Wednesday, February 21, 2007

BNN - MUST SEE BUBBLE TV!


Today brings the following bubbly video clips to BNN:

1. Habib versus Roubini on the Mortgage Meltdown

Barry Habib does his best to keep up appearances in the face of the now obvious collapse of the nations housing and home lending markets.

Habib is the same “expert” that was continuing to repeat the “no housing bubble” sentiment even as late as September of 2006.

Amazingly, Habib suggests that consumers who are in trouble may benefit from what he calls “Two One Buy-downs” which apparently is another contrived interest only loan product that attempts to mitigate the real cost of owning a ridiculously overpriced home.

Nouriel Roubini, as usual, does an expert job at restating the obvious fact that both sub-prim AND prime lending is on shaky ground and that the housing recession is not over but just beginning to unwind.

2. All Eyes on Bies

Federal Reserve Governor Susan Bies suggested yesterday that a bottom may not have been reached in housing as “hidden inventory”, homes that had been taken off the market without sale, come flowing back on as the market shows signs of stabilization.

“There’s a lot of vacant housing out there right now. In fact, the percentage of homes where nobody is living in them is at a record level. So the potential for inventory correction is still very high.” said Bies.

Bies goes on to express surprise that so many 2006 sub-prime mortgages went bad so quickly. “You normally see that delinquencies and defaults and foreclosures tend to peak about two years after somebody has taken out a mortgage… these are going delinquent in just a few months.”

3. Sam Zell on “Mickey Mouse” Financing

An excellent interview with Sam Zell about the state of housing, lending and the prospects for the rental market going forward.

Zell goes on at length about loose lending practices or what he calls “Mickey Mouse” financing as well as the “Rent - Buy” judgment.

Consequently, Zell thinks we will see many more defaults and a significant increase in renting.

4. Peter Schiff, Ben Stein on the Merry-Go-Round!

A whimsical merry-go-round of bulls and bears on the outlook for housing in 2007.

Mike Norman of “BizRadio” seems delusional as he fires off at Schiff “What artificial lending standard are you talking about! We have a tiny default rate in the single digits”.

Apparently Mike doesn’t understand the significance of the excessively loose lending practices that the Federal Reserve is now in the process of cracking down on.

Schiff does and excellent job of reiterating the fact that the problems in lending are not limited to the sub-prime market but are, in fact, seriously out of whack in the prime market as well.

The clip ends with Mike Norman and Tom Adkins of REMAX chuckling ridiculously over Schiff’s closing words.

Posted by at