The housing market has still a way to go before prices stabilize and the demand can pick up. The Obama administration is pondering a new round of bailouts which is being perceived as a midterm elections emergency measure. For the real economy the proposed bailouts are too little, too late.
cruising towards a double dip in a very bad way, says Meredith Whitney (CEO, Meredith Whitney Advisory Group LLC), the straight-shooting analyst who was spot-on with her predictions on several occasions during the recent financial turmoil, in her recent interview (see below). At 49:00, she predicts:
The housing will take a double-dip in the 4th quarter. We agree.
Meredith Whitney also points out that under the new credit card rules, credit card lenders must give borrowers 45 days notice in order to be able to reprice a loan should the risk they assumed grow. Too bad lenders are in no mood to extend credit if they can’t get paid for the risk. For this simple reason, the new regulations have already backfired on some fronts. They lead to a credit contraction of about 1.5 Trillion, the disappearance of some offers, and the emergence of creative new fees.
It gets a lot more expensive to be poor, says Whitney.
Like it or not, it seems there will be plenty of renters looking for affordable housing for years to come. With banks tightening credit, rent-to-own deals will only grow in importance. Buyers-renters will have even less protection than before FinReg.
If you want to know more about Meredith’s rise to the top, read “The Big Short: Inside the Doomsday Machine” (see page 20 and the following below).