28-Mar-12 WV-Syria's Assad accepts Kofi Annan's plan

[John]

28-Mar-12 World View -- Syria's Assad accepts Kofi Annan's farcical six-point 'peace plan'


Home prices fall in January to lowest level since 2003

** 28-Mar-12 World View -- Syria's Assad accepts Kofi Annan's farcical six-point 'peace plan'
** http://www.generationaldynamics.com/cgi ... 28#e120328



Contents:
West African nations threaten military intervention in Mali
Syria's Assad accepts Kofi Annan's farcical six-point 'peace plan'
Tribal violence grows in south of Libya
Home prices fall in January to lowest level since 2003


Keys:
Generational Dynamics, Mali, Ivory Coast, Amadou Toumani Touré,
Economic Community of West African States, ECOWAS,
United Nations, Kofi Annan, Syria, Bashar al-Assad,
Libya, Muammar Gaddafi, Sabha, Tabu, Abu Seif, home prices,
Case-Shiller report

[mannfm11]

I used to have a post on a Chinese website that recently disappeared that was moved there by some guy over there from the Prudent Bear site that analyzed the overbuilding between 1997 and 2007. As far as home sales go, the record of 819K in 1978 had stood until 1997. The 78 figure was driven by the boomer generation, speculation against high inflation and tax shelters. At that time, you could take a lot of passive losses out of real estate, thus writting off all interest and depreciation with little limit against what at that time was a rapidly inflating tax rate. The record was broken in 1997 and every year there after until 2005 or 2006, with sales approaching double the 1997 record. Seems there were over 10 million homes built and sold between 1997 and 2006, which implied a glut of over 3 million units. Plus, the market hadn't taken a rest since 1994.

They started calling an end to the bust before it began. The NAR has been lying about sales since they started reporting them or at least since the market busted, probably to give the impression the market had bottomed. Seems my calculations were it would take to 2013 or 2014 for the glut to be cleared. But, that wasn't figuring for the poor economy that followed. I believe here in DFW, the market is at least not falling apart, but even before the bust we had a high number of foreclosures. Also, I believe there has been sizable speculation in housing here since this mess started, which has prevented any downward adjustment. The artificial rates have also put a floor under prices in a lot of areas.

I don't believe the prices in the desert states are going to approach where they were before the bust for a long time. This is important, because it prevents equity extraction and keeps homeowners trapped in under water mortgages. Home equity drove the US economy and as far as that goes, money flows around the world, allowing countries like China and India massive growth. That game is over and the only thing that keeps it going is the world is still begging for dollars. Notice you don't hear a lot of talk about abandoning the dollar recently.

Now, China has its own popping housing bubble. Australia also has one. There is a bubble in Germany and England as well as Canada. These will pop as well, which should drive the demand for construction materials into the ground. The next downturn is going to be worse and I believe when recovery comes, the inflation will be extreme. Not until then.