The Next Chapter - A Complete Housing Meltdown
On the heels of last weeks DOW 5000 detailing how the DJIA could be cut in half, again, within 2 years, more good news...
Those waiting for U.S. housing prices to return to the levels of three or four years ago are living in fantasy land.
In the month of July, sales of existing homes in southern California fell nearly 22% from a year earlier.
US DOC has been tracking new home sales since 1963... during the month of May sales of new homes in the U.S. declined to the lowest level ever recorded.
As of March, U.S. banks had an inventory of approximately 1.1 million foreclosed homes, which was up 20 percent from a year ago.
The number of home foreclosures set a record for the second consecutive month in the month of May.
U.S. Banks repossessed 269,962 U.S. homes during the second quarter of 2010, which was a new all-time record.
Despite record foreclosures, short sales and REO's at seemingly cut rate prices...
the Mortgage Bankers Association recently announced that demand for loans to purchase U.S. homes has sunk to a 13-year low.
The number of Americans falling behind on their mortgages continues to increase at a all time record pace.
The housing market got way, way out of balance over the last couple of decades.
The truth is that only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.
The number of the long-term unemployed in America continues to set record after record.
So where did all the jobs go? They got shipped overseas and they aren't coming back.
Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veterans Administration...
backed approximately 90 percent of all U.S. home loans during the first half of 2010.
Right now, the total of all government, business and consumer debt in the United States is somewhere in the neighborhood of 360 percent of GDP.
This is the biggest debt bubble in the history of the world, and it is just beginning to pop.
The Nattering One muses... What have we been preaching to our faithful in these pages since 2005???
1. This is not a short term collapse.
"The truth is that this is not a short-term downturn in the housing market."
2. There will be no recovery until good paying durable economic jobs are created en masse.
"Why? It is because there are not nearly enough jobs for everyone. Without a jobs recovery, there simply is not going to be a housing recovery.
The employment situation is going to go from bad to worse. Americans without jobs are Americans that cannot buy homes."
3. The housing market and supposed real estate "values" have been a ponzi scam all along.
"The days of the real estate boom are gone and they not coming back. The truth is that home prices are still way too high...
and there is no way that Americans can afford the ridiculously inflated home prices that we have seen over the past decade any longer."
4. Bail out all you want, this is like trying to defeat gravity. There are no "free markets" and any attempt to provide false support will not have a happy ending.
The natural laws of economics and the market will prevail in the end. As opposed to the contrived laws of controlled markets, remember "there are no free markets".
"No matter how many trillions of dollars the U.S. government throws at the problem the fundamentals of the marketplace are still going to have their way eventually."
Read the whole missive and see all the gory facts and statistical details at Business Insider.
Those waiting for U.S. housing prices to return to the levels of three or four years ago are living in fantasy land.
In the month of July, sales of existing homes in southern California fell nearly 22% from a year earlier.
US DOC has been tracking new home sales since 1963... during the month of May sales of new homes in the U.S. declined to the lowest level ever recorded.
As of March, U.S. banks had an inventory of approximately 1.1 million foreclosed homes, which was up 20 percent from a year ago.
The number of home foreclosures set a record for the second consecutive month in the month of May.
U.S. Banks repossessed 269,962 U.S. homes during the second quarter of 2010, which was a new all-time record.
Despite record foreclosures, short sales and REO's at seemingly cut rate prices...
the Mortgage Bankers Association recently announced that demand for loans to purchase U.S. homes has sunk to a 13-year low.
The number of Americans falling behind on their mortgages continues to increase at a all time record pace.
The housing market got way, way out of balance over the last couple of decades.
The truth is that only the top 5 percent of all U.S. households have earned enough additional income to match the rise in housing costs since 1975.
The number of the long-term unemployed in America continues to set record after record.
So where did all the jobs go? They got shipped overseas and they aren't coming back.
Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veterans Administration...
backed approximately 90 percent of all U.S. home loans during the first half of 2010.
Right now, the total of all government, business and consumer debt in the United States is somewhere in the neighborhood of 360 percent of GDP.
This is the biggest debt bubble in the history of the world, and it is just beginning to pop.
The Nattering One muses... What have we been preaching to our faithful in these pages since 2005???
1. This is not a short term collapse.
"The truth is that this is not a short-term downturn in the housing market."
2. There will be no recovery until good paying durable economic jobs are created en masse.
"Why? It is because there are not nearly enough jobs for everyone. Without a jobs recovery, there simply is not going to be a housing recovery.
The employment situation is going to go from bad to worse. Americans without jobs are Americans that cannot buy homes."
3. The housing market and supposed real estate "values" have been a ponzi scam all along.
"The days of the real estate boom are gone and they not coming back. The truth is that home prices are still way too high...
and there is no way that Americans can afford the ridiculously inflated home prices that we have seen over the past decade any longer."
4. Bail out all you want, this is like trying to defeat gravity. There are no "free markets" and any attempt to provide false support will not have a happy ending.
The natural laws of economics and the market will prevail in the end. As opposed to the contrived laws of controlled markets, remember "there are no free markets".
"No matter how many trillions of dollars the U.S. government throws at the problem the fundamentals of the marketplace are still going to have their way eventually."
Read the whole missive and see all the gory facts and statistical details at Business Insider.
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