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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (175373)	1/6/2009 2:39:56 PM
From: Smiling Bob	Respond to of 306849

The Fed will shock the markets when they tighten the range from current 0-1/4 down to 0-127/512ths, expanding their toolbox and opening the door for plenty of dramatic suspense for many more meetings ahead. We're in good hands. They've got a handle on it. Taking stocks to the New Economy Ver. 2.0 Sit back and have a drink. Fed Sees Longer Economic Decline Than Earlier Forecasts- CNNMoney.com (SURPRISE, SURPRISE, SURPRISE- THAT"S BULLISH FOR STOCKS... NO??? POLICY MAKERS AGAIN ADMITTING THEY'RE CLUELESS) The U.S. economy is likely to deteriorate further this year and unemployment will rise into 2010, according to the latest forecasts from the staff of the Federal Reserve. This bleak forecast was presented to Fed policymakers when they met last month and lowered interest rates to near zero. --- J FOMC Minutes: Fed Staff Sees US GDP Declining In '09 By Brian Blackstone Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--The Federal Reserve on Tuesday signaled that the already year-long U.S. recession could drag well into the new year, with economic output contracting for 2009 as a whole and inflation flirting with "uncomfortably low levels." Officials also signaled that they'll make aggressive use of the Fed's balance sheet to stimulate the economy, with some officials even favoring the use of targets for bank reserves. According to the minutes of the Dec. 16 Federal Open Market Committee meeting, released with the usual three-week lag, Fed staff economists projected gross domestic product would decline this year and "rise at a pace slightly above the rate of potential growth in 2010." Still, the unemployment rate should rise "significantly" into 2010, the Fed said, to a rate even higher than it projected in late October. The Fed stunned Wall Street last month with a surprisingly aggressive reduction in the target federal funds rate for interbank lending from 1% to a range just above zero, the first time the Fed has ever set a target range for fed funds. Most economists had expected only a half-point rate reduction to 0.5%. With the amount of reserves in the banking system limiting the Fed's control over the fed funds rate, "several members thought that it might be preferable not to set a specific target," the Fed said in meeting minutes. In fact, setting a range "could be helpful," some officials thought, since it would highlight the shift toward the Fed's balance sheet "as a way of providing further monetary stimulus." In addition to setting short-term rates near zero, officials also surprised Fed watchers last month by committing to "exceptionally" low interest rates "for some time," suggesting official rates could stay near zero well into 2010. Policymakers also signaled a new phase for policy in which the Fed's balance sheet used to fund new lending and purchase programs effectively replaces interest rates as the Fed's primary tool. According to the Dec. 16 policy statement, the focus of policy "will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level." The Fed also said last month it was "evaluating the potential benefits of purchasing longer-term Treasury securities." That would likely have the effect of bringing longer-term interest rates down while programs aimed at mortgage-backed and asset-backed securities would narrow the spread between those rates and Treasury yields. "The available evidence indicated that such purchases would reduce yields on those instruments, and lower borrowing costs for a range of private borrowers, although participants were uncertain as to the likely size of such effects," the minutes stated. Fed officials met last month just two weeks after the National Bureau of Economic Research declared the U.S. to be in a recession that began December 2007. Gross domestic product contracted 0.5%, at an annual rate, during the third quarter and economists are penciling in another drop of 5% or even more in the fourth quarter followed by a smaller contraction this quarter. The resulting economic slack, coupled with falling energy prices, should bring inflation down, officials said. "Some members saw significant risks that inflation could decline and persist for a time at uncomfortably low levels," the Fed said. -By Brian Blackstone; Dow Jones Newswires; 202-828-3397; brian.blackstone@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: djnewsplus.com. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires January 06, 2009 14:02 ET (19:02 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 02 02 PM EST 01-06-09

To: patron_anejo_por_favor who wrote (175373)	1/29/2009 12:44:06 PM
From: Smiling Bob	Respond to of 306849

UPDATE: Building Star NVR Reports Loss, Others Detail Pain 75 minutes ago - Dow Jones News Related Companies Symbol Last %Chg HOV 1.75 -8.38% LEN 8.09 -8.69% LEN.B 6.21 -8.41% MTH 10.12 -15.88% PHM 10.66 -8.50% As of 12:42 PM ET 1/29/09 (Updates with NVR, analysts quotes, stock prices, home sales data) By Dawn Wotapka Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- The home building sector's star has finally dimmed. NVR Inc. (NVR), which has long outshone its peers by shunning land ownership, said it swung to a quarterly loss, another blow for a battered sector limping through a prolonged downturn that shows few signs of letting up. Indeed, Thursday, the government said new home sales plunged in December, capping the worst year for sales since 1982, while two other large builders, Meritage Homes Corp. (MTH) and Ryland Group Inc. (RYL), reported losses late Wednesday. The barrage of negative headlines battered builder stocks. NVR fell nearly 7%, compared with a 4.75% loss for the Dow Jones US Home Construction Index. Meritage fell nearly 10%, easily making it the sector's biggest loser. Ryland posted a nearly 3% gain. Before the market opened Thursday, Reston-Virginia based NVR said it lost $30.46 million, or $5.54 a share for the quarter ended Dec. 31, compared to net income of $67.27 million, or $11.72, a year earlier. The company, which took about $121 million in asset impairment charges, also said that as of Feb. 4 Dwight C. Schar, the executive chairman, will relinquish the executive officer title, but remain chairman of the board. The loss is the company's first of the downturn, said Alex Barron, Agency Trading Group's building analyst. Unlike other builders, he doesn't expect future large impairments because of the lack of land ownership and just $29 million of options remaining on the books, he said. "I don't think anybody was expecting" the loss, Barron said, adding that without the charge the company would have made money. "What this writeoff means is they don't believe that a lot of the land options that they had contracted would be profitable if they would go ahead and build those houses." Exercising those options would mean building at a loss, Barron pointed out. The question is: What now? "That's where it becomes a little bit interesting," he said. The notoriously guarded company - which went bankrupt in the last residential downturn and avoids conference calls - said the quarter's new orders decreased 30%. The cancelation rate was also 30%, dipping from 32% a year earlier, some of the lowest rates to come from builders recently. "Relative to the rest of the industry, they still look like they're outperforming," said Robert Curran, Fitch Rating's lead home-building analyst. Meritage and Ryland's numbers weren't as grim: They shaved their fourth-quarter losses. But Meritage still said the quarter was painful. "Economic conditions in the fourth quarter of 2008 were the worst we've experienced to date," said Steven J. Hilton, Meritage's chairman and chief executive. "The reverberations from the financial crisis that began in September 2008 impacted all of our markets, and we experienced a substantial decrease in traffic and sales." Arizona-based Meritage posted its seventh consecutive quarter of red ink, with a net loss of $79.1 million, or $2.58 a share, compared with $128.8 million, or $4.91 a share, a year earlier. Closing revenue fell 35% to $399.6 million, while net orders plunged 52%. Closings took a 30% hit, while the average selling price fell about 10% to $259,800. During the 2006 heyday, the average closing price topped $330,000, according to JPMorgan. The most recent cancelation rate was 56%, showing many customers decided not to buy. Analysts have long been fans of Meritage because, like NVR, it favors options instead of owning land. But they're concerned about Meritage's strategy of depending on Texas to survive the downturn. The Lone Star State, which accounted for 52% of last year's revenue, saw orders crumble 61%. "The significant weakness in Texas is troublesome," noted Credit Suisse's Dan Oppenheim. Hilton said the company was responding and it remains confident in what remains its strongest region because of population and employment growth and housing affordability. "We were swift in taking aggressive actions in Texas as our net sales there fell during the quarter," he said. "We closed certain communities, sold some assets and consolidated operations in the region. We'll continue to be cautious until we are more comfortable with the activity in our Texas region." California-based Ryland, meanwhile, reported a net loss of $59.9 million, or $1.40 a share, compared with a year-ago loss of $201.9 million, or $4.80 a share. Revenue tumbled 39% to $528.2 million, while orders dropped 65%. Closings slid 36% to 1,964. The average home price dropped 8.6% to $246,000. That's down from nearly $300,000 during the boom, according to JP Morgan. To jumpstart business in time for the spring selling season, builders are unveiling eye-catching specials. Last week, luxury builder Toll Brothers Inc. (TOL) surprised the industry when it lowered the rate of its 30-year, fixed-rate mortgage to 3.99%. Industry giant Lennar Corp. (LEN) beat that with 3.875% in some markets. Hovnanian Enterprises (HOV) is working on a program that would pay mortgages for some unemployed homeowners. Pulte Homes (PHM), meanwhile, will make payments until 2010 for qualified buyers in some markets. Home builders have strongly lobbied Congress to expand on a $7,500 temporary tax credit for first-time home buyers, making it available to all home buyers and eliminating a requirement to pay the credit back over time. But Hilton said he's not counting on that: "We fully expect 2009 will be another challenging year, and are not hanging our hopes on 'rescue packages' that are out of our control." -By Dawn Wotapka, Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com (John Kell contributed to this report.) (END) Dow Jones Newswires 01-29-09 1127ET Copyright (c) 2009 Dow Jones & Company, Inc.