The Wanna-be Housing Recovery

In this excellent analysis, Jim Quinn reveals the rotten foundation that underlies the housing "recovery".

Some of the highlights:

• The $8,000 first time buyer credit did nothing to stimulate housing sales - it only pushed existing demand forward at a cost of $15 billion to the tax payers.
• Far from helping people down on their luck, HAMP (Home Affordable Modification Program) has simply allowed people who make poor financial decisions to keep making them at a cost of $75 billion to the tax payers.
• New home sales are currently 200,000 units less per year than they were in 1963 when the US population was 121 million less than it is today.
• At the current rate of sales, banks have 9 years worth of inventory of foreclosed homes - with more foreclosures in the offing due to what he calls "a tsunami" of mortgage resets on the horizon for ARMS, etc.

Well worth a read in its entirety:

John Paulson Will Be Wrong This Time by Jim Quinn