Meredith Whitney: Goldman has lost its edge & housing double dip still ahead…

Update: Housing prices fall, Case Schiller is having a hard time with their price series due to enormous jumps in seasonality this go around,

After reviewing the data, the S&P/Case-Shiller Home Price Index Committee believes that, for the present, the unadjusted series is a more reliable indicator and, thus, reports should focus on the year-over-year changes where seasonal shifts are not a factor. Additionally, if monthly changes are considered, the unadjusted series should be used….

this is unlike any other housing drop, in terms of severity and government intervention, so any series cannot capture where prices are going..

…On an unadjusted basis, prices dropped 0.9 percent in February, worse than the estimated 0.3 percent decline and following a 0.4 percent downturn in January….

…The report suggests more price erosion is possible before prices start rising on a sustained basis, S&P said. The price improvement can be attributed to momentum from the federal homebuyer tax credits, which expire on April 30, and prices could be pressured further by foreclosure sales….

More on falling prices from First Logic via Calculated Risk:

…On a month-over-month basis, the national average home price index fell by 2.0 percent in February 2010 compared to January 2010, which was steeper than the previous one-month decline of 1.6 percent from December to January…

Vodpod videos no longer available.

Best financials analyst on the street Meredith Whitney’s latest comments on financials and housing via CNBC:

Beleaguered banking giant Goldman Sachs has lost much of the edge it had over competitors due to the recent government charges and is a stock investors should avoid, analyst Meredith Whitney told CNBC.

…(GS) faces a future in which its brand has been tainted and it will lose business to small competitors, said Whitney, who doesn’t have a “buy” rating on Goldman or any of the other big banks…

…The company’s stock should trade around book value, Whitney added, which would place the price just above $120….

Reasserts the double dip in housing-

…On other issues, Whitney called proposed new financial reform regulations “squishy” but said the result will be banks shrinking their balance sheets and consumers forced to seek predatory lenders for credit.

She also renewed her prediction that the housing market would see a double dip as more inventory is forced back onto the market.

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April 27, 2010. Tags: , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Wall St. 2 comments.

Market Mover Tuesday: Home prices rise 1.2% m/m, Consumer Confidence drops sharply shocks forecasters…

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They are SHOCKED, SHOCKED I say that we consumers are not feeling the happy happy joy joy. WE HAVE NO JOBS YOU NITWITS!!!!

They feel we should be excited about a 1.2% m/m home price increase, even though we are still dropping y/y. Face it, NO housing value increases to write home about (pardon the pun) while unemployment and thus foreclosures are rising….In other scary news PIMCO’s Bill Gross is warning about pressure on credit.

CNBC:

Consumers’ confidence about the U.S. economy fell unexpectedly in October as job prospects remained bleak. The Conference Board’s Consumer Confidence Index shows Americans are as worried about the economy’s current state as they’ve been in nearly three decades.

They also have a grim outlook for the future, expecting a worsening business climate, fewer jobs and lower salaries.

That sentiment drove Tuesday’s results, which showed the index falling to 47.7 in October. Analysts surveyed by Thomson Reuters expected a reading of 53.1.

A reading above 90 means the economy is on solid footing. Above 100 signals strong growth…

October 27, 2009. Tags: , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, Unemployment Statistics. Comments off.

Update:Market Mover: Meredith Whitney – Home Prices may fall another 25%…

Update: Second video clip courtesy CNBC, this has the money quote on the coming second leg down in home prices..

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“There’s no doubt that home prices go down dramatically from here,” Meredith Whitney, of the Whitney Advisory Group, told CNBC

Meredith Whitney is IMO the best financial analyst on the street…

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more about “Market Mover: Meredith Whitney – Home…“, posted with vodpod

CNBC:

Home prices in the US could fall by another 25 percent because of high unemployment and another leg down will come for stocks, banking analyst Meredith Whitney told CNBC Thursday.

“No bank underwrote a loan with 10 percent unemployment on the horizon,” Whitney said. “I think there is no doubt that home prices will go down dramatically from here, it’s just a question of when.”

Local governments and states are chronically under-funded and “most states are under water,” adding to the problem of low private consumption, she said.

“If you look at the drivers for unemployment I don’t see that reversing very soon,” Whitney said.

If consumers were to decide to spend, “that would be a game-changer,” but it would be an unnatural thing to do in a recession, she said.

“A lot of themes are constant, which is the US consumer and the small business doesn’t have any credit, credit is still contracting,” Whitney said.

Consumer debt and consumer credit have dropped according to the latest figures which also show that people have been spending more from their debit cards than from their credit cards.

“Obviously that doesn’t bode well for spending,” Whitney said….

Weekly Jobless claims slightly lower, long term unemployment continues to drop as people lose bennies, trade deficit widens:

The number of U.S. workers filing new claims for jobless benefits fell last week to 550,000, according to a government report on Thursday that also showed the number of those collecting long-term aid tumbled.

Analysts polled by Reuters had expected initial claims to drop to 560,000, after reaching 576,000 the prior week, which had previously been reported as 570,000.Continued claims fell to 6.088 million in the week ended Aug. 29, the latest for which the data is available, from 6.247 million the prior week. That was the lowest level since the week ended April 4.

…Although the drop in jobless claims indicates a healthier labor market, “we haven’t seen hirings pick up yet. We might have the worst of the firings over but the companies are not confidant enough in hiring,” said John Canally, economist at LPL Financial in Boston.

Meanwhile, a separate report showed that the U.S. trade deficit widened the most in more than 10 years in July as imports grew a record 4.7 percent on resurgent U.S. demand for foreign cars, consumer goods and oil, a government report showed on Thursday.

The trade gap expanded 16.3 percent in July to $32.0 billion, the biggest month-to-month increase since February 1999….

September 10, 2009. Tags: , , , , , , , . Finance, Foreclosures, Housing, Labor Department, Unemployment Statistics, Wall St. 1 comment.

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