Yep, new home inventory is ~600k, which blows away previous records. We are looking at a bust that rivals all others.
tabs, home builders were buying back stock in summer 2005. At the same time, insiders were exercising options and selling. Then, we have companies issuing junk bonds and using the windfall to buy back stock. Fools looking for high yields (6%?????) in the bond market eat up the ***** bonds like it was apple pie.
re: companies sitting on massive piles of cash. They sit on the cash because the return on investment is piddly. With a slowing economy on the horizon, companies surely won't be investing in growth.
As far as the housing market taking the economy down, calculate the effect of the consumer. The American consumer is a huge influence on the world economy. The GDP of CA rivals nearly every country in the world, so when Johnny gets the measles, do you think he will be thinking about that shiny new Chinese bicycle or German leather seats for his early 911 hot rod? No, he'll be in bed, constantly calling for chicken soup from his mommy It will happen because I say so.....Oh, wait. I thought I was someone else.
