Homebuilder admits home building not likely to recover

homebuilder D.R. Horton had their conference call with investors. The homebuilder confirmed what free-market economists had said all along: the tax credit was a failure and we would be better off without another such gimmick.

28% of "buyers" canceled their orders. D.R. Horton's CEO is not surprised by these horrid numbers and expresses relief that the distortion was not actually worse. "I was surprised it only increased to 28%."

Looking forward, "The next 12 to 24 months will be challenging in the homebuilding industry."

As unemployment and lagging income catch up with consumers and businesses, we may see more defaults and bankruptcies. Personal bankruptcies rose again in July, to the highest rate since 2005.

http://calculatedriskimages.blogspot.com/2010/08/personal-bankruptcy-filings-july-2010.html

http://www.calculatedriskblog.com/2010/08/dr-horton-conference-call-comments-no.html

http://www.calculatedriskblog.com/2010/08/personal-bankruptcy-filings-up-9-in.html

After the Fall: Stocks Remain Overvalued

Last week's plunge in stocks was the sharpest drop in more than a year. But it still was not enough to correct the precariously overvalued position of the excessively leveraged (inflated) stock market.

82% of stocks on the S&P500 are still above their 200day moving averages, even after last week's plunge. In fact, the overvalued positions are even more extreme than anything seen in 2007-2008.


Stocks are even more overvalued; values are even more inflated; the real economy is even more burdened by excessive debt; the "recovery" is even more phony than the 2007-2008 bubble that preceded it.