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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: CalculatedRisk who wrote (48060)12/23/2005 10:51:48 AM
From: russwinter  Read Replies (3) of 110194
 
No mystery here, look at the numbers "under construction", a very high 298,000. As long as there is activity the Humpties will continue to build on speculation, because their profit margins are still pretty robust.

However, the evidence is building that builders are leading the prices down. They need transactions, even if at lower prices.
Message 21976362

Message 21999338

Adding to the problem for builders are cancellations:
Message 21977294

And has the ultra easy lending standard been removed for the marginal buyer?
Message 21999772

Big tsunami of folks with much higher housing costs, and pressure to "get out" when they see price cuts all around.
idorfman.com

Finally, time tested reaction to the end of speculative manias:

Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.

-John Kenneth Galbraith writes in his book "A Short History of Financial Euphoria"

For me it's almost impossible to draw any conclusion now, other than Humpty is falling off the wall.
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