jim cramer: Deutsche Bank: Half of All Mortgages To Be Underwater By 2011 - 08/06/09 09:19 PM
According to a new report put out by Deutsche Bank, half, or approximately 25 million homeowners will be underwater with their mortgage by 2011, the year in which Deutsche Bank expects home prices to finally stabilize.
Les Christie and CNNMoney.com are reporting that the Deutsche Bank forecast goes further than any other estimates that have been calculated to date, "First American CoreLogic estimated 11 million homeowners -- and rising -- were underwater by the end of 2008. Moody's Economy.com estimated 15 million at the end of March and projected 17.5 million by early 2010. Zillow.com reported that 20 million were already underwater at the end of … (61 comments)

jim cramer: NAR: Home Prices Down -15.4% Year Over Year - 07/26/09 03:17 PM
The NAR announced that home values fell -15.4% year over year from June of 2008 to June of 2009.  While bulls would blindly taut that the "pace" of home value declines has slowed from last month's year over year decline of -16.8%, there is still significant systemic risk in the housing market that can't be overlooked, not the least of which is that the pace of foreclosures is actually accelerating.   
To give the current pace of home value declines some perspective, something that is often missing, here is what the year over year percentage change in the median home value has looked like over the past several … (1 comments)

jim cramer: Bank of America "Earnings" - 07/18/09 02:13 AM
How can a bank lose money when they can borrow at 0% and lend at 5%?  Most won't lose money, and Bank of America was no exception when it released its second quarter earnings this past week, but they came close.
A couple of things from a Reuters report that are worth pointing out:
First, "Results included a $5.3 billion pre-tax gain from the sale of one-third of the bank's stake in China Construction Bank Corp".
Second, "Second-quarter net income applicable to common shareholders fell 25 percent to $2.42 billion".
When you add these numbers up you can see that Bank of America … (11 comments)

jim cramer: Jim Cramer: "The Worst Is Over" - 07/17/09 04:24 PM
Despite RealtyTrac's recent announcement revealing that foreclosure filings surged 33% from last year, Jim Cramer is refusing to back down from his shameful housing bottom call that he made in June.  In fact, Cramer took his prediction one step further on Thursday when he wrote, "the worst is over" while referencing JPMorgan Chase's recent earnings and statement about delinquencies stabilizing.
While the case can certainly be made that the banking system has been back-stopped thanks to TARP, hundreds of billions of loan guarantees made by the Treasury, and some very bank-friendly tax benefits, it is reckless for Cramer to think that the worst is … (9 comments)

jim cramer: RealtyTrac: Foreclosure Filings Surge 33% From Last Year - 07/16/09 04:05 PM
According to RealtyTrac, foreclosure filings surged by 33% from June of 2008 to June of 2009.  Additionally, filings are up 5% month over month from May to June.  In other words, despite Obama's housing plan, the pace of foreclosures is accelerating.
According to the AP, "It was the fourth-straight month in which more than 300,000 households received a foreclosure filing".
Not that anybody should be surprised, Bush's loan modification plan didn't work either, why would this one?  The problem of course is not just housing affordability, but home values.  As long as home values continue to deteriorate, loan modifications will only … (4 comments)

jim cramer: Consumer Confidence: The Tail Is Wagging The Dog - 07/10/09 05:04 AM
On May 26th, as a result of consumer confidence surging despite a deteriorating job market and eroding home values, I arrived at the conclusion that the stock market rally was the reason for the increase in consumer sentiment, there was no other explanation. 
The flaw in this "confidence" was of course that the stock market rally had no economic basis, it was built on sand.  The source of the rally was hope rather than an actual healing of the economy.  The tail was wagging the dog.
Well, here we are on July 10th and the market looks to be returning to low tide.  Not surprisingly the … (5 comments)

jim cramer: Jim Cramer: "Obama Hurting The Economy" - 07/09/09 04:11 AM
OK, Jim, we agree on this, "Obama Hurting The Economy".
That was the title of one of Cramer's most recent blog posts on CNBC.com
Cramer writes, "Businesses won't start hiring until we get two of three economic imperatives, Cramer said: people need to feel their jobs are stable, their home prices are stable and that stocks are going higher".
I agree with all of this which I why I have suggested that the Obama administration is dropping the ball by not doing three things.
1.)  Cutting taxes for all income brackets, including small businesses.  Businesses are suffering from a loss of … (9 comments)

jim cramer: The Next Wave of Foreclosures: Option ARMs - 07/05/09 01:30 AM
Whoever said, Jim Cramer, that the housing market has bottomed doesn't know anything about Option ARMs.  Those loans are represented by the light yellow bars in the graph below, the ones that surge in 2010 and 2011. 

Never mind that a record 12% of all mortgages are 30 days late, or that the real unemployment rate is 16.5% and that there is a relationship between job losses and foreclosures, the Option ARM loans represent the next major obstacle to a housing recovery, and the problem with them is that they are not easily diffused with a refinance.  Sorry, President Obama.
By design, … (11 comments)

jim cramer: New Home Sales Stumble In May - 06/26/09 01:37 AM
According to the Census Bureau, new home sales disappointed expectations by declining -0.6% in May compared to April when they fell to a 342,000 seasonally adjusted annual rate.
The current rate of new home sales continues to hover around the record low pace that was set in January of 2009 at a seasonally adjusted rate of 329,000.
The pace of home sales is still down -32.8% from last year, and 2008 was a really bad year for new home sales.
New home inventory of unsold new homes also fell by -35.5% from last year to 292,000.
The end result is that the … (1 comments)

jim cramer: CNBC's Diana Olick vs. Jim Cramer - 06/23/09 01:27 AM
There are housing analysts, and then there is Jim Cramer.
For those of you who don't know, in August of 2008, CNBC's Jim Cramer predicted that the housing market would bottom in June of 2009.  Well, here we are in June of 2009, and rather than Cramer swallow his pride and admit that he was wrong, Cramer confirmed his prediction and made a shameful housing bottom call despite the fact that the preponderance of evidence points to continued home value declines. 
Diana Olick is CNBC's housing analyst who continues to see weakness and risk in the housing market based on, well, the preponderance of evidence. 
So … (13 comments)

jim cramer: Wait a second, I thought the economy was recovering? - 06/22/09 04:10 AM
Wait a second, I thought the economy was recovering?
Isn't that what everybody has been saying?
What about all of those "green shoots" and mustard seeds that Bernanke and Larry Kudlow have been talking about?
Didn't the new administration tells us that unemployment would only peak at 8% because of their "stimulus" plan? 
What about the recent Wall St. rally?
I thought consumer confidence was up?
Even Jim Cramer recently called a housing bottom.
But then I read today that the World Bank's revised economic forecast shows that the recession will be deeper than once thought. 
The truth is that an economic recovery is difficult when … (6 comments)

jim cramer: May Housing Permits Off Their Record Low In April - 06/21/09 11:17 AM
According to the U.S. Census Bureau, housing permits increased 4.0% in May compared to April to a seasonally adjusted annual rate of 518,000 units.  However, the current pace is still off -47% from last year, and 2008 was a bad year for real estate.
To give the current number some context, the rate of 498,000 seasonally adjusted housing permits in April, the previous month, was the slowest pace in over four decades.
But apparently Jim Cramer still wants us to think that the housing market and home values have found a bottom.

(2 comments)

jim cramer: Jim Cramer's "Shameful" Housing Bottom Call - 06/16/09 12:05 PM
To use Jim Cramer's own words, Cramer's housing bottom call today is "shameful".
He has no idea what is going on out there.
Jim Cramer is being an academic, something he accused Ben Bernanke of nearly two year ago.
This is a different kind of market, Cramer.  It is not just about stabilizing demand, it is about the relationship of demand relative to the supply of housing, also known as the month's supply of housing.  As long as foreclosures continue to flood the market and demand remains weak, home values will erode as they have been for the past 2.5 years.
Cramer's call … (6 comments)

jim cramer: Credit Card Defaults Surge In May, Bank of America Leads The Way - 06/15/09 08:07 AM
According to Reuters, credit card defaults surged to another record high in May after setting a previous record in April.
"Bank of America-the largest U.S. bank-said its default rate, those loans the company does not expect to be paid back, soared to 12.50 percent in May from 10.47 percent in April."
But apparently, according to Jim Cramer, Bank of America is on solid footing.  Don't worry about sky-rocketing foreclosures and credit card defaults.  Cramer's housing bottom call means that Bank of America is in great shape?   
Here is a look at how default rates have jumped from April to May for major credit … (6 comments)

jim cramer: Jim Cramer on Bank of America - 06/14/09 03:57 PM
Never mind that credit card defaults and mortgage delinquencies are surging, these are apparently insignificant details.  CNBC's Jim Cramer is bullish on Bank of America due to Morgan Stanley's recent announcement that the previous analyisits earnings estimates are too low for B of A.
Morgan Stanley analyst Betsy Graseck is predicting earnings of $2.54 a share for Bank of America next year.
Meredith Whitney on the other hand is forecasting earnings of approximately 20 cents a share.
If Jim Cramer's recent call of a housing bottom were indeed accurate, I would be more likely to buy into his enthusiasm for Bank of America, unfortunately, this is only the eye of the … (5 comments)

jim cramer: Goldman Sachs: A Long Protracted Recession - 06/11/09 10:59 AM
With the government and the Fed talking about a second half economic recovery and Jim Cramer telling everybody that the housing market is currently at a bottom, its nice to see that not every person of influence has swallowed their financial compass.
According to Reuters, Goldman Sachs CEO Lloyd Blankfein was recently quoted as saying, "I think it's going to be a long protracted recession".
In regards to the recent Wall St. rally, "There is no reason to think this is it ... So many things have to be sorted out. Why would this be the recovery?  The chances are it's not."
 
(3 comments)

jim cramer: Shiller, Bank Stress Tests, And 48% Home Value Declines - 06/07/09 10:50 AM
According to an article in The New York Times by Robert Shiller of the Case-Shiller home price index, the recent government bank stress tests were in the anticipation of a 41% fall in home values.  The tests also included a "more adverse" drop of 48 percent from the high water mark in 2006.
In 2006, according to the NAR, the median home value was $221,900.  As recently as April of 2009, the median home value in the United States had plunged to $170,200.  In other words, the median home value has already fallen over 23%.  And yes, I know all real estate is local, but … (9 comments)

jim cramer: The "Real" Unemployment Rate Jumps To 16.4% - 06/06/09 02:07 AM
According to the Bureau of Labor Statistics, the "real" unemployment rate, the U-6 rate, jumped from 15.8% in April to 16.4% in May as the labor market shed another "projected" 345,000 jobs during the month.  The U-6 rate has jumped nearly 7 basis points from May of 2008 when it was 9.8%.
As I have written about before, the U-6 unemployment rate includes three types of workers that are not part of the more publicized U-3 unemployment number:
1.)  Marginally attached workers - people that want a full time job, have looked for one in the past, but are no longer looking for work.
2.) … (4 comments)

jim cramer: Jim Cramer's Housing Bottom Call?? - 06/04/09 03:34 AM
"Yeah, it's here."  Says CNBC's Jim Cramer as he calls a "bottom" to the housing markets despite home values plunging a near record -15.4% in April while there is still a 10.2 month supply of housing despite massive foreclosure moratoriums (Source: NAR).
Citing low, but rising, interest rates, the $8,000 first time home buyer tax credit, and record housing affordability, Jim Cramer is calling a "bottom" to the housing market.  But what Cramer is overlooking is that despite all of these "buying signs" and housing stimulus, home sales are still bouncing along multi-year lows.  Demand for real estate on a seasonally-adjusted basis  has not been impacted … (8 comments)

jim cramer: Housing Starts Fall To Record Low...Again - 05/19/09 12:05 PM
For the second time in four months housing starts set a new record low according to the Census Bureau.
Housing starts dropped -12.8% month over month to a seasonally adjusted rate of 458,000.  Additionally, housing starts are down -54.2% year over year and are now at the slowest pace on record going back to 1959.
Now, in an effort to make full disclosure, single family or 1-unit housing starts were up 2.8% from the previous month but they are still trolling along a historic bottom and are down -45.6% year over year.
This data continues to suggest that while the new home market … (1 comments)

 
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Mark MacKenzie

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