‘Demand Has Evaporated’: CEO
Some housing bubble reports from Wall Street and Washington. “CEO Robert Toll said the U.S. housing market got ahead of itself due to greed on the part of buyers and sellers, and that it now likely faces the highest level of speculative inventory ever. ‘Every day there’s an article about how lousy housing is now and how dumb you have to be to buy a house now,’ the CEO said Tuesday at the Credit Suisse Homebuilders Symposium.”
“Don Tomnitz, CEO of D.R. Horton Inc., Tuesday said the company is preparing itself for a tougher housing market in 2007 compared to 2006, with prices finally stabilizing in 2008. ‘We have never seen housing prices and demand slow as quickly as they have during this downcycle,’ said the CEO of the nation’s largest home builder when measured by 2005 deliveries.”
“‘Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.’ The use of incentives by builders to move homes in a slower sales environment will continue for the next three to four quarters, Tomnitz estimated.”
“The CEO of home builder Hovnanian Enterprises Inc. said housing markets are changing ‘quite dramatically’ and that new-home prices have effectively reversed through the use of concessions and incentives. Speculators and investors were a greater part of the market than anyone realized, and are now contributing to the inventory overhang of homes as they stop buying and relist homes, said Ara Hovnanian.”
“‘Buyer psychology has shifted..buyers are more content to wait on the sidelines than they were,’ the CEO said. ‘Cancellation rates have been creeping up.’”
The Motley Fool. “The publicly traded homebuilders were amazingly aggressive in their land acquisition strategies over the past several years, and they are paying for it now in interest expense and write-downs.”
“On their income statements all but 3 of the smallest builders are still showing large profits. However, cash flow statements show that the builders are burning through cash and increasing borrowings at an alarming rate. With sales in the early stages of a long, steep decline, they are putting themselves at the mercy of creditors, which I expect will result in bankruptcy for some of them.”
From Inman News. “It’s altogether too easy to blame real estate’s excessive number of newbies for a variety of ills in the industry that include intense competition, downward pressure on commissions (a boon to sellers, though not brokers) and unethical behavior. But the newbies themselves, as a group, aren’t at fault for these conditions.”
“Rather, the responsibility lies at the feet of state lawmakers, real estate brokers, trade associations, licensing schools and, admittedly, the media.”
“A slowing U.S. housing market and the possibility of a major oil supply disruption are two of the biggest risks to the world’s economy, International Monetary Fund head Rodrigo Rato said Tuesday.”
“‘With the housing market in the U.S. cooling faster than anticipated, there is a risk of an abrupt slowdown in the U.S. which could derail the global expansion,’ Rato told a conference.”
“U.S. lawmakers will question some leading government and industry economists about the perils of a possible ‘housing bubble’ in a Wednesday hearing. Lawmakers wanted the session ‘because we’ve heard a great deal about the possibility of a housing bubble for several years now,’ said Sen. Wayne Allard.”
“The hearing, ‘The Housing Bubble and its Implications for the Economy,” will be held in an open session of the Senate Banking Committee at 10 a.m.. Next week, the same committee will hold a hearing on the growth of innovative mortgage products that have mushroomed along with the housing sector.”
“‘The economy has been buoyed for some time by unrealistic expectations about the appreciation of housing prices,’ said Jack Reed, from Rhode Island, who is helping sponsor the meeting. ‘Now that the housing market is cooling, the economy may be headed for a bumpy landing.’”
oil has CRASHED
to 63.50
wow gas will CRASH to 2.70 or so
go buy a house
Now I can afford more house
Now I can commute to the Bay Area from Mariposa.
Maybe fill up the car.
Gas is 2.30 and under in some places already.
Must be getting near election time
The commodity boom was riding on the back of the lending/real estate boom. Oil futures falling is a sign that the latter is coming to end.
Here is a Wall Street Journal report on lending to developers:
‘The regulators conjure up memories of the late 1980s and early 1990s, when aggressive lending led to overbuilding, vacant properties, price collapses and huge losses for taxpayers. From 1987 through 1994, more than 1,100 banks and nearly 1,000 savings-and-loan institutions failed or required financial assistance, according to the Federal Deposit Insurance Corp.’
‘It is hard to overstate the impact of that crisis on our economy,’ John Dugan, the comptroller of the currency, said in a speech to New York bankers in April. Mr. Dugan’s agency, part of the U.S. Treasury, supervises more than 2,500 nationally chartered banks.’
‘It is hard to overstate the impact of that crisis on our economy,’
One way to state the impact is in terms of the likelihood that it will be repeated in closely similar fashion. From the standpoint of the housing bubble which is currently unwinding, I would say the impact is pretty high, as many bubble enablers are throwing caution to the wind under the assumption that another taxpayer-funded bailout will provide the required financial assistance just like last time.
This is the most hazardous thing about government bailouts: they encourage more of the same behavior. Right now, the government has so much debt they could ill afford it anyway.
As the saying goes…
The memory span of a banker is only about 10 years.
‘It is hard to overstate the impact of that crisis on our economy,’ John Dugan, the comptroller of the currency,
Why the f*ck should this come as revelation to any of these jokers. I saw this coming the minute Greenspan crashed rates
The interesting point in all of this, is that a single monsterous, uncharted, unanalyzed, radom event (9-11) triggered all of this.
The low interest rates for past 4 years were an artifical anonmaly. It’s hard to imagine the same circumstance to ever evolve again.
Millons are now trapped in the tar pit of precipitously declining
homes values, from which there will be no financially viable escape.
9/11 had nothing to do with rates crashing. The stock market had been in a downward spiral for 15 months at that point.
Didn’t the NASDAQ implode in March 2000? If that marked the beginning of the stock market’s downward spiral, we’d be talking about 18 months, rather than 15, right?
The internet stocks imploded in March, 2000. The bigger boys (INTC, CSCO, etc), didn’t start tanking until October.
Depending at which index you look, the market began its downward course somewhere between January and October of 2000. Regardless, the point is 9/11 is more a product of a bad environment than a producer of one.
9/19/11 had nothing to do with rates crashing. The stock market had been in a downward spiral for 15 months at that point.
That right…the market was tankin’ and 9/11 pushed it over the cliff.
F*ckin’ BS…Even the MSM got that one right.
You know what’s hilarious? Reading comments like this: “Oh, but we learned so much the last time around. Now we have these nifty computer models that are much more sophisticated at analyzing risk, and therefore, our loans will never go bad and there’s nothing to worry about.” But every cycle — EVERY credit cycle — is the same. Look at the implosion in housing demand and the rapid build up in unsold (now “spec”) inventory. All of these home builders and the apologist analysts who follow them on Wall Street claimed they learned so much from the last boom and bust. But lo and behold, they overbuilt … again … and are now sitting on the highest level of new homes for sale in U.S. history. I’m shocked … SHOCKED … to see this, let me tell you (he says, voice dripping with sarcasm)
yes we were told over and over and over, its different this time. these builders have their inventory under control.
But it turns out their greed and their buyers greed was not!
We never heard that, but we did see last July & August massive stock sales!
Sure, happens every time. This is precisely why the Nasdaq crashed 6 years ago. Everybody overestimated the demand from the internet stocks, and the Ciscos of the world built too much capacity, which to this day is STILL being worked off.
Now, it’s happening again, but not just with housing. There is a serious glut of NAND flash memory and other tech overcapacity that will lead to quite a few earnings warnings in the coming weeks.
Bernanke sounded the alarm on this issue a long time ago. Robert McHugh wrote on article on why this would lead to the next recession:
http://www.safehaven.com/article-4759.htm
“The Housing Bubble and its Implications for the Economy”. Good thing the politicians are getting involved. Perhaps we could have Bernanke set prices for houses like he does for money.
That’s Washington for you. Right on top of things as usual.
Someone sent me this info on the hearings: ‘C-Span by Phone: Dial (202)-737-3220 and tell the operator that you want to request programming of a congressional hearing. He will put you through to a menu that leads to the program director that covers congress.’
C-Span by Email: events@c-span.org
after hours number is: (765) 464 3080…just left a message
ginster..please don’t stop at Fx!.
they set prices for stocks, oil, gold,interest rates, all in the vain attempt at stabilization!
Now its a daily enterprise.
good Comrad, see you at the next election rig in November!
Here is the link to the 13 Sept Senate Banking Cmte hearing:
http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=236
And here is the witness list:
Mr. Patrick Lawler, Chief Economist, Office of Federal Housing Enterprise Oversight
Mr. Richard Brown, Chief Economist, Federal Deposit Insurance Corporation
Mr. Dave Seiders, Chief Economist, National Association of Homebuilders
Mr. Tom Stevens, President, National Association of Realtors
I think all of us on this blog know exactly what they are going to say (spin, lies, b.s, etc.). Hopefully one of the few Senators attending this will ask the obvious political question, “How badly are we in Congress going to get pounded over this?”
“‘Demand has evaporated to the extent of about 20% to 30% for the industry, and in a tighter timeframe than we’ve seen before.’
And demand is *still* continuing to evaporate. Ok everyone, time to break out that old Demand Curve from Econ 101. What happens to prices if the demand falls? What happens to prices if demand falls by 30, 40, or 50%
Homebuilder share prices go up when demand evaporates or when anything else which indicates eroding fundamentals comes to light, because these share prices do not follow the usual rules of economics
My short puts got killed today =(. Perhaps they’ll revive by October close.
they go into a permanent plateau?
Like in 1890 to 1980! With a few wrinkles in between!
or just down a few percent for 17 years in a row as in Japan 1980’s to current!
You have what realtor’s call a ‘buyer’s market’?
It’s begun–the congressional hearings, the hand-wringing, finger pointing, bankruptcies, price-wars, I told you so’s, fear and loathing, back stabbings, how did this happen questions, bail-outs, investigations, denials, and the pain.
And the RE market hasn’t even begun to crash at this point. Imagine the level of finger-pointing and Hill hearings beginning next spring…and next fall…
An extra helping of Schadenfreude, anyone?
Speculators and investors were a greater part of the market than anyone realized
________________________________________________________
I don’t work in the HB industry and knew this? How can these guys not this? Give me a break!
*How can these guys not know this?
How can the Fed not know this?
The issued a report stating that this boom was pure fundementals. They will know it was not when they issue their research papers in 2015!
It could be similar to the “See no evil, hear no evil” policy of the Enron head honchos.
Crispy & Stucco
Both doknow this….the builder it was prfoit and the thought he was in control..- Greed & Arragance
For the FED it the big picture plan!
They are all powerfull Lord’s of the universe and the public is chattel!
What does one do with Chattel..they sell it at the market.
“All debtors to market”
“All debtors to market”
Bringin in the sheeves!
Maybe they were so busy selling their shares that they didn’t notice. Bob Toll, for example, sold approximately $665,525,000 worth of his shares in Toll Brothers in 2005.
http://biz.yahoo.com/t/11/1190.html
So he did notice!
Come on C&C, don’t be a retard - you know exactly why they’re saying it now as opposed to a year ago. How were they supposed to make all that money if they were being honest?
Seems we’re being ‘prepared’: the next few months of home sales, sales cancellations, and price drops are the real alert here. Their telling us it’s bad, folks - and it’s gonna get a lot worse.
Did Karatz (KB Homes) have any comments to make at this HB summit, err…, truth serum convention? Remember in Feb 2006 when he said give it six months to shake out - then everything will be great again.
http://bakersfieldbubble.blogspot.com
here is a summary of all his comments from june 2005
have fun
http://immobilienblasen.blogspot.com/2006/09/kbh-homes-kbh-warning.html
The sentiment in Manhattan is still that “Manhattan Prices” only go Up” and “What we are seeing is temporary and next spring things will pick up again” and “prices are still higher than last year.” I was at dinner with colleagues and I pointed out that 14,000 new condo’s are going up in NYC. The comment back I got was that ..”well, the developers will just hold the condo’s if they can’t sell them at asking price…” I doubt that. Everywhere you look there is construction, but the prices are outrageous. I also went to two open houses this weekend. I was curious what 850K buys you in this city. Nothing I would want to live in was the answer. A fourth floor 900 sqft walk-up with the bedroom cut in half to make it a two bedroom (UWS 92 and broadway). It had roof access and an ugly metal circular staircase in the apt to get you to the roof “terrace”. The furniture in the house was very run down. Funny contrast, if you have a home that expensive, you would think the furniture would be better, unless you bought a very long time ago and your house used to be worth much less. The best part was that the realtor had described it as a “penthouse apartment”. That was comical ( 4th floor walk-up a penthouse?) My colleagues (physicians) couldn’t buy their own apartment today if they wanted to. They don’t think anything is wrong with that. Hey Manhattan folks, any new data? I really want concrete evidence that it is “happening here”.
The sentiment in OC is the same.
Check out this knucklehead who is using his real identity to go out on blogs and goad bears.
http://blogs.ocregister.com/lansner/archives/2006/09/oc_home_inventory_bumps_up_1.html#comments
Look for Pat Veling.
In my estimation, New York seems to be following the same pattern as elsewhere, but so far, more mildly and several months behind.
NYC inventory is climbing, open houses are quiet, but stuff is still selling. Two new condo buildings in my neighborhood went from totally dark to almost full in August; however, I presume these were people who bought a couple months ago and were waiting to move in. An acquaintance of mine in Brooklyn just sold an apartment a few weeks ago and generated a four-way bidding war (I had predicted he’d have trouble selling, so he’s gloating on me a bit). Nobody I’ve talked to admits that prices have fallen yet, but some acknowledge they’ve largely stabilized.
It will be interesting to see what happens. According to data I’ve seen, existing NYC owners have taken out comparatively few exotic loans, which probably means comparatively few amateur flippers are in the market. However, there are a lot of new condos going up, I keep seeing the 14,000-units figure being discussed but I’m not sure how accurate that is.
My impression is that NYC homes have not appreciated nearly as much in this bubble as have those in California, Florida, etc. In NYC, $2 million still gets you a very respectable place, and many thousands of New Yorkers can easily afford that. Meanwhile, lots of homes cost $2 million in LA or Miami also, and, let’s face it, most people don’t make nearly as much money in those towns. From personal experience, I know my colleagues doing the exact same work in California make about 60% of what I do, and many of them are paying similar prices for housing as we New Yorkers do.
If we have a downturn in the financial sector in the next year, which I believe is likely, NY will get hit fairly hard, otherwise I see a quick 8-12% drop this fall and winter, followed by a downward dribble of prices for the next 4 years or so, amounting to an overall 25-35% price drop, adjusted for inflation.
Believe me, I wish it would fall harder and faster, but too many people I know are piling up serious cash, and none of them seem to realize there’s any place worth living other than NYC.
” I see a quick 8-12% drop this fall and winter, followed by a downward dribble of prices for the next 4 years or so, amounting to an overall 25-35% price drop, adjusted for inflation.”
sounds about right — though nominal, not adjusted for inflation.
It will be worse.
Take a cab up 10th Ave from the Upper West Side to Chelsea, Gramercy, or Murray Hill, and then head up 1st Ave to 57th, and down 2nd Ave again.
There are literally condos going up on every street corner.
It’s looney out there.
A bit of outer-borough input here: A studio apartment in my building has been sitting FSBO for months, with open houses every week. My wife keeps finding the listing in one of the free dailies: $139,5–what we paid for our 2 bedroom apartment (2002 price). They have the chutzpah to claim that this is “Priced to sell!”
Asking prices seem to be averaging around $110K for studios, $240K for 2 bedrooms. To get back in line with rents, coop prices around here would have to fall back down to around $90K for studios, $160K for 2 bedrooms. Asking prices are starting to creep back down to this reality, but slowly, too slowly, so far.
This is assuming, though, that maintenance fees remain stable. A lot of boards (including my own) have been tacking on “temporary” assessments to pay their heating oil bills, trying to postpone the inevitable maintenance increase. Because so much of the cost of living is tied up in those maintenance fees (my maintenance fee is bigger than my mortgage payment), big increases will shave prices even closer.
This neighborhood has a lot of Asian immigrant households (Chinese and Korean) with much higher rates of saving than your average American. Lots of mattress money floating around. All-cash offers are not unheard of. At first that worked to prop up prices compared to other Queens neighborhoods, but now I think it’s restraining them. When asking prices for 2 bedroom apartments started going over $200K, I think people started investing in larger mattresses.
“CEO Robert Toll said the U.S. housing market got ahead of itself due to greed on the part of buyers and sellers”
Robert Toll is one of the country’s biggest home sellers so the greed he is talking about is his oun.
At least he was smart enough to recognize pure stupidity when it presented itself (last summer) and took a lot of money off the table. I would have sold all of it myself but how would that look? I’m sure he’s hedged or collared the rest.
“I would have sold all of it myself but how would that look?”
That sounds to me like a good reason to not sell all of it.
However, at the same time he was selling he was telling everyone homes would go from $500k to $4million. We had achieved a new paradigm and we would be like Europe and all the other crap he was spewing.
I am ok with selling if you are at least honest and not spewing all this paradigm shift crap. If he would have said “Hey prices are moving up way to f’n fast and our profits are as good as it gets I am gonna DUMP a $hit load of stock” I would be ok with that. LOL
I think that Toll’s straight forwardness in recent months is a smart move to get ahead of the pack when the shtf and to protect those mega bucks he made last summer.
In about a year when the REAL congressional investigation starts he will be able to point back and say “Hey, I told you guys the building industry was going into the crapper. Every time I told you the damn shares would spike 5%! What’s your beef?”.
Ding! Ding! Ding! C&C wins the prize.
Recently, he’s been exercising his options to buy at about $4-$5 a share. Picked up about 1M shares over the last few months. I love it.
Of course he’s buying. After the biggest RE explosion in history you’ll have the biggest implosion. And guess who’ll be there at the bottom to pick those shares up. Robert Toll of course.
Sell high, buy low! My name is, Robert Toll!
the question is, is he exercising options and holding them, or immediately selling them? I’d guess he’s cashing in the options rather than buying the shares and holding them.
A family friend used to work for the Toll Brothers. He coined a slogan about the company’s houses that my mother is fond of repeating:
Guaranteed For Five Years. Then They Fall Apart.
“A slowing U.S. housing market and the possibility of a major oil supply disruption are two of the biggest risks to the world’s economy, International Monetary Fund head Rodrigo Rato said Tuesday.”
Don’t forget the last 6 rate hikes are not baked in the economy yet…YIKES!!
Man, that Rato fellow is deep.
DataQuick numbers for San Diego are out:
http://www.voiceofsandiego.org/survival/
Detached: unchanged median price from Aug. ‘05, condos and new houses down.
So, what’s significant in these numbers? Andrew LePage from DataQuick said there’s not much change from June and July’s trends.
“The main thing is, unfortunately, more of the same,” he said. “The market’s entered a lull, and is spinning its wheels in the sand.”
LePage emphasized how much uncertainty there is in the market, with variables like the employment and interest rates. But he speculated that we might see a more pronounced decline as autumn begins.
“Anyone who was going to buy a house and move in before the kids started school, they’ve already pulled the trigger,” he said, estimating that homebuyers traditionally save 5 to 8 percent when they buy homes in the winter months. That reduction might grow this year due to the current market conditions, he said.
Hey look, someone is blaming the media for the BUBBLE, not for SLOWING SALES of the SOFT LANDING by scaring buyers with horror stories and doom and gloom. Bad media, shame on you.
“admittedly, the media”
what a load. The media, even biased media, is merely is a reflection of what is happening. It is not a cause or a “responsibility”. You can debate the bias, lack of depth, failure to check resources, and a whole lotta other miscreant behavior by the media, but it is not a cause of this housing situation.
Here we go…that 5% to 8% decline that’s about to pop up in the statistics is only a “traditional” winter discount. The spin is already out.
of course, what they fail to mention is that the 5-8% discount happens every year, so the YOY numbers shouldn’t reflect it. But this year they will.
He seems reasonably honest to me, notice the last bit:
“That reduction might grow this year due to the current market
conditions, he said.”
So November 2005 at $518k compared with August 2006 at $493k minus, say 12%, would be $434k or -16% y-o-y by November.
Here are the numbers for the SFV.
http://www.dailynews.com/business/ci_4322085
Here are the numbers for the SCV (Prices going up)
http://www.the-signal.com/?module=displaystory&story_id=32740&format=html
“At the current pace of sales, combined inventory represents just more than a six-month supply, the Realtors association reported.”
Oh really? 250 SFRs sold, 106 condos, which is 356 sales. Inventory is about 3300 total, almost 2600 SFRs and 700 condos. Is that really “just more” than six months’ worth of inventory? I guess so if over nine months is “just more” than six months.
Hi Desmo - Still interested in getting together for Sunday open house tours in Valencia?
sheltielover1@gmail.com
Thanks!
The median price for all homes in August was $482,000 for 3,666 sales. That compared to a median price of $493,000 and 5,379 sales in August 2005. August sales totals rose 8.8 percent from July of this year, compared with a 12.9 percent gain from July to August in 2005.
The county’s median price for all types of housing peaked in November 2005 at $518,000.
“housing market got ahead of itself due to greed on the part of buyers and sellers…”
One of theose “greedy sellers” was none other than Mr. Robert Toll himself. Hell, he was so greedy that he was even selling his company’s Scam, aka stock, like there was no tomorrow.
Here is was I said 10 months ago to a group on my private e-mail:
November 08, 2005
Toll Brothers’ Execs — A Fine Example Of Corporate Crooks of America
Toll Brothers’ Scam, aka stock, has been my number one short position for the past 6 months (I was early, as always) among the Housing and Finance related companies and I have commented on it several times during this period (see one commentary below, for example, and you will see that I had already concluded then that he was lying).
My skills at identifying Corporate Crooks is well-honed by now and it took me watching two interviews each by Mr. Robert Toll, one of the two Toll brothers and the CEO, and Joel Rassman, the CFO, to conclude that they are genuine Crooks and they were purposely misleading the public to pump-and-dump their holdings of the company’s Scam.
The Scam, which has been going down sharply for the past 3½ months, went down another 14% today when these execs’ lies about the future demand for their homes could no longer be held back from the public. The two Crooks again appeared on the TV today and what a difference in their demeanor and the lack of former confidence about the business in 2006 that they exuded only two months ago.
Vast majority of America’s public corporations are run by Crooks who are in the BUSINESS of selling their company’s Scam. Don’t feed the Crooks by being a Scam Lover. If you got the guts and, most importantly, the skills, be a Scam Hater! It would be good for your character.
Jas
How to be a Scam Hater????? Please advise. Much thanks
Sorry, I am a professional speculator, but I can’t give any investment advice/rec on a blog. For most people just avoiding Scams, or Scam Mutual Frauds, altogether is the best advice.
Shorting Scams requires years of experience and I would discourage most people.
No need to be greedy in the coming deflationary environment. led by Housing Bubble Burst, and Cash will be King.
Best advice for most people from Bernard Baruch: Work hard and save! That is still valid 70 years later.
Jas Jain
not looking to short scams - would like to diffuse one when I see it - or ID the most sneaky ones
OK.
My today’s favorite is: Goldchain Silverknife, the famous Fraudster on Wealth Street
Jas Jain
I shorted that last spring and am still wearing it.
It’s my favorite pastime.
The folks here could look at Mark Cuban’s new blog. sharesleuth.com for starters.
Or if you want to spend a few bucks, subscribe to offwallstreet.com. Expensive but so worth it.
More On Toll Execs:
July 27, 2005
“The Government Is Keeping the Housing Shortage [In the US]”!
This is the claim of the CFO, Joel Rassman, of Toll Brothers, a leading US Hopebuilder, aka. Homebuilder. I think that Mr. Rassman means various local governments and not the Federal govt. In “the land of the free” why shouldn’t governments artificially keep a shortage of housing, or any other necessity? After all, by keeping this supposed shortage, the governments are making people rich without lifting a finger. And what could be more American than that?
Just to give you an idea of the magnitude of the financial wonder, or the magic, these governments have been able to accomplish, the “wealth” of Americans has increased by some $10 trillion over the past five years. Of this increase in wealth, without lifting a finger, Americans have borrowed against and spent some $2-3 trillions over the past 3½ years. This has been the difference between America remaining in a recession for the past four plus years and the so-called current recovery. This spending is also the reason for the booms in China and India and many other countries not being in a recession recently.
Is Mr. Rassman telling the truth about the housing shortage that is driving the prices up? Are you kidding? The number one skill that an executive of an American public company must possess is the ability to lie thru his, or her, teeth without being unbelievable. This ability is used selectively, and mostly during boom in his, or her, industry, to lie about the future demand and the causes of the current boom. The CFO and CEO of Cisco Systems demonstrated this ability most masterfully during 1998-2000. The company has the distinction of losing more money for the public shareholders than any other company in the history and would retain this distinction forever. The CFO and CEO of Cisco were very handsomely rewarded for their mastery of the art of lying without getting caught legally. Americans think highly of people who can sucker the public and make a fortune without going to jail. A culture of corruption and “innocent fraud,” to use Prof. Galbraith’s term, has taken very deep roots in America.
Financial Fraud has been fully institutionalized in America. Make no mistake about this. When Americans go bankrupt, within this decade, that is when the world would learn about this Fraud and what America is really about. Chicanery of Americans has been known for hundreds of years. This time they sure have gone too far. It will take the “system” down with the economy.
Jas
You’re right Jas, you can burn your textbook on American History that uses presidential elections to mark a timeline. Instead, replace it with a more accurate one that marks the latest cons, bubbles, panics and fraud. It has been non-stop since the founding. It would provide a better education, and no one could ever say “it’s different this time” without someone in the room laughing.
Yes, indeed.
North American colonies were founded by speculators. It was a big failure in the beginning, but tough people hung on and got their rewards.
George W, the Big One, was a very successful speculator. He was a land surveyor in what was then called the Ohio Territory and made a bundle in land specualtion. He married a rich widow but he himself made a lot of dough. Smart man. And a great man. Look, what we got now in the little’un?
Jas Jain
Hellooo! Some of us *were* seeking this thingy called freedom, and we got it. And if you keep pissing on us any more, I’m going to come over there and throttle you.
You’re just jealous because you don’t feel like you have any inalienable rights. Admit it.
it’s interesting that you characterize this behavior as uniquely american. so you haven’t seen any of this in china, russia, peru, brasil, italy, mexico … you pick the place jas. or perhaps you don’t get out much?
Those nations do not steal from others. This nation does by paying for goods in dollars and then printing more to dilute it to nothing. All the while the Federal Reserve claims to fight inflation but they are the ones actually creating it. This is uniquely american, and institutionalized.
Financial Fraud has been fully institutionalized in America. Make no mistake about this. When Americans go bankrupt, within this decade, that is when the world would learn about this Fraud and what America is really about. Chicanery of Americans has been known for hundreds of years. This time they sure have gone too far. It will take the “system” down with the economy.
After 23 in the appraisal biz, I’m in 100% agreement. The number of f*ckin’ crooks, liars, cheats, and scammers involved in this bubble boggle the mind. And it all goes right to the top of government who’ve acquiesced to it, in order to cover their own governance misdeeds.
oh, this is rich……
In an article titled “Foreclosures on Rise in Dallas” this bullish blogger says: “According to my sources, Dallas is also undergoing revitalization near it’s downtown, which is still considered a ripe area for investors. With this increase in foreclosures, perhaps some investors out there can these homeowners in need.”
link: http://texasrealestate.blogs.com
Yeah, if you time it right, you can make some extra cash letting people park in your yard for the cotton bowl and state fair.
From Motley Fool:
“They increased money spent on share repurchases to $558,006,000 during Q2 ‘06, vs. $207,069,000 during Q2 ‘05. Just as they thought increasing land holdings to 6 years supply or more was a good idea in 2005, many of them seem to think that borrowing money to repurchase shares is a good idea right now.”
Holy cow! Six years of land on the books! Get the red ink pen out. Write downs are coming!
Wright downs? They are called loses! Call them what they are. Good will = lose. A loss is a lose. So many euphemisms for the word looser any more, nobody even knows the meaning of the word anymore.
Miss spellings intended.
Yeah, I heard that txchick is thinking about getting in on that Dallas downtown revitalization! She’s dyin’ to help out those less fortunate homeowners in need! LOL.
Oh thanks! Another spray of DC hits the monitor. LOL!
Demand Has Evaporated
Maybe. But keep in mind that supply has risen dramatically in the past few months to offset the slump in…
Oh, wait.
“The CEO of home builder Hovnanian Enterprises Inc. said housing markets are changing ‘quite dramatically’ and that new-home prices have effectively reversed through the use of concessions and incentives. Speculators and investors were a greater part of the market than anyone realized, and are now contributing to the inventory overhang of homes as they stop buying and relist homes, said Ara Hovnanian.”
Some of us warned, but few listened. So much for the latest batch of cocktail party real estate experts.