This "housing depression" still has a long way to go

I decided to aptly characterize whats happening right now, as a housing depression, as opposed to just an overall economic depression, at least in the US. Certainly, the world economy has its debt issues too. But Why a housing depression ?

Well for one, the stock market has been doing quite well, which means the companies that make up the market, aren't obviously ENTIRELY dependent on the US Consumer, as it would appear many companies have figured out ways to make money from sources around the world.

Secondly, one just has to look at how poorly the consumer is doing in terms of covering his loans and debts, and the overall indebtnedness that owning a house has created for people buying one in the past 20 years (who truly couldn't afford the one they bought but didn't really know since the banks changed the terms to be so easy), along with the over extended consumer, and his or her inability to increase their income, to see that this housing situation is continue to get a lot worse before its better. Then there is the shadow inventory of homes that hasn't hit the market yet, but is not generating one dime of income for the banks, or basically for the Feds who now "own" all that toxic debt, which really means its been set aside to be "socialized" for current and future generations of tax payers.

Thirdly, and most importantly, there is that $16 trillion Ben shelled out to cover the devastating consequences of all this excessive credit, prompted mainly by his predecessors and his continued and persitently absurd monetary and interest rate policy.

So truly, this is aptly characterized a housing depression.

Here's some good background on another 11 million homeowners that will likely default, adding more "depressionary" effects to housing (depressing the prices- note specifically I refuse to use the word deflation as the use of that word has been misleading to many), which will likely continue to spill over into the overall economic condition of many companies, as we still haven't weaned ourselves entirely off of domestic sources of GDP. Will this translate to another major downleg or continuation of a bear market in equities ? Not sure, but I lean that direction, as I do believe as posted previously equities are excessively over-valued.


A major bear on the housing market: Amherst Securities' Laurie Goodman has predicted since 2009 another housing crash as banks are forced to liquidate tons [more] of bad loans.

Up to 11 million mortgages are likely to default, according to Goodman. This is a frightening figure, seeing as only several million have been liquidated since the crisis began. When it happens the market will be flooded with [even more] supply.

Goodman reached 11 million by projecting default rates for non-performing loans, re-performing loans, and underwater loans. Here's a recent presentation (via The Atlantic):http://www.aei.org/docLib/AEI%2007-21-2011%20Goodman.pdf


Read more: http://www.businessi...7#ixzz1TEOxrlfL

this is not important it has been priced in already