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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: J_Locke who wrote (73060)	10/27/2006 2:20:44 PM
From: SouthFloridaGuy	Respond to of 110194

Brilliant post, totally agree.

To: J_Locke who wrote (73060)	10/27/2006 2:20:44 PM
From: SouthFloridaGuy	Respond to of 110194

Excellent post, totally agree.

To: J_Locke who wrote (73060)	10/27/2006 2:35:53 PM
From: russwinter	Respond to of 110194

<even as housing prices are down 2%> Starting to look more like 10%. Time for Riskloves to grant some more loans? From San Diego County: -The median price last month for newly built houses and condos and condo conversions locally was $413,500, down 17 percent from a year earlier. DataQuick said San Diego County's new-housing total was 885 transactions last month, 37.5 percent lower than in September 2005. There is very little doubt, that the bursting Bubble is spilling over into big ticket consumption: -For the quarter, new car sales fell 8 percent in total and 12 percent in California, a state that accounts for one-fifth of AutoNation's new vehicle business. Connecting the dots on this one: -The nationwide car dealer AutoNation Inc. said it expects to slash its orders from the Big Three automakers by 30 percent because of swollen inventories, according to a report published Friday. From Virginia, -Sales of homes in Virginia slid nearly 27 percent in September, marking the largest percentage drop this year -- and the 13th consecutive month of slower sales. The median price, with half the houses selling for more and half for less, fell 9 percent to $199,975. From Palm Beach County Florida, -The county's year-over-year median price dropped $34,500 or 9 percent last month to $365,500 from $400,000 in September 2005. Sales fell a whopping 53 percent in September. There were 566 homes sold last month, down from 1,202 a year ago. From Southwest, Florida: * Sarasota-Bradenton saw volume collapse 33 percent, to 436 units. Meanwhile, the median sales price dipped to $290,000, down 16 percent from September 2005, and the biggest price adjustment of any Florida metro area. * Naples, the state's highest-priced residential market, sustained a 37 percent drop in sales, to 236 houses. Median prices dropped 8 percent, to $446,900. * Sales of 693 units in Fort Myers-Cape Coral were off 36 percent from September last year. The median price of $261,400 represented a 9 percent drop over the same period. From Arizona, -There were 2,281 new-home permits issued in the Valley in September, off nearly 53 percent from the same month last year and the lowest monthly total since December of 2001.

To: J_Locke who wrote (73060)	10/27/2006 2:36:42 PM
From: NOW	Read Replies (2) \| Respond to of 110194

a "soft" landing is guaranteed?

To: J_Locke who wrote (73060)	10/27/2006 2:50:44 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 110194

It's very rare that a housing bust doesn't lead to a hard landing. The only time a housing bust didn't lead to recession in the U.S. during the last 50 years was in '66 when the economy was "saved" by huge increases in defense spending. So your "virtual" guarantee of a soft landing - the consensus view on Wall Street - is actually going against history. A soft landing might be possible, but it is definitely not guaranteed. The two initial drags on the economy from a housing bust will be: 1) lost housing related jobs, and 2) loss of consumption due to mortgage extraction. Housing related jobs are still near record highs. That is about to change. Residential construction jobs track closely to housing completions - and housing completions probably peaked last month. See this graph (Starts are moved 6 months into future): According to the preliminary GDP data, mortgage debt increased by about $250 Billion in Q3. About half was from buyers; about half from equity extraction (refinancing). As prices fall, equity extraction will most likely slow down, impacting consumption. Maybe there will be a soft landing, but since the impacts from the bust are ahead of us (not behind us like some think) - calling for a soft landing right now might be a "Mission Accomplished" moment.