to financial crisis. She also gives loads of positive advice and insight.

Here is a summary she provided for MaxKeiser.com on where she thinks we are today two years since the crisis began:

“Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay.”

http://globaleconomicanalysis.blogspot.com/

[Rt.66]

We’ve just interviewed Janet Tavakoli for our first episode of The Keiser Report. If you don’t know her, you should. She wrote a fantastic book, Dear Mr. Buffett. Max and I are on our second read of it. You really must get this book if you want to understand derivatives from one of the foremost experts on it who writes in plain English about how these financial tools became instruments for widespread fraud that then led to financial crisis. She also gives loads of positive advice and insight.

Here is a summary she provided for MaxKeiser.com on where she thinks we are today two years since the crisis began:

“Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay.”

http://globaleconomicanalysis.blogspot.com/

[Rt.66]

We’ve just interviewed Janet Tavakoli for our first episode of The Keiser Report. If you don’t know her, you should. She wrote a fantastic book, Dear Mr. Buffett. Max and I are on our second read of it. You really must get this book if you want to understand derivatives from one of the foremost experts on it who writes in plain English about how these financial tools became instruments for widespread fraud that then led to financial crisis. She also gives loads of positive advice and insight.

Here is a summary she provided for MaxKeiser.com on where she thinks we are today two years since the crisis began:

“Regarding the outlook, my analysis is grim. I am not a doomsayer, I follow the cash, and so far, I’ve been correct, and the government has been wrong. Here’s the situation. We are at greater risk of a total meltdown due to a deflationary collapse than we were in 2007. After the greatest Ponzi scheme in the history of the capital markets, we’ve seen history’s greatest fiscal and monetary expansion, but it hasn’t worked. Debt levels of consumers and business exceed the capacity to repay.”

http://globaleconomicanalysis.blogspot.com/

[Nor-LA-SD-guy]

Here is a Man on the street observation for you.

I was passing through O-Side near the back gate Saturday (don’t ask), There was this new Richman American housing tract being advertised with sign twirlers so we decided to check it out, there were three sales people in the office and one in the model all busy signing new contracts, and the models were very busy with other customers as well.

The Homes were going for about 500K and were 2500 to 3300 sqf.

Did not bother to ask why they were selling so many that day.

[Nor-LA-SD-guy]

Here is a Man on the street observation for you.

I was passing through O-Side near the back gate Saturday (don’t ask), There was this new Richman American housing tract being advertised with sign twirlers so we decided to check it out, there were three sales people in the office and one in the model all busy signing new contracts, and the models were very busy with other customers as well.

The Homes were going for about 500K and were 2500 to 3300 sqf.

Did not bother to ask why they were selling so many that day.

[Nor-LA-SD-guy]

Here is a Man on the street observation for you.

I was passing through O-Side near the back gate Saturday (don’t ask), There was this new Richman American housing tract being advertised with sign twirlers so we decided to check it out, there were three sales people in the office and one in the model all busy signing new contracts, and the models were very busy with other customers as well.

The Homes were going for about 500K and were 2500 to 3300 sqf.

Did not bother to ask why they were selling so many that day.

[Nor-LA-SD-guy]

Here is a Man on the street observation for you.

I was passing through O-Side near the back gate Saturday (don’t ask), There was this new Richman American housing tract being advertised with sign twirlers so we decided to check it out, there were three sales people in the office and one in the model all busy signing new contracts, and the models were very busy with other customers as well.

The Homes were going for about 500K and were 2500 to 3300 sqf.

Did not bother to ask why they were selling so many that day.

[Author]

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