Pending Sales Down From “Unsustainable Boom”: NAR
Some housing bubble reports from Wall Street and Washington. “The National Association of Realtors said Monday the pending home sales index fell 1.7% in October after a 1.1% drop in September. The index is down 13.2% in the past year.”
“‘It’s important to focus on where the housing market is now, it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high,’ David Lereah, chief economist for the trade association, said in a statement.”
“‘In addition, a temporary correction in prices distracts from the fact that it is primarily the number of home sales that affects the economy, and the number for this year will be the third highest on record,’ he said.”
“Regionally, the PHSI in the Midwest was 15.4 percent below a year ago. The index in the South was 9.3 percent below October 2005. In the Northeast, the index was 13.5 percent lower than a year earlier. The index in the West was 17.4 percent below October 2005.”
From MarketWatch. “‘The existing home market needs to find a bottom for the new home market to rise again,’ according to Alex Barron, a housing sector analyst at JMP Securities.”
“‘Given that the majority of people who buy homes from the public builders, including move-up, luxury and active-adult buyers, are current homeowners who need to sell their home before they close on their purchase of a new home, we believe the existing home market needs to find a bottom first in order for the new home market to find its footing again,’ Barron wrote.”
“According to the analyst, much of the problem is that many sellers continue to set unrealistically high prices, while many buyers lack confidence.”
From Bloomberg. “Cemex SA, the world’s third-largest cement maker, said its $11.7 billion takeover offer for Rinker Group Ltd. was adequate, rejecting claims from the Australian building materials maker the bid may be 36 percent too low.”
“When it rebuffed the bid last week, Rinker didn’t adequately explain the outlook of its U.S. business as a housing bubble in Florida, its biggest market, is bursting, Cemex said. The valuation by its adviser was based on ‘unrealistic multiples and unjustified premiums,’ the cement maker said.”
From Reuters. “The U.S. Treasury and key lawmakers in the U.S. House of Representatives have drafted a compromise plan in the long-delayed bid to reform oversight of mortgage finance giants Fannie Mae, and Freddie Mac.”
“The compromise language that was circulating Friday states the new regulator ’shall monitor the portfolio of each enterprise’ and ‘may, by order, require’ the companies to shed some of their investments.”
National Mortgage News. “Fannie Mae and Freddie Mac may face restrictions on purchases of interest-only and payment-option mortgages if the Office of Federal Housing Enterprise Oversight decides to move ahead and issue nontraditional mortgage guidance for the two government-sponsored enterprises.”
“According to the new 3Q issue of the Quarterly Data Report, loan production fell 11% in the third quarter. And according to the Alternative Products Quarterly Data Report, jumbo loan production fell 21%.”
‘One of the surprises contained in the study was that the number of first-time buyers dropped to 36 percent of respondents, compared with 40 percent in the previous three annual surveys.’
‘I hope this does not become a trend,’ said David Lereah, NAR’s chief economist. ‘The first-time buyer is a critical component of the housing industry … Remember that affordability is not just about interest rates. It’s also about prices. Some of the first-time buyers in the market for a home earlier in the year simply could not afford to get in.’
‘These personal qualities underscore the fact that real estate is very much a face-to-face people business,’ said Thomas Stevens, (former) realty association president. ‘It appears that an individual agent’s reputation, trustworthiness and knowledge of the market are more important factors than the company they work for or business model. What people want is competence and trust.’
‘It’s important to focus on where the housing market is now, it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high.’
So do prices, as he appears to concede in the quote above. The faster the drop, the sooner the turnaround, the better for almost everyone. Here’s hoping for 2007 to set the stage for a recovery.
“Here’s hoping for 2007 to set the stage for a recovery.”
I would love to believe it could happen, but I am really beginning to think that the bottom is not until 08 or 09. In Northen NV (an area I have paid close attention to having grown up in Reno), it is agreed that the peak was in summer of 05. But when one looks at Zillow, and sales, it shows prices peaking in late summer, early fall, 05, then dropping until late summer 06, then actually, in a lot of areas, equalling, or surpassing those highs again. These are all based on actual sales. It seems, that there are still many GF’s buying into this market at absurd prices. And I am convinced that a lot of the sales are fraudulent (similar to what Paladin is reporting). Even if they are fraud, they still count as comps, and this is holding prices up. Looking at new listings, in many cases, they are actually higher than last year. While these are certainly wishing prices, some are getting them. And it underlines how sticky these prices are. Sales have not exactly slowed to a crawl. Properties are still moving. I just shake my head in awe. I wish it would bottom like yesterday, but it is really stubborn. Sometimes I think to myself, “Am I wrong about this?” Maybe this is some new paradigm and I am just a serf. I really cannot grasp how all of these people can afford not only these homes, but Hummers, vacations, dinners out, etc. Unreal.
“I am really beginning to think that the bottom is not until 08 or 09″
I think that that is optimistic and here’s why: right around 2010, baby-boomers will begin to retire en masse (or at least reach retirement age.) Lacking adequate savings, many of them will seek to downsize out of their present homes and downsize to smaller accommodations in cheaper areas removed from the expensive coastal earning zones.
This will put constant downward pressure on home prices for literally a generation until the “echo boom” hits its peak earning years.
My guess for a real adjusted-for-inflation RE turnaround? 2015.
Never been a better time to rent, folks. Enjoy it.
In Robert Shiller’s book, Irrational Exuberance (2nd edition), he noted a downward trend in real estate prices between 1890 and 1940. That’s more than one generation, folks.
“I really cannot grasp how all of these people can afford not only these homes, but Hummers, vacations, dinners out, etc. Unreal.”
Here’s a little factoid that helps explain part of your perceived conundrum:
“The median downpayment by first-time buyers was 2 percent although 45 percent purchased a home with no money down. Of first-time buyers who made a down payment, 22 percent received a gift from a friend or relative, usually their parents.
Holy Crap. If I read this correctly, 2/3 of first time buyers had no money for a downpayment. Almost 1/2 put nothing down at all.
I’d really like to know how many of those folks who purchased in 2004 and 2005 have negative equity. It must be a huge number.
I’ve got a study in my hands that analyzes this, and estimates the number of people in reset jeopardy, but does so in terms of mortgage loss potential, as opposed to an analysis of how many homes may actually wind up back on the market. The study compares the total mortgage loss potential, and then compares it to GDP to reach the conclusion: “It’s miniscule!” Well, duh. Sure. But it’s probably much more relevant to know how many homes may wind up back on the market, because this potential defines the liklihood of further downward pressure on equity and even more foreclosures. I’m trying to jigger the numbers to get there.
If anybody wants to look at it, here it is:
http://www.firstamres.com/pdf/MPR_White_Paper_FINAL.pdf
One thing to keep in mind: The study is based on home values at 09/05, pretty much the top of the market, so it’s easy to make % estimates when changing default parameters.
face to face- like mort broker rip offs- give me the net anyday
David Lereah, NAR’s chief economist. ‘The first-time buyer is a critical component of the housing industry … Remember that affordability is not just about interest rates. It’s also about prices. Some of the first-time buyers in the market for a home earlier in the year simply could not afford to get in.’
A moment of sanity from Lereah. Mark the date and time!
Why wasn’t he worried about first time buyers and talking about an ‘unsustainable boom’ back when it could have done some good?
Done some good for whom? Certainly not for the only group he cares about.
dwr,
For the market, but for realtors especially. They are going to be blamed by people like the lady in the Florida post for any losses. After all, who has been saying alls well?
Yes,
and some great sounding reforms will be enacted, with plenty of loopholes that are not immediately obvious, and will only be seen at a later time. By that time, the 3 day attention span of the American public will have moved on to the latest scandal about some Hollywood skank, or some political wrangle over a non-important issue.
But a whole lot of politicians will be happy to trumpet that they “did something” to protect the American dream.
Because RE only goes up! Seriously though, first timers are the cornerstone of all this. There can only be a limited number of transactions without them. Since the number of willing and qualified buyers is quickly drying up, DL should buckle his seatbelt for the steep downhill ride ahead.
Truer words were never spoken. Any business that doesn’t get new biz is either tredding water or dying. New biz for housing is the first time home. If you you lock them out who buys the entry level homes?
It’s a great time to generate a comm…er…. buy and sell houses.
We know that’s what floats DL’s boat. The drama of his reaction to sanitized NAR data and the funny press releases are right up there with the Casey Serin Saga.
Ben, how about we have one thread on possible & likely DL pronouncements as the train wreck continues?
The first-time buyer is a critical component of the housing industry … Remember that affordability is not just about interest rates. It’s also about prices.
DL’s books, TV appearances and press quotes are part of the reasons that prices shot up so high and first time buyers are unable to get in (in front of the freight train, I should add).
Some of the first-time buyers in the market for a home earlier in the year simply could not afford to get in.
And others who could not afford to get in ARE in anyway. Who’s left? How big is the pool of the last few knife-catchers?
What a useless piece of journalism. Plenty of usages of % but it isn’t going anywhere in it’s point.
“The National Association of Realtors said Monday the pending home sales index fell 1.7% in October after a 1.1% drop in September. The index is down 13.2% in the past year.”
I’m not familiar with this index…but 13.2% sounds colossal. Can someone shed some light on the meaning of this? Is it really as big of a deal as it sounds?
Yes, and the 1.7% drop in October from the 1.1% drop in September is a 54.5% bigger drop. Only the NAR could see something getting worse and spin it as if it’s a sign the market is stabilizing. A 54% drop in the index in a two month span?? How is this market stabilizing?? And why isn’t the MSM taking this guy to task for these statements?
hehehe… we don’t expect them to actually come out and say that month-to-month plung in a key market index is accelerating, do we?
“Yes, and the 1.7% drop in October from the 1.1% drop in September is a 54.5% bigger drop.”
Well, yeah, but the rate of decline in October (v. 10/05) was actually a bit slimmer than the rate of decline in September (v. 09/05). 13.2% v. 13.8%. So, October’s activity was not comparatively worse than September’s, but it really wasn’t signficantly better, either.
And these are just the “pending sales” numbers. What about the ACTUAL sales completed? Is there any “canceled home sales” index?
One note on Fan and Fred. One reason many want to shrink their share of the secondary mortgage market is a competing, private market has developed, eliminating the historic need for these agencies. However, that private secondary market may be about to go broke en-masse. It could be that when this is over, Fan and Fred are the only ones left issuing RMBS.
“However, that private secondary market may be about to go broke en-masse”
So how are Freddie and Fannie protected from the same thing happening?
They are not protected per se, but there is a widely-held belief that the government stands behind Fannie and Freddie. This assumption may very well be true, but it is untested.
Furthermore, if each of these are reviewed, and forced to raise their standard for mortgage purchases, this means:
1. The banks are going to have to find someone else to buy these risky loans.
2. The banks will have to take on the risk themselves.
3. (most likely) The banks will need to raise their own lending standards to reduce their risk exposure.
Going with option 3, that means that will further reduce the pool of first time buyers, because as we all know, mortgage credit was extended to more people than it should have been. This will, of course, speed up the cycle of the downward price trend. As the # of potential buyers is reduced, coupled with the ever increasing # of homes on the market, will create a major, I repeat, MAJOR drop in prices across the board, regardless of location. Boy, will late spring and early summer be interesting. (ARM resets, people waiting to re-list, etc.)
Option 4: Add in a shrinking pool of first time buyers because dreams of RE easy riches will be a thing of the past. How many new buyers will be willing to have 30%+ of their take home pay going to an asset that isn’t increasing in value?? Why bother??
Fear & greed are equally powerful on the way DOWN.
And the list continues. . .
btw: not to mention those that are willing to have 30% of their GROSS pay going toward their depreciating asset (the maximum alloted by FHA)
Chad — nice summation and nice tactful recovery of the initiative on your point.
Why should the Government not back Fan and Fred when government controls their portfolio? This is likely step one in making the implied guarantee and outright guarantee.
“‘In addition, a temporary correction in prices distracts from the fact that it is primarily the number of home sales that affects the economy, and the number for this year will be the third highest on record,’ he said.”
Last year’s NAR conventional wisdom: Real estate always goes up.
Updated NAR conventional wisdom: The trend doesn’t matter, just the level of activity.
Tell that to a stuck flipper!
Actually, that has some truth to it.
Remember C + I + G from Econ 101? Only new homes get counted in “C”. (The “I” means investments in capital equipment and R&D and the like, not the thing CNBC pretends to report on.)
‘Only new homes get counted in “C”.’
“C” might be where group think led some practitioners in the macroeconomics profession to stuff new homes into the GDP equation, but this is conceptually wrong. Anyone who understands the conceptual distinction between investment and consumption also knows that new home construction is clearly a component of investment (I believe the govt bean counters refer to it as Residential Fixed Investment). Further, anyone who understands the accelerator theory of investment knows that when new home construction goes into a recession, the rest of the economy is likely to soon follow suit.
Come to think of it, you’re right. New housing goes into I, not C. My point was a house gets counted in GDP only once, when it’s built, and that the “I” isn’t what most people think of as investing.
If it wasn’t clear, I was commenting on the stuff you quoted rather than your comment on it (which I agree with too).
““When it rebuffed the bid last week, Rinker didn’t adequately explain the outlook of its U.S. business as a housing bubble in Florida, its biggest market, is bursting, Cemex said. The valuation by its adviser was based on ‘unrealistic multiples and unjustified premiums,’ the cement maker said.”
Don’t know why it didn’t register with me sooner, but in the past couple of months I have been seeing a LOT fewer gravel trucks on 528 (the toll road linking Orlando and Port Canaveral). They haul gravel from the port, where Rinker has a huge operation, to construction sites in the center of the state and are a curse for drivers because of large pebbles that ding paint and crack windshields.
David Lereah, NAR’s chief economist, said……. “In addition, a temporary correction in prices distracts from the fact that it is primarily the number of home sales that affects the economy, and the number for this year will be the third highest on record.”
No it’s not, Mr. Lereah, ever heard the expression “using your house as an ATM”?
You gotta love Mr. Lereah. He is nothing if not an optimist. In the face of a continuous drumbeat of bad RE news, he can still spin a fine fantasy. I’m sure he believes this no more than he did what he was saying at the start of 2006.
3rd best! HA! Can you imagine Steelers coach saying, “our recent losses distracts from the fact that we are still 3rd in our division!”
Hey, Cowher’s the second-best Steelers’ coach ever, and Roethlisberger’s the second-best QB!
GO STEELERS!
Um, they arent going anywhere. You still have a date with Baltimore ….they will finish the beat-down they stated two weeks ago. Oh and uh to stay on topic….do you think that when Steelers 5-11 this year and 2-14 next year that all their high income free agents will leave and further depress the Pittsburgh market?
Whatever, anyone with money in Pittsburgh is moving out anyway now that Mellon is going bye-bye.
2-14 is not even a remote possibility. They haven’t had a record that bad since the year Joe Greene was a rookie.
Why do I feel like the NAR will be the subject of the sequel to “Thank you for Smoking”?
Chile — for whatever reason, you remind me of an experience I had on a flight from Vienna to Rome on Alitalia in 1985 or 1986. No-smoking rules for airplanes were just starting in Europe. Absolutely cracked me up — no-smoking was on the left and smoking was on the right. It was one of life’s great moments and an everlasting war story.
…If you’d been flying Rome to Vienna, the left side would have been filled…. I love those Italians… Can’t wait to visit again
Interesting cycle: in the posted articles, it is suggested that sales of existing homes need to “find a bottom” first, so that potential buyers of new homes will be able to sell their current POS. We have noted, though, that the builders of new homes will smash the resale market by consistently undercutting it. Sounds like a recipe for a fast and furious dive in prices, but expectation of profit or breaking even prevents re-sellers from pricing competitively. In the end, maybe the new houses will be bought by “first-time buyers” after all. Or, not bought at all, I guess there’s a lot of that going around.
maybe he should say ‘this marketing coundn’t find it’s bottom w 2 hands”
I would never buy one of the new houses built during this bubble. I’m renting one at present, and the lack of attention to detail is astounding, IMO. Not to mention that alot of the new “communities” come with HOA dues and other assessments. I would much rather buy something built in the ’50s or ’60s. Besides, houses are too big these days. Do people really enjoy cleaning their 2500 sq ft stucco crapbox?
This is a bit off-topic, but have you all seen this video? It’s pretty funny.
http://www.flippernation.com/
That was funny and extremely well-done! It reminded me of my fake technical school S.H.I.T.,
http://www.signalhillinstituteoftechnology.com - very tongue in cheek.
Very funny. Bookmarked it for future episodes.
“and the number for this year will be the third highest on record,’ he said.”
and 2007 will be the third lowest on record, he will say a year from now.
believe us when we say that the drop that we said would never happen is dropping but now stabilizing.
“According to the analyst, much of the problem is that many sellers continue to set unrealistically high prices, while many buyers lack confidence.”
Plenty of confidence, just not enough money, nor belief in a GF beyond themselves.
I think the analyst is referring to the “faith-based” brand of confidence, as in, “I am confident that I can handle that interest-only mortgage because I have faith that I will get a salary raise in 3 years so I can handle the full PITI payment. It’s a booming economy after all.”
And I am very proud to be lacking that kind of confidence.
Some days I take Dave Liareah with a grain of salt….. others I want to kick him square in the balls.
So, which kind of day was it today????
Ouch!!
I blame it on Ben;). There’s nothing like Liareah (il)Logic to stir the natives.
LOL - I suspect the same. Liareah is a total lightning rod in here, all the better to rally the troops.
I pretty much always want to kick him. Whenever I see his name in print, I know that he’s going to be mindlessly spitting out some senseless drivel that the Realtors will use to try to pressure buyers into a house they can’t afford.
There reaches a point where a new buyer just can’t qualify for the entry into real estate yet the NAR/Realtors do not want to discuss the affordability issues because than it would point to a natural cap on real estate prices which this RE mania already exceeded .
pilot to passengers: “The engines are out, the plane is in a dive, and we have no parachutes. But don’t worry, we’re currently at our third-highest altitude ever!”
Apparently the boom is sustainable in Chicago…
http://yochicago.com/today/market-conditions/are-the-buyers-buying-again_3288/
Hah!!! A couple brokers report some increased activity — probably a result of heavy incentives or price cutting or just a flat out lie — and the “mexican standoff” is over?
The fall is over and the buyers are rushing in again! Hurry in and buy! Chicago was never overpriced in the first place! Read my blog, I’m blogging so I must be honest and not have a commission motive, and BTW, if you’re still on the fence, buy now, or be priced out forever!
that’s hilarious Ken.
For people outside of Chicago, Wilmette is one of the NorthShore suburbs that is always close to the top 10 in median home value (in the nation). Kennilworth which is essentially the same suburb was I think top 5 in the last study (or maybe 2 surveys ago).
If you folks want to see something Hilarious, I went ahead and looked up Lyn Flannery’s listings (she is located in Wilmette, so I am assuming this is where the info came from), Here they are, none are under 1 mil:
http://coldwellbankeronline.com/CustomModules/Property/PropertyResults.aspx?PersonnelID=2340
Now the “new” homes appear to be spec homes, one is 1.69 mil. Boy that’s typical of the “Chicago” market….
What a joke.
Kenilworth is tiny and doesn’t extend as far away from the lake as WIlmette/Winnetka/Glencoe do, hence it’s traditionally #1 for house prices in the Chicago area.
Yea, the ghetto’s of Winnetka can be rough… LOL
Ha ha, but Evanston certainly has rough areas with street gangs, etc., Skokie has never been anything more than middle-class, parts of Highland Park are decidedly downmarket and Highwood is what it’s always been despite its attempts to gentrify itlsef.
No question. I lived in Rogers park when I first moved to Chicago and am well aware of the trouble spots in Evanston.
But I just wanted to point out to people that weren’t familiar with Chicago (or the “NorthShore” which Wilmette is certainly a part of) how offbase it is suggesting a 1.695 mil home in one of the wealthiest suburbs in Chicago is indicative of this market.
Chicago isn’t San Diego, but it isn’t Indianapolis either…
Ken — in your referenced post, the opener is:
“Flannery, for example, reports contracts within the past two weeks on several new construction homes that had languished on the market for quite a while.”
But quickly, a poster replies:
“New construction homes? What about the existing homes contracts? That’s a bigger share of the market.”
That’s the point. Builders have enjoyed huge profit margins in recent years and can give those up, and thus evaporate their inventory, long before 90+% of used-home sellers figure out what is going on.
For sure, I won’t live another 25 years. In that time, U.S. builders will not have another heyday like they’ve enjoyed for the past 5-7 years.
Less pending home sales indicate less closed sales. Also some pending sales fall out. How does this indicate an improving housing market?
Damnit, these analysts have to be some of the most overpaid hacks on earth. They seem to operate in their own little fantasy world where good news is good, and bad news is good or about to improve. When the chickens come home to roost they will all be blabbing about how things were clearly unsustainable, etc. And once again the public will all nod their heads in agreement.
“According to the analyst, much of the problem is that many sellers continue to set unrealistically high prices, while many buyers lack confidence.”
I think the final section of the above quote should be revised to the following: ….”while the few potential buyers remaining lack the stupidity and ignorance necessary to pay the irrational current prices.”
“According to the analyst, much of the problem is that many sellers continue to set unrealistically high prices, while many buyers lack confidence.”
The fact is; Buyers are over-confident that prices will drop. Therefore, buyers are waiting to buy at a lower price. American consumers are the most sophisticated shoppers in the world.
American buyers however, are lazy. They will wait for the lower price to be offered, rather than negotiating the price down. This has nothing to do however, with the over-confidence of buyers, that prices are going down. Most American buyers were not born yesterday. They know what they know about how the market works. History is their guide.
Buyers are over-confident of the direction of the market, and they have lots of patience, and they will wait it out.
My question is, in general, do prices at the end of cycle usually collapse quickly, stablilize for many years, and then begin a steadily accelerating climb? Or do, they decline slowly and steadily for a period of years, stabilize for a few years, and then rise?
Think of bubbles and markets like a spring. If you strech the spring out it will gain potential energy and then start to push back slowly and gain momentum. As the market hit its normal levels, it is like the equilibrium point in the spring and anything past that point will start to slow it down. It could go well past the point of equilibrium though. I expect the downturn to start slow, as it has, and get quicker and quicker. You will know its time to think about buying when inventories go back down and it is “not cool” to buy real estate. That is how Trump made his money.
Thanks. So what you are saying is the spring (housing) was stretched way too far (due to the bubble speculation) and should snap back (collapse) once the force (rampant buying) is released. In other words, since buying is coming to a crawl, prices will collapse in 2007 and fall back below rational levels (for a time). What reference year do you suppose prices will inititally collapse down to? 2000? 1997?
I estimate the correct price is the value in 2000+ 2% normal appreciation and correction for inflation @ 2% per year.
Markmax33,
Your “spring” analogy is a good one, but you’re looking at the wrong spring. This one is as wide as the 20th century, not just the last decade.
The last time the US had such high rates of liquidity, leverage and speculation combined with virtually non-existent credit standards and widespread corruption was the Roaring 20’s.
Californian’s generally survived the 90’s bust due to most having purchased with 20% down and fixed rate loans. Even so, prices plunged 40% or more. This time around, “blood in the streets” won’t do justice to the carnage.
Prices aren’t going back just 5 or 10 years, they’re going back 20 or 30.
will someone….anyone….tell david lireah to
SHUT THE F UP!
Better to tell the press to stop being his mouthpiece. I realize it’s NAR’s data–they have to give them a chance to elaborate on it, but by now you’d think they’d let their lazy fingers do the walking to at least one other independent analyst to counterbalance NARs neverending, forever innacurate spin.
So here’s a suggestion for us — how about a running tally of who in the press still lazily relies on David L. as a single source — Greg Robb, senior reporter for Marketwatch, you should know better -and Reuters, you too.
Any more one-sided offerings you all have seen?
Remember that affordability is not just about interest rates. It’s also about prices. Some of the first-time buyers in the market for a home earlier in the year simply could not afford to get in.’
The sheer gall of this guy is breathtaking. For the past two years at least realtors beat the “buy now or be priced out forever” drum to pressure naive and foolish first-time buyers into grossly overpaying for houses they couldn’t afford, many of which are doomed to foreclosure. If this clown had a shred of decency, he would’ve left town under cover of darkness a long time ago.
Your so right Sammy . It gets harder and harder for me to read DL statements . When these poor first time buyers that were scared into buying go into foreclosure there will be alot of pain and suffering all because the RE industry and mortgage scum wanted a commission . I’m telling you right now ,had I been in the business in the last five years I could not of done it . It was all based on the myth of real estate always goes up .
Just a note from Texas. A big Subprime wholesale lender with 300+ employees is shutting its doors immidiately. Signs of things to come?
I’ve got plenty of confidence… in my finances. I’ve got confidence… in my intelligence. No confidence at all in the market, of course, that would require a rather large dose of stupid.