Posted on 07/24/2008 5:40:51 PM PDT by TigerLikesRooster
US markets falter following home sales figures
Tom Bawden in New York
America’s main stock markets tumbled by more than 2 per cent yesterday after new data showed the number of previously-owned homes sold in June fell by more than twice the expected volume to the lowest level in at least ten years.
The Standard & Poor's 500 Index fell by 29.62 points, or 2.3 per cent, to 1,252.57, with builders and financial services groups taking the biggest hit because they have the most to lose from the housing crisis. The Dow Jones Industrial Average declined by 283.1, or 2.4 per cent, to 11,349.28, while the Nasdaq tumbled by 45.77 points, or 2 per cent, to 2,280.11.
(Excerpt) Read more at business.timesonline.co.uk ...
Ping!
So many had hoped. It appears, however, that the reality is only beginning to sink in.
I just read an article from Reno yesterday that the market there is having larger volumes than last year. The prices in that market have retreated in excess of 30% over the last couple years. The prices have flattened out and volumes are coming back up.
I think is was Obama’s speech in Berlin. Wall Street heard how much U.S. tax dollars would be required to make him a world citizen president.
Most attempts to explain the day by day motions of stock prices by looking at what seems to be the days news are misguided.
It would be like a child on the beach, explaining the last 5 seconds of ebb or flow of the tide as a consequence of some little pile of sand he had made or removed.
Just watching the tides come and go, over time, I had a pretty good idea that today or tomorrow, the tide would go back out a bit, the prices down a bit, after the last few days which had a sharp rising tide, coming off a fairly deep ebbing tide. The last two days, the incoming tide (rising prices) had stopped (with prices moving very little earlier this week), and seemed ready to go back out a bit.
The ebb and flow of human endeavor and emotion, involved in cycles and reactions to far larger and longer lasting forces than todays housing report, are more important determinants of stock prices. Nothing moves in a straight line; it's all cycles within cycles, actions and reactions repeating, fear and greed, adapting to the ever changing.
Those who engage purely in technical analysis, chart reading and Elliott waves get it wrong too, in my opinion. They are like Copernicus, studying the cycles within the cycles. There are larger forces at work, which the Newtons and Einsteins of the ages occassionally illuminate.
The world dominance of the dollar has peaked. We have been undermined too long by our enemies, funded with our own dollars.
Peak Dollar.
Our area is beginning to come back, slowly. There are some homes that had been on the market a long time, but some of that old inventory is finally selling. The ones taking the biggest hit in price were those that had not been updated for many years.
Buyers are looking for 'prom queen' homes. They don't want to do ANYTHING when they move in, and if they do have to do something, they'll discount the offer, usually well beyond the actual cost of the work they think needs to be done. But if the house is in good shape, and the kitchen and bathrooms have been updated, the values seem to be holding up pretty well.
There are homes that have come on the market the last few months that have had higher asking prices compared to last year, and are selling close to those prices. I think buyers are realizing that sellers aren't going to give the houses away, and if they want to get something, they'd better act on it pretty soon.
According to the following Bloomberg article, there are $5 billion worth homes Fannie Mae couldn't find a buyer for. If they are not sold soon, apparently Fannie Mae is in more trouble:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aMz0dl3IdwjU&refer=home
Fire-sale coming?
All this is location specific, though. Our area saw prices go down a little more than Metro Boston, or the inside Hwy. 128 area. But we don't have near the inventory of unsold new or used homes that some of the faster growth areas have.
Only in the low end (less than $200k) Reno, NV market. We have a ton of foreclosures, not including a next wave that is from the 2005 ARM resets.
The Pelosi factor
Thanks for the ping.
I figure the total losses that are incurred to this fiasco are in the neighborhood of S4 trillion.
Because of that, the dollar will slide in value and inflation with respect to food and energy will continue to spiral.
Do not expect a sustained sound rebound of any measurable sorts until fall of 2009.Freddie and Fannie have 'slept around' with way too many of the wrong people and Countrywide set the pace.
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