Despite all the overwhelming evidence to the contrary, CNBC's Jim Cramer has officially called a bottom to the housing market.
Man, I love these old comedy reels, don't you?
But here's the reality of the situation:
All these will combine for a perfect storm in the second half of the year and into 2010. Housing prices will continue to fall, not stabilize. Buying into a recovery right now, especially a strong recovery, is a lethal mistake. More havoc will continue to spread across the country...and if housing starts are truly on the way back up, the supply of unsold homes on the market will only continue to increase.
- Unemployment will most likely increase to above 10% very soon, with the U-6 pushing 18, possibly 20%.
- The second wave of forclosures caused by unemployment and resetting ARMs is already underway.
- Increased pressure on banks will come from the ongoing commercial real estate collapse.
That means housing prices have to fall. I said back in May that housing starts had to continue to fall under May's record lows, not rebound from them.
Cramer's not only wrong, but he should be fired. I'll keep revisiting this one to see how badly Cramer's call has failed.
Part of me is having a really good chuckle right now. Then I remember what me being right actually means, and I'm not so happy anymore.
Also, Cramer's still an idiot.
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