If the US ruins its ability to borrow and sends interest rates spiraling upward by trying too hard to bail out bad mortgages, it's going create yet another leg down in housing.
The only thing that can raise the NAHB index is survivors' bias. As the weaker players are culled things will indeed look better for the survivors. At this point I'd be watching very carefully for subtle wording changes in the questions the NAHB distributes.
Not up to your usual standards, L. As a society we need to figure out what kind of development will do us the most good, right now and ten years down, and incent business to go in that direction.
Because we've seen what happens when business sets its own incentives with no restraint.;
The problem is people don't believe it can go lower with homebuilders, but, with looming BKs, it can and will. Pretty soon this graph will go below zero, representing the graves of most homebuilders.
In the period represented by the chart, we've never had an 'L' shape. There has always been a fairly quick rebound. This time it doesn't feel like that will happen - certainly not in the near future.
The kind of development that will do us the most good? Fixing inner city schools so that urban neighbourhoods will be more desirable to middle income people. Most older cities have huge supplies of perfectly good houses sitting vacant because of crime and bad schools. These were once homes for upper-middle and middle income folks. They can be again.
Oh and fix health care. If those 2 things are done, time will heal the rest.
(FORTUNE Magazine) Bouncing in the back seat of a Toyota 4Runner as it crawls along volcanic clay roads through the jungle, Hank Paulson, the 57-year-old chairman and CEO of Goldman Sachs, wants nothing more than to get where he's going and make an important phone call. That is, until Jason, our driver, pumps the brake and remarks coolly, "Look, a snake."
"Where?! Stop!!" Paulson shouts. Leaping from the SUV so frantically that a passenger in the vehicle behind us thinks, "Hank has seen a dead body or something," Paulson races down the road, poking at the thick underbrush. He fails to find the reptile. "I love ..." he says sadly, his voice trailing off. "Snakes?" I ask. "Yes," he replies matter-of-factly. "I like to hold them and look at them."
Aheadofthecurve writes:
The kind of development that will do us the most good? Fixing inner city schools so that urban neighbourhoods will be more desirable to middle income people.
How about recognizing that the trillions of dollars we've poured into the urban core has been at best mal-invested.
Most older cities have huge supplies of perfectly good houses sitting vacant because of crime and bad schools. These were once homes for upper-middle and middle income folks. They can be again.
No. They'll still be too dense, have more crime and much higher costs. This war is long lost, time to move on.
wally writes:
"In the period represented by the chart, we've never had an 'L' shape. There has always been a fairly quick rebound. This time it doesn't feel like that will happen - certainly not in the near future."
I agree. Like the old adage says, a picture can say a thousand words and these two graphs show -- to my untrained, non-economist eyes -- that these are strange times. But do I know? I mean, I wouldn't have predicted this current market rally.
Bottom will come when the market falls 600-900 points in a row. That will be bottom. Let the bulls have their last hurrah. I need to sell some losers too. As Dick Cheany would say we are in the "last throes" of a multi-year US bull market.
One other thing, someone on another forum I read mentioned Tuesday that either the bulls or bears will need fresh underwear by the end of the week - he wasn't kidding!
Rob-I've re-thought and you're correct. It is a crying shame that there is still some farmland and forest left. We must turn it into housing developments forthwith.
Also, let's add more waste to the health care system.
MER made some $ today!
[BlackRock Inc.'s (BLK, $201.93, $22.98, 12.84%) second-quarter profits rose 23%, as the investment-management firm saw continued demand for its advice amid tumultuous markets. The fund manager also announced a "strong reaffirmation" of its relationship with Merrill Lynch & Co. (MER, $31.08, $3.08, 11.00%), the struggling investment bank that owns just under 50% of BlackRoc]
The NAHB survey has a couple of even-more-foreward-looking thingees than the market index. The future sales index is actually (as I understand it) based on a question about intentions for starts over the next 6 months. That index fell 4 points to a new low. The prospective buyer traffic index is a measure of pre-sale customer activity. That index fell 4 points to a new low. When you are in the teesn and twenties, 4 points is kind of a lot.
The money that poured into downtown Los Angeles was for housing for couples without children. There is no infrastructure for families. No playgrounds. No schools. no parks, no public facilities like pools. Young couples stay until their kids reach 4 and then leave.
It's hard to attract families if no one builds for them.
Aheadofthecurve writes:
Rob-I've re-thought and you're correct. It is a crying shame that there is still some farmland and forest left. We must turn it into housing developments forthwith.
In New England there is much more forest land than there was 100 years ago. You know when the OPACs (Obsolete Pre-Automotive Cities) were at their zenith. How'd that happen?
Anonymouse writes:
One other thing, someone on another forum I read mentioned Tuesday that either the bulls or bears will need fresh underwear by the end of the week - he wasn't kidding!
Anonymouse | Homepage | 07.17.08 - 2:31 pm | #
With all the volatility they might all need clean undies. Again the Oracle of Omaha proves his mettle - Berkshire H owns Fruit Of the Loom.
Rob-Most of the forest land in New England and throughout the Northeast was farmed 100 years ago. Back then cities ate largely what was grown nearby, instead of California or overseas. High oil prices may drive some reversal of this.
So much for speculation not driving the crude market. I wonder if the CFTC is putting the screws to traders (IBs) and forcing them to close out positions, so they can get congress off their back.
The Chicago Tribune had a big Sunday spread a few months ago about pioneer families who bought in iffy neighborhoods, gutted the houses, and stuffed their savings into them. The prices haven't moved that much, but now they have kids who need to go to school. The city schools are dangerous, and private ones about 5K-10K a year. Now, they can't sell for much of a profit, can't afford the schools, and can't come to the suburbs since their pioneer nieghborhoods are still iffy. They complain to the city about the horrible public schools but all they get are parades for the big Holidays.
Aheadofthecurve writes: Rob-Most of the forest land in New England and throughout the Northeast was farmed 100 years ago. Back then cities ate largely what was grown nearby, instead of California or overseas. High oil prices may drive some reversal of this.
Amazing that adaptive reuse isn't it? Everything must change to prop up the cities.
There is nothing automatically incompatible between dense cities and good schools. You only have to look at the Nobel Laureates and leaders in virtually every field who came out of the New York public schools between 1900 and 1950 or so. Many of them were from homes where the parents had only a few years of schooling and could barely speak English.
But CNBC announcers say speculation doesn't effect the price of oil. Apparently speculation only effects the price of financial stocks, shorts on the down side, that is.
Well here in Atlanta none of the developers I have talked to can get any financing at all. All the bankeers we have talked to say that they are not to originate any new paper, and the paper they have outstanding they are to slow down and pull back as possible. Several stories are going around of CRE builders going into the bank on Friday with that week's payables and being told that they are no longer getting any money and having to shut down.
Several of our subs are gone. Literally gone. some to New Orleans (where there is still some work) and the Carolinas.
First.
oh CR....you are your Probable Recession!
Ya kill me
It will be a long next few years for many...
should be and not are..!
If the US ruins its ability to borrow and sends interest rates spiraling upward by trying too hard to bail out bad mortgages, it's going create yet another leg down in housing.
Like walking into a room and being knocked over by foulness....and then proceeding to fuss about whether it's actual crap or a fart.
Either way it still stinks.
A Marsupial Market, mascot: Platypus.
From 1200 to 1270 in 4 days!
oh the humanity
and there were no bottom calls!
A Monotreme Market, excuuse me.
The only thing that can raise the NAHB index is survivors' bias. As the weaker players are culled things will indeed look better for the survivors. At this point I'd be watching very carefully for subtle wording changes in the questions the NAHB distributes.
Essentially we're trashing much or most economic development of the last seven years as mal-investment (love that term).
So we've got a lot of ground to make up, and no clear direction to go in. That's why I'm pessimistic.
Bob,
I'll recommend a direction -- up.
"Bob,
I'll recommend a direction -- up."
Not up to your usual standards, L. As a society we need to figure out what kind of development will do us the most good, right now and ten years down, and incent business to go in that direction.
Because we've seen what happens when business sets its own incentives with no restraint.;
Thanks CR, - it's raining future rental units here in NYC - hallelujah!
The problem is people don't believe it can go lower with homebuilders, but, with looming BKs, it can and will. Pretty soon this graph will go below zero, representing the graves of most homebuilders.
From 1200 to 1270 in 4 days!
oh the humanity
You think that's bad?
LOL
In the period represented by the chart, we've never had an 'L' shape. There has always been a fairly quick rebound. This time it doesn't feel like that will happen - certainly not in the near future.
The kind of development that will do us the most good? Fixing inner city schools so that urban neighbourhoods will be more desirable to middle income people. Most older cities have huge supplies of perfectly good houses sitting vacant because of crime and bad schools. These were once homes for upper-middle and middle income folks. They can be again.
Oh and fix health care. If those 2 things are done, time will heal the rest.
Once the bubble started falling in late summer 2005, I was confident of this outcome. However, it still bothers me.
From an 2004 article on Paulson:
(FORTUNE Magazine) Bouncing in the back seat of a Toyota 4Runner as it crawls along volcanic clay roads through the jungle, Hank Paulson, the 57-year-old chairman and CEO of Goldman Sachs, wants nothing more than to get where he's going and make an important phone call. That is, until Jason, our driver, pumps the brake and remarks coolly, "Look, a snake."
"Where?! Stop!!" Paulson shouts. Leaping from the SUV so frantically that a passenger in the vehicle behind us thinks, "Hank has seen a dead body or something," Paulson races down the road, poking at the thick underbrush. He fails to find the reptile. "I love ..." he says sadly, his voice trailing off. "Snakes?" I ask. "Yes," he replies matter-of-factly. "I like to hold them and look at them."
Aheadofthecurve writes:
The kind of development that will do us the most good? Fixing inner city schools so that urban neighbourhoods will be more desirable to middle income people.
How about recognizing that the trillions of dollars we've poured into the urban core has been at best mal-invested.
Most older cities have huge supplies of perfectly good houses sitting vacant because of crime and bad schools. These were once homes for upper-middle and middle income folks. They can be again.
No. They'll still be too dense, have more crime and much higher costs. This war is long lost, time to move on.
wally writes:
"In the period represented by the chart, we've never had an 'L' shape. There has always been a fairly quick rebound. This time it doesn't feel like that will happen - certainly not in the near future."
I agree. Like the old adage says, a picture can say a thousand words and these two graphs show -- to my untrained, non-economist eyes -- that these are strange times. But do I know? I mean, I wouldn't have predicted this current market rally.
Bottom will come when the market falls 600-900 points in a row. That will be bottom. Let the bulls have their last hurrah. I need to sell some losers too. As Dick Cheany would say we are in the "last throes" of a multi-year US bull market.
Bad call yesterday; took a loss on SDS. I'm still thinking tomorrow could be a reversal (after another up move..?), but I'll shut it now.
One other thing, someone on another forum I read mentioned Tuesday that either the bulls or bears will need fresh underwear by the end of the week - he wasn't kidding!
Rob-I've re-thought and you're correct. It is a crying shame that there is still some farmland and forest left. We must turn it into housing developments forthwith.
Also, let's add more waste to the health care system.
I hand you the NYC thing on a platter and what do I get? A Bloomberg quote from Ian Shepherdson. Harrumph!
MER made some $ today!
[BlackRock Inc.'s (BLK, $201.93, $22.98, 12.84%) second-quarter profits rose 23%, as the investment-management firm saw continued demand for its advice amid tumultuous markets. The fund manager also announced a "strong reaffirmation" of its relationship with Merrill Lynch & Co. (MER, $31.08, $3.08, 11.00%), the struggling investment bank that owns just under 50% of BlackRoc]
Foreclosure winners? and losers.
Good numbers.
The Orange County Register
I look forward to shorting the sheet out of the market next week, when the dumb beast loses interest in the sparklies.
Now that I'm over my hurt feelings...
The NAHB survey has a couple of even-more-foreward-looking thingees than the market index. The future sales index is actually (as I understand it) based on a question about intentions for starts over the next 6 months. That index fell 4 points to a new low. The prospective buyer traffic index is a measure of pre-sale customer activity. That index fell 4 points to a new low. When you are in the teesn and twenties, 4 points is kind of a lot.
The money that poured into downtown Los Angeles was for housing for couples without children. There is no infrastructure for families. No playgrounds. No schools. no parks, no public facilities like pools. Young couples stay until their kids reach 4 and then leave.
It's hard to attract families if no one builds for them.
Aheadofthecurve writes:
Rob-I've re-thought and you're correct. It is a crying shame that there is still some farmland and forest left. We must turn it into housing developments forthwith.
In New England there is much more forest land than there was 100 years ago. You know when the OPACs (Obsolete Pre-Automotive Cities) were at their zenith. How'd that happen?
Anonymouse writes:
One other thing, someone on another forum I read mentioned Tuesday that either the bulls or bears will need fresh underwear by the end of the week - he wasn't kidding!
Anonymouse | Homepage | 07.17.08 - 2:31 pm | #
With all the volatility they might all need clean undies. Again the Oracle of Omaha proves his mettle - Berkshire H owns Fruit Of the Loom.
You have to wash underwear. That is why I just wear Depends.
Rob-Most of the forest land in New England and throughout the Northeast was farmed 100 years ago. Back then cities ate largely what was grown nearby, instead of California or overseas. High oil prices may drive some reversal of this.
So much for speculation not driving the crude market. I wonder if the CFTC is putting the screws to traders (IBs) and forcing them to close out positions, so they can get congress off their back.
The Chicago Tribune had a big Sunday spread a few months ago about pioneer families who bought in iffy neighborhoods, gutted the houses, and stuffed their savings into them. The prices haven't moved that much, but now they have kids who need to go to school. The city schools are dangerous, and private ones about 5K-10K a year. Now, they can't sell for much of a profit, can't afford the schools, and can't come to the suburbs since their pioneer nieghborhoods are still iffy. They complain to the city about the horrible public schools but all they get are parades for the big Holidays.
Aheadofthecurve writes:
Rob-Most of the forest land in New England and throughout the Northeast was farmed 100 years ago. Back then cities ate largely what was grown nearby, instead of California or overseas. High oil prices may drive some reversal of this.
Amazing that adaptive reuse isn't it? Everything must change to prop up the cities.
Leftys Liquors,
You open?
There is nothing automatically incompatible between dense cities and good schools. You only have to look at the Nobel Laureates and leaders in virtually every field who came out of the New York public schools between 1900 and 1950 or so. Many of them were from homes where the parents had only a few years of schooling and could barely speak English.
Aheadofthecurve writes:
Many of them were from homes where the parents had only a few years of schooling and could barely speak English.
In adversity there is opportunity.
barely,
But CNBC announcers say speculation doesn't effect the price of oil. Apparently speculation only effects the price of financial stocks, shorts on the down side, that is.
Well here in Atlanta none of the developers I have talked to can get any financing at all. All the bankeers we have talked to say that they are not to originate any new paper, and the paper they have outstanding they are to slow down and pull back as possible. Several stories are going around of CRE builders going into the bank on Friday with that week's payables and being told that they are no longer getting any money and having to shut down.
Several of our subs are gone. Literally gone. some to New Orleans (where there is still some work) and the Carolinas.
It's ugly.
not surprised there aren't many "starts".
They are only a year late.