Comments on: Settling For Less in the New Normal http://www.ritholtz.com/blog/2009/07/settling-for-less-in-the-new-normal/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 21:38:31 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: I-Man http://www.ritholtz.com/blog/2009/07/settling-for-less-in-the-new-normal/comment-page-1/#comment-198913 I-Man Thu, 30 Jul 2009 21:53:46 +0000 http://www.ritholtz.com/blog/?p=34055#comment-198913 Excerpt from the Gross piece: "Most of the politicos and even ordinary citizens are screaming for limits on monetary/fiscal expansion: “No TARP II! 1.5 trillion dollar deficits are enough! The Fed must have an exit plan!” etc. If there are such future political constraints or caps (both domestically and from abroad), then one should recognize that most of the ammunition has been spent stabilizing the financial system, and very little directed towards the real economy in terms of job loss prevention. Where is the political will or wallet now to grant corporate tax breaks for private sector job creation or to even hire new government workers, aside from a minor positive push with military enlistment?" Emphasis on: "one should recognize that most of the ammunition has been spent stabilizing the financial system, and very little directed towards the real economy in terms of job loss prevention" Pretty much what most of us here at TBP have been screaming the whole time... Or in the words of Sala and Indiana Jones from Raiders of the Lost Ark: "They've been digging in the wrong place!!!" Excerpt from the Gross piece:

“Most of the politicos and even ordinary citizens are screaming for limits on monetary/fiscal expansion: “No TARP II! 1.5 trillion dollar deficits are enough! The Fed must have an exit plan!” etc. If there are such future political constraints or caps (both domestically and from abroad), then one should recognize that most of the ammunition has been spent stabilizing the financial system, and very little directed towards the real economy in terms of job loss prevention. Where is the political will or wallet now to grant corporate tax breaks for private sector job creation or to even hire new government workers, aside from a minor positive push with military enlistment?”

Emphasis on:

“one should recognize that most of the ammunition has been spent stabilizing the financial system, and very little directed towards the real economy in terms of job loss prevention”

Pretty much what most of us here at TBP have been screaming the whole time…

Or in the words of Sala and Indiana Jones from Raiders of the Lost Ark:

“They’ve been digging in the wrong place!!!”

]]> By: davossherman@gmail.com http://www.ritholtz.com/blog/2009/07/settling-for-less-in-the-new-normal/comment-page-1/#comment-198526 davossherman@gmail.com Thu, 30 Jul 2009 03:23:35 +0000 http://www.ritholtz.com/blog/?p=34055#comment-198526 "Tonight I’d like to discuss two different articles that came out today, and while the authors (Barry Ritholtz and Bill Gross) may not have much in common, they both would like to remind investors not to get too carried away with the recent batches of less poor economic data. Barry’s gripe has to do with the latest housing data, and it’s posted on his fine website, The Big Picture (see Permalink below). I’ll let Barry tell the tale in his own words, but the key point to take away is that the reported rise in the June new home sales figures was less than meets the eye. New home sales for June of 2009 were in fact the worst totals for any June since 1982. Barry offers multiple charts to buttress his main point — that a return to “a healthy market cleared out of excess inventory with genuine price increases is likely years away . . .”" Super read! Thank you. I agree. On ZeroHedge there was a white paper indicating 19 million vacant homes, in addition to 4-5 million homes on the market. Worse, I have no idea who will be able to purchase these homes now that banks aren't offering financing to those who couldn't apply for a traditional mortgage. And if that isn't bad enough the Alt-A and Option Arm wave is coming to shore along with a 3.5 + trillion dollar CRE mess. I can't begin to think what 5+ trillion will do to the market, the real estate market or banks. Take care “Tonight I’d like to discuss two different articles that came out today, and while the authors (Barry Ritholtz and Bill Gross) may not have much in common, they both would like to remind investors not to get too carried away with the recent batches of less poor economic data. Barry’s gripe has to do with the latest housing data, and it’s posted on his fine website, The Big Picture (see Permalink below). I’ll let Barry tell the tale in his own words, but the key point to take away is that the reported rise in the June new home sales figures was less than meets the eye. New home sales for June of 2009 were in fact the worst totals for any June since 1982. Barry offers multiple charts to buttress his main point — that a return to “a healthy market cleared out of excess inventory with genuine price increases is likely years away . . .””

Super read! Thank you.

I agree. On ZeroHedge there was a white paper indicating 19 million vacant homes, in addition to 4-5 million homes on the market. Worse, I have no idea who will be able to purchase these homes now that banks aren’t offering financing to those who couldn’t apply for a traditional mortgage. And if that isn’t bad enough the Alt-A and Option Arm wave is coming to shore along with a 3.5 + trillion dollar CRE mess. I can’t begin to think what 5+ trillion will do to the market, the real estate market or banks.

Take care

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