Housing bears: We told you so

Posted Aug 10th 2007 4:00PM by Julie Tilsner
Filed under: Major Movement, International Markets, Other Issues, Bad News, Countrywide Financial (CFC), Goldman Sachs Group (GS), Bear Stearns Cos (BSC), Housing

Time was, back in the go-go days of 2005, nobody would listen to the housing bears. Anyone who pointed to shaky fundamentals, or questioned the wisdom of the don't ask, don't tell mortgage vehicles being given to any Tom, Dick or Harry, were quickly shouted down. Fools, they said. Bitter renters.

Real estate, after all, only goes up. And not only real estate. Investors loved all things mortgage. Those sexy CDOs were snapped up like hotcakes.

So we watched. And we waited. And we read blogs like Ben's Bubble Blog daily, and talked amongst ourselves while waiting for the inevitable to happen.

And now here it is. The Wall Street Journal's A1. (subscription required). I'm sure I'm not the first to say this. But we told you so.

Now the Fed, in what experts agree is highly unusual, is intervening in the market to keep things from really getting ugly. Isn't the open market supposed to take care of these things by itself? Is the Fed action helping or hurting?

It didn't help the situation when even the vaunted Countrywide Financial Corp. (NYSE: CFS) the country's largest mortgage lender in terms of volume, went on record as saying the situation is rapidly evolving and that the impact on the company is "unknown." That doesn't sound like happy news to me. Shares plunged as much as 13.7% when this acknowledgment came to light.

Bear Stearns (NYSE: BSC) is is still in trouble. Even the mighty Goldman Sachs Group, Inc. (NYSE: GS) is trying to quell panic over two hedge funds that are hemorrhaging money.

None of this, in fact, sounds like the situation is "contained," as our leaders have been telling us.

Thank God it's Friday, huh?

Tags: BSC, CFC, featured, federal reserve, FederalReserve, GS, housing, interest rates, InterestRates, subprime, the Fed, TheFed

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Reader Comments (Page 1 of 1)

8-10-2007 @ 4:49PM

jimmy lee said...

The Stock Market can be likened to a B-Ball game between the "Haves" as the "Shirts", and the "Have Nots" sporting "Skins".........

THE HAVES, ARE NOW HANGING ON BY THE "SKIN" OF THEIR TEETH.......AND FAST LOSING THEIR SHIRTS !!

8-10-2007 @ 4:53PM

JIM said...

The Stock Market can be likened to a B-Ball game between the "Haves" as the "Shirts", and the "Have Nots" sporting the "Skins".........THE HAVES, ARE NOW HANGING ON BY THE "SKIN" OF THEIR TEETH.......AND FAST LOSING THEIR SHIRTS !!

8-10-2007 @ 5:02PM

Warren said...

It's nice how people never come forward to claim their inaccurate predictions. They only seem to want to crow about the ones they got right.

Funny that...