Dr. Housing Bubble 07/29/08

[Crewleader]

Real Homes of Genius: Today we Salute you Long Beach with our Real Home of Genius Award. 792 Square Feet for $109,900. Built During the Great Depression and Offered at New Depression Prices.

Did you hear that? Probably not because that was the sound of Treasury Secretary Hank Paulson’s bazooka shooting out a dud. The market on Monday simply reaffirmed what we all know at our core; housing is still a long way from any bottom and even though the Senate signed off on the housing bailout bill, not much is going to change except putting the American taxpayer on a bigger hook. The market hit a bottom on July 15 of 10,962 and rallied to a high of 11,632 on July 23 for a gain of 670 points. Yet in another 5 days the market gave back 501 points to stand at 11,131 on July 28. The market today just had another rally based on “better than expected” drivel even though nationwide housing prices drop for a 22nd month in a row putting prices down by 15.8% nationwide according to the Case-Shiller Index. This means more write-downs in the future but the market is trying to act like we are at a bottom.

Merrill Lynch on Monday after hours announced more write-downs to the tune of $5.7 billion and stated that it will seek to raise capital. Capital which only a short time ago it stated was not necessary. This is what CEO John Thain had to say in April of this year:

“(Fortune) Despite this quarter’s loss, Merrill Lynch’s underlying businesses produced solid results in a difficult market environment,” said Thain. “The firm’s $82 billion excess liquidity pool has increased from year-end levels, and we remain well-capitalized. In addition, our global franchise is positioned strongly for the future, and we continue to invest in key growth areas and regions.”

http://www.doctorhousingbubble.com/real-homes-of-genius-today-we-salute-you-long-beach-with-our-real-home-of-genius-award-792-square-feet-for-109900-built-during-the-great-depression-and-offered-at-new-depression-prices/