Home price values will plunge another 30% this year !

Its abundantly clear. When you look at chart after chart of whether its stocks or home prices, or any asset class you want to choose, and then you see that with developing conditions in retail, manufacturing, and ESPECIALLY commercial real estate, we are clearly entering an unprecedented period of destruction of asset prices heretofore never witnessed by mankind. To wit: home prices in our area of chicago had held out longer than most around the country. in recent months the paraboloa has turned into a very distinct and strong downward trend. Home prices are always trending and never rapid, and in particularly when there are so few home selling the prices actually remain artificially elevated for protracted periods. Then just go site see your local mall, office complex, retail strip, and note the rapid change in vacancies. Also go through some industrial parks. Folks, I drive hundreds of miles per week in my sales job, personally seeing all of these complexes whether it be retail, commercial office space, and industrial, and the vacancies have become so vast and so rapid, I am stunned that our markets have held up as well as they have. The customers that are left ALL report the same thing. THEY SEE NO BOTTOM, and orders keep dropping off the map. Im talking every single industry. all thes vacancies mean one thing. immensely FEWER people have jobs. no jobs = no money = more foreclosures = no spending = less goods needed to produce = less companies needed to produce them FOLKS : THE TREND and this is a TREND, is severely down. Not up, not sideways, not justa little down, BUT SEVERELY and entrenched DOWN. You all need to really look hard and drive around your communities and visit other cities. Not just once, but frequently. One time visits do not allow you any perspective bc you will not know where an area has been previously or how long ago it was doing better. These are severe, substantial and rapid changes. I have been watching this for years, as I have been in sales for over 24 years. The past 2 years have been nothing short of unbelievable. The destruction of jobs, and you can mark my words here, will easily lead to months where we have in excess of 750,000 reported losses easily by this summer. Im even seeing Mcdonalds and Walmarts struggling, and very soon you will see those two companies who have been relative hold outs in the economy bc they sell "cheap" shuttering stores like there is no tomorrow. You can see it in the eyes of employees. They see the dropped traffic through stores everyday, and they wonder wtf is happening. Noone has ever witnessed this level of destruction before. NO ONE. and its trending DOWNWARD. We are easily looking at a drop of 50% in the markets - take your pick, the DOW, the S&P, the DAQ, they are ALL going to drop at least another 50%. They have to. Its a foregone conclusion. Just look at P/E's. They are actually quite high and rapidly getting higher, because E is falling off a cliff, and P hasn't caught up yet. This si not a one quarter phenomenon. Its trending down. Well you don't need to be a magic forecaster or rocket scientist or economist to forecast this stuff. You just need to get out from nehind your computer and go out in the world and see what is happening. Current events folks. and to wit, there are no new businesses coming in to replace these empty shells. now imagine the balance sheets of the companies that own all these buildings. Think of all the services that were previously provided these buildings, let alone the suppliers who made products for the companies in these buildings to sell themselves or service or assemble or what have you. What Im also seeing now in services is trades beginning to price gouge bc they are so desparate. Plumbers electricians who you would think be doing the opposite and lowering their prices just to get any business, are now raping people on prices where they know people need something fixed. Im also seeing major increase in the number of tickets issued by police for everything. the counties are desperate and cities and munis are desperate for cash. Tickets are a cash generator. A cop is a profit center. he is being instructed to ticket any living thing out there, or nonmoving thing that previously they may have overlooked. (my neighbor is a police woman. she gabs a lot. this is how I know whats happening) Of course that is doing nothing to help prevent crime which is also ramping upward substantially in the past 9 months. many many thefts. Retailers are reporting massive thefts, and that is going unnoticed by the media and likely underreported by the businesses themselves. Im also seeing more and more security gaurds hired for all types of businesses.(at least the ones that are left standing.) Its stunning to see and behold. This is a very rapid transformation. Now when the IRS reports its tax receipts later this year, you know that will be EXTREMELY low and getting lower. Tax cheating has to be top of mind on many folks agenda. Lastly, I think we see default on our debt before March 2010. good luck if you hold dollars.

Edited by nimblebear, 14 February 2009 - 12:43 PM.

Its abundantly clear...

Lastly, I think we see default on our debt before March 2010. good luck if you hold dollars.

Here's a message from Chuck: Take a deep breath and relax!

I live south of Houston. Went out to dinner last night and had to pass up several restaurants that were swamped. Finally found one that I could get seated without a wait. Went out today to pick up some flowers for the wife. The florist had a line out the door. Drove by Dairy Queen on the way home and it was packed. Ditto for Walmart and Target. No sign of a recession here in Texas.

KMB

"default on our debt before March 2010. good luck if you hold dollars. "
say 10000000000000 $ goes to money heaven default=destruction of capital? "the number of dollars shrinking exceeds the increase of dollars"
defationary?

both views expressed here?
http://londonbanker....y-of-great.html

I had to wait through 3 lights to get INTO the mall at 12 pm. When we left, it took 10-15 minutes to get out. I had to park a long way away if I was to park in the mall lot. Like 5 spaces from the farthest out. It was busy. Very busy. Now, this is a high end mall. Maybe others were dead. I dunno. But it was shocking to me. Mark

Valentine's Day. Try again next weekend.

The wife and I went to the Apple store this afternoon to get a new Bose sound dock for my new iPhone. (love that iPhone) The 1st problem we had was trying to drive past the mall area...the traffic was as bad as Christmas. Insane. We finally got to the Apple store and it looked like Grand Central Station. People were falling out the door. A zoo with a capital Z. I think I wanna buy some Apple stock (AAPL) at some point for a LLT investment. Anyways...I've lived through every recession since 1953 and this one seems different. Much higher levels of retail activity at the main street level than I remember during previous cyclical economic lows. Maybe Valentine's day had something to do with it, but I gotta say I was duly impressed. (the Bose docking station rocks!) U.F.O.

My wife works an inventory position at a suburban Walgreen's, and their average sale day is about $12k gross. They routinely have been doing 14 - 18. Yesterday was nuts- Valentines @ 18K. But even two to three weeks ago they had $16-18k days. Some days there is a non-stop stream of customers. Margins are sliced, but price seems to bring them in. Same goes for my real estate biz. Frank

Nimble, you need to get out of Chicago area, especially cook county, and possibly even Illinois. You have a corrupt governor, past governors in prison, and the infamous Daley machine in charge in Chicago. I spent 37 years in Cook & Dupage and could'nt be happier having left for good. We went to Stanford's restaurant in Portland last night, a medium-high priced eatery. There were 30 people waiting to get a table. On the way out, there were 50 people waiting to get a table. Now I must confess they have a promotion going on, but still people are out spending money here. Unemployment is what 7.5% now? So what are the 92.5% people doing not spending? What I see is a loss of consumer confidence more than loss of earnings. Routine unemployment is 4 to 5 %. 2 to 3% above that is not the end of world. Like FDR said "You have nothing to fear except fear itself".

That's cute. Ya'll came out of your caves for the weekend. Valentines weekend. People are out. But are they buying much ? retailers say a resounding NOOOO ! Goo ahead. Discount me all you want. It doesn't matter to me one bit what y'all do. The facts speak for themselves if you chose to open your eyes to them.

nimble...do something to help the economy. Go buy an iPhone. U.F.O.