Posted on 07/15/2008 10:22:16 AM PDT by Kozman
Oppenheimer & Co.'s Meredith Whitney, the analyst who, very early in the game, correctly predicted Citigroup would reduce its dividend, even when Citigroup denied that they would, says the housing decline will continue and that it won't be over until house prices drop more than 33% from thier peak levels, in an interview on Bloomberg Television with Carol Massar.
Whitney also downgraded Wachovia Corp and said the earnings outlook for Wachovia. has ``dramatically diminished''. She also said that she remains negative on Citigroup, Wells Fargo and Bank of America...
(Excerpt) Read more at economicpolicyjournal.com ...
I thought the hardest hit areas have already suffered far more than 33%?
My area on the other hand has seen no change in prices.
Good.
It is better for long term high standards of living if houses didn’t cost 4.5 x net household income...a historical norm of house prices of 2.5-2.8 net household income would be much better....
And then the states will begin their wailing and teeth-gnashing. With property tax revenue supporting bond ratings, a 33% reduction in the underlying assets would wreak havoc on their abilities to borrow ever more money and require higher interest payments to get financing. Wait until all those democrat-run states have to raise taxes on top of the federal taxes Reid/Pelosi wants to strap us with. 2010 may be a good year to be a Republican.
for later
Texas has not suffered, either. Too many people moving here from high tax/no growth states. Plenty of medical professionals, too, due to tort reform.
A lot of people were speculating about Citigroups dividend, that hardly makes this guy Nostradamus.
No change in prices in my area.
Steady in Richmond...
Way down here in southern OH. Probably off 10-15%, but it’s hard to tell, as we got out just at the start of the downturn.
In the past 10 years, my area has been turned into a “high end” condo market. They are NOT selling. I wouldn’t be surprised some of these may go as low as 50% of the asking prices. They will offset some of the 5-10% losses an minimal increases.
Meredith is a woman.
I’ve made the same error. :)
Uh, Ms. Whitney is hardly a “guy.” ;-)
She is married to a rather large guy, former professional wrestler JBL, aka “Bradshaw,” a self-taught investor/finance guy.
Whitney was a) very early with her analysis of (Sep/Oct 2007) Citi, and b) spelled it out in great detail in her research pieces how they were short of capital, their funky off-balance sheet crap, their cash burn, etc, and c) as a result, received death threats by November 2007, presumably from people who were pissed that she had the audacity (they thought) to say something so bold.
During this time, if you remember, Chuck Prince was telling everyone that “everything was just fine.”
Prince was forced out by the board the first weekend in November, 2007.
She was right, she was early and she’s been one of the few people right on the whole sector - ie, she was saying “there’s more crap coming down the pipe” when everyone else was saying “the bottom is in!” and “Buy financials, the worst is over!”
Guess you know they developed that high end area money form all too easy lending firms who gave them way over market value to toss around.Thought the gubmunt was regulating such instatutions, lol.
sorry i meant to say the developed that high end area with money from all to easy lending firms who loaned way too much for the property so it had to be priced too high to cover their rears.
This guy is a moron.
Prices have fallen much more than 33% already, and there are still MILIONS of vacant homes across the country that are in lenders’ foreclosure pipelines...that haven’t reached “the active and available” market yet.
Last year there were 18 million vacant homes, with only 2 million of them for sale.
Mortgage lenders drag their feet because once they do offer them for sale, the paper loss becomes a cash one on their books.
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