Comments on: Just What We Needed — More Homes

By: Jack McHugh

Jack McHugh — Wed, 18 Mar 2009 15:03:01 +0000

Thanks for all the posts. To Leftback’s clever mob spin on the AIG situation, I would only add that Vik the Bandit, Jamie the Diamond, and Kenny the Lewsor all turned state’s evidence and joined the TARP witness protection program…

By: leftback

leftback — Wed, 18 Mar 2009 14:18:22 +0000

The American people now realize that AIG is a very simple story, after all:

Once upon a time, there was a bookie, see, called Maurice, only they called him Hank, and he worked with Joey “the Numbers” Cassano in a shop called AIG. A lotta the guys in da neighborhood, they liked to bet on the horses. Guys like Lloyd, Jimmy C, Rick the Dick, all those guys on the Street, it was like a syndicate, see.

Only some guys like Johnny Paulson started betting against the syndicate’s horses – and then Lloyd see, he was smart, he sees that Johnny is eating their lunch, and he starts betting against the other guys while Jimmy was playing cards. Pretty soon, Jimmy C and Rick the Dick are broke, and then Joey finds out he figured the odds wrong and then the cops come in and all these guys from the neighborhood want their money…

By: leftback

leftback — Wed, 18 Mar 2009 14:00:05 +0000

You have a way with headlines, Jack. I spent some time yesterday raising cash. Speaking of headlines, have you seen the Post today? The American people will start figuring this AIG stuff out soon.

By: rktbrkr

rktbrkr — Wed, 18 Mar 2009 13:53:41 +0000

A single swallow doth not spring make…just a misleading single number

By: Bob_in_MA

Bob_in_MA — Wed, 18 Mar 2009 13:09:45 +0000

Actually, as CR pointed out in a great post yesterday, if you parse out single-family homes built for sale, they have been below sales for the last several months, so inventory is being worked off. Sales have fallen faster than the fall in inventory, so months of inventory has risen.

CR is by far the best source on this stuff:
http://www.calculatedriskblog.com/2009/03/housing-starts-is-this-bottom.html

By: Keith D.

Keith D. — Wed, 18 Mar 2009 12:24:01 +0000

As I understand it, weren’t a large majority of the housing starts actually apartment buildings? That would certainly make more sense as people are shying away from buying homes and instead renting. I personally rent and have looked at buying, but with my job future unknown, I can’t commit to that (that seems to be the theme for most potential buyers these days).

Regardless, there will always be people who buy new homes no matter what. They’re the same people who buy new cars rather than old ones. Perhaps we can call them Buyer Germaphobes. I’d be interested to see if some of these homes are also retirement community homes like Del Webb. My parents recently moved from a new Del Webb home in Texas to a new Del Webb home in Chicago, so perhaps some are retiring baby boomers looking for some kind of community like that.

By: d4winds

d4winds — Wed, 18 Mar 2009 08:26:29 +0000

re “…but for me it was the reaction by market participants that represented the real anomaly…an item suffering from weak demand and ever weakening prices is in need of less — not more — supply.”

Very true. The Permabulls are grasping at straws. This news should have been interpreted negatively by the market, since it indicates that housing demand-supply imbalances may be worsening, creating more downward price pressure, underwater mortgages, etc. Market reactions to news events in the last week (Pandit’s assertion that EBITDAW is >0 & Lewis’s “me too”–as though the ‘W’ for write-offs were irrelevant) have seemed childish.