The Ongoing Case-Shiller Fallacy/Shadow Inventory

[Arraya]

[quote=Rt.66]

1st line = CITY

2nd line = LISTINGS REO

3rd line = LISTINGS AUCTION

4th = NOTICE OF DEFAULT

5th = Total Shadow Inventory

6th line = Total Inventory

7th = Inventory ÷ Actual Listings

San Diego, CA
10,416
5,603
7,727
11,548
24,878
35,294
338.8%[/quote]

Actually, given the “cure” rate methodology, you could probably put total shadow inventory close to double that.

What banks are looking it, for survival purposes, is the number of mortgages upside down because of the huge default risk. With 250,000+ mortgages upside down in SD, they can’t have people walk en masse or they go out of business. If prices keep sliding, you could probably add another 50-75K of inventory to SD pretty quick.

So what the Fed must do is to save the banks is:

Keep inventory low
Keep interest rates low
Keep foreigners buying treasuries
Keep running a HUGE deficits
And most importantly, keep confidence high, which entails, keeping people in the dark

Problem, the life blood of our economy, credit, is still contracting. This WILL NOT AND CANNOT STOP for the foreseeable future. This is the driver of the contraction.

Something will snap eventually.

[scaredyclassic]

it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.

[scaredyclassic]

it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.

[scaredyclassic]

it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.

[scaredyclassic]

it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.

[scaredyclassic]

it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.

[Rt.66]

Well said Arraya and sensible.

TG you are class act, anyone reading your posts can see that (not saying you are always correct tho, the fat lady has yet to sing on our old debate).

When I read your posts I picture a 1960s Paul Newman behind the computer with a hot Woodward-esque chick on his lap, maybe even a cool pipe and smoking jacket. I have a feeling the debate you lost with SDRealtor has more to do with him having zero class and hitting below the belt than with actual facts.

[Rt.66]

Well said Arraya and sensible.

TG you are class act, anyone reading your posts can see that (not saying you are always correct tho, the fat lady has yet to sing on our old debate).

When I read your posts I picture a 1960s Paul Newman behind the computer with a hot Woodward-esque chick on his lap, maybe even a cool pipe and smoking jacket. I have a feeling the debate you lost with SDRealtor has more to do with him having zero class and hitting below the belt than with actual facts.

[Rt.66]

Well said Arraya and sensible.

TG you are class act, anyone reading your posts can see that (not saying you are always correct tho, the fat lady has yet to sing on our old debate).

When I read your posts I picture a 1960s Paul Newman behind the computer with a hot Woodward-esque chick on his lap, maybe even a cool pipe and smoking jacket. I have a feeling the debate you lost with SDRealtor has more to do with him having zero class and hitting below the belt than with actual facts.

[Rt.66]

Well said Arraya and sensible.

TG you are class act, anyone reading your posts can see that (not saying you are always correct tho, the fat lady has yet to sing on our old debate).

When I read your posts I picture a 1960s Paul Newman behind the computer with a hot Woodward-esque chick on his lap, maybe even a cool pipe and smoking jacket. I have a feeling the debate you lost with SDRealtor has more to do with him having zero class and hitting below the belt than with actual facts.

[Rt.66]

Well said Arraya and sensible.

TG you are class act, anyone reading your posts can see that (not saying you are always correct tho, the fat lady has yet to sing on our old debate).

When I read your posts I picture a 1960s Paul Newman behind the computer with a hot Woodward-esque chick on his lap, maybe even a cool pipe and smoking jacket. I have a feeling the debate you lost with SDRealtor has more to do with him having zero class and hitting below the belt than with actual facts.

[NotCranky]

[quote=scaredycat]it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.[/quote]

It’s not just the economic gamble,I think a lot of people think that they are their house, so the more the better obviously. People who would glob on to more tended to also be the ones who would do it even though they could not reasonably afford it . People did take big risks to have an excess of house and decor. Millions did it not because they thought they could get rich from it but because they wanted it. Sure they consoled themselves with the dream that it was a good investment. People are still sitting around on blogs like this just waiting to buy too much house a little cheaper with a little more down than the last batch of fools did. Not everybody of course.

[NotCranky]

[quote=scaredycat]it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.[/quote]

It’s not just the economic gamble,I think a lot of people think that they are their house, so the more the better obviously. People who would glob on to more tended to also be the ones who would do it even though they could not reasonably afford it . People did take big risks to have an excess of house and decor. Millions did it not because they thought they could get rich from it but because they wanted it. Sure they consoled themselves with the dream that it was a good investment. People are still sitting around on blogs like this just waiting to buy too much house a little cheaper with a little more down than the last batch of fools did. Not everybody of course.

[NotCranky]

[quote=scaredycat]it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.[/quote]

It’s not just the economic gamble,I think a lot of people think that they are their house, so the more the better obviously. People who would glob on to more tended to also be the ones who would do it even though they could not reasonably afford it . People did take big risks to have an excess of house and decor. Millions did it not because they thought they could get rich from it but because they wanted it. Sure they consoled themselves with the dream that it was a good investment. People are still sitting around on blogs like this just waiting to buy too much house a little cheaper with a little more down than the last batch of fools did. Not everybody of course.

[NotCranky]

[quote=scaredycat]it’s all actually kind of interesting.

was housing this dramatic and interesting back in the old days?

Was buying a house seen as a big gamble, or was it just a pretty safe, conservative thing? when did that change, if it did?

Seems like it chouldn’t be viewed as much more than a savings account. Would be nice to be able to just buy a place and not view it as atremendous economic gamble.[/quote]

It’s not just the economic gamble,I think a lot of people think that they are their house, so the more the better obviously. People who would glob on to more tended to also be the ones who would do it even though they could not reasonably afford it . People did take big risks to have an excess of house and decor. Millions did it not because they thought they could get rich from it but because they wanted it. Sure they consoled themselves with the dream that it was a good investment. People are still sitting around on blogs like this just waiting to buy too much house a little cheaper with a little more down than the last batch of fools did. Not everybody of course.

[Author]

Posts