In case you haven’t been able to tell, I’ve been a little frustrated (okay a lot frustrated) with the markets lately. Why? Am I asking for bad news?
Nope, I’m looking for straight talk and reality and I don’t believe we’re getting that right now. I don’t believe that:
- That the government is telling us the whole story in terms of the health of the banking world.
- That the statistics that supposedly show the market is recovering are truly that. Since when is a “slowing of the pace of decline” a sign of recovery? Bad at a slower pace doesn’t mean it’s good.
- That the true story on the devastation that the bankruptcy of GM and Chrysler is going to mean to our economy is truly being acknowledged and prepared for. Preparedness is essential and we’re missing the boat on that one.
I’ve spent 20 years trying to help people manage their money and their real estate investments wisely and it’s never been more challenging than it is now.
So, I’m going to keep preaching the world the way I see it. It isn’t pretty and it isn’t nearly as pretty as the main stream media would like you to believe.
Ask yourself this, when it comes to analyzing and understanding the economy, who would you put more confidence in? Brian Williams and Katie Couric or Paul Krugman and Nouriel Roubini?
I’ll be on Paul and Nouriel’s side every time.
Tom Vanderwell
U.S. Home Prices May Be Lost for a Generation: John F. Wasik – Bloomberg.com
We might be looking at a lost generation for U.S. home values.
Far too many analysts are calling a bottom to the housing market after home prices in 20 metropolitan areas declined at a slower pace in February, according to the Standard & Poor’s/Case-Shiller Index.
Don’t be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story.
You won’t see a widespread housing rebound in an economy in which 600,000 jobs a month are lost and foreclosures ravage the most overleveraged areas. These are just the visible barriers to a recovery.
Mortgage lending has also been an unusually tightfisted process of late. Lenders are demanding a 20 percent deposit for home purchases, and want impeccable credit ratings. About 45 percent of U.S. banks surveyed by the Federal Reserve said they had “tightened their lending standards on prime mortgages.” I suspect that number is much higher.
Then there’s the reality that the market is glutted with homes. A record 19 million homes stood empty at the end of 2008.
Rick NHS says:
I can relate to some of your concerns.. I too am somewhat skeptical about much of what the media feeds to us. Personally, I hope the worst is behind us.. but as we all know… only time will tell.
May 7, 2009 — 10:54 am
Joe Hayden says:
Tom…
All you can do is filter the BS to the best of your ability and use your platforms to spread the most correct information you are able.
Unfortunately, we have moved further away from anything resembling sanity in the business world and as long as contractual obligations, investor trust and private corporations can be artificially altered “for the public good”, no amount of reasonable preparation can defend you from making mistakes.
The deals being forged in the auto and banking industries are going to negatively affect the economy for many years to come, most likely resulting in a lower standard of living for the very people the system is purporting to help.
Sad to see it go, really…
May 7, 2009 — 11:42 am
Timothy G Theiss says:
Here’s my problem with the news coming from the media: 48% of all statistics are made up on the spot – or is it 84%? 🙂
May 7, 2009 — 11:45 am
Don Reedy says:
Tom,
Particularly “appreciated” the snippet from Wasik. BUT, what struck me was the unparalled opportunity those of us who care about our neighbors, friends and family, have to create new (oh I hate this word…) paradigms to actually educate and house our next generation.
Look, let’s start sharing strategies KNOWING THAT WHAT YOU SHARE IN THIS POST IS TRUE AND ACCURATE. I have started reading your posts and following your site simply because I can see clearly how you think. Now I, along with pretty much everyone who reads here and on your site, want to start staking out some ideas to work out solutions. Feel free to share, because you’ll have lots of readers with awfully big ears listening….
May 7, 2009 — 6:23 pm
kevin pellatiro says:
“Lenders are demanding a 20 percent deposit for home purchases, and want impeccable credit ratings.”
This may be what is ‘truth’ outside of my little world, but this is not the case here in Nashville. Is this really what you are seeing on the street in your neck of the woods?
“They are only 44 million strong, not as wealthy and even more in debt from college loans. “
SIDENOTE: Will this buster-dip create another boom in housing once the next gens – after X and Y (estimated to be larger than the boomers) – come through?
“…it shows that more than half of all new construction is in the South, where the cost of housing and living is significantly lower than in the Northeast, Midwest and on the West Coast.”
ALL for this, being in the South (grin), but isn’t this more a sign of our knee jerk reaction? Isn’t that same guy who is buying a home in the south (right now, read: cheaper) going to wake up in ten years and say its time to go back to sunny Southern Cal? Hasn’t that always been the case for FL and the Sand States?
“lost on those still trying to price their homes at 2006 levels.”
Is he making fun of me here?
May 8, 2009 — 4:34 am