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House Sales Drop The Most In 40 Years

From a ‘real estate writer’ at the Associated Press:

Dec. home sales sink; prices plunged in 2009

By Alan Zibel, AP Real Estate Writer

January 25, 2010

WASHINGTON – Sales of previously occupied homes took their largest drop in more than 40 years last month yet managed to end 2009 with the first annual gain in four years.

Still, prices plunged by more than 12 percent last year — the sharpest fall since the Great Depression. The price drop for 2009 — to a median of $173,500 — showed the housing market remains too weak to help fuel a sustained economic recovery. Total sales for 2009 were nearly 5.2 million, up about 5 percent from 2008.

Last month’s worse-than-expected showing underscores concerns that the housing market could weaken further after March 31, when the Federal Reserve is set to end its program to buy mortgage securities to keep home loan rates low. Once that program ends, mortgage rates could rise. Adding to the worries, a newly extended homebuyer tax credit is scheduled to run out at the end of April.

The numbers "clearly indicate that the rebound in housing demand observed so far has been largely supported by government programs," Anna Piretti, senior economist at BNP Paribas, wrote in a research note Monday.

The poor December showing occurred after Congress extended the tax credit, easing pressure on buyers to act quickly….

The report "places a large question mark over whether the recovery can be sustained when the extended tax credit expires," wrote Paul Dales, U.S. economist with Capital Economics…

Despite fears that home prices are starting to fall again, some analysts still say the worst is over

And yet the ‘retail writer’ at the Associated Press assures us:

Economic survey: Slow recovery continues

By Mae Anderson, AP Retail Writer

January 25, 2010

NEW YORK – Businesses expect to boost hiring and capital spending in the first half of the year as the U.S. recovery from the recession slowly continues, according to a new survey.

Since the fall of 2009 demand has edged higher in the goods-producing, finance and real estate industries, while other sectors such as transportation are seeing less drastic declines in growth. While costs have been increasing, prices also have moved higher, allowing businesses to post improved profits. Job losses, meanwhile, have been moderating with a slightly better outlook for hiring over the next six months.

The latest industry survey from the National Association for Business Economics, set for release Monday, shows that capital spending plans continue to brighten as credit markets loosen slightly. Thirty-five percent of those surveyed said credit conditions are hurting their business, down from 42 percent in the third quarter…

Of the 75 NABE members from private sector and industry trade associations interviewed for the survey, all said they are making business decisions with an eye toward positive economic growth in 2010. Sixty-one percent of survey respondents believe real GDP will expand by more than 2 percent in 2010 — up from 45 percent of respondents in October.

For the second quarter in a row, price increases have been more common than price cuts. Only 8 percent of respondents said their companies cut prices in the last quarter.

Meanwhile, job losses are slowing down. While the unemployment rate remains at 10 percent and many economists expect it to increase in the coming months, the percentage of companies cutting payrolls fell to 28 percent from 31 percent in NABE’s October 2009 survey. Also, 29 percent of those surveyed expect their companies to hire over the next six months, up from 24 percent last fall.

The vast majority — 69 percent — said the government’s fiscal stimulus package enacted in February 2009 has had no impact on employment to date…

Where is all of the evidence that we are in a recovery?

Employment? House sales? Consumer confidence?

It is to laugh.

This article was posted by Steve on Monday, January 25th, 2010. Comments are currently closed.

11 Responses to “House Sales Drop The Most In 40 Years”

  1. tranquil.night says:

    You know, I wish I had the direct evidence here to support my statement; I think we all do – but this is absolutely on purpose. 1 Trillion dollars was created from nothing to stop this very thing and it still is the worst year in forever. All the Fed and Treasury did was artificially prop up Wall Street for a year while Goldman-Sachs and the Fed amassed and plundered. YARR.

    Wall Street could tailspin if Bernanke isn’t confirmed. Yeah, no #%&! – they’re floating on money that only exists because it popped into Ben’s head one day that you can create it because you own a printing press. Actually, they’re only floating on a fraction of that money. The rest is safe in a slush fund called Stimulus, another slush fund called Goldman, or with China.

    So now you’re making us choose between our financial system or disastrous inflation? Ugh! Sorry, I’m fired up today! This is ugly!

  2. proreason says:

    Let’s review the chain of events.

    Big Gov forced banks to make mortgage loans to unqualified buyers, ramping to levels in the 90’s where the majority of loans were to deadbeats. Not loans for toothpaste. Not loans for clothes. Not loans for cars. Loans for THE BIGGEST PURCHASE PEOPLE MAKE IN THEIR LIVES.

    In order to stay in business, under the threats from the government, banks drastically reduced loan qualification requirements and set interest rates for the first 3 years of loans below what they had ever been in history.

    Big Gov held interest rates far below normal for 7 years after 9/11, which throw fuel on the smoldering economic firestorm.

    Around 2004 and 2005, many of the loans began to recalibrate to higher interest rates and the default rate began to skyrocket.

    Drooling Barney Franks and Chris Dodd forced Fannie Mae to purchase the bad loans, which hid the problem for years.

    Democrats screamed bloody murder when Republicans tried to stop the mounting crisis. The deadbeat borrowers all vote Democratic.

    Instead, the Drooler granted himself the power to force financial institutions to create Derivatives, a complex financial product which allowed loans that will never be repaid to be hidden by mixing them in with good assets. This allowed the tinderbox situation to last several more years. Such actions were like slowly feeding kindling wood to a fire underneath your house.

    In 2007, the growing catastrophe became obvious to the general investment community. Around Oct, 2007, the stock market began to slide downward.

    In the summer of 2008, the Drooler declared that Fannie Mae was still a great investment. Earlier, Franklin Raines, the CEO of Fannie Mae had declared that Fannie only needed to maintain a fraction of the conventional amount of backup capital for mortgages because housing never goes down in value, apparently even when the buyers can’t make the mortgage payments. In the summer of 2008, Secretary Paulsen and Ben Bernacke publicly declared that the US economy was sound. Indeed, other than a sliding stock market and higher than normal inflation (attributable to the high price of oil, an unrelated problem), the historic measures of the economy indicated some economic weakening but the measures were well within the bounds of normality. The country was not evern in a recession by the definition that had been in place for decades.

    Sept 5, the Republican convention ended. That weekend, John McCain took the the lead in the Gallup Poll.

    Sept 8, George Soros, Goldman Sachs and other backers of Obama took advantage of the simmering fire in the basement and threw gasoline on it. On that day, stock market volume jumped about 40% and remained at that level for months. Soloman Bros, one of the parties involved in the derivatives scam was forced by the criminals behind Obama into bankruptcy by the end of the week. The stock market in general became extremely dangerous and volatile.

    Wednesday of the next week, there was a massive run on Money Market funds. On Thurday, the co-declarers in the summer that everything was fine with the US economy, Henry Paulsen and Ben Bernacke, rushed into George Bush’s office to proclaim that the world economy would collapse immediately if they were not given nearly a trillion dollars to prop up the financial industry. Between mid-summer and Sept 18, apparently, the country had gone from normalcy to the brink of the worst disaster in human history, and for reasons, apparently, that had been known for years, and WIDELY KNOWN since October of 2007.

    Obama then coasted to his election as POTUS. In those two months, millions of senior citizens saw their lifetime savings decline by 50% or more.

    In January 2009, as his first economic action, Obama rammed through his $787 B Porkulus package, which lawmakers were not allowed to read.

    Now, one year later, unemployment and underemployment in the US is about 22%. Housing prices fell more in 2009 than they had in 40 years, even though they had fallen about 30% from peak before 2009. Obama has spent more in his first year in office than all Presidents before him combined. The national debt is PLANNED to quadruple on Obama’s watch. He now controls GM, Chrysler, Student Loans, the Banking Industry, the Mortgage industry and the government is on the verge of taking over the Health Insurance and Medical industries.

    Thousands of Americans who have never missed a payment in their lives are now being thrown out of their homes because they have lost their jobs and their savings.

    But all of this has been “unexpected”.

    And Obama is here to save us.

    • tranquil.night says:

      And there it is. Volumes will be written in the decades to come evaluating what you just put simply and effectively (maybe with an addendum to come once we understand a bit more about the Bank of America, AIG, auto-bailouts, and how combined with political fear it all nearly lead to the complete paralysis of our once-indestructable private system). Comment saved, thanks Pro.

      By the way: “millions of senior citizens saw their lifetime savings decline by 50% or more.”

      Tell me THAT doesn’t fall in lock-step with Death Panels and this transparent agenda to wipe America of the Greatest Generation?!

  3. jobeth says:

    Pro…thanks for that. Eloquent!

    I am using this to explain, better than I ever could to a favorite cousin what has been going on in the past few years.

    You couldn’t have written it at a better time for me.

    I hope he looks into your facts.

    I’m sure he isn’t alone in needing to understand these points.

    You are an anchor for the rest of us! And smart too! lol

  4. jobeth says:

    Pro..

    Typo…

    “In January 2008, as his first action, Obama… ”

    2009?

    • proreason says:

      Jobeth, I fixed the date issue and made some non-essential wording changes.

    • jobeth says:

      Thanks Pro.

      I wouldn’t have even mentioned it because those of us here knew what you meant.

      However your comment was so well written I know I’m not the only person who will use it to inform others. And I for one don’t want to give anyone reason discount anything you wrote. It was on the mark.

  5. wterrier says:

    @proreason…that was great Mr. Pro. You are a pro!
    Steve I’m sure you’re aware of the insightful contributions proreason adds here.
    Pro, any thoughts on the diminishing volume during the rally since Mar ’09? Also significant insider selling into the rally. And retail has practically left the market. Street rumor…S&P below 600, all pension funds were insolvent.
    One last thing, I never heard about Frank’s role in the creation of derivatives…they came about out of the need to get rid of risky mortgage loans. If you were a bank that had to write these mortgages or face being hauled into court like BAC was by BHO, then you had to offload them because you knew they would default. That need, by thousands of small lenders, led to the growth of the derivatives. Those that took the other side of those derivatives (mostly big European banks), well no one put a gun to your head.
    One last, last thing. I remember the day the money markets broke the buck. Folks the world was literally going to end. If you have a deposit account, the FDIC will pay $1 for $1 up to $100,000, then (raised since). But if you’re EOM for example with $100M that you carry in cash float to conduct your business all over the world, all of a sudden you don’t get $1 for $1. Liquidity would have vanished if nothing was done.

    • proreason says:

      I suspect thin volume during the rally is because so many average people have pulled out. The pros are gambling against themselves now. During the 1990’s and 2000’s there was a steady influx of cash into the markets from 401K’s which provided a good volume baseline. That has to be lower now. Average people have been burned twice within a decade now, and the caution typically lasts for a generation.

      Of course, volume is a strange beast. One trader can generat a LOT of volume, so interpretting volume is a lot like reading tea leaves.

      That being said, if I’m right that thin volume is because the market is a professional playground now, then it’s possible that the next crash will be even worse than the last one, because there won’t be as many rubes holding their cards, as there was in 2001 and 2008.

      re Frank’s role in the derivatives mess, despite my comment, I don’t know that he was the primary instigator. I do know, however, that the push to derivatives was actually overseen by the “regulators”. It didn’t happen because there wasn’t enough regulation. It happened because the regulators demanded it.

      It created a perfect storm.
      a) the banks were pressured to make the bad loans.
      b) Franklin Raines and other Fannie Mae crooks shilled for the scam (with the Drooler and friends), because they have a social agenda to re-distribute income. The Drooler and Chris Dudd covered for them.
      c) to hide the evidence, the government demanded derivatives to cover the crap. That’s why you know they really knew it was a ponzi scheme. But they also might have thought it would work.
      d) Goldman Sachs and others saw an opportunity to make a fortune, since they realized that Fannie and Freddie wouldn’t be allowed to fail. They were right.
      e) This was all compounded when Gramm-Leach-Bliley Act overturned Glass-Steagell in 1999. Glass Steagell had created a firewall between commercial and retail lenders. As the profits from the Ponzi lending schemes grew geometrically, it’s easy to see how the gamblers took control of ALL of the financial instutions. The profits from the Ponzi scheme blew away the profits from the conservative side of the shops, so the gamblers took over the financial companies.
      f) AIG also facilitated the scam because it rated all of the crap derivatives AAA. And why not? Franklin Raines said the shit loans were good, didn’t he? And they knew the US taxpayers would bail them out. They were right about that too.
      g) Low interest rates in the early 2000’s also fueled the greed, because there was no money to be made in bonds and other traditionally safe investments. The low interest rates also postponed the bubble because the whole thing really did play out like a Ponzi scheme. The prior years failed loans were covered by the money coming in from the next years growth in sub-prime lending.
      h) The bomb probably could have been pricked anytime after mid 2007. It also probably could have been brought to a soft landing. But that didn’t suit Soros’ and the Obama Cabal’s agenda.

      And for people who think I’m just making shit up, think about this.

      Mortgage Lending was the most conservative business in the world for decades. Anybody who tried to buy a house in the early 90’s and before knew what the rules were. You HAD to meet income requirements and down payment requirements and payments had to be below a % of provable income. Yet, the government would like us to believe that mortgage bankers all went insane at exactly the same point in time, and transformed themselves from fuddy duddies to riverboat gamblers overnight.

      The only part of all of this that is not easily provable is whether or not Soros and Co actually pricked the bubble.

      Of course, Soros has been convicted of Securities Fraud by Hungary for activities in late 2008. But he might not have been participating in such activities in the US. Certainly he would have been scrupulously careful to not interfere in OUR elections. Right?

      And it’s easy to understand why there isn’t a single journalist interested in the most dramatice financial events since 1929. It doesn’t matter now. Trillions of dollars in wealth is gone. Millions of people’s life styles have been reduced to poverty levels. But their guy won, after all. It’s just water under the bridge.

      Much better to focus total attention on the crease in the Moron’s pant legs.

  6. wterrier says:

    for EOM, meant XOM


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