Monday, July 09, 2007

Currently There is no Pent up Demand

An Article in the WSJ was just full of good quotes today:

It concludes with:
"I would argue that this time is different," Morgan's Mr. Stevenson says. "Currently, there is no pent-up demand, the Fed doesn't look like it is cutting interest rates and we haven't gone into economic recession yet."

I'm afraid I just cannot add much to that statement...

But other interesting quotes (Fair use):
With home prices deteriorating, additional book-value erosion for builders appears likely. Mr. Oppenheim estimates that home builders have already written down about 9% of their book values since the peak of the housing boom in July 2005 and are likely to shed an additional 13% of their book values from future land-related charges.

But the timing of such charges can be unclear. Analysts say some builders have been more aggressive in taking write-downs this year, while others may put off some charges -- especially on subdivisions that haven't yet opened, hoping that the market will stabilize.

In other words... builder stocks aren't done yet.
And Wall street knows that the recovery is a long way away.

Got popcorn?

No comments: