Banks Hold 875,000 homes and prices will drop further.

Banks Hold 875,000 homes and prices will drop further.

Yes We Can... forget the speculation.  Housing prices are in for another jolt.  We've all known about the "shadow inventory" and the purported homes that have been foreclosed upon that the banks were "allegedly" not ready to release to prime time.

And why would they have to sell if they were being bailed out by taxpayer money?  Why would they have to own up to the negative asset they held in their portfolio as prices continued to drop - if they were getting assistance in the form of cash from Joe U.S.A., Uncle Sammie, you the taxpayer?

And now those chickens are coming home to roost.

Some giant brain has finally put two and tow together and cut through the bleeding red ink that is the NY Times and released the story.  

NEWSFLASH - More inventory means less sales and yes... lower prices.  Seems the elites on the east coast have finally remembered economics one OH MY one.  Supply and demand have coming home to a cozy Freidmanesque resting spot, like Quasimodo swinging down from a fraying rope after ringing a blaring clarion call bell.  

How's that for a mix of metaphors?  (I know I know... they're simile... but people have a grasp on the word "metaphor" and fewer... "simile"  - most think I misused and or misspelled "smile" )

I don't want to sound joyous in my "I told you so" moment.  I'm not.

More pain is more pain.  I've plenty of interest in real property.

The joy will be in those that have waited to buy and will continue to wait, saving dollars for the oft longed for day where they can look back at "THE" bottom of the pricing.

"They" will have glory in the purchasing at twenty cents on the dollar, carrying a minimum mortgage after having watched many of the yupsters using their ever inflating home values as a piggy bank to fund their two jet ski, twin BMW lives.

My real question is about the mindset that thought or perhaps still thinks that QE1 and QE2 were great ideas.  That we as a country could print money out of thin air and buy our own debt (yes you did read that correctly - if you know not of what I speak - ixney the ongbey) and somehow prevent a collapse of prices in housing and thus a collapse of the marvelous Ponzi scheme that has been fueling this country for thirty years.  

Our money is backed by a promise.

And the party is twinkling out as the dawn arrives.  The ashtrays are full, the champagne bottles are empty, the caviar has been left out all night.....

Prices will drop more and all the crud that is attached to the truth of that statement will come to pass.

If ya gotta sell... the good news is that inflation is coming!

Where the balance of the sweet spot on that deal is... is dependent on what the definition of "is" is... and will be the subject of another post.

What a note for a monday....

Videy the Boomtown Rats... tell me why... I don't like...