Housing Recovery is Here

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. There’s an “ass” for every seat… and Wall Street is running out of chairs. “All is well with the economy,” they once told us. “There’s a recovery underway, but it just won’t feel like one.” The Great Recession ended in June 2009 when no one was looking. And people actually believe it — at least the dimwitted that live among us with short attention spans do… “Ooh, a shiny penny.” Advertisement Military’s Latest Energy Report Will Give You the Willies Inside, they confess a shocking truth… without any new developments, we only have 16 months of oil left! Before the media catches wind and panic drives the price of oil through the roof, I’ll show you how one group of companies solving the problem could make you filthy rich by Christmas. Click here to find out more.   More than 70% of Americans think now is a good time to buy a home, according to a Fannie Mae survey. And 78% believe home prices have either bottomed, or will rise next year. What are they thinking? Better yet, what are they drinking? Sure, home prices recovered over the last year… But that was thanks to an artificial stimulus known as “the home buyer tax credit.” Plus, home prices were recovering from a boost in confidence, as foreclosure numbers dropped. But let’s not be naďve here. Foreclosures only dropped because banks delayed the foreclosure process. I don’t want to hear that defaults are down 30%. It only happened because banks weren’t sending out the notices of default, which they did to keep housing prices afloat. Fact is, three long years and millions of foreclosed homes later, there’s still a wave of foreclosures headed our way — just as we’ve been warning readers about since the early days of 2007. We’re nowhere near the end of a crisis that could cost us $1.5 trillion. Thinking we’ve bottomed is like thinking you’d survive a nuclear blast. We’ve gone from one asset bubble, in which the Fed warned about irrational exuberance but did nothing… to another bubble (credit and housing), in which the Fed was implicit by keeping rates far too low for too long without regulation… to where we are now, witnessing the Fed blowing up yet another bubble. It’s pathetic. Anyone that tells you housing has bottomed shouldn’t be giving investment advice. Period. People are still losing their jobs. Resets haven’t finished. Foreclosures will mount even more than they already have. Without the home buyer tax credit, the government can’t prop up imaginary housing numbers any longer. More than 25% of homeowners owe more than their homes are worth. This could result in more strategic defaults, which in turn will drive up foreclosure rates even more. There is a tremendous amount of inventory on the market, and this will only grow as homeowners fail to pay their mortgages. With banks reeling from all the bad paper their holding, they’re not very motivated to lend money to people that could screw them later. So what incentive is there to buy a house? We still have these pesky resets that will hit very hard — and drop values further. There are two more waves…

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Housing Recovery is Here

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